PRITI PRAJYOT POTPHODE,PALGHAR V. INCOME TAX OFFICER WARD 3, PALGHAR

ITA 4058/MUM/2025

AI Insights

This case involves an appeal by Priti Prajyot Potphode against the order of the National Faceless Appeal Centre (NFAC), which was based on an earlier assessment by the Assessing Officer. The primary contention was the addition of Rs.57,31,862 as undisclosed income, which the assessee argued was a result of income being reported under her individual PAN instead of the newly formed private limited company. The CIT(A) had dismissed the appeal on an ex-parte basis due to non-prosecution, without adjudicating on the merits. The Tribunal found this dismissal inappropriate and set aside the order, directing a fresh examination of the case.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 775757 (ITAT-MUMBAI)
• Duration Of Justice: 3 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-09-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2014-2015
• Appeal Filed On: 07-06-2025
• Other Referred Cases: CIT vs. Premkumar Arjundas Luthra (HUF) - [2016] 69 taxmann.com 407 (Bombay)
• Laws Referred To: Income-tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIRABHADRA MAHAJAN
• Assessee Lawyers: TANMAY PHADKE
• Keywords: Set aside; Opportunity of being heard; Principle of natural justice; FORM 26AS
• Section: 143(3); 133(6)

Judgement Text

"IN THE INCOME-TAX APPELLATE TRIBUNAL “C” BENCH, MUMBAI BEFORE SHRI AMIT SHUKLA, JUDICIAL MEMBER & SHRI. ARUN KHODPIA, ACCOUNTANT MEMBER आयकर अपील सं./ITA No. 4058/MUM/2025 (निर्धारण वर्ा / Assessment Year: 2014-15) Priti Prajyot Potphode Umber pada Wadare, Safale, Palghar 401102 v/s. बिधम Income Tax Officer Ward 3 Amba Wadi, Palghar, Maharashtra, Thane 401404 स्थधयी लेखध सं./जीआइआर सं./PAN/GIR No: AJHPM9841M Appellant/अपीलधथी .. Respondent/प्रनिवधदी निर्धाररिी की ओर से /Assessee by: Shri Tanmay Phadke-Advocate रधजस्व की ओर से /Revenue by: Shri. Virabhadra Mahajan, (SR DR) सुिवधई की िधरीख / Date of Hearing 09.09.2025 घोर्णध की िधरीख/Date of Pronouncement 10.09.2025 आदेश / O R D E R PER ARUN KHODPIA, AM:- This appeal is filed by the assessee against the order of the National Faceless Appeal Centre (NFAC), Delhi [CIT(A)] dated 26.08.2024 for the assessment year 2014-15, which in turn arises from the order u/s. 143(3) of the Income-tax Act passed by Assessing Officer, NFAC, Delhi, dated 26.03.2021. 2. The grounds of appeal raised by the assessee are extracted as under: “1. On the facts and circumstances of the case and in law, the National Faceless Appeal Centre/Commissioner of Income Tax (Appeals) [\"the learned Commissioner (Appeals)] erred in deciding the appeal ex-parte in violation of the principle of natural justice. Thus, the order dated 26.08.2024 may be set aside and the matter may be restored back to the file of the learned Commissioner (Appeals). Printed from counselvise.com P a g e | 2 ITA No 4058/Mum/2025 Ay 2014-15 Priti Prajyot Potphde 2. Without prejudice to the above, on the facts and circumstances of the case and in law, the order dated 26.08.2024 as passed by the learned Commissioner (Appeals) is bad in law since it dismisses the appeal on the reason of non-prosecution and does not adjudicate on the grounds/additional grounds of appeal and the issues under consideration. The said order being in violation of the provisions of Section 250 and 251 of the Act and the decision of the Hon'ble jurisdictional Bombay High Court in \"CIT vs. Premkumar Arjundas Luthra (HUF)- [2016] 69 taxmann.com 407 (Bombay)\" may be quashed. 3. Without prejudice to the above, on the facts and circumstances of the case and in law, the addition of Rs.57,31,862/- as undisclosed income being unsustainable in law may be deleted. Miscellaneous ground: 4. The Appellant craves leave to add, alter, rescind, or amend any of the above grounds of appeal.” 