MAHESH MOHANLAL DESAI,NAVSARI V. INCOME TAX OFFICER, WARD-3, NAVSARI

ITA 606/SRT/2024

AI Insights

The case involves an appeal by Mahesh Mohanlal Desai against the order of the National Faceless Appeal Centre, Delhi, for the Assessment Year 2017-18. The primary contention was that both the Assessing Officer and the Commissioner of Income Tax (Appeals) passed ex parte orders without providing a fair and reasonable opportunity to the assessee. The assessee argued that despite filing responses to show cause notices, the assessments were made under section 144 of the Income Tax Act, which allows for ex parte assessments. The Tribunal considered the submissions of both parties, the procedural history, and the principles of natural justice before deciding to restore the matter to the Assessing Officer for a fresh assessment.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 33922 (ITAT-SURAT)
• Duration Of Justice: 4 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-10-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Next Hearing Date: 21-10-2024
• Assessment Year: 2017-2018
• Appeal Filed On: 22-05-2024
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Principle of natural justice
• Section: 144; 250

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL, SURAT BENCH (SMC), SURAT BEFORE SHRI PAWAN SINGH, JUDICIAL MEMBER ITA No. 606/Srt/2024 (Assessment Year 2017-18) (Hybrid hearing) Mahesh Mohanlal Desai, Sanjay Farm, P Box No. 11, Post- Talavchora, Tal: Chikhli, Navsari, Gujarat-396521. PAN No. ALTPD 2853 N Vs. I.T.O, Ward-3, Navsari, Room No. 206, 2nd Floor, Income Tax Office, Charpool, Awabaug, Navsari-396445. Appellant/ Assessee Respondent/ Revenue Assessee represented by Shri Akshay M Modi, C.A. Department represented by Shri Mukesh Jain, Sr. DR Appeal instituted on 22/05/2024 Date of hearing 21/10/2024 Date of pronouncement 21/10/2024 Order under Section 254(1) of Income Tax Act PER: PAWAN SINGH, JUDICIAL MEMBER: 1. This appeal by the assessee is directed against the order of the National Faceless Appeal Centre, Delhi (NFAC)/learned Commissioner of Income Tax (Appeals), [in short, the ld. CIT(A)] dated 15/03/2024 for the Assessment Year (AY) 2017-18. 2. Rival submission of both the parties have been heard and record perused. The learned Authorised Representative (ld. AR) of the assessee submits that the Assessing Officer as well as the ld. CIT(A) passed ex parte orders making high pitch assessment. No fair and reasonable opportunity was given to the assessee. Before Assessing Officer, the assessee filed certain details in response to the show cause notices, yet assessment order is passed under section 144. Before ld CIT(A), the assessee filed appeal in 2019, first notice of hearing was issued for filing reply / submission by 29.01.2021, the assessee sought adjournment, which was allowed. Further, the notice under section 250 was issued for filing ITA No. 606/Srt/2024 Mahesh Mohanlal Desai Vs ITO. 2 submission by 09.01.2022 and again vide notice dated 21.02.2022, the assessee filed application for adjournment, copy of screen shot of ITBA portal is filed. The assessee sought one-month time and thereafter no notice was received by the assessee. the ld AR of the assessee submits that it is not the case where the assessee has not made compliance. Rather, the assessee is interest in pursuing his appeal. The ld AR of the assessee prayed that in the interest of justice, matter may be restored back to the file of Assessing Officer to allow the assessee to file submissions and evidence in support of his claim and to pass order afresh after giving fair and reasonable opportunity to the assessee. He undertakes on behalf of the assessee to be more vigilant in future and will file all required submissions on first date of hearing. 3. On the other hand, the learned Senior Departmental Representative (ld. Sr. DR) for the revenue supported the orders of the lower authorities. The ld. Sr. DR for the revenue submits that more than reasonable and sufficient opportunity was provided to the assessee as evident from the contents of orders of lower authorities itself. The ld. AR of the assessee unable to explain the circumstances which resulted in non-compliance on the part of assessee. The ld. Sr. DR for the revenue submits that even before the Tribunal, neither the assessee has disclosed reasonable and plausible reason for non-appearance nor filed any evidence. The assessee does not deserve any leniency and addition made in the assessment may be upheld. In alternative submissions, the ld SR DR of the revenue submits that in case this bench is of the view, that the assessee deserve any leniency, the matter may be restored to the file of ld CIT(A). ITA No. 606/Srt/2024 Mahesh Mohanlal Desai Vs ITO. 3 4. In the short rejoinder submission, the ld. AR of the assessee submits that both the authorities below have passed ex parte order, and in the event of filing written submissions and evidences to substantiate the cash deposit, such evidence may require verification at the end of Assessing Officer, so to avoid the long drawn process of remand report the matter may be restored to the file of Assessing Officer. 5. I have considered the submissions of both the parties and have gone through the orders of the lower authorities carefully. I find that the Assessing Officer completed the assessment under Section 144 on 11/10/2019. I find that during the assessment, the Assessing Officer issued three show cause notices as recorded in para 4 of assessment order. The assessee was also asked in the show cause notice that in case of non-compliance, assessment will be finalised under Section 144 of the Act. The Assessing Officer recorded that despite such show cause notice, neither the assessee furnished any reply nor any evidence to substantiate the cash deposit. The Assessing Officer find that there was cash deposit of Rs. 12,03,000/- in the bank account. The Assessing Officer made addition on account of cash deposit in absence of evidence. On appeal before the ld. CIT(A), the assessee was served with four notices to substantiate various grounds of appeal as recorded in para 4 of order of ld. CIT(A). No compliance was made by assessee, thus, the ld. CIT(A) in absence of any submission or evidence, confirmed the addition. Now before us, the ld. AR of the assessee explained that notice under section 250 was issued by ld CIT(A) for filing submission by 09.01.2022 and again vide notice dated 21.02.2022, the assessee filed application for adjournment, copy of screen shot of ITBA portal is filed. The ITA No. 606/Srt/2024 Mahesh Mohanlal Desai Vs ITO. 4 assessee sought one-month time and thereafter no notice was received by the assessee. It was also explained the that it is not the case where the assessee has not made compliance, rather, the assessee is interest in pursuing his appeal and prayed that in the interest of justice, matter may be restored back to the file of Assessing Officer to allow the assessee to file submissions and evidence in support of cash deposit. Considering the facts and circumstances of the case and keeping in view the principles of natural justice, I restore the matter back to the file of Assessing officer to decide the issue afresh. The matter is restored to the file of Assessing Officer keeping in view of the facts that assessment was also completed under section 144. Needless to direct that before passing the order, the Assessing Officer shall grant opportunity of hearing to the assessee. The assessee is also directed to be more vigilant in future and not to cause further delay and seek adjournment without any valid reason and to furnish all the details and his submissions and evidences on various grounds of appeal raised by it, as soon as possible, if so desired without any further delay. In the result, the grounds of appeal raised by the assessee are allowed for statistical purposes. 6. In the result, this appeal of assessee is allowed for statistical purposes only. Order announced in open court on 21st October, 2024. Sd/- (PAWAN SINGH) JUDICIAL MEMBER Surat, Dated: 21/10/2024 *Ranjan ITA No. 606/Srt/2024 Mahesh Mohanlal Desai Vs ITO. 5 Copy to: 1. Assessee 2. Revenue 3. CIT 4. DR 5. Guard File By order Sr. Private Secretary, ITAT, Surat "