RAKESH SINGH, RAIPUR,RAIPUR V. INCOME TAX OFFICER, WARD-1(1), RAIPUR, RAIPUR

ITA 365/RPR/2025

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The case involves Rakesh Singh, the appellant, who was assessed for income tax for the assessment year 2011-12. The Income Tax Officer (ITO) reopened his case under section 147 of the Income Tax Act, 1961, due to non-filing of income tax returns despite substantial transactions amounting to Rs. 23,13,46,531 under the National Commodity and Derivatives Exchange. The ITO added Rs. 11,56,732 to Singh's income based on presumed profits from these transactions. Singh appealed to the CIT(Appeals)/NFAC, which was dismissed ex-parte due to non-compliance. The ITAT, referencing a similar case, remanded the matter back to the CIT(Appeals) for a fresh examination, providing Singh another opportunity to present his case.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 652811 (ITAT-RAIPUR)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-06-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Other Referred Cases: Brajesh Singh Bhadoria Vs. Dy./ACIT, Central Circle-2, Naya Raipur, IT(SS)A Nos.1 to 6, 8 & 9/RPR/2025
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PRIYANKA PATEL
• Assessee Lawyers: PRAFULLA PENDSE
• Keywords: Principle of natural justice
• Section: 147; 148; 271(1)(c)

