JAGDISH KANAKRAJ SANGHVI,MUMBAI V. ITO WARD-19(2)(1), MUMBAI

ITA 1655/MUM/2024

AI Insights

The case involves an appeal by Jagdish Kanakraj Sanghvi against the order of the Learned National Faceless Appeal Centre (NFAC), which upheld the addition of Rs. 54,00,000 as a non-genuine unsecured loan from M/S Falak Trading Co. Pvt. Ltd. The addition was initially made by the Income-tax Officer under section 143(3) of the Income Tax Act, 1961, following a search and seizure operation that revealed the involvement of the assessee in obtaining accommodation entries for unsecured loans. The CIT(A) dismissed the appeal ex parte due to non-compliance with notices, which the assessee attributed to an inactive email address. The tribunal found that the assessee was denied a reasonable opportunity to present his case and thus restored the matter to the CIT(A) for a fresh examination.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 474436 (ITAT-MUMBAI)
• Duration Of Justice: 6 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-10-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Next Hearing Date: 28-10-2024
• Assessment Year: 2013-2014
• Appeal Filed On: 04-04-2024
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ASHISH KUMAR SRAR
• Assessee Lawyers: AMAN SHAH
• Keywords: Set aside; Opportunity of being heard; Search and seizure; Accommodation entries; Bogus loan; Bogus
• Section: 143(3); 250; 68

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “F”, MUMBAI BEFORE SHRI. B.R. BASKARAN, ACCOUNTANT MEMBER AND SHRI. ANIKESH BANERJEE, JUDICIAL MEMBER I.T.A 1655/Mum/2024 (Assessment Year:2013-14) Jagdish Kanakraj Sanghvi 23, 2nd Floor, Kotawal Building, 3rdKhetwadi Lane, Near Alankar Cinema, Mumbai-400 004 PAN : ACAPS6172P vs ITO 19(2)(1), Mumbai Piramal Chamber, Mumbai APPELLANT RESPONDENT Assessee by : Shri Aman Shah Respondent by : Shri Ashish Kumar (SRAR) Date of hearing : 28/10/2024 Date of pronouncement : 29/10/2024 O R D E R PER ANIKESH BANERJEE, J.M: Instant appeal of the assessee is preferred against the order of theLearned National Faceless Appeal Centre (NFAC), Delhi [for brevity, ‘Ld.CIT(A)’] passed under section 250 of the Income Tax Act, 1961 (for brevity the “Act”), order dated 29.11.2023. The impugned orderis emanated from the order of the Learned Income-tax Officer-19(2)(1), Mumbai, order passed under section 143(3) of the Act, date of order 28/03/2015. 2 ITA No.1655 /Mum/2024 Jagdish Kankraj Sanghvi 2. The assessee has taken the following grounds:- “Being aggrieved by the order of the CIT (Appeals), appellant submits herewith the following grounds of appeal (which are taken up without prejudice to each other) for your sympathetic consideration: 1. The Learned Commissioner of Income-tax (Appeals) [hereinafter referred to as \"Ld. CIT(A)\"] has erred in upholding the order of Learned Assessing Officer by adding the loan taken to the extent of Rs. 54,00,000/- from M/S Falak Trading Co. Pvt. Ltd. as non-genuine unsecured loan. 2. The appellant craves to leave, add, alter or amend any grounds of appeal before or at the time of hearing.” 3. The brief facts of the case are that a search and seizure action was conducted on Shri Pravin Kumar Jain group on 03/10/2013 by DDIT(Inv), Mumbai. During the search proceedings, it is found that the group runs paper companies / firms / proprietary concerns with no real business activities operating solely with the purpose of facilitating the fraudulent financial transaction which includes, among others, providing of accommodation entries in form of unsecured loans to the interested parties. On getting information from the DIT(Inv), Mumbai, the ld. AO found that the assessee has also obtained accommodation entry for unsecured loan from said group amount to Rs.54 lakhs from party, M/s Falak Trading Co Pvt. Ltd. After a detailed investigation, the Ld.AO added back Rs.54 lakhs under section 68 of the Act on ground of bogus loan. Being aggrieved on the assessment order, the assessee filed an appeal before the ld. CIT(A) with delay. The Ld.CIT(A) allowed the assessee a reasonable opportunity on different dates, but none of the notice was complied with. Finally, the appeal order was passed exparte, and the appeal of the assessee was dismissed. Being aggrieved on the appeal order, the assessee filed an appeal before us. 3 ITA No.1655 /Mum/2024 Jagdish Kankraj Sanghvi 4. We heard the rival submission and considered the documents available in the record. The Ld.AR submitted a written submission which is kept in the record. In argument, the Ld.AR placed that the email id provided to the ld. CIT(A) was [e-mail] which was not at all active. Now the assessee activated new email id [e-mail] which is in operation. The Ld.CIT(A) allowed number of opportunities for hearing, but all the notices are remained un- complied with. Further, we find that the Ld.CIT(A) indicated that the appeal of the assessee was filed with delay of 382 days and the assessee was not able demonstrate any ‘sufficient cause’ for delay in filing appeal before the authority. So, on the ground of limitation, the appeal of the assessee was dismissed ex parte. We find that the assessee has explained the reason for non-receiving of noticesin appeal proceeding. The assessee filed an application for condonation of delay before the Ld. CIT(A) and explained reason for delay in filing appeal before the Ld. CIT(A). We find that the reasonable opportunity was denied to the assessee. The Ld.DR agued and was not able to submit any other mode of communication of notice except email to the assessee during appeal proceeding. The Ld.AR prayed for restoring the matter back to the file of Ld. CIT(A) for denovo adjudication. Considering the submission of both the parties, we restore the matter to the file of the Ld.CIT(A) for denovo adjudication. We are not expressing our view on the merit of the case, which will impair the appeal proceedings. Both the revenue and the counsel of the assessee had not made any objection for remanding the appeal before the ld. CIT(A). Needless to say, that the Ld. CIT(A) shall provide proper and adequate opportunity of being heard to the assessee in set aside 4 ITA No.1655 /Mum/2024 Jagdish Kankraj Sanghvi proceedings. The evidence/explanation submitted by assessee in its defense shall be admitted by the Ld. CIT(A)and adjudicated on merits in accordance with law. On the other hand, the assessee should be diligent and co-operative before the LD. CIT(A) for quick disposal of the appeal. 5. In the result, the appeal of the assessee bearing ITA 655/Mum/2024 is allowed for statistical purpose. Order pronounced in the open court on 29th day of October, 2024. Sd/- sd/- (B.R. BASKARAN) (ANIKESH BANERJEE) ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai,दिन ांक/Dated: 29/10/2024 Pavanan Copy of the Order forwarded to: 1. अपील र्थी/The Appellant , 2. प्रदिव िी/ The Respondent. 3. आयकरआयुक्त CIT 4. दवभ गीयप्रदिदनदि, आय.अपी.अदि., मुबांई/DR, ITAT, Mumbai 5. ग र्डफ इल/Guard file. BY ORDER, //True Copy// (Asstt. Registrar), ITAT, Mumbai "