MEHER NOSHERWAN JEHANGIR ,MUMBAI V. ITO, WARD-19(2)(2), MUMBAI

ITA 6211/MUM/2024

AI Insights

The case involves an appeal by the assessee, Meher Nosherwan Jehangir, against the order of the National Faceless Appeal Centre (NFAC), Delhi, which was passed under section 250 of the Income-tax Act, 1961. The appeal was initially dismissed by the Ld. CIT(A) due to a perceived delay in filing, which the assessee contested, stating that the delay was not deliberate and the cause of action arose only upon receiving an email about the rectification order. The Income Tax Appellate Tribunal (ITAT) found that the Centralised Processing Centre (CPC) had made an adjustment to the assessee's capital gains without providing a reasonable opportunity to be heard, leading to the decision to remand the matter for a fresh examination.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 474428 (ITAT-MUMBAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-01-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: J
• Assessment Year: 2015-2016
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SHRIASIF KARMALI
• Assessee Lawyers: JAYESH DADIA
• Keywords: Opportunity of being heard; Reassessment proceedings; Rectification of order
• Section: 143(3); 154; 143(1); 139(4)

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “J(SMC)”, MUMBAI BEFORE SHRI AMARJIT SINGH, ACCOUNTANT MEMBER AND SHRI ANIKESH BANERJEE, JUDICIAL MEMBER ITA No.6211/Mum/2024 (Assessment Year: 2015-16) Meher Nosherwan Jehangir 4, Darbhanga Mansion, 12/a Michael Road, Cumballa Hill S.O., Mumbai-400 026 PAN : AANPJ4670J vs Income-tax Officer, Ward 19(2)(2), Mumbai Piramal chambers, Lower Parel Mumbai APPELLANT RESPONDENT Assessee by : Shri Jayesh Dadia Respondent by : ShriAsif Karmali (SR DR) Date of hearing : 16/01/2025 Date of pronouncement : 22/01/2025 O R D E R PER ANIKESH BANERJEE: The appeal was preferred by the assessee against the order of the National Faceless Appeal Centre (NFAC), Delhi *for brevity, ‘Ld.CIT(A)’) passed under section 250 of the Income-tax Act, 1961 (for brevity, ‘the Act’), date of order 04/10/2024 for A.Y. 2015-16. The impugned order was emanated from the order of the Centralised Processing Centre, Bengaluru (in brevity, ‘the AO’), passed under section 143(3) / 154 of the Act, date of order 18/07/2017. 2 ITA No.6211/Mum/2024 Meher Nosherwan Jehangir 2. We have heard the submissions of the parties and reviewed the documents on record. The assessee filed a return of income under Section 139(4) of the Act, which was subsequently processed under Section 143(1) of the Act. The Ld. AR submitted that the assessee had declared a capital gain of Rs.4,06,005/- in the return of income. However, while processing the return, the CPCerroneously assessed the capital gain at Rs.19,34,657/-. This discrepancy was considered by the assessee as an inadvertent error made by the CPC. The assessee filed an application under Section 154 of the Act, seeking rectification of the intimation issued under Section 143(1). Ultimately, the assessee was informed via email on 05/02/2023 that the rectification order, dated 18/07/2017, had been issued. Upon receiving this intimation, the assessee filed an appeal in Form 35 on 02/03/2023, within 30 days of the receipt of the email. The Ld. CIT(A), however, treated the rectification order dated 18/07/2017 as the date of service and dismissed the appeal, citing a delay of more than five years in filing the appeal. The Ld.AR contended that no intimation or service of the rectification order had been received prior to the email dated 05/02/2023. Therefore, the cause of action arose only upon receiving the email, and the appeal was filed within the statutory time limit. The impugned appellate order was subsequently challenged before the ITAT. During the hearing, the Ld. AR reiterated that the assessee was informed of the rectification order only through the email dated 05/02/2023, and a copy of the said email is included in the paper book (APB, page 17). It was further submitted that the assessee had correctly declared the capital gain in the return of income, and the calculation of short-term capital gain was duly provided to the Ld. AO. However, the 3 ITA No.6211/Mum/2024 Meher Nosherwan Jehangir CPC, without considering the return of income and without issuing any show-cause notice, made an adjustment under Section 143(1) of the Act. The assessee also filed an affidavit before the Tribunal, affirming that the cause of action arose only on 05/02/2023, when the email from the CPC was received. This affidavit, executed before the Hon’ble Notary Public on 14/01/2025, is annexed in the paper book (APB, pages 1 & 2). 3. The Ld. DR argued and fully relied on the order of the revenue authorities. 4. In our considered view, the Ld. AO adjusted the capital gain without providing a reasonable opportunity to the assessee and unilaterally added Rs. 15,28,650/- to the assessee’s total income. The Ld. AR explained that the delay in filing the appeal was not deliberate. Through an affidavit, the assessee submitted that the cause of action arose on 05/02/2023, when the rectification order was intimated via email. The Ld. DR was unable to provide any evidence or argument to contradict the submissions made by the Ld. AR. We also find that the error originated from the CPC, which made the adjustment without affording the assessee a reasonable opportunity of being heard. In light of these facts, we deem it appropriate to remand the matter to the file of the Ld. AO for a fresh examination of the issue. Both the Ld. AR and the Ld. DR concurred with the observations of the Bench. It is needless to state that the assessee should be given a fair opportunity of being heard during the proceedings before the Ld. AO. At the same time, the assessee is expected to act diligently and cooperate fully during the reassessment proceedings. 4 ITA No.6211/Mum/2024 Meher Nosherwan Jehangir 5. In the result, the appeal of the assessee bearing ITA No.6211/Mum/2024 is allowed for statistical purpose. Order pronounced in the open court on 22nd day of January, 2025. Sd/- sd/- (AMARJIT SINGH ) (ANIKESH BANERJEE) ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai,दिन ांक/Dated: 22s/01/2025 Pavanan Copy of the Order forwarded to: 1. अपील र्थी/The Appellant , 2. प्रदिव िी/ The Respondent. 3. आयकरआयुक्त CIT 4. दवभ गीयप्रदिदनदि, आय.अपी.अदि., मुबांई/DR, ITAT, Mumbai 5. ग र्डफ इल/Guard file. BY ORDER, //True Copy// (Asstt. Registrar), ITAT, Mumbai "