RANJEET SINGH SAINI, RAIPUR,RAIPUR V. INCOME TAX OFFICER, WARD-3(1), RAIPUR, RAIPUR

ITA 58/RPR/2025

AI Insights

The case involves Ranjeet Singh Saini, the appellant, contesting an assessment order under sections 147 and 144B of the Income Tax Act, 1961, which was initially passed by the Assessing Officer and later upheld by the CIT(A). The appellant challenged the legality of the reassessment proceedings, citing violations of statutory provisions and procedural lapses, including inadequate notice and non-compliance with the mandated seven-day response period. The ITAT found that the CIT(A) had dismissed the appeal ex parte due to non-compliance by the appellant, which was contested on the grounds of non-receipt of communication. The Tribunal, referencing similar cases and principles of natural justice, decided to remand the case for a fresh hearing.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 298996 (ITAT-RAIPUR)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-04-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2018-2019
• Other Referred Cases: Brajesh Singh Bhadoria Vs. Dy./ Asstt. Commissioner of Income Tax, Vijay Shrinivasrao Kulkarni Vs. Income-tax Appellate Tribunal, Delhi Transport Corporation vs. DTC Mazdoor Union, Commissioner of Income Tax Madras v. Chenniyappa Mudiliar
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: PRIYANKA PATEL
• Assessee Lawyers: VEEKAAS S SHARMA
• Keywords: Set aside; Opportunity of being heard; Reassessment proceedings; Unexplained investment; Principle of natural justice; Validity of assessment
• Section: 147; 148; 144; 143(3); 250; 69; 13; 69A

Judgement Text

"आयकर अपीलीय अिधकरण, रायपुर Ɋायपीठ, रायपुर IN THE INCOME TAX APPELLATE TRIBUNAL RAIPUR BENCH, RAIPUR Įी पाथ[ सारथी चौधरȣ, Ɋाियक सद˟ एवं ŵी अŜण खोड़िपया, लेखा सद˟ क े समƗ । BEFORE SHRI PARTHA SARATHI CHAUDHURY, JM & SHRI ARUN KHODPIA, AM आयकर अपील सं. / ITA No: 58/RPR/2025 (िनधाŊरण वषŊ Assessment Year: 2018-19) Ranjeet Singh Saini, C-38, Saini Electricals, New Bombay Market, Raipur-492001, Chhattisgarh V s The Income Tax Officer-Ward-3(1), Central Revenue Building, Main Building, Civil Lines, Raipur-492001, Chhattisgarh PAN: ANFPS1114H (अपीलाथŎ/Appellant) . . (ŮȑथŎ / Respondent) िनधाŊįरती की ओर से /Assessee by : Shri Veekaas S Sharma, CA राजˢ की ओर से /Revenue by : Dr. Priyanka Patel, Sr. DR सुनवाई की तारीख / Date of Hearing : 09.04.2025 घोषणा की तारीख/Date of Pronouncement : 09.04.2025 आदेश / O R D E R Per Arun Khodpia, AM: The captioned appeal is filed by the assessee against the order of Commissioner of Income Tax (Appeals), NFAC, Delhi, [in short “Ld. CIT(A)”], under section 250 of the Income Tax Act, 1961 (in short “the Act”), dated 31.12.2024, for the Assessment Year 2018-19, which in turn arises from the order passed by Assessing Officers, National Faceless Assessment Unit, Income Tax Department, Delhi (in short “Ld. AR”), u/s 147 r.w.s. 144B of the Act, dated 27.03.2023. 2 ITA No. 58/RPR/2025 Ranjeet Singh Saini Vs. I.T.O., Ward-3(1), Raipur 2. The grounds of appeal raised by the assessee are as under: 1. On the facts and in the circumstances of the case, the assessment order passed u/s 147 r.w.s. 144B is illegal, bad in law and void-ab-initio inasmuch as the provisions laid down u/s 148A(b) has not been adhered to, meaning thereby the proceedings initiated against the assessee is in gross violation of statutory prescription of not less than seven days’ notice under clause (b) of section 148A of the Income Tax Act, 1961 inasmuch as the show cause notice u/s 148A(b) was issued on 17th March 2022 seeking compliance up to 23rd March, 2022 thereby providing only five days to respond to the said notice which is contrary to the statutory mandate of ‘not less than seven days’ to be provided to the assessee to respond to the show cause notice, thus, the entire proceedings are void-ab-initio and liable to be quashed. Relief Sought: It is humbly requested that the proceedings initiated in violation of statute may kindly be declared as void-ab-initio, bad-in-law and illegal and the consequential addition of Rs.1,14,88,500/- may kindly be deleted. 