JAYANTILAL CHIMANLAL RESHAMWALA,SURAT V. ITO WARD-1(2)(2), SURAT

ITA 489/SRT/2024

AI Insights

The case involves Jayantilal Chimanlal Reshamwala, the appellant, who contested the addition of Rs. 55,00,000 to his income, which was treated as unexplained money under section 69A of the Income Tax Act, 1961. The addition was based on alleged unexplained cash deposits in the appellant's bank accounts. The Assessing Officer (AO) rejected the appellant's explanation that the deposits were from previously withdrawn cash. The CIT(A) dismissed the appeal due to non-compliance with notices, which the appellant claimed were not received due to an error in the email address used by the CIT(A). The Tribunal found that the CIT(A) had not adequately addressed the merits of the case and had dismissed the appeal solely on procedural grounds without a substantive discussion on the issues raised.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 314215 (ITAT-SURAT)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-05-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2017-2018
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MUKESH JAIN
• Assessee Lawyers: P. M. JAGASHETH
• Keywords: Set aside

Judgement Text

" IN THE INCOME-TAX APPELLATE TRIBUNAL, SURAT BENCH, SURAT BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER AND SHRI BIJAYANANDA PRUSETH, ACCOUNTANT MEMBER आयकर अपील सं./ITA No.489/SRT/2024 Assessment Year: (2017-18) (Hybrid Hearing) Jayantilal Chimanlal Reshamwala, 4/2330, Doriwala, Salabatpura, Surat – 395001 Vs. The ITO, Ward – 1(2)(2), Surat èथायीलेखासं./जीआइआरसं./PAN/GIR No: ABEPR8935N (Appellant) (Respondent) Appellant by Shri P. M. Jagasheth, CA Respondent by Shri Mukesh Jain, Sr. DR Date of Hearing 08/04/2025 Date of Pronouncement 05/05/2025 आदेश / O R D E R PER BIJAYANANDA PRUSETH, AM: This appeal by the assessee emanates from the order passed under section 250 of the Income-tax Act, 1961 (in short, ‘the Act’) dated 13.03.2024 by the learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi [in short, ‘CIT(A)’] for the assessment year (AY) 2017-18. 2. The grounds of appeal raised by the assessee are as under: “1. On the facts and in the circumstances of the case as well as the law on the subject, the learned Commissioner of the Income Tax (Appeals) has erred in confirming the action of the Assessing Officer in making addition of Rs.55,00,000/- on account of alleged cash deposited in bank account treated as alleged unexplained money u/s.69A of the Income Tax Act, 1961 and not considering the fact that said amount of Rs.55,00,000/- is explained cash duly withdrawal from the bank in earlier years and thereby out of opening explained cash balance. 2. On the facts and in the circumstances of the case as well as the law on the subject, the learned Commissioner of the Income Tax (Appeals) has erred in 2 ITA No.489/SRT/2024/AY.2017-18 Jayantilal Chimanlal Reshamwala confirming the action of the Assessing Officer in the law by applying retrospectively the provisions of section 115BBE of the Act and Section 271AAC to the case of appellant being the said provisions in the Law were enacted after event of the cash deposited by the appellant. 3. On the facts and in the circumstances of the case as well as the law on the subject, the learned Commissioner of the Income Tax (Appeals) has not offered adequate opportunities to hear the case and passed ex-parte order and hence the case may please be set aside and restored back to the CIT(A) or AO. 4. On the facts and in the circumstances of the case as well as the law on the subject, the learned Commissioner of the Income Tax (Appeals) has erred in confirming the action of the Assessing Officer in initiating penalty u/s.271AAC of the Income Tax Act, 1961. 5. It is therefore prayed that the above addition may please be deleted as learned members of the tribunal may deem it proper. 6. Appellant craves leave to add, alter or delete any ground(s) either before or in the course of the hearing of the appeal.” 3. Brief facts of the case are that are that assessee filed his return of income for AY.2017-18 on 28.03.2018, declaring total income at Rs.4,31,580/-. The case was selected for limited scrutiny under CASS. Various statutory notices and show cause notice were issued calling for various details relating to the cash deposits made during the year. The reply of the assessee has been discussed at para 4 of the assessment order. The assessee mainly claimed that he had withdrawn cash in the previous year, which has been deposited in his bank account. The cash in hand as on 31.03.2016 was Rs.70,00,298/-. The explanation of assessee was not accepted for the reasons discussed at para 6 of the assessment order. The AO, at para 8 of his order, held that the assessee failed to justify the source of cash deposits amounting to Rs.20,00,000/- in Surat People Co-operative Bank Limited on 20.05.2016 and Rs.35,00,000/- in Central Bank of India in August, 2016. Hence, cash deposits of Rs.55,00,000/- 3 ITA No.489/SRT/2024/AY.2017-18 Jayantilal Chimanlal Reshamwala was treated as unexplained money u/s 69A of the Act and added to the total income. 