SAKSHI SANJAY MISHRA,NASHIK V. ITO, WARD 1(1), NASHIK

ITA 2312/PUN/2024

AI Insights

The case involves Sakshi Sanjay Mishra, the appellant, who contested an ex-parte order from the Ld. CIT(A) / NFAC, which confirmed an addition of Rs.1,02,61,697 to his income for the assessment year 2018-19 under section 68 of the Income Tax Act, 1961. The addition was initially made by the Assessing Officer due to discrepancies in the remuneration reported by the assessee from his partnership firm, M/s. S.M. Systems. The CIT(A) upheld the addition without a detailed examination as the assessee failed to appear at the hearings. The Tribunal found that the CIT(A) did not adequately follow the procedural requirements of section 250(6) and thus restored the matter back to the CIT(A) for a comprehensive re-evaluation.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 24636 (ITAT-PUNE)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-03-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2018-2019
• Other Referred Cases: CIT vs. B. N. Bhattacharjee & Anr. reported in 118 ITR 461 (SC)
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ARVIND DESAI; ADDL
• Assessee Lawyers: PRAMOD S SHINGTE
• Section: 142(1); 143(2); 143(1); 68

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH “B”, PUNE BEFORE SHRI R. K. PANDA, VICE PRESIDENT AND MS. ASTHA CHANDRA, JUDICIAL MEMBER ITA No.2312/PUN/2024 Assessment year : 2018-19 Sakshi Sanjay Mishra 12, Brickwoods Apartment, Ravishankar Marg, Nashik – 422011 Vs. ITO, Ward 1(1), Nashik PAN: AUPPM4916L (Appellant) (Respondent) Assessee by : Shri Pramod S Shingte Department by : Shri Arvind Desai, Addl CIT DR Date of hearing : 17-03-2025 Date of pronouncement : 20-03-2025 O R D E R PER R. K. PANDA, VP : This appeal filed by the assessee is directed against the ex-parte order dated 10.09.2024 of the Ld. CIT(A) / NFAC, Delhi relating to assessment year 2018-19. 2. Although a number of grounds have been raised by the assessee, however, these all relate to the ex-parte order of the Ld. CIT(A) / NFAC in confirming the addition of Rs.1,02,61,697/- made by the Assessing Officer u/s 68 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’). 2 ITA No.2312/PUN/2024 3. Facts of the case, in brief, are that the assessee is an individual and filed his return of income on 10.10.2018 declaring total income of Rs.16,96,570/-. The return was processed u/s 143(1) of the Act. Subsequently, the case was selected for scrutiny under the E-assessment Scheme, 2019 on the following issues: “S.No. Issues i. Remuneration paid by firm” 4. Accordingly, statutory notices u/s 143(2) and 142(1) of the Act were issued and served on the assessee, in response to which the assessee filed certain details. During the course of assessment proceedings the Assessing Officer noticed from the Partnership deed submitted by the assessee that the assessee is a working partner in the partnership firm M/s. S.M. Systems and is eligible for receiving remuneration at the rate of 40% from the firm. However, on perusal of Profit and Loss Account of M/s. S.M. Systems submitted by the assessee, he found that the firm has debited indirect expenses at Rs.3,08,33,158/-. He further found that 40% of the same comes to Rs.1,23,33,263/- which is higher than the amount of remuneration of Rs.74,80,000/- received by the assessee as stated in his submissions. Further, on perusal of the ITR for assessment year 2018-19 filed by the assessee he noticed that the assessee has shown an amount of Rs.20,71,566/- as remuneration from the firm. In absence of any convincing reply from the side of the assessee, the Assessing Officer made addition of Rs.1,02,61,697/- being the difference between Rs.1,23,33,263/- and Rs.20,71,566/-. 