KAMAL GUPTA, RAIPUR,RAIPUR V. INCOME TAX OFFICER-3(1), RAIPUR, RAIPUR

ITA 450/RPR/2024

AI Insights

The case involves Kamal Gupta, the appellant, who was assessed for the Assessment Year 2019-20 by the Income Tax Officer (ITO) under sections 147 and 144B of the Income Tax Act, 1961, resulting in an addition of Rs. 1,15,00,000 as unexplained cash credit under section 68. The CIT(A) dismissed Gupta's appeal due to non-prosecution, leading to the current appeal before the ITAT. The ITAT found procedural improprieties in the dismissal of the appeal by the CIT(A) and restored the matter for fresh adjudication on merits.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 299026 (ITAT-RAIPUR)
• Duration Of Justice: 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-10-2024
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 29-10-2024
• Assessment Year: 2019-2020
• Appeal Filed On: 15-10-2024
• Other Referred Cases: CIT vs. Premkumar Arjundas Luthra (HUF)
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: PRIYANKA PATEL
• Keywords: Set aside; Opportunity of being heard; Reassessment proceedings; Unexplained cash credit; Principle of natural justice; Accommodation entries; Assessment record
• Section: 147; 148; 250; 251; 68; 246A

Judgement Text

"आयकर अपीलीय अिधकरण, रायपुर Ɋायपीठ, रायपुर IN THE INCOME TAX APPELLATE TRIBUNAL RAIPUR BENCH, RAIPUR ŵी रिवश सूद, Ɋाियक सद˟ एवं ŵी अŜण खोड़िपया, लेखा सद˟ क े समƗ । BEFORE SHRI RAVISH SOOD, JM & SHRI ARUN KHODPIA, AM (आयकर अपील सं. / ITA No: 450/RPR/2024) (िनधा[रण वष[ Assessment Year: 2019-20) Kamal Gupta, B-8, Shriji Vihar, Near Sarvodaya Hospital, Dubey Colony, Mowa, Raipur, C.G., 492001 V s Income Tax Officer-3(1), Aayakar Bhawan, Raipur PAN: AJCPG1271G (अपीलाथŎ/Appellant) . . (ŮȑथŎ / Respondent) िनधाŊįरती की ओर से /Assessee by : None राजˢ की ओर से /Revenue by : Dr. Priyanka Patel, Sr. DR सुनवाई की तारीख / Date of Hearing : 29.10.2024 घोषणा की तारीख/Date of Pronouncement : 29.10.2024 आदेश / O R D E R Per Arun Khodpia, AM: The Captioned appeal is filed by the assessee against the order of Commissioner of Income Tax (Appeal), NFAC, Delhi [in short, “Ld. CIT(A)”], u/s 250 of the Income Tax Act, 1961 (in short, “The Act”), for the Assessment Year (AY) 2019-20, dated 20.08.2024. Resulted, from the order passed by the Assessment Unit, Income Tax Department (in short, “Ld. AO”), u/s 147 r.w.s. 144B of the Income Tax Act, dated 26.07.2021. 2 ITA No. 450/RPR/2024 Kamal Gupta vs ITO-3(1), Raipur 2. The grounds of appeal raised by the assessee in ITA No. 450/RPR/2024 are extracted as under: 1. Ld. CIT(A) erred in not adjudicating the appeal on merits. Resultantly, the order passed by Ld. CIT(A) is illegal and bad in law. 2. Ld. CIT(A) erred in confirming addition of Rs. 1,15,00,000/- made by AO on account of alleged accommodation entry treating it to be unexplained cash credit, invoking sec. 68. The addition made by AO and confirmed by Ld. CIT(A) is arbitrary, baseless and not justified. 3. Assumption of jurisdiction by jurisdictional AO and consequent reassessment order passed is illegal and liable to be quashed inasmuch as notice u/s 148 is not issued in accordance with sec. 144B. 4. In the facts and circumstances of the case and in law, assumption of jurisdiction by the AO, initiation of reassessment proceedings and the consequent reassessment order passed by the AO is illegal, ab initio void. There was no escapement of income. 5. Initiation of reassessment is illegal and invalid inasmuch as the approval granted u/s 151 is not in accordance with provisions of law. Consequent reassessment proceeding and the reassessment order is illegal and liable to be quashed. 6. The order passed by AO is illegal inasmuch as the same has been passed violating the principles of natural justice, without providing due and proper opportunity to the appellant. The order passed by the AO being contrary to principles of natural justice and being illegal, is liable to be quashed and is not sustainable. 7. The appellant reserves the right to amend, modify or add any of the ground/s of appeal. 