JATIN SACHDEVA H.NO. 3842, SECTOR 32-A, CHANDIGARH ROAD, LUDHIANA,PUNJAB V. INCOME TAX OFFICER WARD1(4) LUDHIANA JAO ITO WARD 1(3), LUDHIANA, PUNJAB

ITA 839/CHANDI/2024

AI Insights

The case involves Jatin Sachdeva, the appellant, who appealed against the order of the CIT(A) confirming an assessment of Rs. 96,26,500 as unexplained money for the Assessment Year 2017-18. The assessee did not file a return of income, and the Assessing Officer (AO) made the assessment based on substantial cash deposits during the demonetization period. The CIT(A) dismissed the first appeal, leading to the current appeal before the Tribunal. The primary contention was the lack of proper notice to the assessee, which was claimed to be a violation of the principles of natural justice.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 107994 (ITAT-CHANDIGARH)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-02-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2017-2018
• Other Referred Cases: Munjal BCU Centre of Innovation and Entrepreneurship Vs CIT (Exemptions)
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Matter Remanded
• Court: TRIBUNAL
• Department Lawyers: VIVEK VARDHAN
• Assessee Lawyers: SUDHIR SEHGAL; POST
• Keywords: Set aside; Reasonable cause; Principle of natural justice
• Section: 144; 142(1); 250; 246A