3 ITA No.2312/PUN/2024 5. Since the assessee did not make any submission before the Ld. CIT(A) / NFAC, therefore, the Ld. CIT(A) / NFAC relying on the decision of the Hon'ble Supreme Court in the case of CIT vs. B. N. Bhattacharjee & Anr. reported in 118 ITR 461 (SC) and various other decisions, upheld the action of the Assessing Officer. 6. Aggrieved with such order of the Ld. CIT(A) / NFAC, the assessee is in appeal before the Tribunal. 7. The Ld. Counsel for the assessee at the outset submitted that the first notice dated 26.11.2021 fixing the date of hearing on 13.12.2021 was issued by the office of the Ld. CIT(A) / NFAC during Covid period on which date the assessee has requested for an adjournment. He submitted that the second notice was issued by the office of the Ld. CIT(A) / NFAC on 02.07.2024 fixing the date of hearing on 10.07.2024 and due to non appearance he dismissed the appeal. He submitted that the Ld. CIT(A) / NFAC has not given adequate opportunity to the assessee. Further, he has also not decided the appeal as per the provisions of section 250(6) of the Act and has simply dismissed the appeal for want of prosecution. He accordingly submitted that in the interest of justice, the assessee should be given an opportunity of hearing to substantiate his case by filing the requisite details before the Ld. CIT(A) / NFAC. 4 ITA No.2312/PUN/2024 8. The Ld. DR on the other hand strongly relied on the orders of the Assessing Officer and the Ld. CIT(A) / NFAC.. 9. We have heard the rival arguments made by both the sides and perused the orders of the Assessing Officer and Ld. CIT(A) / NFAC. It is an admitted fact that the assessee did not file any submission on the date on which the appeal was fixed for hearing. It is an admitted fact that the Ld. CIT(A) / NFAC has simply dismissed the appeal for want of prosecution but has ignored the provisions of section 250(6) of the Act which reads as under: “250….. …..…… (6) The order of the Joint Commissioner (Appeals) or the Commissioner (Appeals) disposing of the appeal shall be in writing and shall state the points for determination, the decision thereon and the reason for the decision.” 10. Considering the totality of the facts of the case and in the interest of justice, we deem it proper to restore the issue to the file of Ld. CIT(A) / NFAC with a direction to grant one final opportunity to the assessee to substantiate his case by filing the requisite details and decide the issue as per fact and law. The assessee is also hereby directed to respond to the notice issued by the CIT(A) / NFAC and submit the requisite details, if any on the appointed date without seeking any adjournment under any pretext, failing which the CIT(A) / NFAC is at liberty to pass appropriate order as per law. We hold and direct accordingly. The grounds raised by the assessee are accordingly allowed for statistical purposes. 5 ITA No.2312/PUN/2024 11. In the result, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced in the open Court on 20th March, 2025. Sd/- Sd/- (ASTHA CHANDRA) (R. K. PANDA) JUDICIAL MEMBER VICE PRESIDENT पुणे Pune; दिन ांक Dated :20th March, 2025 GCVSR आदेश की प्रतितिति अग्रेतिि/Copy of the Order is forwarded to: 1. अपीलार्थी / The Appellant; 2. प्रत्यर्थी / The Respondent 3. 4. The concerned Pr.CIT, Pune DR, ITAT, ‘B’ Bench, Pune 5. गार्ड फाईल / Guard file. आदेशानुसार/ BY ORDER, // True Copy // Senior Private Secretary आयकर अपीलीय अधिकरण ,पुणे / ITAT, Pune 6 ITA No.2312/PUN/2024 S.No. Details Date Initials Designation 1 Draft dictated on 17.03.2025 Sr. PS/PS 2 Draft placed before author 20.03.2025 Sr. PS/PS 3 Draft proposed & placed before the Second Member JM/AM 4 Draft discussed/approved by Second Member AM/AM 5 Approved Draft comes to the Sr. PS/PS Sr. PS/PS 6 Kept for pronouncement on Sr. PS/PS 7 Date of uploading of Order Sr. PS/PS 8 File sent to Bench Clerk Sr. PS/PS 9 Date on which the file goes to the Head Clerk 10 Date on which file goes to the A.R. 11 Date of Dispatch of order "