PRAVINBHAI JAGJIVANBHAI GAJJAR,SURAT V. INCOME TAX OFFICER, OLD: WARD-3(2(2) SURAT NEW: WARD-3(2)(1)), SURAT

ITA 587/SRT/2024

AI Insights

The case involves Pravinbhai Jagjivanbhai Gajjar, the appellant, who contested the additions made to his income by the Assessing Officer (AO) under sections 69 and 69A of the Income-tax Act, 1961, for unexplained cash deposits and investments in property. The Commissioner of Income Tax (Appeals) dismissed the appellant's appeal ex-parte, leading to the filing of an appeal before the Income-Tax Appellate Tribunal. The Tribunal found that the appellant was not given adequate opportunity of hearing at lower levels and that the order passed by the CIT(A) was in violation of the provisions under sub-section (6) of section 250 of the Act. The Tribunal noted the appellant's non-cooperation with statutory notices and the show cause notice but decided to remit the matter back to the AO for a fresh assessment after providing a proper hearing.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 26777 (ITAT-SURAT)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-12-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2012-2013
• Other Referred Cases: Collector, Land Acquisition vs. Mst. Katji & Ors
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MINAL KAMBLE
• Assessee Lawyers: RAJESH UPADHYAY
• Keywords: Condonation of delay; Set aside; Opportunity of being heard; Principle of natural justice; Source of fund; Reason to believe
• Section: 148; 144; 142(1); 143(2); 250; 69; 69A

