LALJIBHAI THAKARSHIBHAI CHOTALIYA,RAJKOT V. DY. COMMISSIONER OF INCOME-TAX, DELHI

ITA 228/RJT/2024

AI Insights

The case involves Laljibhai Thakarshibhai Chotaliya, the appellant, who contested an order from the CIT(A) regarding an addition of Rs. 99,05,000 to his income for the assessment year 2015-16, claimed to be unexplained cash receipts. The appellant argued that the re-opening of the assessment was based on borrowed satisfaction without independent inquiry and lacked mindful approval by the designated authority. The AO had made the addition based on information from a survey report and without any documentary evidence directly linking the appellant to the alleged cash receipts. The CIT(A) upheld the AO's decision, leading to the current appeal. The Tribunal noted that the appellant had not been given a fair opportunity to present his case at earlier stages and thus decided to remit the matter back to the AO for a fresh assessment.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 28852 (ITAT-RAJKOT)
• Duration Of Justice: 6 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-10-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 01-10-2024
• Assessment Year: 2015-2016
• Appeal Filed On: 12-04-2024
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ABHIMANYU SINGH YADAV
• Assessee Lawyers: SUMIT SHINGALA
• Keywords: Principle of natural justice; Third party statement; Opportunity of cross examination; Borrowed satisfaction
• Section: 148; 144; 132; 69A

