RAYSINGBHAI JESINGBHAI ZALA,FACHARIYA V. INCOME TAX OFFICE, VERAVAL

ITA 735/RJT/2024

AI Insights

The case involves Raysingbhai Jesingbhai Zala, the appellant, who contested the orders of the National Faceless Appeal Centre (NFAC) and the Assessing Officer (AO) under the Income Tax Act, 1961. The appellant had not filed a return for AY 2017-18 but had significant cash deposits during the demonetization period, which were treated as unexplained by the AO. The NFAC upheld the AO's decision, leading to the appeal. The Tribunal found procedural lapses in the notice delivery, which were sent to an outdated email, and thus set aside the previous orders, directing a re-assessment.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 473460 (ITAT-RAJKOT)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-04-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2017-2018
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ABHIMANYU SINGH YADAV; LD.
• Assessee Lawyers: CHETAN AGARWAL; LD
• Keywords: Set aside; Unexplained cash credit; Principle of natural justice
• Section: 147; 144; 69; 44AD; 69A; 144C

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL, RAJKOT BENCH, RAJKOT BEFORE DR. ARJUN LAL SAINI, ACCOUNTANT MEMBER AND SHRI DINESH MOHAN SINHA, JUDICIAL MEMBER आयकरअपीलसं./ITA No. 735/RJT/2024 ( नधा\u000fरणवष\u000f / Assessment Year: (2017-18) (Hybrid Hearing) Raysingbhai Jesingbhai Zala Village: Fachariya of Taluka Kodinar, District: Gir, Somnath – 362720 Vs. The Income Tax Officer, ward-1, Junagadh The ITO, ward-5, Yogeshwar Bhavan, Nr. Ambaji Temple, Veraval - 362265 \u0013थायीलेखासं./जीआइआरसं./PAN/GIR No.: AAUPZ7180N (Appellant) (Respondent) Appellant by : Shri Chetan Agarwal, Ld. AR Respondent by : Shri Abhimanyu Singh Yadav, Ld. Sr. DR Date of Hearing : 07/01/2025 Date of Pronouncement : 04/04/2025 आदेश / O R D E R PER DINESH MOHAN SINHA, JM: Captioned appeal filed by the assessee is directed against the order passed by the National Faceless Appeal Centre [(in short “NFAC/Ld. CIT(A)”] vide order dated 24.07.2024, which in turn assessment order passed by Assessment Unit, Income Tax Department / Assessing Officer under section 144 of the Income Tax Act, 1961 (in short “the Act”), vide order dated 11.12.2019. 2. Grounds of appeal raised by the assessee are as follows: Page | 2 Raysingbhai Jeshingbhai Zala v. ITO ITA No. 735 /Rjt/2024 (AY 2017-18) 1.0 Ld. Commissioner of Income tax (Appeals), National Faceless Appeal Centre has erred in law and facts in dismiss the appeal in violation of principles of natural justice; 2.0 Ld. Commissioner of Income tax (Appeals), National Faceless Appeal Centre has erred in law and facts in confirming the addition u/s 69A of the Act of Rs. 24,37,500/-, which may kindly be deleted and justice be done; 3.0 Ld. Commissioner of Income tax (Appeals), National Faceless Appeal Centre has erred in law and facts in confirming the estimated addition u/s 44AD of the Act of Rs. 3,63,060/-, which may kindly be deleted and justice be done;3. Brief facts of the case that the Assessing officer issued the draft assessment order dated 18.01.2024 u/s. 147 r.w.s. 144C of the I. T. Act, 1961 by making an addition of Rs. 79,75202/- on account of unexplained credits u/s. 69 of the Act, total income assessed at Rs. 80,30,400/-. 3. Brief facts of the case that the assessee has not filed a Return of Income for AY 2017-18. However, the assessee deposited cash of Rs. 18,00,000/- in account no. 8101416601000474 and Rs. 6,92,580/- was deposited in account no. 810141660100479 in Kodinar Nagrik Sahakari Bank. During the demonetarization period, the notices were issued to the assessee to filed submission after receiving direction from Jt submission. In the Submission the assessee has stated that he is engaged in the trading of Jaggery and also has agriculture income. The assessee has approx. 