Judgement Text

" IN THE INCOME-TAX APPELLATE TRIBUNAL, SURAT BENCH, SURAT BEFORE SHRI PAWAN SINGH, JUDICIAL MEMBER AND SHRI BIJAYANANDA PRUSETH, ACCOUNTANT MEMBER आयकर अपील सं./ITA No.587/SRT/2024 Assessment Year: (2012-13) (Physical Hearing) Pravinbhai Jagjivanbhai Gajjar, 17/6, Brahman Mahollo, Adajan Garh, Choryasi, Surat - 395005 Vs. The ITO, Ward – 3(2)(2), Surat èथायीलेखासं./जीआइआरसं./PAN/GIR No: ABRPG1658G (Appellant) (Respondent) Appellant by Shri Rajesh Upadhyay, AR Respondent by Shri Minal Kamble, Sr. DR Date of Hearing 17/12/2024 Date of Pronouncement 26/12/2024 आदेश / O R D E R PER BIJAYANANDA PRUSETH, AM: This appeal by the assessee emanates from the order passed under section 250 of the Income-tax Act, 1961 (in short, ‘the Act’) dated 19.12.2022 by the learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi [in short, ‘CIT(A)’] for the assessment year (AY) 2012-13. 2. The grounds of appeal raised by the assessee are as under: “1. The Ld. CIT(A), NFAC, Delhi has erred in law and on fact to dismiss appellant’s appeal ex-parte i.e. without providing adequate opportunity of being heard and he also erred to pass speaking order on the grounds raised in appeal before him. 2. Ld. CIT(A), NFAC, Delhi has erred in law and on fact to upheld AO’s addition u/s 69A for Rs.37,03,022/- made on account of cash deposit of Rs.10,01,000/-as well as cheque deposit of rs.27,02,000/- Ion Indian Bank account no.979935996. 3. Ld. CIT(A), NFAC, Delhi has erred in law and on fact to upheld AO’s addition u/s 69 for Rs.27,03,000/-being appellant’s one half share in purchase of 2 ITA No.587/SRT/2024/AY.2012-13 Pravinbhai Jagjivanbhai Gajjar agricultural land at Moje-Masma, Block No.412,Tal-Olpad, Dist-Surat ignoring the fact that the said addition amounts to double taxation in view of appellant’s ground no.2.” 3. The appeal filed by the assessee is barred by limitation by 93 days in terms of provisions of section 253(3) of the Act. The assessee has filed an affidavit giving reasons for delay in filing the appeal of appeal before the Tribunal. In the affidavit, the assessee stated that order of NFAC, Delhi passed on 19.12.2022. The appeal had been file with the registry, ITAT, Surat on 20.05.2024, which is barred by limitation by 458 days. The assessee submitted Shri Kedarbhai Kothari, who had filled his return of income and looked after his income tax matter. Service of appeal order was in his knowledge. The appellant was unaware of dismissal of appeal by CIT(A), NFAC, Delhi. Shri Kothari did not intimate him for rejection of appeal due to which he has not taken any step to file second appeal before the Hon'ble ITAT. He consulted to Shri Narendrabhai Patel, who advised him to file second appeal before the ITAT. Thereafter, the appellant had consulted to Shri Rajesh M. Upadhyay, AR on 28/04/2024. He found that assessment order for A.Y. 2012-13 was not available in the papers handed over by Mr. Kothari. As appeal was filed electronically, Shri Rajesh M. Upadhyay has tried to download copy of assessment order from the government site. However, it was also not uploaded along with form 35. Therefore, an application was prepared and filled with the ITO Ward-3(2)(1), Surat for getting copy of assessment order for AY 2012-13. It was made available on 16/05/2024. The appellant submitted that the delay in filing appeal was neither wilful nor deliberate, but due to the circumstances beyond his control. It was submitted 3 ITA No.587/SRT/2024/AY.2012-13 Pravinbhai Jagjivanbhai Gajjar that if the date of receipt of order from AO is considered, there is no delay in filing the appeal. The appellant has placed reliance on the decision of Hon’ble Supreme Court in the case of Collector, Land Acquisition vs. Mst. Katji & Ors where it was held that when substantial justice and technical consideration are pitted against each other, the cause of substantial justice deserves to be preferred, the other side cannot claim to have vested right in injustice being done because of non-deliberate delay. The appellant submitted that there was neither any intention nor deliberate delay in filing the present appeal. He requested that in the interest of justice, the delay may be condoned, and appeal may be decided on merit. 4. On the other hand, learned Senior Departmental Representative (ld. Sr. DR) for the revenue submitted that assessee has failed to offer sufficient cause for the delay; hence, delay should not be condoned. 5. We have heard both the parties on this preliminary issue of delay in filing appeal. In the affidavit, it is submitted that tax consultant has not communicated the assessee about fate of appeal due to which, the delay of 458 days has occurred in filing appeal before the Tribunal. It was submitted that the new AR tried to download the assessment order, but he was unable to do so. Thereafter, an application was made to AO who provided copy of assessment order on 16.05.2024. Thereafter, appeal was filed on 20.05.2024 which was within time. Considering all these facts, we find that assessee was not negligent but due to absence of legal advice of erstwhile tax consultant, there was delay in filing the present appeal. As assessee was unaware of the proceedings, he was 4 ITA No.587/SRT/2024/AY.2012-13 Pravinbhai Jagjivanbhai Gajjar unable to pursue his case and there was lack of guidance and assistance to the assessee with respect to the procedure and formalities of filing appeal before the Tribunal. Hence, the reasons given in the affidavit for condonation of delay are reasonable and the same would constitute sufficient cause for the delay in filing this appeal. We, therefore, condone the delay and admit the appeal for hearing. 