Judgement Text

"आयकरअपीलीयअिधकरण,चǷीगढ़Ɋायपीठ “ए” , चǷीगढ़ IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BENCH “A”, CHANDIGARH HEARING THROUGH: PHYSICAL MODE ŵी िवŢम िसंह यादव, लेखा सद˟ एवं ŵी परेश म. जोशी, Ɋाियक सद˟ BEFORE: SHRI. VIKRAM SINGH YADAV, AM &SHRI. PARESH M. JOSHI, JM आयकरअपील सं./ ITA NO. 839/Chd/2024 िनधाŊरणवषŊ / Assessment Year : 2017-18 Jatin Sachdeva H.No. 3842, Sector 32-A, Chandigarh Road, Ludhiana- 141001 बनाम The ITO Ward 1(4), Ludhiana ˕ायीलेखासं./PAN NO: GADPS6442D अपीलाथŎ/Appellant ŮȑथŎ/Respondent िनधाŊįरती की ओर से/Assessee by : Shri Sudhir Sehgal, Advocate राजˢकी ओर से/ Revenue by : Shri Vivek Vardhan, Addl. CIT, Sr. DR सुनवाई की तारीख/Date of Hearing : 29/01/2025 उदघोषणा की तारीख/Date of Pronouncement : 25/02/2025 आदेश/Order PER PARESH M. JOSHI, J.M. : This is an appeal filed by the assessee u/s 253 of the Income Tax Act, 1961 (hereinafter referred to as the Act for sake of convenience and ease) before this Tribunal. The assessee is aggrieved by the order bearing number ITBA/NFAC/S/250/2024-25/1065601777(1) DT. 12/06/2024 passed by CIT(A) under section 250 of the Act in first appeal u/s 246A of the Act which is hereinafter referred to as the “impugned order”. The relevant AY is 2017-18 and the corresponding previous year period is from 01/04/2016 to 31/03/2017. 2. Factual Matrix 2.1 The assessee did not file return of income for the A.Y. 2017-18. On the basis of information available on AIMS Module of ITBA, the 2 AO nticed that the assessee has made huge cash deposits in his bank accounts during demonetization period. Since thee was no response to various notices issued u/s 142(1) of the Act, the AO completed the assessment u/s 144 of the Act on 29/12/2019 treating the amount of Rs. 96,26,500/- as unexplained money. That the assessment order bears no. ITBA/AST/S/144/2019-20/102339560(1) dated 29/12/2019 of Ld. AO which is u/s 144 of the Act. 2.2 That the assessee being aggrieved by the assessment order dated 29/12/2019 preferred first appeal under section 246A before CIT(A) and who by the “impugned order” has dismissed the appeal of the assessee. 2.3 That the assessee being aggrieved by the “impugned order” has preferred the present appeal on following grounds: 1. That the Ld. CIT (A) has erred in confirming the order of the Assessing, who had assessed the income at Rs.96,26,500/- vide order, dated 19.12.2019. 2. That the confirmation of the order of AO by the Ld.CIT(A) is not proper because no notices by way of post or physical mode have been served upon the assessee or on his counsel. 3. That the assessee came to know of the ex-parte order having been passed by the Ld. CIT(A) only when telephonic message was received from the office of the AO. Ludhiana regarding the passing of the order by the Ld. CIT(A) ex-parte, for recovery of demand and then the assessee came to know of the order having been passed by the CIT(A) and contacted some other counsel for filing the appeal against the order of CIT(A). 4. That the assessee is not much educated and, as such, could not access to the portal and neither his counsel informed him about the notices having been received at his portal and even the assessee was prevented by sufficient and reasonable cause in not submitting the submissions before the CIT(A), is highly regretted in view of the judgment of Hon'ble Punjab 8t Haryana High Court in the case of Munjal BCU Centre 3 of Innovation and Entrepreneurship Vs CIT (Exemptions) in CWP No. 21028/2023. 5. Notwithstanding the above said grounds of appeal, the Ld. CIT(A) has erred in sustaining the addition of Rs. 96,26,500/-, which is against the facts and circumstances of the case. 6. That the appellant craves leave to add or amend the grounds of appeal before the appeal is finally heard or disposed off. 3. Record of Hearing The hearing in the matter took place before this Tribunal on 29/01/2025 when Ld. AR for & on behalf of the assessee appeared and interalia contended that impugned order is bad in law, illegal and in violation of the principles of natural justice and ought to set aside by this Tribunal as no notices by way of post or physical mode was ever served on the assessee or his counsel. It was stated that in Form 35 which is form of Appeal to CIT(A) email id of his earlier counsel [e-mail] was given. As per portal assessee’s email id is [e-mail]. It was submitted that though the office of CIT(A) had sent email notice(s) on earlier counsel email id but the earlier counsel never informed him about notices for hearing. Consequently matter before CIT(A) too came to be decided in exparte manner. Reliance was placed on the judgement of Hon’ble Punjab & Haryana High Court in case of M/s Munjal BCU Centre of innovation and entrepreneurship Ludhiana Vs. CIT(E) Chandigarh (W.P. No. 21028/2023) wherein the Hon’ble High Court has held as under: 4 In view of the above, it is essential that before any action is taken, a communication of the notice must be in terms of the provisions as enumerated hereinabove. The provisions do not mention of communication to be \"presumed\" by placing notice on the e-portal. A pragmatic view has to be adopted always in these circumstances. An individual or a Company is not expected to keep the e- portal of the Department open all the time so as to have knowledge of what the Department is supposed to be doing with regard to the submissions of forms etc. The principles of natural justice are inherent in the income tax provisions and the same are required to be necessarily followed. Having noticed as above, this Court is of the firm view that the petitioner has not been given sufficient opportunity to put up his pleas with regard to the proceedings under Section 12A(1)(ac)(iii) of the Act of 1961 and as he was not served with any notice. Therefore, he would be entitled to file his reply and the Department would of course be entitled to examine the same and pass a fresh order thereafter. 10. In view of the above. Writ Petition is allowed and the order dated 16.01.2023 (Annexure P-5) is quashed and set aside. Per contra Ld. DR has gone by the impugned order of CIT(A) and finally has left it to this Tribunal to pass appropriate orders according to law. 4. Observations, Findings & Conclusions 4.1 We notice that number of notice(s) were issued by the office of CIT(A) but none were responded to. The claim of the assessee is that notice(s) went on email id of earlier counsel and he did not intimate the assessee in time. The Ld. CIT(A) accordingly passed exparte order. In form 35 we notice email id of [e-mail] where notice(s) for hearing had gone which assessee now say that it is of his earlier counsel and that he (the counsel) never informed the assessee about the hearing dates. We notice that it is not recorded in the impugned order that notice(s) were served to assessee by post or other physical mode. Keeping in view the above observation of Punjab & Haryana High Court (supra) we are of the considered view 5 that notice(s) ought to have gone even to assessee at least once in facts and circumstances by post or physical mode but unfortunately that has not happened in the instant case. 4.2 In the premises we set aside the impugned order and remand the case back to the file of CIT(A) to pass a fresh order on denovo basis as exparte nature of orders of both the authorities below, cannot be just ignored. 5. Order 5.1 The impugned order is set aside as and by way of remand back to the file of CIT(A) to pass a fresh order on denovo basis. 5.2 In the result, appeal is allowed for statistical purposes. Order pronounced in the open Court on 25/02/2025 Sd/- Sd/- िवŢम िसंह यादव परेश म. जोशी ( VIKRAM SINGH YADAV) (PARESH M. JOSHI) लेखासद˟/ ACCOUNTANT MEMBER Ɋाियक सद˟ / JUDICIAL MEMBER AG आदेशकीŮितिलिपअŤेिषत/ Copy of the order forwarded to : 1. अपीलाथŎ/ The Appellant 2. ŮȑथŎ/ The Respondent 3. आयकरआयुƅ/ CIT 4. आयकरआयुƅ (अपील)/ The CIT(A) 5. िवभागीय Ůितिनिध, आयकरअपीलीयआिधकरण, चǷीगढ़/ DR, ITAT, CHANDIGARH 6. गाडŊ फाईल/ Guard File आदेशानुसार/ By order, सहायकपंजीकार/ Assistant Registrar "