Judgement Text

" आयकर अपीलȣय अͬधकरण,राजकोट Ûयायपीठ, राजकोट। IN THE INCOMETAXAPPELLATE TRIBUNAL, RAJKOT BENCH: RAJKOT BEFORE DR. ARJUN LAL SAINI, ACCOUNTANT MEMBER And SHRI DINESH MOHAN SINHA, JUDICIAL MEMBER आयकर अपील सं./ITA No. 228/RJT/2024 (Ǔनधा[रण वष[/Assessment Year: (2015-16) Laljibhai Thakarshibhai Chotaliya, 321-A Raghuvir Complex, Soni Bazar Savjibhai Street, Rajkot-360001 Vs. Deputy Commissioner of Income (National Faceless Appeal Centre), Delhi èथायी लेखा सं./जीआइआरसं./PAN/GIR No.: AQVPC8489J (अपीलाथȸ/Appellant) (Ĥ×यथȸ/Respondent) Ǔनधा[ǐरती कȧ ओर से/Appellant by : Shri Sumit Shingala, A.R. राजèव कȧ ओर से/Respondent by : Shri Abhimanyu Singh Yadav, Sr. D.R. सुनवाई कȧ तारȣख/ Date of Hearing : 01/10/2024 घोषणा कȧ तारȣख/Date of Pronouncement : 15/10/2024 आदेश / O R D E R PER SHRI DINESH MOHAN SINHA, JUDICIAL MEMBER: This appeal filed by the assessee is directed against the order of Learned Commissioner of Income Tax (Appeals) [in short, “the Ld. CIT(A)”], National Faceless Appeal Centre (in short “NFAC”), Delhi order dated 14.02.2024 for assessment year 2015-16. 2. The assessee has raised the following grounds of appeal:- “1 Re-opening is Dad in Law, for reasons including, that the same a. was merely based on borrowed satisfaction, without any independent inquiry or independent application of mind; and b. lacked mindful approval by designated authority 2 Ld. AO has erred in law as well as in facts, in making addition of Rs.99,05,000/- towards alleged Cash Receipt, without considering the facts and circumstances of the case, and in as much as: a. No Documentary evidences, were available with the Id. AO.; and Page | 2 ITA No.228/RJT/2024 A Y:2015-16 b. Allegations were merely on the basis of information received from DCIT, Central Circle; and c. No Addition can be made merely on the basis of Survey Report of third party. d. Ld. AO did not make any independent inquiries; and e. Assessee cannot be asked to prove negative, especially when Id. AO did not have any documentary evidence in support allegations; and 3 Principles of Natural Justice are violated, as: a. No addition can be made without allowing the assessee, a fair and sufficient opportunity to cross-verify documentary evidences pertaining to which addition is made; and b. No addition can be made without allowing fair and sufficient opportunity of cross-examination of relevant persons, especially when the allegations are purely based on third party statements sans evidences. Appellant craves leave, to add, amend, alter and/or withdraw any or more Ground/s of Appeal, by or before Final Hearing.” 3. That the appellant is an individual and doing the business of labour job for the A.Y. 2015-16. The assessee filed returned on 17-02-2016 declaring net income of Rs. 2,61, 730/-. That the notice u/s. 148 was issued to the assessee and in response to this notice, the assessee filed return of income declaring total income of Rs. 2,61,730/-. Reasons for issuing of notices that survey proceedings were initiated on 08-02-2018 by the DCIT CC, Rajkot. In the case of M/s. National Shroff specifically upon finding unaccounted cash of Rs. 1,14,000/- found at the premises of Ellora & Co, search action u/s. 132 was initiated against National Shroff and Company. The assessee is one of the beneficiaries of the bank account being controlled by Shroff and Company. The due notices were sent to the assessee but the assessee has filed in response to that notice nor any document has been furnished, hence the cash transaction of Rs. 99,05,000/- framed unexplained within the meaning of section 69A of the Act. The AO has framed an ex-parte assessment order dated 29-03-2022 with following remarks: 1 Returned Income Rs. 2,61,730/- 2 Addition: As discussed in Para 6 above Rs. 99,05,000/- 3 Total Assessed Income Rs. 1,01,66,730/- Page | 3 ITA No.228/RJT/2024 A Y:2015-16 Rounded to Rs. 41,01,66,730/- 4. The assessee filed an appeal against the order dated 29-03-2022 by moving an appeal in the office before the ld. CIT(A). The ld. CIT(A) has disposed the appeal by the remark that I have gone through the order of the A.O. and noted that AO has passed the order on material in hand therefore I hold that the addition made by the ld. ITO is confirmed and the ground of the appeal of the assessee is dismissed. 5. The assessee is in appeal against the order dated 14-02-2024 before us. 6. During the course of hearing, the ld. AR made a request that the appellant could not avail the opportunity neither before the A.O. nor before the CIT(A) Hence, an opportunity may kindly be provided to present the case before the lower authorities. On the contrary, the ld. D.R. submitted that the appellant is negligent having issued notice by ld. CIT(A) on 06-06-2023 and 10-01-2024 and has not replied to the notice of the AO also. It is a great burden on the revenue. The ld. D.R. relied the judgment of the lower authorities. 7. We have heard both the parties and we noted that assessee’s case under consideration, the assessment was carried u/s. 144 of the Act and the order of the ld. CIT(A) dated 14-02-2024 is also ex-parte order and non-spearing order. Therefore, we do not wish to make any comment on merits of the grounds raised by the assessee. We note that ld. CIT(A) has not decided the issue in respect of grounds raised by the assessee in memo of appeal as per mandate of provisions of section 250(6) of the Act. Hence, we are of the view that one more opportunity should be given to the assessee to plead his case before ld. A.O. on account of non-co-operative attitude of the assessee. The assessee is burdened a cost of Rs. 5,000/- and the same is to be deposited with Prime Minister Relief Fund. We note that it is a settled principle of natural justice and fair play requires that the aggrieved party granted sufficient opportunity of Page | 4 ITA No.228/RJT/2024 A Y:2015-16 being heard to contest his case. Therefore, we deem it fit and appropriate to set aside the order of the ld. CIT(A) and remit the matter back to the file of AO to adjudicate the issue afresh on merit after giving reasonable opportunity of being heard. Needless to direct that before passing the order afresh, the AO shall also allow opportunity of hearing to the assessee. The assessee is also directed to furnish all the evidences at the earliest possible time before the ld. A.O. as and when notice issued to the appellant. 8. In the result, the appeal filed by the assessee is allowed for statistical purposes. Order is pronounced on 15/10/2024 in the Open Court. Sd/- Sd/- (DR. ARJUN LAL SAINI) (DINESH MOHAN SINHA) ACCOUNTANT MEMBER JUDICIAL MEMBER Rajkot TRUE COPY Ǒदनांक/ Date: 15/10/2024 Copy of the Order forwarded to 1. The Assessee 2.The Respondent 3.The CIT(A) 4.Pr. CIT 5.DR/AR, ITAT, Rajkot 6. Guard File. By Order, Assistant Registrar/Sr. PS/PS ITAT, Rajkot "