NIPA CHETAN SHAH ,MUMBAI V. THE INCOME TAX OFFICER 19(2)(4), MUMBAI

ITA 3661/MUM/2024

AI Insights

This case involves an appeal by Nipa Chetan Shah against the order of the Learned Commissioner of Income-tax (Appeals), National Faceless Appeal Centre, Delhi, which was passed under section 250 of the Income-tax Act, 1961 for the Assessment Year 2013-14. The primary contention of the appellant was the lack of jurisdiction and breach of natural justice in the appellate order, along with challenges to the reassessment proceedings and the addition of Rs. 1,94,37,405 as unexplained cash credit under section 68 of the Act. The reassessment was initiated based on information regarding the use of BSE listed penny stock for generating bogus capital gain by the assessee. The tribunal noted that the notices for the appeal were sent to an incorrect email address, leading to the decision to restore the matter for a fresh hearing.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 26655 (ITAT-MUMBAI)
• Duration Of Justice: 3 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-10-2024
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 08-10-2024
• Assessment Year: 2013-2014
• Appeal Filed On: 19-07-2024
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: PARESH DESHPANDE
• Assessee Lawyers: VIPUL JOSHI; DINKEL HARIA
• Keywords: Opportunity of being heard; Reasonable cause; Capital Gains; Principle of natural justice; Bogus
• Section: 147; 250; 68