2. On the facts and in the circumstances of the case, the reassessment order passed u/s 147 r.w.s. 144B is invalid, illegal, bad-in-law and void-ab-initio inasmuch as the assessment ought to have been framed u/s 147 r.w.s. 143(3) r.w.s. 144B as the assessment is framed either u/s 143(3) or u/s 144 after the issuance of notice u/s 148, hence, it is prayed that the reassessment order passed u/s 147 r.w.s. 144B may kindly be held to be illegal, bad-in-law and consequential enhancement of Rs.1,14,88,500/- made to the total income may kindly be directed to be deleted. 3. On the facts and circumstances of the case, the reassessment proceedings are illegal, bad-in-law and void-ab-initio inasmuch as the reassessment proceedings were initiated based on incorrect and non-existing facts and the sanctioning authorities have accorded sanction mechanically without application of mind which vitiates the entire reassessment proceedings and liable to be quashed and it is prayed that the reassessment proceedings may kindly be held to be illegal and consequential enhancement of Rs.1,14,88,500/- made to the total income may kindly be directed to be deleted. 4. On the facts and circumstances of the case and in law, the Assessment order passed is illegal, bad-in-law and void-ab-initio inasmuch as the assessment proceedings were culminated from notice issued u/s 148 of the Income Tax Act, 1961 dated 30.03.2022 which ought to have been issued by “Faceless Assessing Officer” was in fact issued by “Jurisdictional Assessing Officer” 3 ITA No. 58/RPR/2025 Ranjeet Singh Saini Vs. I.T.O., Ward-3(1), Raipur which is violative of and contrary to Notification No. 18/2022 dated 29.03.2022, therefore, it is prayed that the assessment order may kindly be declared to be illegal and quashed. 5. Without prejudice to the above, alternatively, it is submitted that on the facts and in the circumstances of the case, the Learned ClT (Appeal) is not justified in passing the order and confirming the additions in an exparte order without providing sufficient opportunity of being heard to the assessee and without independently deciding the grounds on merit and thereby violating the principles of natural justice. Hence, the impugned order passed by the Learned CIT (Appeal) is liable to be declared as illegal and bad-in-law. It is prayed that the order passed by the Learned CIT (Appeal) may kindly be declared as illegal and bad-in-law on account of violation of principles of natural justice. 6. On the facts and in the circumstances of the case, the Learned A.U, NFAC, Delhi has erred on facts and in law in making addition of Rs.65,80,000/- on account of alleged undisclosed short term capital gain on sale of immovable property and the Learned CIT (Appeal), NFAC, Delhi has erred in confirming the same, the addition so made is contrary to facts and law, therefore, it is prayed that the impugned addition of Rs.65,80,000/- may kindly be deleted. 7. On the facts and in the circumstances of the case, the Learned A.U, NFAC, Delhi has erred on facts and in law in making addition of Rs.20,00,000/- by invoking Section 69 on account of alleged unexplained investment in fixed deposit and the Learned CIT (Appeal) has erred in confirming the same and therefore, the invocation of Section 69 is contrary to facts and law and hence, liable to be deleted. It is prayed that the addition of Rs.20,00,000/- may kindly be deleted. 8. On the facts and in the circumstances of the case, the Learned A.U, NFAC, Delhi has erred on facts and in law in 30,07,982/- making addition of Rs. 29,08,500/- by invoking Section 69A on account of alleged unexplained cash deposits in bank accounts and the Learned CIT (Appeal) has erred in confirming the same and therefore, the invocation of Section 69A is contrary to facts and law and hence, liable to be deleted. It is prayed that the addition of Rs.29,08,500/- may kindly be deleted. 9. The Appellant craves leave to add, amend, alter vary and / or withdraw any or all the above grounds of Appeal. 