RIZWANI AHMED RAIS AHMED ANSARI,SURAT V. ASST. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-3, SURAT

ITSSA 26/SRT/2024

AI Insights

This case involves a series of appeals by the assessee, Rizwani Ahmed Rais Ahmed Ansari, against the orders of the Commissioner of Income-tax (Appeals)-4, Surat, concerning the assessment years 2015-16 to 2019-20. The appeals were consolidated due to common facts and interconnected grounds. The primary issues revolved around additions made by the Assessing Officer under sections 69A and 115BBE of the Income Tax Act, 1961, related to unexplained income and commission income from bank transactions. The Tribunal admitted additional grounds of appeal concerning the timeliness of the assessment order and the ownership of the bank accounts in question, which required further verification of facts.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 106877 (ITAT-SURAT)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 19-02-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2018-2019
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Matter Remanded
• Court: TRIBUNAL
• Department Lawyers: RAVIKANT GUPTA
• Assessee Lawyers: P. M. JAGASHETH
• Keywords: Set aside; Corroborative evidences; Rule of consistency
• Section: 143(3); 250; 153A; 69A

Judgement Text

"आयकर अपीलीय अिधकरण, सूरत Ɋायपीठ, सूरत IN THE INCOME TAX APPELLATE TRIBUNAL, SURAT BENCH, SURAT BEFORE SHRI PAWAN SINGH, JUDICIAL MEMBER AND SHRI BIJAYANANDA PRUSETH, ACCOUNTANT MEMBER आ. (खो और ज).सं./IT(SS)A No.23 to 27/SRT/2024 (AYs 2015-16 to 2019-20) (Physical court hearing) Rizwani Ahmed Rais Ahmed Ansari G-3 & G-5, S Road, Safiya Palace Sabri Nagar, Bharimata Road, Surat-395 004 [PAN : AEQPA 3090 L] बनाम Vs Assistant Commissioner of Income-tax, Central Circle-3, 5th Floor, Aaykar Bhawan, Majura Gate, Surat-396 445 अपीलाथŎ/Appellant ŮȑथŎ /Respondent िनधाŊįरती की ओर से /Assessee by Shri P.M. Jagasheth, CA राजˢ की ओर से /Revenue by Shri Ravi Kant Gupta– CIT-DR सुनवाई की तारीख/Date of hearing 17.02.2025 उद ्घोषणा की तारीख/Date of pronouncement 19.02.2025 Order under section 254(1) of Income Tax Act PER PAWAN SINGH, JUDICIAL MEMBER: 1. This group of five appeals by individual assessee are directed against the separate orders of Ld. Commissioner of Income-tax (Appeals)-4, Surat [for short to as “Ld.CIT(A)”] all dated 29.01.2024 for assessment years (AYs) 2015- 16 to 2019-20 which in turn arose out of separate assessment orders passed by Assistant Commissioner of Income Tax, Central Circle-3, Surat / Assessing Officer under section 143(3) r.w.s 153A of Income Tax Act, 1961 (hereinafter referred to as ‘the Act’ for the sake of brevity) all dated 31.03.2022. In all the appeals assessee has raised certain common and interconnected grounds of appeal, certain facts in all assessment years are also common, therefore, all the appeals were clubbed, heard together and are decided by consolidated IT(SS)A Nos.23-27/SRT/2024 (A.Ys.15-16 to 19-20) Rizwani Ahmed Rais Ahmed Ansari 2 order to avoid conflicting decisions. For appreciation of facts, facts in IT(SS)A No.23/SRT/2023 treated as “lead” case and the decision rendered thereon shall apply with equal force for other assessment years also, in respect of identical issues, except with variance in figures. The assessee in its appeal has raised the following grounds of appeal: “1. On the facts and in the circumstances of the case as well as the law on the subject, the learned Commissioner of the Income Tax (Appeals) has erred in confirming the action of the Assessing Officer in making addition of Rs.1,10,09,302/- on account of alleged calculate 1% commission income on total debits and credits appearing in bank account treated as alleged unexplained income u/s 69A of the Income tax Act, 1961 and also erred in applying provisions of section 115BBE of the Act. 2. On the facts and in the circumstances of the case as well as the law on the subject, the learned Commissioner of the Income Tax (Appeals) has erred in confirming the action of the Assessing Officer in making addition of Rs.2,47,970/- on account of brokerage income shown in the computation of income treated as alleged unexplained income u/s 69A of the Income Tax Act, 1961 and also erred in applying provisions of section 115BBE of the Act. 3. On the facts and in the circumstances of the case as well as the law on the subject, the learned Commissioner of the Income Tax (Appeals) has erred in confirming the action of the Assessing Officer in making addition of Rs.3,43,259/- on account of agriculture income treated as alleged unexplained income u/s 69A of the Income Tax Act, 1961 and also erred in applying provisions of section 115BBE of the Act. 4. On the facts and in the circumstances of the case as well as the law on the subject, the learned Commissioner of the Income Tax (Appeals) has not offered adequate opportunities to hear the case and passed ex-parte order and hence the case may please be set aside and restored back to the CIT(A) or AO. IT(SS)A Nos.23-27/SRT/2024 (A.Ys.15-16 to 19-20) Rizwani Ahmed Rais Ahmed Ansari 3 5. On the facts and in the circumstances of the case as well as the law on the subject, the learned Commissioner of the Income Tax (Appeals) has erred in confirming the action of the Assessing Officer in initiating penalty u/s 271(1)© of the Income Tax Act, 1961. 