MILAN NARESHKUMAR VARMA,AHMEDABAD V. THE ITO, WARD-3(2)(1), AHMEDABAD

ITA 2050/AHD/2024

AI Insights

This case involves an appeal by Milan Nareshkumar Varma against the reassessment order passed under section 147 of the Income Tax Act, 1961, for the Assessment Year 2019-20. The reassessment was based on allegations of the assessee's involvement in unethical practices and discrepancies in reported income versus bank deposits. The Commissioner of Income Tax (Appeals) dismissed the initial appeal for non-prosecution after the assessee failed to submit required documents despite multiple hearings. The Tribunal, while acknowledging the assessee's non-compliance, decided to allow the appeal for statistical purposes and remanded the case back to the Assessing Officer with directions to provide a final opportunity to the assessee.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 312823 (ITAT-AHMEDABAD)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-04-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2019-2020
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Business income; Unexplained cash credit; Principle of natural justice; TDS; Presumptive income; FORM 26AS
• Section: 147; 148; 142(1); 69C

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD “D” BENCH Before: Shri T.R. Senthil Kumar, Judicial Member And Shri Makarand Vasant Mahadeokar, Accountant Member Milan Nareshkumar Varma 1 Parth Bunglow, Opp. Vasudev Bunglow, Jasodanagar, Vatva, S.O. Ahmedabad Gujarat 382440 PAN: ANHPV3125F (Appellant) Vs Income Tax Officer, Ward-3(2)(1), Ahmedabad (Respondent) Assessee Represented: Shri B.T. Thakkar, CA Revenue Represented: Adjournment Application filed Date of hearing : 29-04-2025 Date of pronouncement : 30-04-2025 आदेश/ORDER PER : T.R. SENTHIL KUMAR, JUDICIAL MEMBER:- This appeal is filed by the Assessee as against the exparte appellate order dated 07.10.2024 passed by the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, (in short referred to as “CIT(A)”), arising out of the reassessment order passed under section 147 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) relating to the Assessment Year 2019-20. ITA No. 2050/Ahd/2024 Assessment Year: 2019-20 I.T.A No. 2050/Ahd/2024 A.Y. 2019-20 Page No Milan Nareshkumar Varma Vs. ITO 2 2. Brief facts of the case is that the assessee is an individual and doctor by profession. For the Asst. Year 2019-20, the assessee filed his original Return of Income under presumptive income u/s. 44ADA by showing gross receipts of Rs. 23,05,660/- and offering gross receipts of Rs. 11,52,830/- to tax. The assessee claimed to be a doctor by profession, hence Section 44ADA of the Act is not applicable to the medical profession. Further as per the Tax Evasion Petition received by the Addl. Director of Income Tax (Inv), Vadodara, the assessee has been involved in unethical practices by charging very high fees and taking commission on the medicines and laboratories by giving false Covid positive reports to patients to admit them and also to earn money. The assessee’s gross receipts in bank by way of cash deposits and cash credits totaling to Rs.1,41,13,793/-. Hence notice u/s. 148 dated 27-03-2023 was served on the assessee to file a return. The assessee not responded. Therefore an intimation letter dated 09-08-2023 served on the assessee but no response. Thereafter notices u/s. 142(1) dated 01-11-2023, 24-11-2023 were served on the assessee and a reminder on 08-12-2023 issued and final show cause notice dated 26-02-2024 served. The assessee failed to make any reply. Therefore the Assessing Officer made the following additions: SI No Description Amount (in INR) 1 Income as per Return (0)of Income filed 11,52,830/- 2 Add : Unexplained credits 80,17,004/- 3 Add: Cash deposits Dena Bank 39,98,720/- 4 Add: Cash deposits Kotak Mahindra Bank 14,82,790/- 5 Add: Cash deposits Bank of Baroda 13,41,970/- 6 Add: Interest received from Bank of Baroda 3,78,157/- I.T.A No. 2050/Ahd/2024 A.Y. 2019-20 Page No Milan Nareshkumar Varma Vs. ITO 3 7. Add: Cash withdrawals of Dena Bank 15,24,880/- 8. Payment made to third party 1 ,61,750/- Total income 1,80,58,101/- and determined the total income as Rs. 1,80,58,101 and demanded tax thereon. 3. Aggrieved against the reassessment order, assessee filed an appeal before Ld. CIT(A) within statutory limitation enclosing bank account details. Ld. CIT(A) given three hearings on 10-07-2024, 22-07-2024 and 30-09-2024, whereas the assessee sought for adjournment on 10-09-2024. However the Ld. CIT(A) given time till 19-09-2024 to the assessee to file submission. However assessee failed to file submission, thereby Ld. CIT(A) dismissed the appeal for non-prosecution. 4. Aggrieved against the same, assessee is in appeal before us raising the following Grounds of Appeal: “1. The learned Commissioner of Income Tax (Appeals) (NFAC) erred in law and on facts in dismissing appeal on ground of non-prosecution. Even though, the appellant has uploaded relevant evidence on I.T. Portal 2. The learned Commissioner of Income Tax (Appeals) (NFAC) erred in laws and on facts in confirming addition amounting to Rs.80,17,004/-on the basis of information available with the department, an amount of Rs.1,03,22,664/- has been credited in bank accounts of the appellant, whereas turnover shown by appellant in his return of income is Rs.23,05,660/-; the balance Rs.80,17,004/- considered unexplained income under section 69A without verifying bank statements of the appellant. 