3. Brief facts of the case are that the assessee is an individual filed her return of income for A.Y 2014-15 on 22.11.2014 declaring income of Rs.11,24,610/-. The assessee is engaged in the business of sealing system that can prevent theft, tampering, adulteration and pilferage of material. The gross receipts of the assessee as per Form 26AS was of Rs.3,03,62,555/-whereas the gross receipts as per profit and loss account shown by the assessee was at Rs.2,12,65,589/-. During the course of assessment proceedings, assessee was asked to reconcile the said difference. The assessee filed reconciliation statement and also submitted that the same business was carried out in the name of private limited company floated by the assessee w.e.f. 01/10/2013 and that the Permanent Account Number(PAN) for the private limited company was not intimated properly to all the clients of the assessee. Hence, certain income had been reflected in the Form 26AS in the individual PAN of the assessee, whereas the corresponding income has been shown in the hands Printed from counselvise.com P a g e | 3 ITA No 4058/Mum/2025 Ay 2014-15 Priti Prajyot Potphde of private limited company. The assessee even gave the list of names and addresses of the parties from whom monies were received both by him as well as private limited company before the assessing officer. The assessing officer sought to make verification of those parties by issuing notices u/s 133(6) of the Act. Some parties responded directly to the AO to the said notice which were duly accepted by the AO in the assessment proceedings. In respect of parties who did not respond, the AO disbelieved the explanation of the assessee and proceeded to make addition of Rs.57,31,862/- for the difference in gross receipts between the amount shown by the assessee and Form 26AS. 4. Aggrieved with the aforesaid assessment by the Ld. AO assessee preferred an appeal before Ld. CIT(A). However, before the First Appellate Authority the assessee was unable to made necessary compliances and representation. Accordingly, the order was passed by the Ld. CIT(A) on ex-parte basis. Ld. AR also submitted in the grounds itself that there was no decision by the Ld. CIT(A) on merits of the issues the appeal of the assessee has been dismissed only for the reason of non-prosecution therefore following the principal of laid down by the Hon'ble Mumbai High Court in the case of CIT vs. Premkumar Arjundas Luthra (HUF)- [2016] 69 taxmann.com 407 (Bombay), the order of Ld. CIT(A) is liable to be set aside for adjudication of the issues on merits. Printed from counselvise.com P a g e | 4 ITA No 4058/Mum/2025 Ay 2014-15 Priti Prajyot Potphde 5. Per contra Ld. SR DR supported the order of Ld. CIT(A) however, if the same is set aside for fresh adjudication he did not objected to. 6. We have heard the rival submissions and perused the material available on record and case law riled upon by the assessee. Admittedly, in present case the order passed by Ld. CIT(A) is an ex-parte order, without any adjudication on merits. Further as fairly conceded by both the parties that appeal of assessee has been dismissed for non-prosecution by the Ld. CIT(A), we find it appropriate to set aside the order of Ld. CIT(A) and restore the mater back to his file for fresh adjudication, with reasonable opportunity of being heard to the assessee. 7. In the result, appeal of the assessee is allowed for statistical purposes, in terms of our aforesaid observations. Order pronounced in the open court on 10.09.2025. Sd/- Sd/- (AMIT SHUKLA) (ARUN KHODPIA) JUDICIAL MEMBER ACCOUNTANT MEMBER Place: म ुंबई/Mumbai दिन ुंक /Date 10.09.2025 Divya R. Nandgaonkar Stenographer आदेश की प्रनिनलनप अग्रेनर्ि/Copy of the Order forwarded to : 1. अपील र्थी / The Appellant 2. प्रत्यर्थी / The Respondent. Printed from counselvise.com P a g e | 5 ITA No 4058/Mum/2025 Ay 2014-15 Priti Prajyot Potphde 3. आयकर आय क्त / CIT 4. दिभ गीय प्रदिदनदि, आयकर अपीलीय अदिकरण DR, ITAT, Mumbai 5. ग र्ड फ ईल / Guard file. सत्यधनपि प्रनि //True Copy// आदेशधिुसधर/ BY ORDER, सहधयक पंजीकधर (Asstt. Registrar) आयकर अपीलीय अनर्करण/ ITAT, Bench, Mumbai. Printed from counselvise.com "