4 ITA No. 58/RPR/2025 Ranjeet Singh Saini Vs. I.T.O., Ward-3(1), Raipur 3. Briefly stated, the assessee herein is an individual, engaged in the proprietary business of wholesale and retail trade. During the year under consideration, the assessee earned Profits and Gains from Business & Profession and Income from Other Sources. As per the information available in the ITBA System (Income Tax Business Application Software) which has been identified and flagged under Risk Management Strategy formulated by the Board, the assessee had made cash deposits in Bank accounts of Rs. 65,80,000/-, Interest other than interest on securities of Rs.20,00,000/-, Investment in the form of Time Deposits Rs.17,33,500/-, consideration in lieu of sale of immovable property Rs. 74,928/- during the F.Y. 2017-18. Since the assessee has not filed the ITR the income chargeable to tax being more than 50 lakhs has escaped assessment, considering the material available on record and in view of the above facts and circumstances of the case after providing opportunities to the assessee, with prior approval of the appropriate authorities, notice u/s. 148 of the Income Tax Act, 1961 was issued to the assessee on 30.03.2022. The assessment thereafter has been completed with certain additions to the tune of Rs.1,19,08,730/-, which are assailed by the assessee before the Ld. CIT(A) by way of an appeal, however, due to non-compliance by the assessee despite sufficient opportunities granted by the Ld. CIT(A), the appeal of the assessee has been dismissed. 5 ITA No. 58/RPR/2025 Ranjeet Singh Saini Vs. I.T.O., Ward-3(1), Raipur 4. Aggrieved with the dismissal of appeal by the Ld. CIT(A), assessee preferred to carry the matter before ITAT, which is under consideration in the present case. 5. At the outset, it is noticed that the impugned appellate order passed by the Ld. CIT(A) is an exparte order, which is apparent from the observations of the Ld. CIT(A) at para 1.1, 8 and 9 of the said order. The findings proving the order passed on exparte basis are extracted as under: 1.1 The notices of hearing were issued electronically under section 250 of the Act and the appellant was requested to furnish written submissions on ITBA module, as per the detail given hereunder: Date of issue of notice of hearing Requisite date of Compliance (on or before) Date of compliance Remarks, if any 01/05/2023 Enablement of Communication - -- 03/10/2024 18/10/2024 No Compliance -- 21/10/2024 28/10/2024 No Compliance -- 30/10/2024 06/11/2024 Seeking adjournment -- 07/11/2024 22/11/2024 No Compliance -- 26/11/2024 02/12/2024 No Compliance -- The appeal is disposed after considering the facts on record, on the issue, in the succeeding paras. 8. Further, on perusal of Form-35, it is seen that appellant has neither attached/uploaded any submission nor submitted evidences/document/ 6 ITA No. 58/RPR/2025 Ranjeet Singh Saini Vs. I.T.O., Ward-3(1), Raipur explanation in support of facts and grounds of appeal. Despite being given many opportunities, appellant did not respond during appellate proceeding, nor furnished requisite details/explanations which were required to adjudicate the present appeal. 9. In the present case appellant has been provided sufficient opportunities but appellant failed to submit any submission or evidence during appellate proceedings in support of grounds of appeal as well as statement of facts and remained non-compliant, therefore, in view of the above facts, I am constrained to uphold the order of the AO. As a result, grounds of appeal raised by the appellant are dismissed. 6. On perusal of the aforesaid order by Ld. CIT(A) and the contention raised by the Ld. AR on behalf of the assessee that due to non- receipt of notice / communications from the Ld. CIT(A), the assessee was unable to make necessary compliances on the designated dates, therefore, the substantial facts of the matter could not be brought to the knowledge of First Appellate Authority, consequently, the appeal was decided without taking into consideration the submission of the assessee. It was, therefore, the prayer that the matter may be remitted back to the file of Ld. CIT(A) with one last opportunity to the assessee to represent its case, to be decided denovo on merits, wherein the assessee would be vigilant, proactive and compliant without any fail. 7 ITA No. 58/RPR/2025 Ranjeet Singh Saini Vs. I.T.O., Ward-3(1), Raipur 7. Per contra, Ld. Sr. DR on behalf of the revenue submitted that the contention raised by the assessee that the communications are not received, therefore, the compliances could not be made before the appellate authority should not be acceded to as the assessee had responded to the notice dated 30.10.2024 seeking adjournment, therefore, it is a proven fact that assessee was in receipt of communications but had not responded by adopting an evasive approach. Accordingly, no further chances shall be provided to such assessee’s for misusing the government machinery at his own volition. Ld. Sr. DR vehemently supported the orders of revenue authorities and requested to uphold. 