MADHAV SHETH,GOLF COURSE ROAD,GURGAON V. CENTRAL CIRCLE 6(1), MUMBAI, AIR INDIA BUILDING

ITA 5051/MUM/2024

AI Insights

This case involves an appeal by Madhav Sheth against the order of the Commissioner of Income-tax (Appeals)-54, Mumbai, which confirmed a penalty levied by the Assessing Officer under section 271D of the Income Tax Act for contravening section 269SS. The penalty was based on allegations that the assessee received a cash loan, which was not substantiated by concrete evidence but relied upon retracted statements. The Income Tax Appellate Tribunal (ITAT) found that the assessee was not given a reasonable opportunity to be heard and thus restored the case to the CIT(A) for a decision on merits, emphasizing the need for compliance with procedural requirements under section 250(6) of the Act.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 26228 (ITAT-MUMBAI)
• Duration Of Justice: 2 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-11-2024
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: D
• Next Hearing Date: 18-11-2024
• Assessment Year: 2019-2020
• Appeal Filed On: 27-09-2024
• Laws Referred To: Income Tax Act
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SANYOGITA NAGPAL
• Assessee Lawyers: KAVITA NABERA
• Keywords: Opportunity of being heard
• Section: 143(3); 250; 271D

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH ‘D’, MUMBAI BEFORE SHRI SAKTIJIT DEY, HON’BLE VICE PRESIDENT AND SHRI AMARJIT SINGH, HON’BLE ACCOUNTANT MEMBER ITA No.5051/Mum/2024 Assessment Year: 2019-20 Madhav Sheth B-81, Golf Course Road, The Pinnacle DLF City, Phase-V, Sector- 43, Gurgaon, Haryana-122009. PAN: AJAPS 4139 D vs Central Circle-6(1), Mumbai (Appellant) (Respondent) Present for: Assessee by : Ms. Kavita Nabera Revenue by : Smt. Sanyogita Nagpal, CIT, DR Date of Hearing : 18.11.2024 Date of Pronouncement : 27.11.2024 O R D E R PER AMARJIT SINGH, AM: This appeal of the assessee for the assessment year 2019-20 is directed against the order dated 01.08.2024 passed by the ld. Commissioner of Income-tax (Appeal)-54 Mumbai. The assessee has raised the following grounds of appeal: “1. On the facts and circumstances of the Appellant's case and in law the Ld. CIT(A) erred in passing an ex-parte order without giving reasonable opportunity of being heard, for the reasons mentioned in the impugned order or otherwise. 2. On the facts and circumstances of Appellant's case and in law, Ld. CIT(A) erred in confirming the action of Ld. A.O. in holding that the appellant has contravened the provisions of section 269SS of the Act on account of alleged cash loan received by the appellant, for reasons stated in the impugned order or otherwise. ITA No.5051/Mum/2024 Madhav Sheth A.Y. 2019-20 2 3. On the facts and circumstances of Appellant's case and in law, Ld. CIT(A) erred in relying upon the retracted statements, without having any concrete evidence on record, for the reasons mentioned in impugned order or otherwise. 4. On the facts and circumstances of Appellant's case and in law, Ld. CIT(A) erred in confirming the action of Ld. A.O. in levying a penalty u/s 271D amounting to Rs. 1,50,00,000/-, for reasons stated in the impugned order or otherwise. 5. The appellant craves leaves to alter, amend, withdraw or substitute any ground or grounds or to add any new ground or grounds of appeal on or before the hearing.” 2. In this case a search action was conducted in the case of Perfect Mobiles and Communication Pvt. Ltd. along with the residential premises of the assessee Shri Madhav Sheth who was one of the Director of the said company. The AO completed the assessment u/s 153C r.w.s. 143(3) of the Act for the year under consideration assessing total income at Rs. 77,21,590/-. Subsequently, information was received from the Investigation Wing of the Department that one shri Vijay Kulkarni who was found in possession of cash of Rs. 2,00,50,000/- at his office, in his statement, stated that out of the said cash amount of Rs. 1,50,00,000/- was received from the assessee shri Madhav Sheth. It was also stated that the said amount in cash for the assessee was arranged by one Shri Kailash Karamchandani. Therefore, the AO has levied penalty of Rs. 1,50,00,000/- u/s 271D of the Act upon the assessee in contravention of provision of section 269SS of the Act vide order passed u/s 271D of the Act on 30.01.2023. 3. The assessee has filed appeal before the ld. CIT(A) against the order u/s 271D of the Act passed by the assessing officer. The ld. CIT(A) has dismissed the appeal filed by the assessee for not making any compliance during the course of appellate proceedings. ITA No.5051/Mum/2024 Madhav Sheth A.Y. 2019-20 3 4. Before us, the ld. Counsel submitted that assessee could not make compliance before the First Appellate Authority as the relating supporting material could not be collected timely, therefore, requested that one more opportunity be provided before the First Appellate Authority for deciding the appeal filed by the assessee on merit. 5. After perusal of material placed on record, we find that neither the assessee has made any compliance before the ld. CIT(A) nor the ld. CIT(A) has passed the order u/s 250 of the I.T. Act on merit as prescribed u/s 250(6) of the Act. Section 250(6) of the Act contemplate that the ld. CIT(A) would determine point in dispute and therefore, reason on such point in support of his conclusion after referring material available in the assessment recod. After taking into consideration, the above facts and circumstances, we restore the case of the assessee to the First Appellate Authority for deciding on merit as contemplate u/s 250(6) of the Act after providing three more opportunities to the assessee. The assessee is also directed to make due compliance before the First Appellate Authority without any failure. Accordingly, the appeal of the assessee is allowed for statistical purposes. 6. In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open court on 27.11.2024 Sd/- Sd/- (SAKTIJIT DEY) (AMARJIT SINGH) VICE PRESIDENT ACCOUNTANT MEMBER Mumbai: 27.11.2024 Biswajit, Sr. P.S. ITA No.5051/Mum/2024 Madhav Sheth A.Y. 2019-20 4 Copy to: 1. The Appellant: 2. The Respondent: 3. The CIT, 4. The DR . //True Copy// [ By Order Assistant Registrar ITAT, Mumbai Benches, Mumbai "