NAMAN BHANUBHAI SHAH,AHMEDABAD V. THE ITO, WARD-3(3)(1), AHMEDABAD

ITA 1113/AHD/2023

AI Insights

This case involves an appeal by Naman Bhanubhai Shah against an ex-parte assessment order passed under section 144 of the Income Tax Act, 1961, for the Assessment Year 2017-18. The assessee had initially filed a return declaring an income of Rs. 3,50,000, which was accepted in a regular assessment. However, following a search and seizure operation linked to the Kushal Group, allegations of involvement in price rigging and providing bogus accommodation entries led to a reopened assessment. The assessee's failure to respond to notices resulted in an ex-parte order treating a significant transaction as unexplained income. The appeal against this order was initially delayed and subsequently not condoned by the CIT(A). The Tribunal, emphasizing the principles of natural justice, decided to remand the case for a fresh assessment, imposing a cost on the assessee for the procedural delay.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 23297 (ITAT-AHMEDABAD)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-01-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2017-2018
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Set aside; Principle of natural justice; Search and seizure; Accommodation entries; Bogus
• Section: 148; 144; 143(3); 69

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD “D” BENCH Before: DR. BRR Kumar, Vice President And Shri T.R. Senthil Kumar, Judicial Member Naman Bhanubhai Shah D-604, Dhananjay Tower, Nr. Sachin Tower, Satellite, Ahmedabad-380015 PAN: AMEPS3004Q (Appellant) Vs The ITO, Ward-3(3)(1), Ahmedabad (Respondent) Assessee Represented: Shri K. C. Thaker, A.R. Revenue Represented: Shri Waghe Prasad Rao, Sr.D.R. Date of hearing : 01-01-2025 Date of pronouncement : 03-01-2025 आदेश/ORDER PER : T.R. SENTHIL KUMAR, JUDICIAL MEMBER:- This appeal is filed by the Assessee as against the ex-parte appellate order dated 27.10.2023 passed by the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, (in short referred to as “CIT(A)”), arising out of the exparte assessment order passed under section 144 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) relating to the Assessment Year 2017-18. ITA No. 1113/Ahd/2023 Assessment Year 2017-18 I.T.A No. 1113/Ahd/2023 A.Y. 2017-18 Page No Naman Bhanubhai Shah vs. ITO 2 2. Brief facts of the case is that the assessee is an individual and has filed Return of Income for the Asst. Year 2017-18 on 31-03-2018 declaring total income of Rs.3,50,000/-. Regular assessment u/s. 143(3) was made on 18-12-2019 accepting the Returned Income. Information received pursuant to the Search and Seizure action in the Kushal Group of cases on 05-02-2019, the assessee is involved in price rigging and providing bogus accommodation entries of LTCG and STCG by selling shares of GBFL for Rs.79,79,854/- which has resulted in escaped assessment of income. Hence the assessment was reopened by issuing a notice u/s. 148 dated 31.03.2021. 3. In response, the assessee filed Return of Income on 13-07-2021 declaring total income of Rs.3,50,000/- . However the assessee has not responded to the other notices issued by the Assessing Officer, which has resulted in passing an exparte assessment order treating the total transaction from GBFL share of Rs.79,79,854/- as unexplained income u/s. 69 of the Act. 4. Aggrieved against the exparte assessment order, assessee filed an appeal with a delay of 118 days. The same was also not condoned by the Ld. CIT(A) as ‘sufficient cause’ was not adduced by the assessee. Ld. Counsel for the assessee submitted that one more opportunity be given to the assessee to make out its case on merits before the Lower Authorities. 5. Per contra, Ld. Sr. D.R. appearing for the Revenue submitted that this being an exparte order before the Lower Authorities, heavy I.T.A No. 1113/Ahd/2023 A.Y. 2017-18 Page No Naman Bhanubhai Shah vs. ITO 3 cost be imposed on the assessee for setting aside the matter to the JAO. 6. We have considered the submissions of rival parties and in the Interest of Principle of Natural Justice, we deem it fit to set aside the issue back to the file of Jurisdictional Assessing Officer on the condition of imposing a cost of Rs. 5,000/- payable by the assessee to the Income Tax Department within two weeks of receipt of this order. On proper compliance of the above cost, the Assessing Officer is directed to pass fresh order on merits by giving proper opportunity of hearing to the assessee. 7. In the result, the appeal filed by the Assessee is allowed for statistical purpose. Order pronounced in the open court on 03-01-2025 Sd/- Sd/- (DR. BRR KUMAR) (T.R. SENTHIL KUMAR) VICE PRESIDENT JUDICIAL MEMBER Ahmedabad : Dated 03/01/2025 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 "