LALIT KANTILAL SHINGAVI,PUNE V. ACIT, CENTRAL CIRCLE-1(1), PUNE

ITSSA 37/PUN/2024

AI Insights

The case involves appeals by Lalit Kantilal Shingavi against the orders of the Commissioner of Income Tax (Appeals) for the assessment years 2017-18 and 2018-19. The appeals were directed against the additions made by the Assessing Officer under various sections of the Income Tax Act, 1961, citing unexplained investments. The primary contention was the lack of proper notice to the assessee regarding the hearing dates, as the notices were sent to an inoperative email ID. The ITAT found merit in the assessee's argument that the ex-parte orders were passed without proper notice, thus violating the principles of natural justice.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 41436 (ITAT-PUNE)
• Duration Of Justice: 4 month(s) 2 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 22-10-2024
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Next Hearing Date: 05-09-2024
• Assessment Year: 2017-2018
• Appeal Filed On: 19-06-2024
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: KEYUR PATEL
• Assessee Lawyers: H.G. SHARMA
• Keywords: Additional evidence; Unexplained investment; Document seized; Documents seized; Principle of natural justice; Search and seizure
• Section: 143(3); 142(1); 143(2); 153A; 131; 69; 69A

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH “A”, PUNE BEFORE SHRI R. K. PANDA, VICE PRESIDENT AND SHRI VINAY BHAMORE, JUDICIAL MEMBER आयकर अपील सं. / IT(SS)A Nos.37 & 38/PUN/2024 िनधाᭅरण वषᭅ / Assessment Years: 2017-18 & 2018-19 Lalit Kantilal Shingavi, S.No.672/5-B, Ayodhya Building, Bibwewadi, Pune- 411037. PAN : ACQPS5872E Vs. ACIT, Central Circle-1(1), Pune. Appellant Respondent आदेश / ORDER PER VINAY BHAMORE, JM: Both the above captioned appeals filed by the assessee are directed against the separate orders of ld. Commissioner of Income Tax (Appeals)-11, Pune [‘the ld. CIT(A)’] dated 10.05.2024 for the assessment years 2017-18 and 2018-19 respectively. 2. Since identical facts and common issues are involved in both the above captioned appeals of the assessee, therefore, we proceed to dispose of the same by this common order. 3. First, we shall take up the appeal of the assessee in IT(SS)A No.37/PUN/2024 for A.Y. 2017-18. Assessee by : Shri H. G. Sharma Revenue by : Shri Keyur Patel Date of hearing : 05.09.2024 Date of pronouncement : 22.10.2024 IT(SS)A Nos.37 & 38/PUN/2024 2 IT(SS)A No.37/PUN/2024, A.Y. 2017-18 : 4. The appellant has raised the following grounds of appeal :- “1. The Ld. CIT (A) erred in confirming the addition made by the Assessing Officer without considering the facts and circumstances and hot giving reasonable time to submit reply. The appellant has not received notices for hearing which are sent on e-mail which is not operative. 2. The Ld. CIT (A) has erred and not justified in sustaining the addition of Rs. 65,00,000/- made by Ld. Assessing Officer as unexplained investment under section 69 of the Income Tax Act, 1961 without considering the facts and submissions made before him and solely relied on the statements recorded under section 132(4) without considering the fact that no financial transaction was materialized. 3. The Ld. CIT(A) has erred and not justified in sustaining the addition of Rs. 13,05,000/- made by A.O. under section 69A of the Income Tax Act, 1961 without considering the facts and submissions made before him. 4. The Ld. CIT(A) has erred and not justified in confirming the addition of Rs. 90,00,000/- made by Ld. Assessing Officer under section 69 of the Income Tax Act, 1961 without considering the facts and submissions made before him. a. The Ld. CIT(A) has erred and not justified in sustaining the addition made by Ld. A.O. on the basis of relying on third party without providing the assesse with copies of the statement and that has violated the principle of natural justice in making the addition illegal, liable to be deleted fully. b. The Ld. CIT(A) has erred and not justified in confirming the addition made by the Ld. Assessing Officer by relying on the statement of other party without providing any documentary evidence to the assessee and an opportunity to cross examines them. 5. The Ld. CIT(A) has erred and not justified in sustaining the addition of Rs. 8,77,550/- made by Ld. Assessing Officer under section 69 of the Income Tax Act, 1961 without considering the facts and submissions made before him. 6. The above Grounds of Appeal are without prejudice to one another. 