6. Facts of the case in brief are that the assessee had not filed his original return of income for AY.2012-13. As per AIR information, the assessee deposited substantial amount of cash of Rs.10,01,000/- in his savings bank account maintained with Indian Bank. The Assessing Officer (in short, ‘AO’) issued a letter on 25.01.2019 to verify the cash deposited in the bank account. The assessee did not submit any reply. Thereafter, the AO had reason to believe that income chargeable to tax has escaped assessment u/s 147(2)(a) of the Act. Subsequently, notice u/s 148 of the Act was issued to the assessee on 29.03.2019. Various notices u/s 148, 143(2) and 142(1) were issued to the assessee, but the assessee had not complied with any of the notices. The AO show caused the assessee as to why addition of Rs.64,06,022/- should not be added to the total income. The content of the show cause notice is at paras 2 and 3 of the assessment order. The AO observed that assessee has not submitted the required details despite of ample opportunities provided to him and thus he failed to discharge his onus cast upon him to explain and justify the genuineness of the transaction in question. In absence of details and documents, the AO passed order u/s 144 of the Act on the basis of material available on 5 ITA No.587/SRT/2024/AY.2012-13 Pravinbhai Jagjivanbhai Gajjar record. The AO observed that source of fund utilized for deposits of cash/credit of Rs.37,03,022 (Rs.10,01,000 + Rs.27,02,022) in the bank account, is unexplained and hence he treated the same as unexplained u/s 69A of the Act. Further, investment made in purchase of immovable property of Rs.27,03,000 (1/2 of the total investment including stamp duty and registration fee) was also treated as unexplained u/s 69 of the Act. Therefore, the AO assessed the total income of Rs.65,73,350/- against the returned income of Rs.1,67,326/-. 7. Aggrieved by the order of AO, the assessee filed this appeal before CIT(A). Two notices u/s 250 of the Act were issued to the appellant on 05.03.2022, 21.11.2022 respectively. The CIT(A) asked appellant to file details on or before 21.03.2022 and 06.12.2022. However, appellant did not reply to the notices. The CIT(A) observed that non-compliance to the 2 notices issued shows that appellant was not interested in pursuing his appeal. Therefore, the CIT(A) confirmed the addition made by AO and dismissed appeal of the assessee. 8. Aggrieved by the order of Ld. CIT(A), the assessee filed appeal before the Tribunal. The learned Authorized Representative (Ld. AR) of the assessee submitted that the appellant was not given adequate opportunity of hearing by the lower authorities. He submitted that the AO has passed an order u/s 144 of the Act. He further submitted that the CIT(A) has passed the order u/s 250 of the Act on 19.12.2022 itself, which shows that the order was passed without properly hearing the assessee. The ld. AR contended that assessee could not represent his case before CIT(A) due to circumstances beyond his control. Adequate opportunity of hearing was not given to the assessee. Therefore, ld. 6 ITA No.587/SRT/2024/AY.2012-13 Pravinbhai Jagjivanbhai Gajjar AR requested that one more opportunity should be given to the assessee to plead his case before the AO. 9. On the other hand, learned Senior Departmental Representative (ld. Sr. DR) for the revenue submitted that assessee was negligent and careless during the appellate proceedings; hence, appeal of the assessee should be dismissed. 10. We have heard both the parties and perused the materials available on record. It is an undisputed fact that the assessee has been non-cooperative to the statutory notices and the show cause notice issued to him by the AO and the CIT(A). It is further seen that assessee had not filed his original return of income of AY.2012-13, though there were deposited of cash/ credit to the extent of Rs.37,03,022/- in his bank account. The AO added the entire cash deposit and credit entries in the bank account. He also added the investment of Rs.27,03,000/- on an immovable property. The CIT(A) passed the order u/s 250 of the Act without discussing anything on merit, which is in clear violation of the provisions under sub-section (6) of section 250 of the Act. Considering the peculiar facts of the case, we are of the view that the principles of natural justice would call for giving another opportunity of hearing to the assessee. Accordingly, we hold that the interests of justice would be met in case the AO re-examines the entire issue afresh subject to payment of cost of Rs.15,000/- (Rupees fifteen thousand only) by the assessee to the credit of the “Gujarat High Court Legal Aid Authority” within two weeks from receipt of this order. Subject to payment of above cost, we set aside the order of CIT(A) and remit the matter back to the file of AO with a direction to pass de novo assessment order 7 ITA No.587/SRT/2024/AY.2012-13 Pravinbhai Jagjivanbhai Gajjar in accordance with law after granting adequate opportunity of hearing to the assessee. The assessee is directed to be more vigilant and diligent and to furnish all details and explanations as needed by the AO by not seeking adjournment without valid reasons. With these directions, the grounds of appeal raised by the assessee are allowed for statistical purposes. 8. In the result, appeal of the assessee is allowed for statistical purposes. Order is pronounced in the open court on 26/12/2024. Sd/- Sd/- (PAWAN SINGH) (BIJAYANANDA PRUSETH) JUDICIAL MEMBER ACCOUNTANT MEMBER Surat Ǒदनांक/ Date: 26/12/2024 SAMANTA Copy of the Order forwarded to: 1. The Assessee 2. The Respondent 3. The CIT(A) 4. CIT 5. DR/AR, ITAT, Surat 6. Guard File By Order // True Copy // Assistant Registrar/Sr. PS/PS ITAT, Surat "