8. We have considered the rival submissions perused the material available on record and case law relied upon. Admittedly, since the present case is decided on exparte basis and under similar facts and circumstances, this tribunal had restored the matter back to the file of Ld. CIT(A) for denovo adjudication, therefore, we are of the considered opinion that the present matter also deserves to be remitted back to his files for fresh adjudication. Our decision is supported by a view adopted by this tribunal in the case of of Brajesh Singh Bhadoria Vs. Dy./ Asstt. Commissioner of Income Tax, Central Circle-2, in IT(SS) No. 1 to 6, 8 & 9/RPR/2025 dated 20.03.2025, wherein the relevant findings were as under: 8 ITA No. 58/RPR/2025 Ranjeet Singh Saini Vs. I.T.O., Ward-3(1), Raipur 7. We have considered the submissions of the parties herein and analyzed the facts and circumstances involved in all the captioned appeals. After careful perusal of the documents on record, we find that the assessee had assailed the legal ground as aforestated, however, the fact of the matter is that on perusal of the respective orders of the Ld. CIT(Appeals) for all the years before us, it is also evident from Para 3 that there has been no compliance by the assessee before the said authority and as such, an ex-parte order was passed for the concerned years in appeal. Admittedly, as per record, sufficient opportunities had been provided to the assesse, however, there was no compliance by the assessee. In effect, rights and liabilities of the parties herein are yet to be adjudicated substantially at the level of the first appellate authority. Though in the impugned orders, discussion has been done as per material available on record by the Ld. CIT(Appeals) but they are only Form 35, statement of facts, grounds of appeal and the assessment order. However, due to non-compliance by the assessee, there are no submissions, evidence and documents submitted for adjudication by the assessee before the Ld. CIT(Appeals). That as per Para 3 of the Ld. CIT(Appeals) order, there has been no compliance on the part of the assessee for submitting detailed explanations regarding the grounds of appeal for the years under consideration which clearly shows that the grounds of appeal raised before the first appellate authority has not been substantiated on merits through corroborative evidence /submissions. 8. That in such scenario we are of the considered view that the Income tax Act is within the ambit of welfare legislation which are completely different from that of the penal legislation, therefore, benefit of doubt whenever arises, it has to be interpreted in favour of the assessee tax payer within the parameters of law and facts. There may be circumstances beyond control of the assessee because of which, the assessee may not have been able to represent his case on the given 9 ITA No. 58/RPR/2025 Ranjeet Singh Saini Vs. I.T.O., Ward-3(1), Raipur dates of hearing before the Ld. CIT(Appeals). Though it is correct that there was no compliance from the side of the assessee, however, nothing is there on record which suggests any deliberate non-compliance or malafide conduct of the assessee. That further, if one final opportunity is provided to the assessee to represent his case before the first appellate authority, the position of the revenue will also not be jeopardized. 