Judgement Text

"आयकर अपीलȣय अͬधकरण Ûयायपीठ “एक-सदèय” मामला रायपुर मɅ IN THE INCOME TAX APPELLATE TRIBUNAL RAIPUR BENCH “SMC”, RAIPUR Įी पाथ[ सारथी चौधरȣ, ÛयाǓयक सदèय क े सम¢ BEFORE SHRI PARTHA SARATHI CHAUDHURY, JUDICIAL MEMBER आयकर अपील सं./ITA No.365/RPR/2025 Ǔनधा[रण वष[ /Assessment Year : 2011-12 Rakesh Singh Indira Chowk, Ring Road, Sanjay Nagar, Raipur-492 001 (C.G.) PAN: BONPS5712K .......अपीलाथȸ / Appellant बनाम / V/s. The Income Tax Officer, Ward-1(1), Raipur (C.G.) ……Ĥ×यथȸ / Respondent Assessee by : Shri Prafulla Pendse, CA Revenue by : Dr. Priyanka Patel, Sr. DR सुनवाई कȧ तारȣख / Date of Hearing : 17.06.2025 घोषणा कȧ तारȣख / Date of Pronouncement : 20.06.2025 2 Rakesh Singh Vs. ITO, Ward-1(1), Raipur (C.G.) ITA No.365/RPR/2025 आदेश / ORDER PER PARTHA SARATHI CHAUDHURY, JM The captioned appeal preferred by the assessee emanates from the order of the Ld.CIT(Appeals)/NFAC, dated 13.03.2025 for the assessment year 2011-12 as per the grounds of appeal on record. 2. The brief facts in this case are that though the assessee during the year under consideration made a transaction of Rs.23,13,46,531/- under National/Multi Commodity Exchange-Contract but had not filed his return of income. Accordingly, the A.O recorded reasons to believe that income of the assessee had escaped assessment and thus, reopened the case of the assessee u/s. 147 of the Income Tax Act, 1961 ( for short ‘the Act’). Notice u/s. 148 of the Act was issued to the assessee on 26.03.2018. 3. During the course of the assessment proceedings, the assessee has given details of intraday transactions of purchase of Rs.18,36,019/- and sales of Rs.18,37,329/- showing profit of Rs.1,311/-. It is also stated by the assessee that he had not carried out any transaction in National/Multi Commodity Exchange during the year under consideration. However, the A.O did not accept the contention of the assessee and made an addition of Rs.11,56,732/-. For the sake of completeness, the relevant observation of the A.O is culled out as follows: 3 Rakesh Singh Vs. ITO, Ward-1(1), Raipur (C.G.) ITA No.365/RPR/2025 “As per the AIR information available in this office the assessee has made 1052 transactions of purchases and sales of Rs.23,13,46,531/- under the National Commodity and Derivatives Exchange Limited. Therefore the reply of the assessee is not acceptable. The total transactions for purchases and sales have been made by the assessee at Rs.23,13,46,531/-. On the basis of these the transactions of sales comes approximately to Rs.11,56,73,265/- (50% of the total value of transactions as the total value is comprised of the both purchases and sales). The approximate net profit @ 1% on the sales of Rs.11,56,73,265/-is taken and determined at Rs.11,56,732/- and added to total income of the assessee. Penalty proceedings u/s 271(1)(c) is initiated separately for furnishing inaccurate particulars of income and concealment of income.” 4. That being aggrieved, the assessee carried the matter in appeal before the Ld. CIT(Appeals)/NFAC. It is noted that as per Para 4 of the impugned order, the Ld.CIT(Appeals)/NFAC vide an ex-parte order had dismissed the appeal of the assessee due to non-compliance by the assessee. For the sake of clarity, Para 4 of the Ld.CIT(Appeals)/NFAC order is culled out as follows: “4. Decision: 4.1 The appeal was filed by the appellant on 14.02.2019 against the Assessment order u/s.144 of the Act dated 03.12.2018. In connection to the appeal, opportunities were provided to the appellant to substantiate his grounds of appeal on following dates: Sr. No. Date of hearing (s) 1. 12.03.2021 2. 19.02.2025 3. 04.03.2025 Against all these notices there was no response from the appellant, as has been brought out above, it is evident that 4 Rakesh Singh Vs. ITO, Ward-1(1), Raipur (C.G.) ITA No.365/RPR/2025 the appellant is not interested in filing any details during the appellate proceedings and avail the opportunity under the principle of natural justice. In response to the notices issued, even adjournment was not sought. In such situation, the only conclusion which can be drawn is that the appellant is not interested in pursuing the appeal.” 5. The Ld. Counsel for the assessee submitted that if a final opportunity is given before the Ld. CIT(Appeals)/NFAC, then the assessee shall file affidavit regarding the fact that he does not have any account with National Commodity Stock Exchange and his PAN was misused. The Ld. Counsel further submitted that the assessee has not filed original return of income, however in response to the notice u/s.148 of the Act, the assessee had filed return of income showing profit and gains through presumptive profits u/s.44AD of the Act. As regards the query from the Bench regarding capital gain shown by the assessee in short term gain from securities taxable, it was submitted by the Ld. Counsel that this transaction was made with Ventura Securities Ltd. and not with National Commodity Stock Exchange. 6. In this regard, the Ld. Sr. DR has fairly conceded that the matter may be investigated and examined before the first appellate authority providing one final opportunity to the assessee. 7. I have heard the submissions of the parties herein and carefully considered the contents in the documents/material available on record. 5 Rakesh Singh Vs. ITO, Ward-1(1), Raipur (C.G.) ITA No.365/RPR/2025 As per the aforesaid examination of the entire spectrum of the matter in the interest of natural justice, I deem it fit and proper to provide one final opportunity to the assessee to represent his case on merits before the Ld. CIT(Appeals). 8. In the overall spectrum of an ex-parte order being passed due to non-compliance by the assessee before the Ld.CIT(Appeals)/NFAC, I refer to the order of the ITAT, “Division Bench”, Raipur in the cases of Brajesh Singh Bhadoria Vs. Dy./ACIT, Central Circle-2, Naya Raipur, IT(SS)A Nos.1 to 6, 8 & 9/RPR/2025, dated 20.03.2025 wherein the Tribunal had dealt with similar issue on the same parameters of ex-parte order passed by the Ld. CIT(Appeals)/NFAC and remanded the matter back to the file of the Ld. CIT(Appeals)/NFAC. 9. Respectfully following the aforesaid order on the same parity of reasoning, I am providing final opportunity to the assessee to represent his case before the first appellate authority. Accordingly, I set-aside the order of the Ld. CIT(Appeals)/NFAC and remand the matter back to its file for denovo adjudication as per law while complying with the principles of natural justice. 10. Before parting with this matter it is stated that if the assessee fails to comply with hearing notices before the Ld.CIT(Appeals)/NFAC or the assessee fails to substantiate his claim that he has not carried out any 6 Rakesh Singh Vs. ITO, Ward-1(1), Raipur (C.G.) ITA No.365/RPR/2025 transaction in National/Multi Commodity Exchange during the year under consideration, the additions are to be sustained. 11. As per the above terms, the grounds of appeal raised by the assessee stands allowed for statistical purposes. 12. In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in open court on 20th day of June, 2025. Sd/- (PARTHA SARATHI CHAUDHURY) ÛयाǓयक सदèय/JUDICIAL MEMBER रायपुर / Raipur; Ǒदनांक / Dated : 20th June, 2025. SB, Sr. PS आदेश कȧ ĤǓतͧलͪप अĒेͪषत / Copy of the Order forwarded to : 1. अपीलाथȸ / The Appellant. 2. Ĥ×यथȸ / The Respondent. 3. The Pr. CIT-1, Raipur (C.G.) 4. ͪवभागीय ĤǓतǓनͬध, आयकर अपीलȣय अͬधकरण, “एक-सदèय” बɅच, रायपुर / DR, ITAT, “SMC” Bench, Raipur. 5. गाड[ फ़ाइल / Guard File. आदेशानुसार / BY ORDER, // True Copy // Senior Private Secretary आयकर अपीलȣय अͬधकरण, रायपुर / ITAT, Raipur "