6.It is therefore prayed that the above addition may please be deleted as learned Members of the Tribunal may deem it proper. 7. Appellant craves leave to add, alter or delete any ground(s) either before or in the course of the hearing of the appeal.” 2. The assesse vide application dated 17.02.2025 has raised following additional ground of appeal: “1. On the facts and in the circumstances of the case as well as law on the subject, the learned Assessing Officer has erred in passing the assessment order under section 143(3) rw.s. 153A of the Income Tax Act, 1961 which is time barred as the assessment order is manually signed and intimation of the DIN issued dated 03.04.2022. 2.On the fact and in the circumstances of the case as well as law on the subject, the learned Assessing Officer has erred in passing the assessment order, which has been passed on the name of Authorized Signatory/Manager of the bank account instead of the owner/proprietor. 3. I am filing herewith the additional grounds of appeal which may kindly be taken on record, and oblige.” 3. Brief facts of the case are that on 29.01.2021, the Police Inspector of Police Station Salabatpura, Surat intercepted a cash of Rs.39.72 lacs from the possession of the assessee while he was riding on Motor Cycle. On founding such huge cash information was forwarded to Investigation Wing, Surat. The Investigation Wing, Surat recorded the statement of assessee on 30.01.2021 about seizure of cash by police. The assessee was asked to explain the source of cash in his possession. In the statement, assessee stated that he is engaged IT(SS)A Nos.23-27/SRT/2024 (A.Ys.15-16 to 19-20) Rizwani Ahmed Rais Ahmed Ansari 4 in the business of cheque discounting, which was carried out by him. The assessee also disclosed the source of cash found with him out of which Rs.29.92 lakh was given by Shri Ketan Shah and remaining Rs.10.00 lakh by Shri Ankit Jain. The assessee also explained the modus operandi of cash discounting. In response thereto, notices were issued to the persons, whose names were disclosed by assessee and such persons were not attended the hearing. The Income Tax Department carried out 360º investigation and found that bank accounts with Sutex Co-operative Bank, Prime Co-operative Bank and Adinath Co-operative Bank were found and details of such bank accounts were investigated. Consequent upon such action in seizure of cash requisition of books of accounts under section 132A was issued to the assessee. Notice under section 153A dated 07.02.2022 was issued to the assessee for filing return of income for various years. In response to notice under section 153A, the assessee filed his return of income declaring income of Rs. 2,57,970/-. In the computation of income, the assessee disclosed commission income and net agriculture income of Rs. 3,43,259/-. 4. The Assessing Officer recorded that total debit and credit in such bank accounts, the Assessing Officer recorded that account No., bank name, holder name and authorized signatory in the following manner: Account No. Bank name Holder name Authorized signatory 25010012001010724 (current account) Prime Co-operative Bank M/s Sai Tex (prop. Shaban Rafi Shri Razwani (assessee) 25010012001010777 (current account) Prime Co-operative Bank M/s Sagar Tex (Shahid Rahi Ansari) Shri Rizwani (assessee) IT(SS)A Nos.23-27/SRT/2024 (A.Ys.15-16 to 19-20) Rizwani Ahmed Rais Ahmed Ansari 5 5. The Assessing Officer recorded that assessee was an authorized signatory of such bank accounts. Summons under section 131(1A) was issued to holders of bank accounts could not be traced. The Assessing Officer noted that during financial year relevant to assessment year 2015-16, there was total credit and debit entries aggregating Rs. 110.09 crores. The Assessing Officer recorded that assessee himself admitted that he is engaged in business of cheque discounting and earned commission income. The Assessing Officer, accordingly, added 1.00 % of income of such debit and credit entries. The Assessing Officer also added commission income by taking view that in the computation of income, assessee has shown brokerage income. The assessee was asked to furnish details of name and address of the persons and the transactions from whom, the brokerage