9. Recently, the Hon’ble High Court of Bombay in the case of Vijay Shrinivasrao Kulkarni Vs. Income-tax Appellate Tribunal (2025) 171 taxmann.com 696 (Bom.), dated 04.02.2025 observed that in the case the Assessing Officer had passed an ex-parte order and when the matter went on appeal before the Ld. CIT(Appeals)/NFAC, it had also dismissed the matter ex- parte due to non-compliance by the assessee’s authorized representative, when the matter came up before the ITAT, it had failed to address the infirmity regarding the fact that the assessee was not afforded proper opportunity of being heard and the matter was dismissed ex-parte by the Ld. CIT(Appeals)/NFAC which amounted to violation of principles of natural justice, and instead ITAT decided the case on merits, in such circumstances, the Hon’ble High Court of Bombay held that passing of an order on merits by the ITAT even when the impugned order was passed ex-parte amounts to violation of principles of natural justice and accordingly, the said matter was remanded to ITAT for passing a fresh order in accordance with law after hearing the parties. The legal principle as enshrined in the present judgment is crystal clear that the principles of natural justice i.e. the right to be heard is to be provided and accordingly, the matter had to be substantially adjudicated by the appellate authority. Therefore, if the impugned order of the Ld. CIT(Appeals)/NFAC is an ex-parte order, the only recourse in conformity with the aforesaid judicial pronouncement is to remand the matter back 10 ITA No. 58/RPR/2025 Ranjeet Singh Saini Vs. I.T.O., Ward-3(1), Raipur to the file of the Ld. CIT(Appeals)/NFAC for fresh adjudication in terms with the principles of natural justice providing one final opportunity to the assessee. 10. In the aforesaid case, the Hon’ble High Court of Bombay had referred to a judgment of the Hon’ble Supreme Court in the case of Delhi Transport Corporation vs. DTC Mazdoor Union AIR 1999 SC 564, wherein the Supreme Court inter-alia held that Article 14 guarantees a right of hearing to a person who is adversely affected by an administrative order. The principle of audi-alteram partem is a part of Article 14 of the Constitution of India. In light of such decision, the petitioner ought to have been granted an opportunity of being heard which, partakes the characteristic of the fundamental right under Article 14 of the Constitution of India. 11. The Hon’ble High Court of Bombay in the aforesaid case had referred to a decision of the Hon’ble Supreme Court in the case of Commissioner of Income Tax Madras v. Chenniyappa Mudiliar 1969 1 SCC 591, wherein the Supreme Court in interpreting the section 33(4) of the Income Tax Act, 1922 has held that the appellate tribunal was bound to give a proper decision on question of fact as well as law, which can only be done if the appeal is disposed off on merits and not dismissed owing to the absence of the appellant. Reverting to the facts of the present case the grounds of appeal were simply filed before the Ld.CIT(Appeals) they were not substantiated or corroborated through submissions and filing of documentary evidences since the assessee had not complied before the Ld.CIT(Appeals) on the dates of hearing. Therefore, as per framework of the Act there must be adjudication on merits by the first appellate authority and one final opportunity be provided to the assessee to represent his matter on merits in the interest of natural justice. 11 ITA No. 58/RPR/2025 Ranjeet Singh Saini Vs. I.T.O., Ward-3(1), Raipur 12. There may even be a situation where the Ld. Counsel for the assessee may assail a legal ground before the Tribunal following the decision of the Hon’ble Supreme Court in the case of National Thermal Power Company Ltd. Ltd. Vs. CIT (1998) 229 ITR 383 (SC) with a contention that irrespective of the order of the Ld. CIT(Appeals) being ex-parte, the Tribunal may decide the legal issue that has been raised by the Ld. Counsel. In our view, the decision of the Hon’ble Supreme Court in the case of National Thermal Power Company Ltd. Ltd. Vs. CIT (supra) provides that any legal issue which goes to the root of the matter and is established through legal principles, the assessee can take up and raise such legal issue at any appellate forum irrespective of whether the assessee had raised such legal issue at the sub-ordinate level or not, however, it always depends on facts and circumstances of each case whether the Tribunal would decide the legal ground or in a case where the question is of natural justice and ex-parte order by the Ld. CIT(Appeals) the Tribunal