KETAN HITENDRAKUMAR KHATRI,SURAT V. ITO, WARD 2(3)(2), SURAT

ITA 49/SRT/2025

AI Insights

The case involves appeals by Ketan Hitendrakumar Khatri, the proprietor of Aakruti Gems, against the orders of the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, for the Assessment Year 2022-23. The appeals were consolidated due to identical facts and issues. The primary contention was regarding the addition of Rs. 56,54,029 as income, which was estimated at 1% of turnover, and the initiation of penalty proceedings under sections 270A and 272A(1)(d) of the Income Tax Act, 1961. The assessee argued that the CIT(A) had not provided adequate opportunities for a hearing, leading to an ex-parte order. The Tribunal found that the notices were incorrectly sent via email despite the assessee's explicit request for no email communication, resulting in non-representation.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 396770 (ITAT-SURAT)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-05-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2022-2023
• 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

" आयकर अपीलीय अिधकरण,सूरत Ɋायपीठ, सूरत । IN THE INCOME TAX APPELLATE TRIBUNAL SURAT BENCH, SURAT [conducted through Hybrid mode] ŵी संजय गगŊ, Ɋाियक सद˟ एवं ŵी िबजयानȽा Ůुसेथ, लेखा सद˟ क े समƗ। ] ] Before Shri Sanjay Garg, Judicial Member And Shri Bijayananda Pruseth, Accountant Member आयकर अपील सं /ITA Nos.47, 48 & 49/SRT/2025 िनधाŊरण वषŊ /Assessment Year : 2022-23 Ketan Hitendrakumar Khatri Prop. Aakruti Gems 5/905 B-506, Bhagya Building Ghiya Sheri Corner SMC Arogya Kendra Mahidharpura, Surat 395 003 बनाम/ v/s. ITO Ward-2(3)92) Aaykar Bhavan, Majura Gate Surat – 395 001 ̾थायी लेखा सं./PAN: DQZPR 7170 M (अपीलाथŎ/ Appellant) (Ů̝ यथŎ/ Respondent) Assessee by : Shri P.M. Jagasheth, CA Revenue by : Shri Mukesh Jain, CIT (DR) सुनवाई की तारीख/Date of Hearing : 30/04/2025 घोषणा की तारीख /Date of Pronouncement: 27/05/2025 आदेश/O R D E R Per Sanjay Garg, Judicial Member: The captioned appeals have been preferred by the assessee against the separate orders of even date 18/12/2024 of the Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as ‘CIT(A)’] for the Assessment Year (AY) 2022-23. ITA Nos.47,48 and 49/SRT/2025 Ketan Hitendrakumar Jhatri vs. ITO Asst. Year : 2022-23 2 2. Since the facts and issues involved in all these three appeals are identical, these appeals were heard together and are being disposed of by this common order. First, we shall take up ITA No.47/SRT/2025 as the lead case. ITA No.47/SRT/2025 3. The assessee has taken following grounds of appeal: 1. On the facts and in the circumstances of the case as well as the law on the subject, the leaned Commissioner of Income Tax (Appeals) has erred in confirming the action of the Assessing Officer in making addition of Rs.56,54,029/ on account of alleged Estimation of income 1 percent on turnover and income declared in Return of income, hence the Balance amount Rs.56,54,029/- (12824149-7170120) treated as income. 2. On the facts and in the circumstances of the case as well as the law on the subject, the leaned Commissioner of Income Tax (Appeals) has erred in confirming the action of the Assessing Officer in initiating penalty proceedings U/s. 270A of the Income Tax Act, 1961. 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 erred in confirming the action of the Assessing Officer in initiating penalty u/s.272A(1)(d) of the Income Tax Act, 1961. 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 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. 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. 4. At the outset, the Ld.Counsel for the assessee has invited our attention to the impugned order of the Ld.CIT(A) to submit that the impugned order of the Ld.CIT(A) is ex-parte of the assessee. The Ld.Counsel has further demonstrated that the Ld.CIT(A) had allegedly sent the notices of hearing on ITA Nos.47,48 and 49/SRT/2025 Ketan Hitendrakumar Jhatri vs. ITO Asst. Year : 2022-23 3 e-mail of the assessee. He has further invited our attention to the relevant appeal (Form No.35) submitted before the Ld.CIT(A), wherein in response to relevant query “Whether notices/Communication may be sent on e-mail?”, the assessee had answered, “No”. The Ld.Counsel, therefore, has pleaded that the assessee had mentioned in Form No.35 that the notices may not be sent to him on e-mail, however, the Ld.CIT(A) sent the notices on e-mail, which did not come to the notice of the assessee and, therefore, the case of the assessee remained unrepresented before the Ld.CIT(A). 5. Since the non-participation by the assessee in the appellate proceedings was not intentional, rather was due to the aforesaid facts and circumstances, therefore, in our view, the interests of justice will be well served, if the assessee is given an opportunity to present his case before the Ld.CIT(A). 6. In view of this, the impugned order of the CIT(A) is set aside and the matter is restored to the file of Ld.CIT(A) for decision afresh. The Ld.CIT(A) will serve notice of hearing through physical mode at the address provided by the assessee in Appeal Form i,e. Form-35. It is further observed that even the impugned order of the AO is an ex-parte order passed u/s.144 of the Income Tax Act, 1961. Under the circumstances, for just and proper decision of the case, it is directed that if the assessee will furnish any evidences or details before the Ld.CIT(A), the Ld.CIT(A) will call for the remand report on such evidences/details, if furnished by the assessee, thereafter to decide the appeal of the assessee on merits in accordance with law. ITA Nos.47,48 and 49/SRT/2025 Ketan Hitendrakumar Jhatri vs. ITO Asst. Year : 2022-23 4 ITA Nos.48/SRT/2025 & 49/SRT/2025 7. Since the facts and issues involved are identical in these two appeals, hence our findings given above in respect of ITA No.47/SRT/2025 will apply mutatis mutandis to these appeals also. The matter in these appeals is also restored to the file of Ld.CIT(A) for decision afresh in terms as indicated above. 8. In the result, all the captioned three appeals are treated as allowed for statistical purposes. Order pronounced in the Open Court on 27 /05/2025. Sd/- Sd/- (Bijayananda Pruseth) Accountant Member ( Sanjay Garg ) Judicial Member अहमदाबाद/Ahmedabad, िदनांक/Dated 27/05/2025 टी.सी.नायर, व.िन.स./T.C. NAIR, Sr. PS आदेश की Ůितिलिप अŤेिषत/Copy of the Order forwarded to : 1. अपीलाथŎ / The Appellant 2. ŮȑथŎ / The Respondent. 3. संबंिधत आयकर आयुƅ / Concerned CIT 4. आयकर आयुƅ ) अपील ( / The CIT(A)- (NFAC), Delhi 5. िवभागीय Ůितिनिध , अिधकरण अपीलीय आयकर , सूरत /DR,ITAT, Ahmedabad. 6. गाडŊ फाईल / Guard file. आदेशानुसार/ BY ORDER, सȑािपत Ůित //True Copy// सहायक पंजीकार (Asstt. Registrar) आयकर अपीलीय अिधकरण, ITAT,Surat/Ahmedabad "