was received. The Assessing Officer recorded that assessee has not maintained any books of account or details of brokerage income, for want of details, the brokerage income was treated as unexplained money. The assessee also shown agricultural income of Rs.3,43,249/- in his computation of total income. The assessee was asked to furnish complete details of agricultural income as supporting evidence. The Assessing Officer recorded that despite giving opportunities assessee failed to furnish complete details. Therefore, agricultural income of Rs.3,43,249/- was also treated as unexplained money. All the three additions were taxed under section 115BBE of the Act. Aggrieved by the additions made in the assessment order assessee filed appeal before Ld.CIT(A). 6. The Ld. CIT(A) recorded that four notices of hearing under section 250 of the Act issued to assessee for making compliance. The assessee failed to make IT(SS)A Nos.23-27/SRT/2024 (A.Ys.15-16 to 19-20) Rizwani Ahmed Rais Ahmed Ansari 6 any compliance, therefore, appeal was adjudicated on the basis of materials available on record. The Ld. CIT(A) after discussing the contents of assessment order, confirmed all three additions made by Assessing Officer by taking view that assessee failed to file any submission and it was presumed that assessee does not wish to bring any material on record, resultantly all three additions were upheld in order dated 29.01.2024. Further, aggrieved assessee has filed present appeal before the Tribunal. Facts in all remaining assessment years are similar except variance of figures of additions made in all five assessment years. 7. We have heard the submission of Ld.AR of the assessee and Ld. Commissioner of Income-tax Departmental Representative (Ld.CIT-DR) for the Revenue. The Ld. AR of the assessee submits that he has raised additional grounds of appeal, such grounds of appeal were not raised before Ld. CIT(A). The additional grounds of appeal raised by him are purely legal in nature. Facts for adjudication of additional grounds of appeal is emanating from the orders of lower authorities. No new facts are to be brought on record. The Ld. AR of the assessee fairly submits that after admitting additional grounds of matter may be restored back to the file of Ld. CIT(A) for better verification of fact. The Ld. AR of the assessee submits that Assessing Officer despite recording the fact that bank accounts which were made the basis for additions against the assessee do not belong to assessee, rather in the name of third person. The assessee was merely an authorized signatory, he can never be holder of such bank accounts. Such bank accounts belong to a firm and he cannot be treated as owner of the accounts. The Ld. AR of the assessee submits that at the time IT(SS)A Nos.23-27/SRT/2024 (A.Ys.15-16 to 19-20) Rizwani Ahmed Rais Ahmed Ansari 7 of assessment, the address of assessee was of District Dhule, Maharashtra, which is his native place. His father expired on 20.02.2022 at his native place and assessee was at his native place. Though, first appeal was filed by assessee and he gave his e-mail address for the purpose of service of notice, however notice issued by Ld.CIT(A) could not be complied as assessee was not much aware about electronic communication and electronic gadget. The Ld. AR of the assessee submits that assessee has good case on merit and is likely to succeeds if one more opportunity is given to assessee to contest his appeal. The Ld. AR of the assessee submits that he has filed on record copy of statement of bank accounts with Prime Co-operative Bank Ltd, wherein assessee shown as manager being authorized representative and such fact is otherwise recorded by Assessing Officer in assessment order. 8. On the other hand, Ld. CIT-DR for the Revenue submits that during assessment, assessee has not furnished required details, resultantly the Assessing Officer made additions by treating brokerage income as well as agricultural income as unexplained money. Similarly, Assessing Officer reasonably made addition @ 1.00 % of transaction in the bank accounts. Before Ld. CIT(A), again no compliance was made despite issuance of five show cause notices. The Ld.CIT-DR for the Revenue submits that assessee deserve no leniency. The Ld. CIT-DR of the Revenue submits that in case, the Bench is of the view that assessee deserves further hearing on merit an explanatory cost may be imposed on the assessee. On admission of additional grounds of appeal, Ld. CIT-DR for the Revenue submits that no such grounds of appeal were raised by assessee before Ld.CIT(A). The impugned additional IT(SS)A Nos.23-27/SRT/2024 (A.Ys.15-16 to 19-20) Rizwani Ahmed Rais Ahmed Ansari 8 grounds of appeal are raised for the first time before Tribunal which requires verification by Assessing