would remand it back to Ld.CIT(Appeals) providing final opportunity to a bonafide assessee. The Tribunal as the highest fact finding authority must be certain enough that the impugned order before it has been passed on merits and is a speaking order where the assessee has also complied during the process of litigation. In case, where the order of the Ld. CIT(Appeals) itself is ex-parte and some legal ground is raised and if the Tribunal decides such legal ground where in fact principles of natural justice is left unanswered due to the fact that the impugned order before the Tribunal is ex- parte and there was no compliance by the assessee in such scenario the Tribunal would also be usurping the power of the Ld. CIT(Appeals) which is also a statutory authority as per the Act. This is due to the reason that as per framework of the Act, Ld.CIT(Appeals) is the first appellate authority where an appeal by assessee it would be substantially decided through a speaking order by the Ld. CIT(Appeals). When this part is over and either party is aggrieved second appeal lies before the ITAT. Now if for every ex-parte order passed by the Ld. 12 ITA No. 58/RPR/2025 Ranjeet Singh Saini Vs. I.T.O., Ward-3(1), Raipur CIT(Appeals), of course due to non-compliance by the assessee, if the Tribunal adjudicates a legal ground, for instance validity of assessment or reassessment order and answers it in favour of the assessee then it would create an easy route for assessee getting redressal from Tribunal even without bothering to comply with hearing notices before the Ld. CIT(Appeals). This would dismantle the structure of the Act which is definitely not the intention of the legislature. Here in this situation, where the benefit of doubt is given to the assessee since he had not complied with the hearing notices before the Ld. CIT(Appeals) which resulted in passing of an ex-parte order by the Ld. CIT(Appeals), in such scenario, as per the scheme of the Act and following the principles of natural justice, the only course of action is to remand the matter back to the file of the Ld. CIT(Appeals) for adjudication on merits providing one final opportunity to the assessee. 13. In view thereof, we set aside the respective orders of the Ld. CIT(Appeals) for all the years and remand the same to their file for denovo adjudication on merits. At the same time, we direct the assessee that this being the final opportunity, there must be compliance on merits before the first appellate authority. Needless to say, the Ld. CIT(Appeals) shall provide reasonable opportunity of being heard to the assessee and pass an order in terms of Section 250(4) and (6) of the Act within three months from receipt of this order. 9. In view of aforesaid facts and circumstances, respectfully following the aforesaid decision in the case of Brajesh Singh Bhadoria (supra), the impugned order of Ld. CIT(A) is set aside, and matter is restored back to his 13 ITA No. 58/RPR/2025 Ranjeet Singh Saini Vs. I.T.O., Ward-3(1), Raipur file for denovo adjudication within a period of 3 months from the receipt of this order. 10. Needless to say, the assessee shall be afforded with reasonable opportunity of being heard in the set aside appellate proceedings. The assessee is also directed to cooperate and assist proactively in the set aside proceedings, failing which the Ld. CIT (A) would be at liberty to decide the case in accordance with the mandate of law. 11. In result, appeal of the assessee is partly allowed for statistical purposes, in terms of over aforesaid observations. Order pronounced in the open court on 09/04/2025. Sd/- (PARTHA SARATHI CHAUDHURY) Sd/- (ARUN KHODPIA) Ɋाियक सद˟ / JUDICIAL MEMBER लेखा सद˟ / ACCOUNTANT MEMBER रायपुर/Raipur; िदनांक Dated 09/04/2025 Vaibhav Shrivastav आदेश की Ůितिलिप अŤेिषत/Copy of the Order forwarded to : 1. अपीलाथŎ / The Appellant- Ranjeet Singh Saini, Raipur 2. ŮȑथŎ / The Respondent- ITO, Ward-3(1), Raipur 3. The Pr. CIT, Raipur (C.G.) 4. िवभागीय Ůितिनिध, आयकर अपीलीय अिधकरण, रायपुर/ DR, ITAT, Raipur 5. गाडŊ फाईल / Guard file. // सȑािपत Ůित True copy // 14 ITA No. 58/RPR/2025 Ranjeet Singh Saini Vs. I.T.O., Ward-3(1), Raipur आदेशानुसार/ BY ORDER, (Senior Private Secretary) आयकर अपीलीय अिधकरण, रायपुर/ ITAT, Raipur "