MRS HEMALATA VASUDEV HANJI L/H SACHIN VASUDEV HANJI,BELAGAVI V. INCOME TAX OFFICER, WARD - 1(2), BELGAVI

ITA 177/PAN/2024

AI Insights

The case involves Hemalata Vasudev Hanji, who, during her lifetime, faced an assessment under section 143(3) of the Income-tax Act, 1961, for unexplained cash deposits during the demonetisation period. The Income Tax Officer (ITO) added the unexplained cash as income under section 69A and taxed it under section 115BBE. The assessee's appeal to the NFAC was unsuccessful, and after her death, her son, as the legal heir, appealed to the ITAT. The ITAT found procedural irregularities in the handling of the appeal post the assessee's death, particularly the lack of notice to the legal heir and the failure to allow representation, leading to the decision to remand the case for a fresh hearing.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 26284 (ITAT-PANAJI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-12-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: WT(D)
• Assessment Year: 2017-2018
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Matter Remanded
• Court: TRIBUNAL
• Department Lawyers: NAZEERA MOHAMMAD LD.
• Keywords: Principle of natural justice
• Section: 143(3); 250; 143(1); 69A

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL, PANAJI BENCH, PANAJI ITAT-Panaji Page 1 of 4 BEFORE HON’BLE SHRI PAVAN KUMAR GADALE, JUDICIAL MEMBER AND SHRI G. D. PADMAHSHALI, ACCOUNTANT MEMBER ITA No. 177/PAN/2024 Assessment Year : 2017-18 Hemalata Vasudev Hanji L/H Sachin Vasudev Hanji 79-80 Padam, Khanapur Road, Belgaum-590003 PAN:AAGPH0788L . . . . . . . Appellant V/s Income Tax Officer, Ward-1(2), Belgaum. . . . . . . . Respondent Appearances Assessee by : Mr A S Patil [‘Ld. AR’] Revenue by : Smt Nazeera Mohammad [‘Ld. DR’] Date of conclusive Hearing : 30/12/2024 Date of Pronouncement : 31/12/2024 ORDER PER G. D. PADMAHSHALI, AM; The present appeal is filed against the DIN & Order No. ITBA/APLS/S/250/2024-25/1065122409(1) dt. 24/05/2024 passed u/s 250 of the Income-tax Act, 1961 [for short ‘the Act’] by the Addl./Jt. Commissioner of Income Tax-Appeals(2), Surat [for short ‘Ld. CIT(A)/NFAC’] which in turn upheld the order of assessment passed u/s 143(3) of the Act by the Income Tax Officer, Ward-1(2), Belgaum [for short ‘Ld. AO’], in relation to the assessment year 2017- 18 [for short ‘AY’] Hemalata Vasudev Hanji L/H Sachin Vasudev Hanij Vs ITO ITA No.177/PAN/2024, AY: 2017-18 ITAT-Panaji Page 2 of 4 2. Facts of the case briefly stated as; 2.1 The assessee is an individual who filed her original return of income [‘ITR’ hereinafter] on 02/01/22018 declaring total income at ₹4,03,010/-, which was summarily processed u/s 143(1) of the Act. 2.2 The case of the assessee was subjected to limited scrutiny to verify the substantial cash of ₹8,20,000/- deposited by her during the demonetisation period. The replies of the assessee were considered and the source of house holding saving of ₹2,50,000/- was accepted by the Revenue and explanation regarding balance cash deposits since failed to inspire any confidence to the Ld. AO who added the same as unexplained money u/s 69A of the Act and accordingly brought to tax u/s 115BBE of the Act by an order dt. 10/10/2019. 2.3 Aggrieved assessee unsuccessfully contested the former addition in appeal before Ld. NFAC. Aggrieved by the impugned order the natural legal heir (son) of the deceased assessee came in present appeal. 3. Without touching merits of the case, we have heard the rival submissions and subject to the provisions of rule 18 of Income Tax Appellate Tribunal Rules, 1963 [for short ‘ITAT, Rules’] perused the material placed on records. Hemalata Vasudev Hanji L/H Sachin Vasudev Hanij Vs ITO ITA No.177/PAN/2024, AY: 2017-18 ITAT-Panaji Page 3 of 4 4. We note that, aggrieved by the assessment the assessee filed an appeal before Ld. First appellate Authority on 18/11/2019 whereby she challenged the additions & assessment. In response to initial notices issued to her u/s 250 of the Act, the assessee made written representation/submissions till 02/03/2021. Subsequent to migration of appeals to ‘e-Appeals Scheme 2023’ in terms of the CBDT notification dt. 29/05/2023 the appeal of the assessee was transferred to jurisdictional Ld. NFAC who culminated proceeding on 24/05/2024 whereby the addition as well the assessment was upheld solitarily on the basis of material already placed on record by the assessee who died on 01/04/2024. The natural legal heir (the son) who in law represents the estate/property of the deceased assessee in terms of section 2(29) of the Act had no occasion or opportunity to represent the pending litigation & denounce tax liability against the property inherited by & remained with him (if any). On the contrary we also note that, after migration of appeals the jurisdiction Ld. NFAC issued no notice of hearing. The failure on the part of legal heir to intimate the death of the assessee in time coupled with the failure of Ld. NFAC to issue fresh notice on migration in our considered view clearly taken off the legal heir’s right to represent, thus the first appellate proceedings suffered and rendered itself irregular. Hemalata Vasudev Hanji L/H Sachin Vasudev Hanij Vs ITO ITA No.177/PAN/2024, AY: 2017-18 ITAT-Panaji Page 4 of 4 5. The right to represent in appeal is a legal right and it is more so when non-representation creates a charge or fastens a fiscal liability. The impugned order since passed without due opportunity to the appellant legal heir in our considered view has suffered from natural justice hence cannot continue to stand. We therefore deem it fit to accord an opportunity of hearing to the appellant which could only be possible on remand to the Ld. NFAC. For these reasons, we set-aside the impugned order and remand the file back to Ld. NFAC at the stage of its institution with a direction to grant three effective hearing to the appellant and decide the issue de-novo in accordance with law and pass a speaking order in terms of section 250(6) of the Act after to the appellant complies with the provisions of section 2(29) of the Act. The grounds accordingly stands allowed for statistical purposes. 6. In result, the appeal is allowed for statistical purposes. In terms of rule 34 of ITAT Rules, the order pronounced in the open court the date mentioned hereinbefore. -S/d- -S/d- PAVAN KUMAR GADALE G. D. PADMAHSHALI JUDICIAL MEMBER ACCOUNTANT MEMBER Panaji: 31st December, 2024 Copy of the Order forwarded to : 1. The Appellant. 2. The Respondent. 3. The CIT(A)/NFAC Concerned 4. PCIT Concerned 5. DR, ITAT, Panaji Bench, Panaji 6. Guard File By Order, Sr. Private Secretary / AR ITAT, Panaji. "