7. The Appellant craves leaves to furnish additional evidence which may be relevant to above grounds of appeal in course of the appeal proceedings. IT(SS)A Nos.37 & 38/PUN/2024 3 8. The Appellant craves leave to add, amend or alter, delete any of the above Grounds of Appeal.” 5. The facts of the case, in brief, are that the assessee is an individual and deriving income from L.K. Enterprises, capital gains and income from other sources. The assessee has not filed his return of income for the assessment year 2017-18. Since warrant of authorization u/s 131 of the IT Act was issued in the name of the assessee, notice u/s 153A of the IT Act was issued and duly served. In compliance, the return of income was furnished on 31.03.2018 declaring income at Rs.73,82,210/-. Notice u/s 143(2) and 142(1) of the IT Act were also issued. During the course of search and seizure operations conducted on 04.11.2017 at the premises of the assessee various incriminating documents/materials were found and seized. On the basis of above seized documents/materials and after considering the reply of the assessee assessment was completed u/s 153A r.w.s. 143(3) of the IT Act at total income of Rs.2,50,64,760/- as against the income returned by the assessee at Rs.73,82,210/- vide order dated 31.12.2019. 6. Aggrieved with above assessment order, the assessee preferred first appeal before ld. CIT(A). Since the assessee remained absent, ld. CIT(A) dismissed the appeal of the assessee IT(SS)A Nos.37 & 38/PUN/2024 4 vide order dated 10.05.2024. It is this order against which the assessee is in appeal before this Tribunal. 7. The ld. AR submitted before us that the ex-parte order passed by the ld. CIT(A) is not correct. It was submitted that the assessee has raised as many as 8 grounds of appeal before the Bench. In first ground of appeal, the assessee has challenged the ex-parte order passed by the ld. CIT(A) on the ground that no notice was received by the assessee regarding dates of hearing before ld. CIT(A). It was submitted that all the notices were issued on e-mail which was mentioned on the portal. It was submitted by ld. Counsel of the assessee that the e-mail which was mentioned on the portal was created by tax consultant when his PAN was registered on income tax portal. It was further submitted that the assessee was not in possession of that e-mail ID and even password was not known to him. All the notices were sent on this e-mail ID which was not used by the assessee. It was therefore submitted that the assessee was not having the knowledge of dates of hearing fixed by ld. CIT(A). Ld. Counsel of the assessee submitted that although the notice of hearing were not received by the assessee physically but the ex-parte order passed by ld. CIT(A) was received by the assessee physically i.e. through India Post. As soon as he received the ex-parte order passed by ld. CIT(A), he IT(SS)A Nos.37 & 38/PUN/2024 5 immediately appointed Shri H. G. Sharma, Chartered Accountant for the purpose of filing second appeal before this Tribunal. Ld. Counsel of the assessee also submitted an application requesting to set-aside the matter back to the file of the ld. CIT(A) for fresh adjudication after providing reasonable opportunity of hearing to the assessee supported by an affidavit wherein it was stated that e-mail ID registered on income tax portal was not created by him and not used by him and, therefore, notices were not known to him and in the absence of knowledge of hearing, he could not appear before ld. CIT(A). Consequently, ld. CIT(A) has passed ex-parte order. In the affidavit it was also stated that the assessee has already changed his e-mail ID on income tax portal and assured that in future he will take all precaution for submitting reply against notice issued by the Department. On the basis of this affidavit and assurance, ld. Counsel of the assessee requested before the Bench to set-aside the ex-parte order passed by ld. CIT(A) and further requested to remand the matter back to the file of ld. CIT(A) for deciding the appeal afresh after providing reasonable opportunity of hearing to the assessee. 