Judgement Text

" IN THE INCOME-TAX APPELLATE TRIBUNAL “B” BENCH, MUMBAI BEFORE SMT BEENA PILLAI, JUDICIAL MEMBER & SMT. RENU JAUHRI, ACCOUNTANT MEMBER ITA No. 3661/MUM/2024 (A.Y. 2013-14) Nipa Chetan Shah 5, 39, Sai Niwas, Khotachi Wadi, Girgaum, Mumbai-400004 v/s. बनाम ITO 19(2)(4) Piramal Chambers Mumbai-400012 स्थायी लेखा सं./जीआइआर सं./PAN/GIR No: AQQPS8446Q Appellant/अपीलार्थी .. Respondent/प्रतिवादी Appellant by : Shri Vipul Joshi & Ms. Dinkel Haria Respondent by : Shri Paresh Deshpande Date of Hearing 08.10.2024 Date of Pronouncement 30.10.2024 आदेश / O R D E R PER RENU JAUHRI [A.M.] :- This appeal is filed by the assessee against the order of the Learned Commissioner of Income-tax (Appeals)/National Faceless Appeal Centre, Delhi [hereinafter referred to as “CIT(A)”] dated 16.05.2024 passed u/s. 250 of the Income-tax Act, 1961 [hereinafter referred to as “Act”] for Assessment Year [A.Y.] 2013-14. 2. The assessee has raised following grounds of appeal: “1. THE ORDER BAD, ILLEGAL AND WITHOUT JURISDICTION 1.1 In the facts and the circumstances of the case, and in law, the appellate order framed by the Commissioner of Income tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi, ['Ld. CIT (A)'] is bad and illegal, as the same is P a g e | 2 ITA No. 3661/Mum/2024 A.Y. 2013-14 Nipa Chetan Shah framed in breach of the statutory provisions and the scheme and as otherwise also is not in accordance with the law. 1.2 Without prejudice to the generality of the above, the appellate order so passed is bad, illegal and void as the same is utterly cryptic and perverse. 2 NATURAL JUSTICE 2.1 The Ld. CIT (A) erred in passing the appellate order in breach of the principles of Natural Justice. 2.2 While doing so, the Ld. CIT (A) failed to appreciate that: (i) The Appellant was not given fair, reasonable and proper opportunity of being heard; and (ii) In any case, the Appellant was prevented by reasonable causes beyond it control to make effective and proper representation. WITHOUT PREJUDICE TO THE ABOVE 3. REASSESSMENT 3.1 The Ld. CIT (A) erred in confirming the action of the A.O. in initiating the reassessment proceeding and framing the assessment of the Appellant by invoking the provisions of section 147 r.w.s. 148 & 148A of the Act. 3.2 While doing so, the Ld. CIT (A) failed to appreciate that: (i) The case of the Appellant did not fall within the parameters laid down by section 147 r.w.s. 148 r.w.s. 148A, 149 & 151 of the Act; and (ii) The necessary preconditions for initiating the reassessment proceeding and completion thereof were not satisfied. 3.3 It is submitted that in the facts and the circumstances of the case, and in law, the reassessment so framed is bad, illegal, void and without jurisdiction. WITHOUT FURTHER PREJUDICE TO THE ABOVE 4. ON MERITS ADDITION OF RS. 1,94,37,405/- AS ALLEGED UNEXPLAINED CASH CREDIT UNDER SECTION 68 OF THE ACT 4.1 The Ld. CIT (A) erred in confirming the action of the A.O. in making addition of Rs. 1,94,37,405/-, treating the purchase consideration of the shares purchased by the Appellant in two companies, as alleged unexplained cash credit u/s. 68 of the Act. 4.2 While doing so, the Ld. CIT (A) erred in: (i) Basing his action on wrong/ erroneous facts. (ii) Basing his action only on surmises, suspicion and conjecture; (iii) Taking into account irrelevant and extraneous considerations; and (iv) Ignoring relevant material and considerations as submitted by the Appellant. 3.3 It is submitted that in the facts and the circumstances of the case, and in law, no such addition was called for. P a g e | 3 ITA No. 3661/Mum/2024 A.Y. 2013-14 Nipa Chetan Shah 3.4 Without prejudice to the above, assuming - but not admitting - that some addition was called for, it is submitted that the computation of the addition made by the A.O. is arbitrary, excessive and not in accordance with the law.” 3. The brief facts of the case are that the return declaring income of Rs. 2,39,370/- was filed by the assessee on 29.03.2015. Subsequently, in view of the receipt of information regarding use of BSE listed penny stock for generating bogus capital gain by the assessee, the case was reopened and the assessment was finalized u/s 147 r.w.s. 144B of the Act after making an addition of Rs. 1,94,37,405/- u/s 68 of the Act on account of bogus capital gains. 4. Aggrieved with the assessment order, the assessee filed an appeal before the Ld. CIT(A). However, the appeal was dismissed ex-parte on account of fact that the assessee had not complied to the notices issued by the Ld. CIT(A). 5. Before us, the assessee has taken various grounds of appeal including that the assessee was not given a fair and reasonable opportunity of being heard. In this regard, an affidavit has been filed by the assessee on 22.08.2024 submitting that no notices were received on the e-mail Id mentioned in the return or on the portal. The assessee has stated that her email ID in the various income tax returns filed by her has been mentioned as [e-mail] or [e-mail]. However, the notices were sent on the e-mail ID of [e-mail] which was not the correct email Id. 6. We have heard the rival submissions. In view of the above facts, no proper opportunity was given to the assessee by the Ld. CIT(A), as the notices were sent on wrong email ID. We, therefore, deem it appropriate to restore the matter to P a g e | 4 ITA No. 3661/Mum/2024 A.Y. 2013-14 Nipa Chetan Shah the Ld. CIT(A) for fresh adjudication. Needless to add that due opportunity should be given to the assessee by sending notices on correct email Id provided by her. 7. In the result, the appeal of the assessee is allowed for statistical purpose. Order pronounced in the open court on .30.10.2024. Sd/- Sd/- BEENA PILLAI RENU JAUHRI (न्यातयक सदस्य/JUDICIAL MEMBER) (लेखाकार सदस्य/ACCOUNTANT MEMBER) Place: म ुंबई/Mumbai दिनाुंक /Date 30.10.2024 अननक ेत स ुंह राजपूत/ स्टेनो आदेश की प्रतितलति अग्रेतिि/Copy of the Order forwarded to : 1. अपीलार्थी / The Appellant 2. प्रत्यर्थी / The Respondent. 3. आयकर आयुक्त / CIT 4. विभागीय प्रविविवि, आयकर अपीलीय अविकरण DR, ITAT, Mumbai 5. गार्ड फाईल / Guard file. सत्यावपि प्रवि //True Copy// आदेशानुसार/ BY ORDER, उि/सहायक िंजीकार (Dy./Asstt. Registrar) आयकर अिीलीय अतिकरण/ ITAT, Bench, Mumbai. "