3. The brief facts of the case are that the assessee is an individual, who had not filed any return of income for the AY 2019-20. Whereas, as per 3 ITA No. 450/RPR/2024 Kamal Gupta vs ITO-3(1), Raipur information available on record the assessee has entered into an unexplained transaction of Rs. 1,15,00,000/- during the relevant year. Consequently, show cause notice u/s 148A(b) was issued and responded by the assessee. In due course, it is decided that the case of assessee is fit for issuance of notice u/s 148, therefore, reopening assessment proceedings are initiated. During the assessment proceedings, it is revealed that the assessee is related with M/s Outright Logitech Private Limited and is involved in suspicious transactions. An enquiry have been conducted and observed that M/s Jai Maa Trading, Proprietor Shri Kamal Gupta (The Assessee) has carried out various transactions amounting to Rs. 1,15,00,000/- through his bank account in Axis Bank No. 916020029998500 and another bank account in the name of M/s Outright Logitech Private Limited No. 54505093432 with standard chartered bank. After deliberations, considering the response of the assessee, Ld. AO have recorded his satisfaction that the transactions undertaken by the assessee are nothing but accommodation entries, genuineness and nature of the same could not be satisfactorily explained by the assessee, accordingly, an addition of Rs. 1,15,00,000/- was made to the income of the assessee treating the subject transactions as variation in unexplained cash credit u/s 68 of the Act. 4 ITA No. 450/RPR/2024 Kamal Gupta vs ITO-3(1), Raipur 4. Aggrieved by the aforesaid order of Ld. AO, assessee preferred an appeal before the Ld. CIT(A), but the appeal of assessee was dismissed on account of non-prosecution. Again, aggrieved with the order of Ld. CIT(A) , the assessee carried the matter by way of an appeal before us, which is under consideration in the present case. 5. At the threshold of hearing, it is informed that the assessee in the present case has submitted an application seeking adjournment for 15 days. On perusal of the adjournment application, it is revealed that the impugned order of Ld. CIT(A), which is assailed before us is an exparte order, wherein the merits of the issues are not touched or deliberated by the Ld. First Appellate Authority. It is further clarified that the order of Ld. CIT(A) is devoid of any finding or application of mind to the addition made by the Ld. AO. The appeal of the assessee has been therefore, dismissed in limine on account of non- prosecution by the assessee. Considering the dismissal of the appeal of the assessee by the Ld. CIT(A) without adjudicating on the merits of issues only on account of no representation on behalf of the assessee, we find it appropriate to restore the matter back to the files of Ld. CIT(A) for fresh adjudication of the appeal under a speaking order. Under such circumstances, the adjournment application of the assessee would tantamount to prolonging 5 ITA No. 450/RPR/2024 Kamal Gupta vs ITO-3(1), Raipur the litigation, whereas in the interest of justice the matter has to be set aside for fresh adjudication. 6. On this issue, this tribunal has already adopted a view that the Ld. CIT(A) is under bounden duty to disposed of the appeal of the assessee on merits after deliberating the issues assailed therein by the assessee, however, in the present case, the order of Ld. CIT(A) has no whisper qua the merits of the issues, which should have been discussed and decided based on material and assessment records available before him. The disposal of appeal on the basis of non-prosecution alone is not permitted in terms of settled principle of law as observed by the Hon'ble Mumbai High Court in the case of CIT vs. Premkumar Arjundas Luthra (HUF) reported in [2016] 240 taxman 133, wherein Hon'ble Bombay High Court has held as under: “…………It is very clear once an appeal is preferred before the CIT(A), then in disposing of the appeal, he is obliged to make such further inquiry that he thinks fit or