SACHIN KHARE,NAGPUR V. DCIT ACIT, CIRCLE 1, NAGPUR

ITA 281/NAG/2024

AI Insights

The case involves appeals by Sachin Khare against the orders of the learned Commissioner of Income Tax (Appeals), which confirmed the quantum addition of 2,71,22,468 under section 68 of the Income Tax Act and a penalty of 20,95,210 under section 271AAC(1). The additions and penalties were initially imposed by the Assessing Officer due to the assessee's failure to provide necessary details to establish the identity, creditworthiness, and genuineness of the transactions. The CIT(A) dismissed the appeals due to non-cooperation from the assessee. The Tribunal, considering the principles of natural justice, decided to give the assessee another opportunity to present his case before the CIT(A).

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 41467 (ITAT-NAGPUR)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-01-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2018-2019
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ABHAY Y. MARATHE
• Assessee Lawyers: MAHAVIR ATAL
• Keywords: Set aside; Opportunity of being heard
• Section: 68

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL NAGPUR BENCH, NAGPUR BEFORE SHRI V. DURGA RAO, JUDICIAL MEMBER AND SHRIK.M. ROY, ACCOUNTANT, MEMBER ITA no.280 and 281/Nag./2024 (Assessment Year : 2018-19) Sachin Khare Q–20, Shree Residency Laxmi Nagar, Nagpur 440 022 PAN – ALKPK7087Q ……………. Appellant v/s Dy./Asstt. Commissioner of Income Tax Circle–1, Nagpur ……………. Respondent Assessee by : Shri Mahavir Atal Revenue by : Shri Abhay Y. Marathe Date of Hearing – 22/01/2025 Date of Order – 27/01/2025 O R D E R PERV. DURGARAO, J.M. These appeals filed by the assessee which emanates from the impugned orders of even date 06/03/2024, passed by the learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, [“learned CIT(A)”], for the assessment year 2018-19. 2. Assessee’s appeal being ITA no.280/Nag./2024, for A.Y. 2018-19, is against the quantum addition of ` 2,71,22,468, made by the Assessing Officer under section 68 of the Act, which was also confirmed by the learned CIT(A) and assessee’s appeal being ITA no.281/Nag./2024, for A.Y. 2018-19 is 2 Sachin Khare ITA no.280 and 281/Nag./2024 against penalty of ` 20,95,210, levied under section 271AAC(1) of the Act by the Assessing Officer and confirmed by the learned CIT(A). 3. While going through the orders of the authorities below, we find that the assessee failed to furnish the details, as sought by the Assessing Officer, to establish the identity, creditworthiness and genuineness of the transaction and hence the Assessing Officer made addition of ` 2,71,22,468 under section 68 of the Act. Since the quantum addition was made by the Assessing Officer, resultantly, the Assessing Officer levied penalty of ` 20,95,210, under section 271AAC(1) of the Act. The assessee being aggrieved filed appeal before the first appellate authority. 4. Before the learned CIT(A), the assessee failed to appear despite learned CIT(A) provided ample opportunities to the assessee to appear during the first appellate proceedings by furnishing required details and prove the identity, creditworthiness and genuineness of the transaction. Consequent upon non-cooperation of the assessee who failed to comply with the statutory notices which remained non–complied by the assessee, hence the learned CIT(A) also passed the impugned order by dismissing the appeals filed by the assessee without going onto the merits of the issues raised by the assessee. Aggrieved, the assessee is in further appeal before the Tribunal. 5. Before us, the learned Authorised Representative appearing for the assessee submitted that the learned CIT(A) passed an ex-parte order and prayed that one opportunity may be granted by restoring the appeals to the 3 Sachin Khare ITA no.280 and 281/Nag./2024 file of the learned CIT(A) to enable the assessee to substantiate its cases before the learned CIT(A). 6. On the other hand, the learned D.R. submitted that despite the learned CIT(A) provided sufficient opportunities to the assessee, however, the assessee chose not to appear before the learned CIT(A) and not furnished relevant details. He strongly supported the order passed by the learned CIT(A) and the Assessing Officer. 7. We have heard the arguments of rival parties, perused the material available on record and gone through the orders of the authorities below. We find that though the learned CIT(A) granted several opportunities to the assessee to substantiate its cases, ultimately, the orders passed by him are an ex-parte order qua the assessee and the learned CIT(A) was indeed justified in dismissing the appeals of the assessee. However, keeping in view the overall facts and circumstances of the cases before us, to meet the ends of justice, therefore, we are of the opinion that by following the principles of natural justice, one opportunity should be given to the assessee to substantiate the cases before the learned CIT(A). In view of the above, the orders passed by the learned CIT(A) are hereby set aside and remit back the appeals to the file of the learned CIT(A) and direct him to adjudicate these appeals afresh on merit and in accordance with law. Before passing speaking orders, the learned CIT(A) shall provide adequate opportunity of being heard to the assessee. It is also directed that the assessee should not seek adjournment without there being a justified reason. Accordingly, all the 4 Sachin Khare ITA no.280 and 281/Nag./2024 grounds raised by the assessee in these appeals are allowed for statistical purposes. 8. As a matter of assessee’s lackadaisical approach in non-compliance and procedural delays before the authorities below, we deem it fit and appropriate to impose a cost on the assessee for an amount of `10,000 (Rupees Ten Thousand Only) for each appeal aggregating to ` 20,000 (Rupees Twenty Thousand Only) payable to the Maharashtra State Legal Services Authority and produce evidence of payment before the learned CIT(A). This cost underscores the importance of adhering to procedural requirements and timely compliance during assessment and appellate proceedings. 9. In the result, appeals filed by the assessee are allowed for statistical purposes, subject to the condition as stated in Para–8 above. Order pronounced in the open Court on 27/01/2025 Sd/- K.M. ROY ACCOUNTANT MEMBER Sd/- V. DURGA RAO JUDICIAL MEMBER NAGPUR, DATED: 27/01/2025 Copy of the order forwarded to: (1) The Assessee; (2) The Revenue; (3) The PCIT / CIT (Judicial); (4) The DR, ITAT, Nagpur; and (5) Guard file. True Copy By Order Pradeep J. Chowdhury Sr. Private Secretary Sr. Private Secretary ITAT, Nagpur "