Officer. In case, the additional grounds of appeal are admitted, the same may be remitted back to the file of Ld.CIT(A) only. 9. We have considered the rival submission of both the parties and perused the record carefully. First we are considering the plea of additional grounds of appeal raised before us. The Ld. AR of the assessee raised two additional grounds of appeal, first relates to passing the assessment order beyond the time limit i.e. on 03.04.2022 and secondly, the bank account on the basis of which commission income was added, does not belongs to the assessee. We find that facts necessary for adjudication of such grounds of appeal are available on the record of lower authorities, thus, the additional grounds of appeal are admitted. On considering the facts and the submissions of the Ld. AR of the assessee, we find that he has placed on record copy of intimation letter of assessment order under section 153A, which contains the date as on 31.03.2022. The Ld. AR of the assessee also furnished screen shot of ITBA portal about intimation letter of assessment order, as per screen shot such intimation letter was uploaded on 03.04.2022. So far as additional ground No.2 is concerned, the Ld. AR of the assessee has furnished copy of bank statement of current account in the name of Sagar Textile with Prime Co-operative Bank, wherein Shahid Rahij Ansari Manager, Rizwan Ahmad Raees Ahmad Ansari is proprietor and Shahid Rahij Ansari is shown as manager. The Assessing Officer has also recorded the fact that in two bank accounts with Prime Co-operative Bank, the assessee is only authorized representative. Thus, in our view both the additional grounds of appeal required detailed verification of fact and IT(SS)A Nos.23-27/SRT/2024 (A.Ys.15-16 to 19-20) Rizwani Ahmed Rais Ahmed Ansari 9 finding of lower authorities on both the grounds of appeal. Considering the fact that additional grounds of appeal is raised for the first time before Tribunal, therefore, such additional grounds of appeal are restored back to the file of Ld. CIT(A). So far as original grounds of appeal are concerned, we find that the Assessing Officer as well as the Ld. CIT(A) passed order in in ex parte proceeding’s, furthermore, the fact that additional grounds of appeal are directly connected with additions of commissions income on the basis of bank accounts of Sagar Textile. Therefore, original grounds of appeal are also restored back to the file of Ld. CIT(A). Needless to direct that before passing the order ld CIT(A) shall allow fair and reasonable opportunity to assessee. The assessee is also directed to be more vigilant in future in making compliance in time and not to seek further adjournment without any valid reason and furnish all relevant and necessary evidences, if so desire. With these directions the appeal of assessee is allowed for statistical purposes. 10. So far as objection raised by Ld. CIT-DR for the Revenue that in case the Bench is of the view that assessee deserves one more opportunity, an exemplary cost may be imposed. We find that assessee in all five appeals has already paid appeal fees of Rs. 10,000/- each, aggregating to Rs.50,000/- which has been remitted on account of Income Tax Department. Therefore, considering the peculiar nature and facts of the present case, we are not inclined to impose any cost on the assessee. 11. In the result, assessee’s appeal is allowed for statistical purposes 12. Now we take up IT(SS)A No.24-27/Srt/2024 for assessment years 2016- 17 to 2019-20. Since we have already restored the matter back to the file of IT(SS)A Nos.23-27/SRT/2024 (A.Ys.15-16 to 19-20) Rizwani Ahmed Rais Ahmed Ansari 10 Ld. CIT(A) in IT(SS)A No.23/Srt/2024, therefore, considering the facts that in all appeals the assessee has raised similar additional grounds of appeal, the nature of additions in all these appeals are similar, hence, keeping in view the principle of consistency all these appeals also restored back to the file of Ld. CIT(A) with similar directions for deciding the issue afresh in accordance with law. 13. In the result, IT(SS)A No.24-27/Srt/2024 are allowed for statistical purposes. 14. In combined result, all the appeals of the assessee are allowed for statistical purpose. Registry is directed to place one copy of this order in all appeals folder / case file(s). Order announced on 19/02/2025 in the open court. Sd/- Sd/- (BIJAYANANDA PRUSETH) (PAWAN SINGH) लेखा सद˟/Accountant Member Ɋाियक सद˟/Judicial Member सूरत / Surat Dated: 19/02/2025 Dkp Outsourcing Sr. P.S* आदेश की Ůितिलिप अŤेिषत/ Copy of the order forwarded to :  अपीलाथŎ/ The Appellant  ŮȑथŎ/ The Respondent  आयकर आयुƅ/ CIT  िवभागीय Ůितिनिध, आयकर अपीलीय आिधकरण, सूरत/ DR, ITAT, SURAT  गाडŊ फाईल/ Guard File // True Copy // By order/आदेश से, सहायक पंजीकार आयकर अपीलीय अिधकरण, सूरत "