8. Ld. DR relied on the orders passed by the sub-ordinate authorities and requested to confirm the same. IT(SS)A Nos.37 & 38/PUN/2024 6 9. We have heard ld. Counsels from both the sides and perused the material available on record including the affidavit furnished by the assessee and also the case laws relied on by the ld. DR and ld. Counsel of the assessee. We find that ld. CIT(A) has issued various notices on the e-mail ID registered on income tax portal. Since the e-mail ID was not prepared by the assessee but was prepared by a person at the time of registration of PAN on income tax portal, the password was not known to the assessee and the e-mail ID was inoperative and was not in use by the assessee. Due to this fact the notice sent by ld. CIT(A) could not be seen by the assessee. We also find that the notices were sent on e-mail ID registered on income tax portal but the ex-parte order passed by ld. CIT(A) was delivered to the assessee physically i.e. through India Post and then only the assessee came to know about the ex-parte order passed by ld. CIT(A). An affidavit stating the above fact is also submitted before us wherein it is contended that the e-mail ID on which notices were sent by ld. CIT(A) was inoperative and as soon as the assessee came to know about the ex-parte order passed by ld. CIT(A) he immediately appointed Chartered Accountant, Shri H. G. Sharma to file second appeal before this Tribunal and also changed the e-mail ID on income tax portal. It was also stated in the affidavit that in future the assessee will regularly check his IT(SS)A Nos.37 & 38/PUN/2024 7 e-mail and would submit response to the notice issued by the Income Tax Department. Ld. Counsel of the assessee requested before the Bench that if the assessee is given one more chance to appear before ld. CIT(A) he would be in a position to support the grounds of appeal with the help of documents available with him. We find force in the argument of ld. Counsel of the assessee and, therefore, without going into the merits of the case and in the interest of justice, we deem it fit to set-aside the order passed by ld. CIT(A) and remand the matter back to the file of ld. CIT(A) with a direction to decide the appeal afresh after providing reasonable opportunity of hearing to the assessee. The assessee is also hereby directed to appear before ld. CIT(A) and submit replies and documents in support of ground of appeal, otherwise ld. CIT(A) will be at liberty to pass appropriate orders as per law. Thus, the grounds of appeal raised by the assessee in this regard are partly allowed. 10. In the result, the appeal filed by the assessee in IT(SS)A No.37/PUN/2022 for A.Y. 2017-18 is allowed for statistical purposes. IT(SS)A No.38/PUN/2024, A.Y. 2018-19 : 11. Since the facts and issues involved in the appeal of the assessee for the assessment year 2018-19 are identical to the facts IT(SS)A Nos.37 & 38/PUN/2024 8 of the case for assessment year 2017-18, therefore, our decision in IT(SS)A No.37/PUN/2024 for A.Y. 2017-18 shall apply mutatis mutandis to this appeal of the assessee in IT(SS)A No.38/PUN/2024 for A.Y. 2018-19. Accordingly, the appeal of the assessee in IT(SS)A No.38/PUN/2024 for A.Y. 2018-19 is also partly allowed . 12. To sum up, both the above captioned appeals of the assessee are partly allowed for statistical purposes. Order pronounced in the open Court on 22nd October, 2024. Sd/- Sd/- (R. K. PANDA) (VINAY BHAMORE) VICE PRESIDENT JUDICIAL MEMBER पुणे / Pune; ᳰदनांक / Dated : 22nd October, 2024. Sujeet आदेश कᳱ ᮧितिलिप अᮕेिषत / Copy of the Order forwarded to : 1. अपीलाथᱮ / The Appellant. 2. ᮧ᭜यथᱮ / The Respondent. 3. The CIT(A)-11, Pune. 4. The Pr. CIT/CIT concerned. 5. िवभागीय ᮧितिनिध, आयकर अपीलीय अिधकरण, “A” बᱶच, पुणे / DR, ITAT, “A” Bench, Pune. 6. गाडᭅ फ़ाइल / Guard File. आदेशानुसार / BY ORDER, // True Copy // Senior Private Secretary आयकर अपीलीय अिधकरण, पुणे / ITAT, Pune. "