4. Aggrieved by the order of AO, the assessee filed this appeal before the CIT(A). The CIT(A) issued 3 notices fixing the hearing on 15.01.2021, 04.11.2022 and 05.03.2024. But, there was no compliance by the appellant to any of the notices. Hence, the CIT(A) proceeded to decide the appeal based on the materials available on record. He has reproduced assessment order at page 3 to 6 of his appellate order. The decision is at para 5.3 and 5.4 of his appellate order. He has observed that despite being given many opportunities, appellant did not respond during appellate proceedings nor did he furnish any written submission or evidence in support of the grounds of appeal raised by him. In absence of compliance by the assessee, he was constrained to agree with the findings of the AO and accordingly confirmed the addition of AO and dismissed the appeal. 5. Aggrieved by the order of CIT(A), the assessee filed appeal before the Tribunal. The learned Authorized Representative (ld. AR) of the assessee submitted that the notices, though uploaded on the ITBA portal, were not received by the appellant on the e-mail given in Form 35. He submitted copy of the notices of e-proceedings available in Income-tax portal and submitted that the notices were sent at ‘[e-mail]’ instead of ‘[e-mail]’. Therefore, the assessee did not receipt any notice from the CIT(A). Hence, the non-compliance was not deliberate on the part of the appellant. He submitted that the appellant is ready with all details and 4 ITA No.489/SRT/2024/AY.2017-18 Jayantilal Chimanlal Reshamwala evidences in support of the grounds raised by him in the appeal before CIT(A). He requested that one more opportunity may be given to the appellant to plead his case on merit. 6. On the other hand, learned Senior Departmental Representative (ld. Sr. DR) of the revenue supported the order of lower authorities. He, however, observed that the CIT(A) has passed an ex parte order dismissing the appeal without any discussion on merit of the case. 7. We have heard both the parties and perused the material available on record. The AO made addition of Rs.55,00,000/-, being the cash deposits made by the appellant during the year in his bank accounts, by not accepting the explanation of the assessee that the opening cash in hand as on 01.04.2016 was Rs.70,00,298/-. The CIT(A) has dismissed appeal because the appellant did not respond to the notices issued by him. After considering the contentions of both parties, we find that the CIT(A) has not passed an order as per the mandate of section 250(6) of the Act and dismissed the appeal of assessee only on the ground of non-compliance. The ex parte order passed by the CIT(A) is clearly violative of the express provisions of section 250(6) of the Act, which provides that the appellate orders of the CIT(A) are to state the points arising in the appeal, the decision of the authority thereon and the reasons for such decisions. The underlying rationale of the provision is that such orders are subject to further appeal to the appellate Tribunal. Speaking order would obviously enable a party to know precise points decided in his favour or against him. Considering the facts and circumstances of the case and the fact that the 5 ITA No.489/SRT/2024/AY.2017-18 Jayantilal Chimanlal Reshamwala assessment order was confirmed by CIT(A) in ex parte order, we are of the considered view that the assessee deserves one more opportunity to contest his case on merit. In the interest of justice, we set aside the order of CIT(A) and remit the matter back to the file of CIT(A) with a direction to pass fresh order in accordance with law after granting adequate opportunity of hearing to assessee. The assessee is directed to be vigilant and to furnish all details and explanation as needed by CIT(A) by not seeking adjournment without valid reason. With this direction, the grounds of appeal raised by the assessee are treated as allowed for statistical purposes. Since, we have remitted the file back to CIT(A) for de novo adjudication, the other grounds are not adjudicated, being academic in nature. 8. In the result, appeal of the assessee is allowed for statistical purposes. Order is pronounced under provision of Rule 34 of ITAT Rules, 1963 on 05/05/2025. Sd/- Sd/- (SANJAY GARG) (BIJAYANANDA PRUSETH) JUDICIAL MEMBER ACCOUNTANT MEMBER Surat Ǒदनांक/ Date: 05/05/2024 SAMANTA Copy of the Order forwarded to: 1. The Assessee 2. The Respondent 3. The CIT(A) 4. CIT 5. DR/AR, ITAT, Surat 6. Guard File By Order // TRUE COPY // Assistant Registrar/Sr. PS/PS ITAT, Surat "