20vigha agriculture land The assessee has explained source of cash deposited in bank account out of cash on hand and sale proceeds in support, the assessee has furnished copy of ledger account, copy of balance sheet, copy of cash book for F.Y.s 2015- 16 and 2016-17 bank statement, cash flow statement for F.Y.s 2015-16 and 2016-17, copy of 7/12 & 8A, agriculture loan account. The same are verified and kept on record. The assessee has also furnished computation of income, in which the assessee has shown net profit of Rs. 3.16.962/- and taxable income of Rs.2.69.771/- and net agriculture income of Rs.55,094/-. The Assessing Officer has consider on the basis of submission filed by the assessee that they have turnover of Rs. 45,38,300/- of 8% less than income calculated of Rs. 24,37,500/- deposited during the demonetization period Page | 3 Raysingbhai Jeshingbhai Zala v. ITO ITA No. 735 /Rjt/2024 (AY 2017-18) were considered to be unexplained money u/s. 69 of the Act. The assessment completed as under: Net Profit as discussed in Para 04 above Rs. 3,63,060/- Addition: As discussed in Para 03 above Rs. 24,37,500/- Total Assessed income Rs. 28,00,560/- 4. The assessee filed an appeal against the ex-parte order u/s. 144 of the Income Tax Act, in the office of the Ld.CIT. The Ld. CIT(A) has dismissed the appeal on the ground that the non-appearance to notices is deliberate as all the notices have been duly served upon the appellant on the registered email account. 5. That the assessee challenged the validity of the impugned order dated 24.07.2024 passed by the Ld. CIT(A) before the Tribunal. 6. During the course of hearing, the Ld. AR of the assessee submitted that the order of Ld. CIT(A) and the Ld. AO both are ex-parte order, and notices were served on the email-id which is belong to old consultant of the assessee, who did not inform to the assessee about notices issued by the Ld. CIT(A). Therefore, the Ld. AR of the assessee prayed one more opportunity may kindly be granted. 7. On the other hand, the Ld. Sr. DR for the revenue, relied on the judgement of the Ld. CIT(A) and not objected to the prayer of the Ld. AR. 8. We have heard both the parties and perused the material available on record. We noted that the Ld. CIT(A) has issued the four notices on 08.02.2021, 15.05.2024, 24.05.2024, 18.06.2024. There was no compliance to the notices by the assessee. We note that the order of the CIT(A) is silent on service of notices upon the assessee. It is because of that while filing the appeal, on the email-id which was belongs to the previous consultant, who Page | 4 Raysingbhai Jeshingbhai Zala v. ITO ITA No. 735 /Rjt/2024 (AY 2017-18) did not inform to the assessee about the proceedings and hearing, that there is not mistake of the assessee. Therefore, we noted that the assessee deserved one more opportunity to explain his case before the Ld.CIT(A). We further note that before the Ld. AO has also passed an ex-parte order u/s. 144 of the Act. Therefore, we set aside the order of the Ld. CIT(A) as well as Ld. AO. We further direct the Assessing Officer to have fresh adjudication of the case after due opportunity given to the assessee. We also direct the assessee to comply with the notices issued by the Ld. AO and also submitted response before the Ld. AO. In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open court on 04 -04-2025. Sd/- Sd/- (A. L. SAINI) (DINESH MOHAN SINHA) ACCOUNTANT MEMBER JUDICIAL MEMBER Rajkot (True Copy) \u001bदनांक/ Date:04/04/2025 Copy of the Order forwarded to 1. The Assessee 2. The Respondent 3. The CIT(A) 4. Pr. CIT 5. DR/AR, ITAT, Rajkot 6. Guard File By Order Assistant Registrar/Sr. PS/PS ITAT, Rajkot "