MANJULABEN NARASHIBHAI ZALARIYA,MORBI V. ITO, WARD-3, MORBI, MORBI

ITA 716/RJT/2024

AI Insights

The case involves Smt. Manjulaben Narashibhai Zalariya, who appealed against the order of the National Faceless Appeal Centre (NFAC) which had confirmed the additions made by the Income Tax Officer (ITO) under sections 143(3) r.w.s. 147 of the Income Tax Act, 1961. The additions included Rs. 21,16,924 as sale proceeds from shares and Rs. 3,175 as commission expenses related to these transactions, which were alleged to be part of a scheme providing bogus bills for transactions in shares and securities. The Tribunal found that the CIT(A) had not adequately considered the assessee's submissions and documents, leading to a decision to remand the case back to the CIT(A) for a thorough re-examination.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 26420 (ITAT-RAJKOT)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-03-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2010-2011
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ABHIMANYU SINGH YADAV. LD.
• Assessee Lawyers: MEHUL RANPURA; LD
• Keywords: Set aside; Opportunity of being heard; Principle of natural justice; Search and seizure; Bogus
• Section: 148; 143(3); 143(1); 132

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL, RAJKOT BENCH,RAJKOT BEFORE DR. ARJUN LAL SAINI, ACCOUNTANT MEMBER AND SHRI DINESH MOHAN SINHA, JUDICIAL MEMBER आयकरअपीलसं./ITA No.716/RJT/2024 Assessment Year: (2010-11) (Hybrid Hearing) Smt. Manjulaben Narashibhai Zalariya Gokul Nagar, Ravapar Road, Morbi – 363641 Gujarat Vs. The ITO, Ward – 3, Rajkot Aayakar Bhavan, Shakti Chambers, Morbi - 363641 èथायीलेखासं./जीआइआरसं./PAN/GIR No.:AANPZ2967Q (Appellant) (Respondent) Appellant by : Shri Mehul Ranpura, Ld. A.R. Respondent by : Shri Abhimanyu Singh Yadav. Ld. Sr. DR Date of Hearing : 20/03/2025 Date of Pronouncement : 25/03/2025 आदेश/ O R D E R PER DINESH MOHAN SINHA, JM: Captioned appeal filed by the assessee is directed against the order passed by the National Faceless Appeal Centre [(in short “NFAC/Ld. CIT(A)”] vide order dated 18.07.2024, which in turn assessment order passed by Income Tax Department/Assessing Officer under section 143(3) r.w.s. 147 of the Income Tax Act, 1961 (in short “the Act”), vide order dated 26.11.2015. 2. Grounds of appeal raised by the assessee are as follows: 1) Ld. Commissioner of Income tax (appeals), National Faceless Appeal Centre, Delhi erred on facts as also in law in dismissing the appeal ex-parte. ITA No.716/RJT/2024 (A.Y. 2010-11) Smt. Manjulaben Narashinhbhai Zalariya v. ITO 2 2) Ld. CIT(A) erred on facts as also in law in not deciding the ground of appeal related to validity of notice issued u/s. 148 of the IT Act, 1961. That on facts as also in law, initiation of action u/s. 147 of the Act is invalid and assessment made on such invalid initiation deserves to be quashed and may kindly be quashed. 3) The Ld. CIT(A) erred on facts as also in law in confirming addition of Rs. 21,16,924/- being sale proceeds of sale of shares of being sale proceeds of sale of alleged ground Geekay Finance Ltd on the alleged ground of accommodative entry. The addition confirmed is unjustified and uncalled for, which may kindly be deleted. 4) The Ld. CIT(A) erred on facts as also in law in confirming addition of Rs. 3175/- being alleged commission expenses said to have been paid on the above accommodative entry. The addition made and confirmed is bad in law as also on facts therefore the same may kindly be deleted. 5) Your Honour appellant craves leave to add, amend, alter and withdraw any or more grounds of appeal on or before the hearing of appeal. 3. Facts of the case are that the appellant assessee filed her return of income on 08.12.2010 declaring therein total income of Ts. 1,48,910/-. The return of income was processed u/s. 143(1) of the Act thereby accepting the returned income. The ITO office in receipt of information that a search and seizure action u/s. 132 of the Act was carried out in the case of M/s. Mahasagar Securities P. Ltd. by DDIT, Unit- I(4), Mumbai on 25.11.2009 based on the information that this company and its related companies including M/s. Goldstar Finvest P. Ltd, M/s. Aliance intermediateries & Network P. Ltd. And M/s. Mahasagar Securities P. Ltd., etc. we’re not doing any genuine business activities and all were engaged in the business of providing bogus bills of transaction in shares and securities. The directors of these companies were engaged in fraudulent billing activities and in the business providing bogus speculation profit/loss, short term/ long term capital gain/ loss for trading in shares and securities and in commodities and had been continuing this business for many year. Thereafter, the Ld. AO vide order dated 26.11.2015 u/s. 143(3) r.w.s. 147 of the Act, assessed the total income at Rs. 22,69,010/-. The Ld. AO made the following verification to the returned income. ITA No.716/RJT/2024 (A.Y. 2010-11) Smt. Manjulaben Narashinhbhai Zalariya v. ITO 3 4. That the assessee filed an appeal against the order of the AO vide order dated 26.11.2015 in the office of the Ld. CIT(A). However, The Ld. CIT(A) issued several notices for hearing on 06.12.2019, 29.12.2020, 29.04.2022, 05.12.2022 and 03.06.2024. In response to the notices the assessee filed her reply on 24.11.2021. The Ld. CIT(A) dismissed the appeal with following observation: “The appellant is unable to substantiate her claims and its not able to controvert the assessment order. The addition made by the Assessing Officer is therefore confirmed. The appellant has not been able to defend the grounds raised. Hence, grounds raised are rejected.” 5. That the assessee filed an appeal against the impugned order passed by the Ld. CIT(A) before this Tribunal. 6. During the course of hearing, the Ld. AR submitted, that the appeal has been decided without considering the written submissions filed by the assessee. The Ld. CIT(A) has observed that the appellant has not filed a proper response and no supported documents/ evidences filed to substantiate her claim. However, the Ld. AR of the assessee prayed for one more opportunity to be given to the assessee to represent the case before the lower authority. 7. On the contrary, the Ld. Sr. DR for the revenue relied on the order of the Ld. CIT(A) and not objected to the prayer of the Ld. AR of the assessee. 8. We have heard both the parties and perused the material available on record. The Ld. CIT(A) has issued several notices for hearing of the case. In response to the notices the appellant has submitted the response and the same is not proper no documents/ evidences submitted along with the response. We note ITA No.716/RJT/2024 (A.Y. 2010-11) Smt. Manjulaben Narashinhbhai Zalariya v. ITO 4 that Ld. CIT(A) has not decided the appeal as per mandate of provisions u/s. 250(6) of the Act. However, we are of the view, that one more opportunity should be given to the assessee to plead his case before the Ld. CIT(A). It is settled law that principles of natural justice and fair play require that the affected party should be granted sufficient opportunity of being heard to contest his case. Keeping in view, in the interest of justice, we set aside the order of the Ld. CIT(A) and remitted the matter back to the file of the Ld. CIT(A) for fresh adjudication after giving due opportunity to the assessee. In the result, the appeal of the assessee is allowed for statistical purposes. Order is pronounced in the open court on 25/03/2025 Sd/- Sd/- (Dr. A. L. SAINI) (DINESH MOHAN SINHA) ACCOUNTANT MEMBER JUDICIAL MEMBER Rajkot (True Copy) Ǒदनांक/ Date: 25/03/2025 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 "