M/S. GOLD PALACE JEWELLERS,BENGALURU V. .ACIT, CIRCLE-1(1)(1), BENGALURU

ITA 2159/BANG/2024

AI Insights

The case involves M/s. Gold Palace Jewellers, a partnership firm engaged in the business of dealing in gold and diamond jewellery, which appealed against the order of the CIT(A)/NFAC that confirmed the assessment of Rs.2,44,46,257 as unexplained money under section 69A of the Income Tax Act, 1961. The primary issue arose from the source of cash deposits made during the period of demonetization. The assessee had declared a total income of Rs.24,89,750 for the assessment year 2017-18 and was subjected to a complete scrutiny under CASS, leading to the disputed assessment. The CIT(A) dismissed the appeal after a significant delay and without a proper hearing, prompting the assessee to appeal to the Tribunal.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 470468 (ITAT-BANGALORE)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-12-2024
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2017-2018
• Laws Referred To: Income Tax Act
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: NEHA SAHAY
• Assessee Lawyers: NARENDRA SHARMA
• Keywords: Opportunity of being heard
• Section: 143(3); 69A

Judgement Text

"ITA No.2159/Bang/2024 M/s. Gold Palace Jewellers, Bangalore IN THE INCOME TAX APPELLATE TRIBUNAL “A’’ BENCH: BANGALORE BEFORE SHRI WASEEM AHMED, ACCOUNTANT MEMBER AND SHRI KESHAV DUBEY, JUDICIAL MEMBER ITA No.2159/Bang/2024 Assessment Year: 2017-18 M/s. Gold Palace Jewellers #6, Dispensary Road Parallel to Commercial Street Bengaluru 560 001 PAN NO : AACFG2601H Vs. ACIT Circle-1(1)(1) Bangalore APPELLANT RESPONDENT Appellant by : Sri Narendra Sharma, A.R. Respondent by : Ms. Neha Sahay, D.R. Date of Hearing : 18.12.2024 Date of Pronouncement : 18.12.2024 O R D E R PER KESHAV DUBEY, JUDICIAL MEMBER: This appeal at the instance of the assessee is directed against the order of CIT(A)/NFAC dated 4.7.2024 vide DIN & Order No.ITBA/NFAC/S/250/2024-25/1066405027(1) for the assessment year 2017-18. The assessee has raised following grounds of appeal: ITA No.2159/Bang/2024 M/s. Gold Palace Jewellers, Bangalore Page 2 of 5 2. Brief facts of the case are that the assessee is a partnership firm and engaged in the business of dealing in gold and diamond jewellery, silver articles and other precious metals. It purchases gold bullion from wholesalers, gets it converted into gold jewellery and sells the same. Further, the assessee firm also purchases old gold ornaments from individuals and converts the same into jewellery. For the assessment year 2017-18, the assessee firm filed its return of income on 29.10.2017 declaring total income of Rs.24,89,750/-. The case was there after taken up for complete scrutiny under CASS. The only issue that arose during the course of assessment proceedings is the source of cash deposited during the period of demonetization. During the course of assessment proceedings, as ITA No.2159/Bang/2024 M/s. Gold Palace Jewellers, Bangalore Page 3 of 5 the assessee failed to justify the source of cash deposited amounting to Rs.2,44,46,257/-, the AO treated the same as unexplained money u/s 69A of the Act and brought to tax in the assessee’s hand. 2.1 Aggrieved by the assessment completed u/s 143(3) dated 23.12.2019, the assessee preferred an appeal before the ld. CIT(A)/NFAC. The assessee filed the appeal before ld. CIT(A)/NFAC electronically on 14.1.2020. Thereafter, two number of hearing notices were sent on 7.3.2020 and 13.3.2020 which were at the verge of Covid Pandemic. The ld. CIT(A)/NFAC passed the appeal order after a gap of more than 4 years on 4.7.2024 by dismissing the appeal of the assessee and the assessment of Rs.2,44,46,257/- as unexplained deposit u/s 69A of the Act is confirmed by the ld. CIT(A)/NFAC. 2.2 Aggrieved by the order of ld. CIT(A), the assessee has filed the present appeal before the Tribunal. The assessee has filed a paper book comprising 6 pages enclosing therein copies of the following: 3. Before us, ld. A.R. of the assessee vehemently submitted that the appeal was instituted on 14.1.2020. Thereafter, the assessee has been served two notices for hearing on 7.3.2020 and 13.3.2020, ITA No.2159/Bang/2024 M/s. Gold Palace Jewellers, Bangalore Page 4 of 5 which is at the verge of the Covid Pandemic. Thereafter, after a gap of 4 years the ld. CIT(A) passed the order without giving reasonable opportunity of being heard, which is a gross violation of principles of natural justice. 4. Ld. D.R. on the other hand, supported the order of the authorities below. 5. We have heard the rival submissions and perused the materials available on record. On going through the appellate order, we note that the appeal of the assessee filed electronically on 14.1.2020 against the order of ld. DCIT Circle-1(2)(1), Bangalore passed u/s 143(3) of the Act on 23.12.2019. Thereafter, hearing notices were sent on 7.3.2020 and 13.3.2020. The appeal filed by the assessee is disposed of after taking into consideration the material available on record on 4.7.2024 i.e. after gap of more than 4 years. We find force in the argument of the ld. A.R. of the assessee that ld. CIT(A) has passed an order after a gap of more than 4 ½ years that too without providing any reasonable opportunity of being heard to the assessee. Being so, considering the submission of ld. A.R. of the assessee and in the interest of justice and fair play, we remit the matter to the file of ld. CIT(A)/NFAC for fresh consideration and decision as per law after affording a reasonable opportunity of being heard to the assessee. The assessee is directed to produce all the necessary documents/records/information in support of his case and shall not seek unnecessary adjournments. It is ordered accordingly. ITA No.2159/Bang/2024 M/s. Gold Palace Jewellers, Bangalore Page 5 of 5 6. In the result, appeal filed by the assessee is partly allowed for statistical purposes. Order pronounced in the open court on 18th Dec, 2024 Sd/- (Waseem Ahmed) Accountant Member Sd/- (Keshav Dubey) Judicial Member Bangalore, Dated 18th Dec, 2024. VG/SPS Copy to: 1. The Applicant 2. The Respondent 3. The CIT 4. The DR, ITAT, Bangalore. 5 Guard file By order Asst. Registrar, ITAT, Bangalore. "