M/S. KARAM CORPORATION ,MUMBAI V. ITO WARD 28(2)(1), MUMBAI

ITA 2465/MUM/2025

AI Insights

The case involves M/s Karam Corporation, a partnership firm, which appealed against the order of the National Faceless Appeal Centre (NFAC), Delhi, for the Assessment Year 2017-18. The appeal was initially delayed by 676 days due to the lapse of a legal consultant, but the delay was condoned by the tribunal. The primary issue in the case was the ex parte assessment order passed by the Ld.AO under section 144 of the Income-tax Act, 1961, due to non-compliance with notices regarding unexplained cash deposits during the demonetization period and other unexplained credits. The Ld.CIT(A) upheld the additions made by the Ld.AO, leading to the present appeal. The tribunal, considering the circumstances and the non-representation of the assessee at earlier stages, decided to restore the matter to the Ld.AO for a fresh assessment.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 717264 (ITAT-MUMBAI)
• Duration Of Justice: 4 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-08-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Assessment Year: 2017-2018
• Appeal Filed On: 09-04-2025
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: HEMANSHU JOSHI
• Assessee Lawyers: ASHUTOSH DASH
• Keywords: Set aside
• Section: 144; 142(1)

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “E”, MUMBAI BEFORE SHRI ANIKESH BANERJEE, JUDICIAL MEMBER AND SHRI PRABHASH SHANKAR, ACCOUNTANT MEMBER ITA No 2465/Mum/2025 (Assessment Year: 2017-18) M/s Karam Corporation 1504/1604, C-3 Wing Jatashankar Road, Lok Everest, Mulund, Mumbai-400 080 PAN: AAPFK1086K vs ITO, Ward 28(2)(1), Mumbai Room No.326, 3rd Floor Tower No.6, Vashi Railway Station Commercial Complex, Vashi, Navi Mumbai-400 703 APPLICANT RESPONDENT Assessee by : Shri Ashutosh Dash Respondent by : Shri Hemanshu Joshi, SR DR Date of hearing : 07/08/2025 Date of pronouncement : 11/08/2025 O R D E R Per Anikesh Banerjee (JM): The instant appeal of the assesse is filed against the order of the National Faceless appeal Centre (NFAC), Delhi [(in short, ‘the Ld. CIT(A)] passed under section 250 of the Income-tax Act, 1961 (in short, ‘the Act’) for Assessment Year 2017-18, date of order 31/05/2023. The impugned order emanated from the order of the Learned Income-tax Officer, Ward 28(2)(1), Mumbai [in short, the “Ld. AO”] passed under section 144, date of order 27/11/2019. 2. The appeal was filed with a delay of 676 days. A duly notarised affidavit, executed on 04/04/2025, was placed on record. In the said affidavit, Shri Nikhil A. Printed from counselvise.com 2 ITA 2465/Mum /2025 M/s Karam Corporation Bhanushali, partner of the assessee-firm, affirmed that the delay in filing the appeal occurred due to the lapse on the part of the legal consultant. He further stated that despite diligent efforts, the said legal consultant could not be traced, whereupon the partner himself executed the affidavit seeking condonation of delay. The Ld. DR did not raise any objection to the submissions of the assessee. Accordingly, the delay of 676 days is condoned, and the matter is admitted for adjudication on merits. 3. The brief facts of the case are that the assesse is a partnership firm and during the impugned assessment year the assessee had not filed any return under section 139(1) of the Act. As per information available on the ITBA portal of Actionable Information Monitoring System (AIMS), it was found that the assesse deposited cash in bank accounts during the demonetization period. In this impugned assessment year, the Ld.AO issued the notice under section 142(1), but none of the notices was complied with. The Ld.AO found that the assesse has deposited cash of Rs.1,78,16,500/- in bank account maintained with Vishweshwar Sahakari Bank and HDFC Bank during the period of demonetization. Further, the assessee has also deposited cash of Rs.10,94,31,570/- other than the period of demonization in the bank accounts and there are other credits to the tune of Rs.48,97,69,815/- which comes to total amount to Rs.61,70,17,885/-. But the Ld.AO issued several notices under section 142(1) of the Act and finally, the assessment was framed exparte under section 144 of the Act. The addition was made related to cash deposit in demonetization period which comes to Rs.1,78,16,500/- under section 69A and further the addition was made of unexplained business profit related to business turnover amount to R.59,90,01,385/- and profit was taken at 2% which comes to Rs.1,19,84,028/-. So Printed from counselvise.com 3 ITA 2465/Mum /2025 M/s Karam Corporation the total income was determined amount to Rs.2,98,00,528/-. The aggrieved assesse filed an appeal before the Ld. CIT(A). However, the assessee remained absent despite service of hearing notices issued by the Ld. CIT(A). Consequently, the appeal was decided ex parte on the basis of the material available on record, and the Ld. CIT(A) upheld the addition made by the Ld. AO. Aggrieved thereby, the assessee has preferred the present appeal before us. 4. The Ld. AR submitted that the assessee was unable to represent the matter either before the Assessing Officer or before the appellate authority due to lapses on the part of the legal consultant. It was stated that the said consultant did not properly apprise the assessee regarding the progress of the appellate proceedings. In these circumstances, the Ld. AR prayed that the matter be restored to the file of the Ld. AO for fresh adjudication. 5. The Ld. DR did not raise any serious objection to the submissions advanced by the Ld. AR. 6. We have heard the rival submissions and perused the material available on record. From the affidavit placed before us, it is evident that the assessee had entirely relied upon the legal consultant, who had defaulted in compliance before both the authorities. The additions in the impugned assessment comprise (i) total cash deposits during the demonetisation period amounting to Rs.1,78,16,500/-, and (ii) net profit on turnover amounting to Rs.1,19,84,028/-. At both the assessment and appellate stages, the assessee failed to furnish any documentary evidence in support of its claims. Accordingly, in the interest of justice, we deem it appropriate to restore the matter to the file of the Ld.AO. The assesse is directed to furnish all relevant documents and evidence, if any, before the Ld.AO. the Ld.AO shall consider all such documents and evidence in accordance with law and decide Printed from counselvise.com 4 ITA 2465/Mum /2025 M/s Karam Corporation the matter afresh after granting reasonable opportunity of hearing to the assessee. We make it clear that we are not expressing any view on merit of the case, which will impair the assessment proceedings. Needless to say, the assessee should get a reasonable opportunity of hearing before the Ld. AO. On the other hand, the assesse shall be diligent and co-operative in the set aside assessment proceeding to ensure expeditious disposal of the assessment. Accordingly, the matter is restored to the file of the Ld.AO for fresh adjudication. 7. In the result, the appeal filed by the assessee bearing ITA 2465/Mum/2025 is allowed for statistical purpose. Order pronounced in the open court on 11th day of August, 2025. Sd/- sd/- (PRABHASH SHANKAR) (ANIKESH BANERJEE) ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai, िदनांक/Dated: 11/08/2025 Pavanan Copy of the Order forwarded to: 1. अपीलाथ /The Appellant ,s 2. ितवादी/ The Respondent. 3. आयकर आयु\u0014 CIT 4. िवभागीय ितिनिध, आय.अपी.अिध., मुबंई/DR, ITAT, Mumbai 5. गाड फाइल/Guard file. BY ORDER, //True Copy// (Asstt. Registrar), ITAT, Mumbai Printed from counselvise.com "