KETAN BHIKHUBHAI PATEL,VALSAD V. ITO, WARD 5, VAPI

ITA 1370/SRT/2024

AI Insights

The case involves Ketan Bhikhubhai Patel, the appellant, who contested the addition of Rs. 8,31,518 under section 69A of the Income-tax Act, 1961, which was confirmed by the CIT(A). The addition was based on unexplained credit entries in the appellant's bank account. The CIT(A) dismissed the appeal due to non-compliance with notice requirements, observing that the appellant showed no interest in prosecuting the appeal on merits. The Tribunal found that both lower authorities had passed ex parte orders without a substantive hearing on merits and that the CIT(A)'s order did not comply with the mandate of section 250(6) of the Act, which requires a speaking order.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 314033 (ITAT-SURAT)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-05-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2018-2019
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MUKESH JAIN
• Assessee Lawyers: SURESH K KABRA
• Keywords: Set aside; Corroborative evidences; Unexplained cash credit
• Section: 148

Judgement Text

" IN THE INCOME-TAX APPELLATE TRIBUNAL, SURAT BENCH, SURAT BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER & SHRI BIJAYANANDA PRUSETH, ACCOUNTANT MEMBER आयकर अपील सं./ITA No.1370/SRT/2024 Assessment Year: (2018-19) (Hybrid hearing) Ketan Bhikhubhai Patel, Vav Faliya, At Dungri via Udwada (R.S) Tal Udwada, Dungri (Udava RS) B.O, Dungri, Valsad, 396185 Vs. The ITO, Ward - 5, Vapi èथायीलेखासं./जीआइआरसं./PAN/GIR No: APHPP0922Q (अपीलाथŎ/Appellant) (ŮȑथŎ /Respondent) Appellant by Shri Suresh K Kabra, CA Respondent by Shri Mukesh Jain, Sr. DR Date of Hearing 20/03/2025 Date of Pronouncement 07/05/2025 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 09.01.2024 by the learned Commissioner of Income-tax (Appeals), National Faceless Appeal Centre, Delhi [in short ‘CIT(A)’] for the Assessment Year (AY) 2018-19. 2. Grounds of appeal raised by the assessee are as under: “1. The learned CIT, NFAC has erred and was not just and proper on the facts of the case and in law in confirming the addition of 8,31,518/- u/s. 69A of the Income-tax Act. AS ADDITIONAL GROUND OF APPEAL: 2. The Ld. Jurisdictional Assessing Officer has erred and was not just and proper on the facts of the case and in law in issuing the “SCN” u/s 148A (b) and allowing less than 7 days for responding to the “SCN”. 3. PRAYER 2 ITA No.1370/SRT/2024/AY.2018-19 Ketan Bhikhubhai Patel 3.1 The addition made by Ld Assessing Officer and confirmed by the Ld CIT(A) – NFAC may be kindly deleted. 3.2 Personal hearing may be granted. 3.3 Any other relief that your honours may deem fir may be granted. 4. The appellant craves leave to add, amend, alter or delete any or all of the above grounds of appeals.” 3. Brief facts of the case are that are that assessee filed his return of income in response to notice u/s 148 of the Act for AY.2018-19 on 28.01.2023, showing total income of Rs.15,86,300/-. Eight statutory and show cause notices were issued to the assessee. But, the assessee has filed only a part reply dated 02.02.2023. Thus, there was non-compliance to the other notices including the show cause notice. The assessee had received credit entries of Rs.26,93,411/- in his bank A/c No.1301000109180 maintained with HDFC bank. The AO allowed benefit of credit entries of Rs.18,61,893/- pertaining to rent and remuneration declared in the return of income. He disallowed the remaining amount of Rs.8,31,518/- (26,93,411 - 18,61,893) u/s 69A of the Act. 4. Aggrieved by the order of AO, the assessee filed this appeal before the CIT(A). The CIT(A) issued 4 notices fixing the hearing on 19.10.2023, 06.11.2023, 23.11.2023 and 11.12.2023. There was no compliance to any of the notices issued by CIT(A). Therefore, he observed that assessee is not interested in prosecuting the appeal on merits. Further, in absence of any evidence to rebut the assessment order, the appeal was dismissed by him. 3 ITA No.1370/SRT/2024/AY.2018-19 Ketan Bhikhubhai Patel 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 both lower authorities have passed ex parte orders without hearing the appellant on merit. He also submitted that the order of the CIT(A) is not as per the mandate u/s 250(6) of the Act. He submitted that the non- compliance of the notices was not deliberate on the part of the appellant. The appellant is now ready to submit all details and evidences in support of the grounds raised by him 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 submitted that the CIT(A) has passed the order dismissing the appeal due to non- compliance by the appellant in respect of the grounds taken up in the appeal. He would, however, have no objection if the matter is restored to file of AO. 7. We have heard both the parties and perused the material available on record. The AO made additions of Rs.8,31,518/- u/s 69A of the Act towards unexplained credit entries in the bank account of the assessee. The CIT(A) has dismissed appeal because the appellant did not file supporting evidence for the grounds raised in the appeal. The ld. AR submitted that the AO passed an ex parte order, which was confirmed by the CIT(A) in absence of details and evidences. He submitted that the non-furnishing of relevant details by the appellant was not deliberate but due to circumstances beyond control of the 4 ITA No.1370/SRT/2024/AY.2018-19 Ketan Bhikhubhai Patel appellant. The appellant is ready to submit all details in support of the grounds raised by him. He, therefore, requested that one more opportunity may be given to the appellant to plead his case on merit. After considering the contentions of both parties and perusing the order of lower authorities, 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 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 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 5 ITA No.1370/SRT/2024/AY.2018-19 Ketan Bhikhubhai Patel 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 07/05/2025. Sd/- Sd/- (SANJAY GARG) (BIJAYANANDA PRUSETH) JUDICIAL MEMBER ACCOUNTANT MEMBER Surat Ǒदनांक/ Date: 07/05/2025 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 "