RAMESHBHAI RANCHHODBHAI PATEL,BHARUCH V. ITO WARD 1(5), BHARUCH

ITA 598/SRT/2024

AI Insights

This case involves an appeal by Rameshbhai Ranchhodbhai Patel against the order of the Commissioner of Income Tax (Appeals), which confirmed additions made by the Assessing Officer regarding undisclosed agricultural expenditure and unexplained cash credits. The Tribunal noted that the CIT(A) had passed an ex-parte order without proper notice to the assessee, leading to the decision to restore the case for a fair hearing. The primary legal issues revolved around the proper application of Sections 69C and 68 of the Income Tax Act, concerning undisclosed sources of income and unexplained cash credits, respectively.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 33915 (ITAT-SURAT)
• Duration Of Justice: 4 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-10-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Next Hearing Date: 17-10-2024
• Assessment Year: 2017-2018
• Appeal Filed On: 20-05-2024
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MUKESH JAIN
• Assessee Lawyers: CHAITALI SHAH
• Keywords: Opportunity of being heard; Unexplained cash credit
• Section: 69C

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL, SURAT (SMC) BENCH BEFORE SHRI PAWAN SINGH, JUDICIAL MEMBER ITA No. 598/SRT/2024 for AY: 2017-18 (Physical hearing) Rameshbhai Ranchhodbhai Patel, At Post Bharadia, Tal – Valia, Bharuch, Bharuch – 392001, Gujarat e-mail: [e-mail] PAN : BIMPP2185G Vs The ITO, Ward – 1(5), Bharuch APPELLANT RESPONDEDNT Appellant by Ms Chaitali Shah, CA Respondent by Shri Mukesh Jain, Sr. DR Date of Institution 20/05/2024 Date of hearing 17/10/2024 Date of pronouncement 17/10/2024 Order under Section 254(1) of Income tax Act PER PAWAN SINGH, JUDICIAL MEMBER: 1. This appeal by assessee is directed against the order of learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, dated 22.03.2024 for Assessment Year (AY) 2017-18. The assessee has raised following grounds of appeal: 1. On the facts and in circumstances of the case as well as law on the subject, the learned CIT(A) has erred in passing ex-parte order without giving reasonable and sufficient opportunity of being heard. 2. On the facts and circumstances of the case as well as law on the subject, the learned CIT(A) has erred in confirming the action of assessing officer in making addition of Rs.6,67,7057- u/s. 69C as agricultural expenditure from undisclosed sources being 40% of agriculture income. 3. On the facts and circumstances of the case as well as law on the subject, the learned CIT(A) has erred in confirming the action of assessing officer in making addition of Rs.25,97,861/- u/s. 68 on account of unexplained cash credits being cash deposits in bank accounts . 4. On the facts and circumstances of the case as well as law on the subject, the learned CIT(A) has erred in confirming the action of assessing officer in allowing the taxation of the addition by taking the rate @ 77.25 percent by attracting S. 115BBE instead of normal tax rate. ITA No.598/SRT/2024/AY.2017-18 Rameshbhai Ranchhodbhai Patel 2 5. On the facts and circumstances of the case as well as law on the subject, the learned assessing officer has erred in taxing the income u/s 115BBE @ 77.25 percent by applying the duly substituted S.115BBE retrospectively instead of taxing it at 35.54 percent as per the old provision of S.115BBE. 6. It is therefore prayed that additions made by assessing officer and confirmed by CIT(A) may please be deleted. 7. Appellant craves leave to add, alter or delete any ground(s) either before or in the course of hearing of the appeal.” 2. Rival submission of both the parties and perused the record. The learned Authorized Representative (ld. AR) of the assessee submits that while filing appeal before ld CIT(A), the assessee filed detailed statement of fact and explained all the fact leading to addition of Rs.6,67,705/- made on account of expenditure from undisclosed source as well as on addition of cash deposit in bank account, aggregating to Rs.29,57,681/-. The ld. CIT(A) dismissed the appeal of assessee without considering such fact. The ld. AR submits that while filing the appeal, though, the assessee mentioned e-mail address as ‘[e-mail]’. However, in the same column with regard to service of notice through e-mail, the assessee mentioned as ‘No’. Thus, the ld CIT(A)/ NFAC was required to send notice in physical form and / or by post. No physical notice was served from the office of ld. CIT(A). the ld CIT(A) passed ex- parte order by holding that the assessee failed to furnish his submissions. The ld. AR of the assessee submits that assessee is interested in contesting the case on merit and one more opportunity may be allowed to contest his case and the matter may be restored to the file of ld. CIT(A). The ld. AR submits that she undertakes on behalf of the assessee to be more vigilant in future. 3. On the other hand, learned Senior Departmental Representative (ld. Sr. DR) for the revenue submitted that though the assessee was allowed reasonable ITA No.598/SRT/2024/AY.2017-18 Rameshbhai Ranchhodbhai Patel 3 opportunity by ld. CIT(A) and deserve no relief. In alternative submission the ld Sr DR for the revenue submits that if Bench is of the view, assessee deserves any more opportunity, the matter may be restored back to the file of ld. CIT(A) with the direction to assessee to be more vigilant in future in making compliance of notices of hearing issued by first appellate authority. 4. I have considered the rival submission of both the parties and have gone through the orders of lower authorities carefully. I find that while passing the assessment order, the Assessing Officer disallowed Rs.6,67,705/-, out of total agriculture income shown by the assessee, incurred from undisclosed sources. The Assessing Officer also made addition on account of deposit during demonetization of Rs.25,97,861/- by taking view that sources of cash deposit is not explained. Considering the fact that first appellate authority while passing ex-parte order confirmed the addition made by Assessing Officer, therefore, the matter is restored back to the file of ld. CIT(A) with the direction to allow one more opportunity to the assessee to contest the case on merit. The assessee also directed to be more vigilant in future and to make compliance the notices of hearing in time. For statistical purposes, the appeal of the assessee is allowed. 5. In the result, appeal of the assessee is allowed for statistical purposes. Order pronounced on 17/10/2024 in the open court. Sd/- (PAWAN SINGH) JUDICIAL MEMBER Surat, Dated: 17/10/2024 SAMANTA ITA No.598/SRT/2024/AY.2017-18 Rameshbhai Ranchhodbhai Patel 4 Copy to: 1. Appellant 2. Respondent 3. CIT(A) 4. CIT 5. DR 6. Guard File By order // TRUE COPY // Assistant Registrar/Sr.PS/PS, ITAT, Surat "