direct the Assessing Officer to make further inquiry and report the result of the same to him as found in Section 250(4) of the Act. Further Section 250(6) of the Act obliges the CIT(A) to dispose of an appeal in writing after stating the points for determination and then render a decision on each of the points which arise for consideration with reasons in support. Section 251(l)(a) and (b) of the Act provide that while disposing of appeal the CIT(A) would have the power to confirm, reduce, enhance or annul an assessment and/or penalty. Besides Explanation to sub-section (2) of Section 251 of the Act also makes it dear that while considering the appeal, the CIT(A) would be entitled to consider and decide any issue arising in 6 ITA No. 450/RPR/2024 Kamal Gupta vs ITO-3(1), Raipur the proceedings before him in appeal filed for its consideration, even if the issue is not raised by the appellant in its appeal before the CIT(A). Thus once an assessee files an appeal under Section 246A of the Act, it is not open to him as of right to withdraw or not press the appeal. In fact the CIT(A) is obliged to dispose of the appeal on merits. In fact with effect from 1st June, 2001 the power of the CIT(A) to set aside the order of the Assessing Officer and restore it to the Assessing Officer for passing a fresh order stands withdrawn. Therefore, it would be noticed that the powers of the CIT(A) is co-terminus with that of the Assessing Officer i.e. he can do all that Assessing Officer could do. Therefore, just as it is not open to the Assessing Officer to not complete the assessment by allowing the assessee to withdraw its return of income, it is not open to the assessee in appeal to withdraw and/or the CTT(A) to dismiss the appeal on account of non-prosecution of the appeal by the assessee. This is amply dear from the Section 251(l)(a) and (b) and Explanation to Section 251(2) of the Act which requires the CIT(A) to apply his mind to at the issues which arise from the impugned order before him whether or not the same has been raised by the appellant before him. Accordingly, the law does not empower the CIT(A) to dismiss the appeal for non-prosecution as is evident from the provisions of the Act.” 7. In view of aforesaid observations of the Hon’ble Bombay High Court, respectfully following the same, in present case de horse any deliberation on the merits of the issues by the Ld. CIT(A) based on material available on record, wherein the appeal of assessee is dismissed on account of non-prosecution alone. For the sake of clarity, the order of Ld. CIT(A) are extracted hereunder: 7 ITA No. 450/RPR/2024 Kamal Gupta vs ITO-3(1), Raipur 8 ITA No. 450/RPR/2024 Kamal Gupta vs ITO-3(1), Raipur 8. In view of aforesaid facts and circumstances of the present case, without adverting to the merits of the issues assailed in the present appeal, following the aforesaid settled position of law, the present appeal of assessee is restored back to the files of Ld. CIT(A) for fresh adjudication. Needless to say, the assessee shall be afforded with reasonable opportunity of being heard. The assessee is also directed to vigilant enough and attentive during the set aside appellate proceedings, failing which the Ld. CIT(A) shall be at liberty to disposed of the appeal under the provisions of law. 9 ITA No. 450/RPR/2024 Kamal Gupta vs ITO-3(1), Raipur 9. In result, appeal of the assessee is partly allowed, in terms of our aforesaid observations. Order pronounced in the open court on 29/10/2024. Sd/- (RAVISH SOOD) Sd/- (ARUN KHODPIA) Ɋाियक सद˟ / JUDICIAL MEMBER लेखा सद˟ / ACCOUNTANT MEMBER रायपुर/Raipur; िदनांक Dated 29/10/2024 Vaibhav Shrivastav आदेश की Ůितिलिप अŤेिषत/Copy of the Order forwarded to : // स×याǒपत Ĥित True copy // आदेशानुसार/ BY ORDER, (Senior Private Secretary) आयकर अपीलीय अिधकरण, रायपुर/ITAT, Raipur 1. अपीलाथŎ / The Appellant- Kamal Gupta 2. ŮȑथŎ / The Respondent- ITO-3(1), Raipur 3. आयकर आयुƅ(अपील) / The CIT(A), 4. The Pr. CIT, Raipur (C.G.) 5. िवभागीय Ůितिनिध, आयकर अपीलीय अिधकरण, रायपुर/ DR, ITAT, Raipur 6. गाडŊ फाईल / Guard file. "