3. The learned Commissioner of Income Tax (Appeals) (NFAC) erred in laws and on facts in confirming addition amounting to Rs. 39,98,720/- U/s. 69A on ground of cash deposited in Dena Bank Account. Actual cash deposit in the Dena Bank Account is Rs.36,77,930/-. Even though the same amount is already included in the amount of Rs. 1,03,22,664/- total credits in the bank accounts. I.T.A No. 2050/Ahd/2024 A.Y. 2019-20 Page No Milan Nareshkumar Varma Vs. ITO 4 4. The learned Commissioner of Income Tax (Appeals) (NFAC) erred in laws and on facts in confirming addition amounting to Rs. 14,82,790/- U/s. 69A on ground of cash deposited in Kotak Mahindra Bank Account. Even though the same amount is already included in the amount of Rs. 1,03,22,664/- total credits in the bank accounts. 5. The learned Commissioner of Income Tax (Appeals) (NFAC) erred in laws and on facts in confirming addition amounting to Rs. 13,41,970/- U/S 69A on ground of cash deposited in Bank of Baroda Bank Account. Actual cash deposit in the Bank of Baroda Bank Account is Rs. 4,680/-. Even though the same amount is already included in the amount of Rs. 1,03,22,664/- total credits in the bank accounts. 6. The learned Commissioner of Income Tax (Appeals) (NFAC) erred in laws and on facts in confirming addition amounting to Rs. 3,78,157/-on ground of interest received from Bank of Baroda. Whereas, actual interest received from the bank on savings bank account is Rs.123/-only. 7. The learned Commissioner of Income Tax (Appeals) (NFAC) erred in laws and on facts in confirming addition amounting to Rs. 15,24,880/- on the ground of cash withdrawal from Dena Bank amounting to Rs.1,90,61,000/-. On the basis of this amount addition has been made @ 8% as business income on presumptive basis. Whereas actual cash withdrawal from Dena Bank Account is Rs.0/-. The appellant says and submits that, the cash withdrawal from Bank Account is Rs.16,52,500/- from Bank Accounts for the purpose of business-for day-to-day expenses of hospital. 8. The learned Commissioner of Income Tax (Appeals) (NFAC) erred in laws and on facts in confirming addition amounting to Rs. 1,61,750/-U/s. 69C on ground of payments made to third party. In Fact, the addition is made on the basis of form 26AS of the appellant, TDS deducted u/s 194). Even though the appellant has already disclosed the same income in the original return of Income, the addition has been made. 9. The learned CIT(A) (NFAC) has passed the appeal order on 07.10.2024 without considering the submission uploaded on 14.09.2024. Therefore, the appeal order is bad in Law.” 4.1. Assessee filed a Paper Book containing the bank details of the assessee, Audit Report u/s. 44AB and other details. Thus Ld. Counsel pleaded all the materials were though filed before Ld. CIT(A), without considering the same, dismissed the appeal for non-prosecution. Therefore requested to setaside the matter back I.T.A No. 2050/Ahd/2024 A.Y. 2019-20 Page No Milan Nareshkumar Varma Vs. ITO 5 to the file of Jurisdictional Assessing Officer to decide the case on merits. 5. We have considered the submissions of the Ld. Counsel for the assessee. However the Ld. Counsel could not give any reasons for the non-compliance to the several notices issued by the Assessing Officer. Further the assessee filed statutory appeals both before Ld. CIT(A) and before this Tribunal in time, but does not response to the statutory notices issued by the Assessing Officer as well as by the Ld. CIT(A). This clearly shows that the mala-fide intention of the assessee in not filing necessary details before the Lower Authorities. However in the Principle of Natural Justice, we deem it fit to impose a cost of Rs. 5,000/- payable to the Income Tax Department by the assessee for non-cooperation. The above cost is to be paid within two weeks of receipt of copy of this order. On production of receipt before the Jurisdictional Assessing Officer, he is directed to redo the assessment by giving one more opportunity of hearing to the assessee. Needless to say, the assessee should make use of this final opportunity by producing all necessary details/documents to pass order on merits of the case. 6. In the result, the appeal filed by the Assessee is allowed for statistical purpose. Order pronounced in the open court on 30-04-2025 Sd/- Sd/- (MAKARAND VASANT MAHADEOKAR) (T.R. SENTHIL KUMAR) ACCOUNTANT MEMBER JUDICIAL MEMBER Ahmedabad : Dated 30/04/2025 I.T.A No. 2050/Ahd/2024 A.Y. 2019-20 Page No Milan Nareshkumar Varma Vs. ITO 6 आदेश कȧ ĤǓतͧलͪप अĒेͪषत / Copy of Order Forwarded to:- 1. Assessee 2. Revenue 3. Concerned CIT 4. CIT (A) 5. DR, ITAT, Ahmedabad 6. Guard file. By order/आदेश से, उप/सहायक पंजीकार आयकर अपीलȣय अͬधकरण, अहमदाबाद "