NARSHI MAVJI RAGHWANI,MUMBAI V. ITO 29(2)(4), MUMBAI

ITA 6488/MUM/2024

AI Insights

The case involves an appeal by Narshi Mavji Raghwani against the addition of Rs. 12 Lakhs to his income under section 68 of the Income Tax Act, 1961, by the Assessing Officer (AO). The addition was made due to insufficient explanation regarding the source of deposits in the appellant's bank account. The CIT(A) dismissed the appeal for non-prosecution after multiple opportunities were given to the appellant, who failed to respond adequately. The ITAT found that the dismissal for non-prosecution was not in accordance with the law and directed a re-examination of the case on its merits, highlighting the importance of discussing the appeal substantively rather than dismissing it based on procedural non-compliance.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 32275 (ITAT-MUMBAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-02-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Other Referred Cases: CIT, Nagpur Vs. Premkumar Arjundas Luthra
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NIHAR RANJAN SAMAL
• Assessee Lawyers: ATIN S. MEHTA
• Keywords: Set aside
• Section: 68

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL Mumbai “SMC” Bench, Mumbai. Before Smt. Beena Pillai (JM) & Shri Omkareshwar Chidara (AM) ITA No. 6488/MUM/2024 (Assessment Year : 2011-12) Narshi Mavji Raghwani C-3/302 Lok Everest J-S Dosa Road, Mulund West, Mumbai-400080 Vs. ITO 29(2)(4) Kautilya Bhavan Mumbai-400051. PAN : AAQOR9449A Appellant Respondent Assessee by : Shri Atin S. Mehta Revenue by : Shri Nihar Ranjan Samal Date of Hearing : 06/02/2025 Date of pronouncement : 12/02/2025 O R D E R Per Omkareshwar Chidara (AM) :- In this above captioned appeal, the Ld. AO made an addition of Rs. 12 Lakhs under section 68 of the I.T. Act, as there is no satisfactory explanation with respect to source of deposits in the bank account to the extent of Rs. 10 Lakhs, Rs. 1 Lakh and Rs. 1 Lakh on different dates. From the assessment order, it is observed that names of depositors were mentioned, but as the nature and source of the same was not disclosed by the appellant, the Ld. AO made the above addition of Rs. 12 Lakhs. 2. Aggrieved by the addition made by the Ld. AO, and appeal was preferred by the appellant before Ld. CIT(A). The Ld. CIT(A) gave five opportunities to the appellant as mentioned in para 2 of the appellate order. As there is no response from the appellant, the appeal was dismissed. 3. The following grounds of appeal were raised before the ITAT. 1. The Ld.AO has wrongly added Rs.12,00,000/- under section 68, and ADDL/ JCIT (NFAQ erred in confirming the same, despite the fact that the Assessee has fully discharged the identity, genuineness and creditworthiness of the lender in terms if sec.68 of the Income Tax Narshi Mavji Raghwani 2 Act,1961. And the transactions are confirmed by counter parties and through banking channel. 2. The Ld.AO and ADDL/ JC1T (NFAC) ought to have considered that the appellant need to make payment to the workers in the bracket of 0.10 lakhs to 1.10 lakhs which is very often in the construction line of business. 3. The Ld. AO and ADDL/ JCIT (NFAC) misinterpreted the findings of the investigation wing and considered the same as non genuine. 4. Whether there is any delay in filing of appeal NO. 3. During the hearing proceedings, the Ld. AR of the appellant has filed written submission stating that the notices were sent by Ld. CIT(A) during Covid period and hence there was no proper compliance. It was further pleaded that on merits, the appellant has got fair chances to win the appeal. In proof of the same, a paper book containing copy of pass book, ledger account of lenders were also filed to prove the genuineness of credits. The Ld. DR relied on the lower authorities and argued that as there is no compliance by the appellant, the addition made by Ld. AO should be confirmed. 4. After hearing both sides, it is decided to give one more opportunity to the appellant as the papers/documents/evidences filed before us, were not filed before the lower authorities to demonstrate the genuineness of the credits. Moreover, it is observed from the order of Ld. CIT(A) that the issues were not discussed on merits and the appeal of appellant was dismissed for non-prosecution. Hon'ble Bombay High Court in the case of CIT, Nagpur Vs. Premkumar Arjundas Luthra, held that the appeal of appellant cannot be dismissed because of non-prosecution but the appellate order should discuss the merits of the case and the law does not permit Ld. CIT(A) to dismiss the appeal for non-prosecution as is evidenced from the provisions of the Act. Narshi Mavji Raghwani 3 5. In view of the above jurisdictional High Court’s order, the appeal order of Ld. CIT(A) is set aside and in the interest of justice, Ld. CIT(A) directed to pass the appellate order after discussing all the issues arising out of the assessment order. Needless to say that the appellant should be given adequate opportunity before passing the appeal order. 6. The appeal of the appellant is allowed for statistical purposes. Order pronounced in the open Court on 12/02/2025. Sd/- Sd/- (BEENA PILLAI) (OMKARESHWAR CHIDARA) JUDICIAL MEMBER ACCOUNTANT MEMBER Mumbai; Dated: 12/02/2025 Copy of the Order forwarded to : 1. The Appellant 2. The Respondent. 3. CIT 4. DR, ITAT, Mumbai 5. Guard file. BY ORDER, //True Copy// (Assistant Registrar) ITAT, Mumbai PS "