KHUSHAVDAN SANMUKHLAL SOLANKI,BHARUCH V. DCIT, CIRCLE 2(1)(1), VADODARA, VADODARA

ITA 1914/AHD/2024

AI Insights

The case involves an appeal by Khushavdan Sanmukhlal Solanki against the order of the Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre, Delhi, concerning the Assessment Year 2020-21. The primary contention was the improper adjustment of Rs 5,45,160 under section 143(1)(a) of the Income Tax Act, 1961, without the issuance of a statutory notice. The Tribunal referenced several precedents where similar procedural lapses led to the quashing of such adjustments. The Tribunal emphasized the importance of the 'audi alteram partem' principle, which ensures that no one should be condemned unheard.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 474755 (ITAT-AHMEDABAD)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-03-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2020-2021
• Other Referred Cases: Arham Pumps Vs DCIT, Devendra Singh Bhaskar v. DCIT, Khilav Rajendrakumar Joshi v. The DCIT, Satishchandra Hiralal Berawala v DCIT
• Laws Referred To: Income Tax Act 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Question of law
• Section: 143(1)

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD “SMC” BENCH BEFORE: DR. BRR KUMAR, VICE PRESIDENT Khushavdan Sanmukhlal Solanki, C-70, Mangala Park Society, Dahej By Pass Road, Bharuch-392001. PAN: AGTPS9882P (Appellant) Vs The Deputy Commissioner of Income Tax, Circle -2(1)(1), Vadodara. (Respondent) Assessee Represented: Shri Bhupendra Mehta, AR. Revenue Represented: Shri Ashok Kumar Suthar, Sr.D.R. Date of hearing : 03.03.2025 Date of pronouncement : 07.03.2025 आदेश/ORDER This appeal is filed by the Assessee as against the appellate order dated 09.10.2024 passed by the Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre, Delhi, relating to the Assessment Year 2020-21. 2. The assessee has raised the following grounds of appeal: 1. The Ld Addl JCIT A grossly erred on facts and in law in dismissing the appeal without adjudicating the preliminary issue raised regarding the violation of statutory provision of Sec 143(1) (a) of the Income tax Act 1961 the Act in the form ITA No.1914/Ahd/2024 Assessment Year 2020-21 I.T.A No. 1914/Ahd/2024 A.Y. 2020-21 Page No 2 of non issue and service of the notice by the AO u s 143 (1) (a) of the Act before making the adjustment of RS 5,45,160/- 2. The Ld Addl JCIT A grossly erred on facts and in law in not considering and adjudicating the raised ground in the appeal that the addition made is debatable or controversial therefore without jurisdiction and authority of law. 3. The Ld Addl JCIT A has grossly erred in law and is not justified in confirming the addition made by the Ld AO without deciding the involved question of law and not allowing the exemption exceeding RS 3 lakhs u/s.10 (10 AA) of the Act considering the invalid Gazette Notification No 50588 E dated 31 05 2002 issued by CBDT effective 01 04 1998. 4. Your appellant crave leave to add amend any ground of appeal. 3. At the outset I find that the adjustment u/s. 143(1)(a) of the Act has been made without issuance of notice of adjustments statutorily required to be given u/s.143(1)(a) of the Act before making the adjustments. 4. The Ld.DR for the revenue submitted in all fairness of the case that no notice has been issued before making the adjustment. The Ld. Counsel for the assessee in his written submission placed reliance on the various orders of the Co-ordinate Benches which are as follows: (1) Order of Hon'ble ITAT Ahmedabad dated 27/04/2022 in ITA No 206/Ahd/2021 in the case of Arham Pumps Vs DCIT, CPC. (2) Order of Hon'ble ITAT Ahmedabad dated 11/10/2023 in ITA No: 431/Ahd/2022 for AY: 2020-21 in the case of Devendra Singh Bhaskar v. DCIT, Circle 2(1)(1), Vadodara. (3) Order of Hon'ble ITAT, Surat dated 08/11/2024 IN ITA No: ITA 33/SRT/2024 for AY: 2022-23 in the case of Khilav Rajendrakumar Joshi (Lega Heir Deceased Late. Rajendrakumar Joshi) v. The DCIT CPC Bengaluru) (4) Order of Hon'ble ITAT Ahmedabad dated 27/11/2024 in ITA No 940/AHD/2024 for AY: 2020-21 in the case of Satishchandra Hiralal Berawala v DCIT, Circle 2(1)(1), Vadodara. I.T.A No. 1914/Ahd/2024 A.Y. 2020-21 Page No 3 5. For the sake of ready reference, I am reproducing the relevant extract of the order in the case of Arham Pumps Vs. DCIT in ITA No.206/Ahd/2021 dated 27.04.2022, wherein it was held as under: .....8. On going through the above intimation made under section 143(1), CPC has not followed the above provisos by giving proper opportunity to the assessee to defend its case as per the first proviso to section 143(1)(a). Further, the NFAC order is also silent about the intimation to the assessee. Therefore, we find that intimation issued under section 143(1) dated 19.10.2019 is against first proviso to section 143(1)(a), and therefore, the entire 143(1) proceedings is invalid in law. 9. We also observe that the Id.NAFC has not looked into this fundamental principle of \"audi alterm partem\", which has not been provided to the assessee as per the 1st proviso of section 143(1) of the Act, but proceeded with the case on merits and also confirmed the addition made by the CPC. The Id.NAFC is thus erred in conducting the faceless appeal proceedings in a more mechanical manner without application of mind. We therefore hereby quash the intimation issued by the CPC and allow the appeal filed by the assessee…\" 6. In view of the above decision of co-ordinate bench, it is hereby held that the adjustment without giving an opportunity is bad in law and hence the intimation issued by the CPC, Bangalore arising additional payment is hereby quashed. 7. In the result, the appeal filed by the assessee is allowed. Order pronounced in the open court on 07.03.2025 Sd/- (DR.BRR KUMAR) VICE PRESIDENT (True Copy) (True Copy) Ahmedabad : Dated 07.03.2025 I.T.A No. 1914/Ahd/2024 A.Y. 2020-21 Page No 4 आदेश कᳱ ᮧितिलिप अᮕेिषत / Copy of Order Forwarded to:- 1. Assessee 2. Revenue 3. Concerned CIT 4. CIT (A) 5. DR, ITAT, Ahmedabad 6. Guard file. By order/आदेश से, उप/सहायक पंजीकार आयकर अपीलीय अिधकरण, अहमदाबाद "