SARIKA SAJJAN AGRAWAL,MUMBAI V. INCOME TAX OFFICER, WARD 42(1)(5), MUMBAI

ITA 6638/MUM/2024

AI Insights

The case involves Mrs. Sarika Sajjan Agrawal, the Appellant, who appealed against the order of the National Faceless Appeal Center/Commissioner of Income Tax (Appeals) which affirmed the addition of Rs.27,73,881 to her income for the Assessment Year 2012-13. This addition was based on transactions in a penny stock, M/s. Tilak Ventures Ltd., which were deemed to facilitate the introduction of unaccounted income. The Tribunal found that the Commissioner had not properly considered the Assessee's application under rule 46A for admitting new evidence, nor had they provided a personal hearing despite requests, thus violating the principles of natural justice.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 633205 (ITAT-MUMBAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-06-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2012-2013
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MANOJ KUMAR SINHA; LD. .
• Assessee Lawyers: LALCHAND CHOUDHARY; LD
• Keywords: Set aside; Opportunity of being heard; Additional evidence; Income from undisclosed sources; Principle of natural justice; Accommodation entries; Bogus
• Section: 147; 148; 144; 131; 133(6)

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH “SMC”, MUMBAI BEFORE SHRI NARENDER KUMAR CHOUDHRY, JUDICIAL MEMBER AND SHRI OMKARESHWAR CHIDARA, ACCOUNTANT MEMBER ITA No.6638/M/2024 Assessment Year: 2012-13 Mrs. Sarika Sajjan Agrawal, 7/538, City End CHS Ltd., Gorai Road, Borivali West, Mumbai-400091. PAN: AFTPA1907Q Vs. Income Tax Officer, Ward 42(1)(5) Room No.945, Kautilya Bhavan, Bandra Kurla Complex, Mumbai – 400051. (Appellant) (Respondent) Present for: Assessee by : Shri Lalchand Choudhary, Ld. C.A. Revenue by : Shri. Manoj Kumar Sinha, Ld.Sr.D.R. Date of Hearing : 07.04.2025 Date of Pronouncement : 10.06.2025 O R D E R Per : Narender Kumar Choudhry, Judicial Member: This appeal has been preferred by the Assessee against the order dated 01.11.2024, impugned herein, passed by the National Faceless Appeal Center (NFAC)/Ld. Commissioner of Income Tax (Appeals) (in short Ld. Commissioner) u/s 250 of the Income Tax Act, 1961 (in short ‘the Act’) for the A.Y. 2012-13. 2. In this case, an information was received from DDIT (Investigation) unit-8(2), Mumbai dated 07.03.2019 to the effect that during the investigation carried out by the Income Tax Department, it was found that the Assessee during the year under consideration has made transaction of Rs.27,73,881/- in a penny stock-M/s. Tilak Ventures Ltd., which has been used to facilitate introduction of unaccounted income of the members of the ITA No. 6638MUM/2024 Mrs. Sarika Sajjan Agrawal 2 beneficiaries in the form of exempt long term capital gain/short term capital loss, in their books of account. 3. On the basis of aforesaid information, the reasons for reopening of the case u/s 147 of the Act were recorded in the Assessee’s case and accordingly the case of the Assessee was reopened while issuing notice dated 29.03.2019 u/s 148 of the Act, in response to which the Assessee made no compliance. Thereafter, various statutory notices were issued to the Assessee through ITBA portal/e-filing portal/e-mail communication as well as through speed post, however, of no avail, as the Assessee eventually made no compliance. Therefore, in the constrained circumstances, the Assessing Officer (AO) proceeded to complete the assessment proceedings as ex-parte and by taking the refuge of the provision of section 144 of the Act., issued notices u/s 133(6) of the Act to the BSE/NSE and also recorded the statements of exit providers u/s 131 of the Act. The AO thereafter by considering “the modus operandi of providing accommodation entries of long term capital gain/short term capital loss, role of operator, role of promoters of the penny stock M/s. Tilak Ventures Ltd., analysis of share price movement of M/s. Tilak Ventures Ltd., analysis of financials of M/s. Tilak Ventures Ltd., analysis of trade data exit providers, enquiries conducted u/s 131 of the Act, statements recorded u/s 131 of the Act of the exit providers and the case of the Assessee in the context of aforesaid documents and reasons”, ultimately treated the transaction of trading carried out by the Assessee, in the scrip M/s. Tilak Ventures Ltd. to the tune of Rs.27,73,881/- as bogus and consequently added the said amount in the income of the Assessee. ITA No. 6638MUM/2024 Mrs. Sarika Sajjan Agrawal 3 4. The Assessee, being aggrieved, challenged the said addition by filling 1st appeal before the Ld. Commissioner and during the appellate proceedings before the Ld. Commissioner, uploaded certain fresh evidences but without making any application under rule 46A of the Income Tax Rules, 1962 (in short ‘the Rules’) as alleged in the impugned order and therefore the Ld. Commissioner without admitting the additional evidence uploaded by the Assessee in the first appellate proceedings, ultimately affirmed the aforesaid addition by dismissing the appeal of the Assessee. Thus, the Assessee being aggrieved has preferred this appeal. 5. We have heard the parties and perused the material available on record. The Assessee has drawn our attention to the paper book filed on dated 03.02.2025 before the Tribunal, wherein from page 3 to 5 and 13 to 15, it is clearly appears that the Assessee specifically vide application dated 19.03.2020 filed online as claimed by the Assessee, has filed the relevant application u/r 46A of the Rules, for admitting the new evidences such as: (i) Letter of authority (ii) Bank book of the Assessee (iii) Copy of global report for the year including the allied penny stock. (iv) Details of trade in allied penny stock during the year. (v) Brokers’ ledger account for the year (vi) D-mat account for the year 6. Further, vide letter dated 16.07.2022, the Assessee again requested the Ld. Commissioner to admit the evidences, such as bank book of the Assessee, details of date-wise trade in the allied penny stock during the year, global report of broker’s ledger account for the year and D-mat account statement for the year. 7. Further, from the e-proceedings response acknowledgements dated 30.12.2020, 19.12.2020, 22.07.2022 and 04.11.2022, it is clearly appears that the Assessee in the appellate proceedings ITA No. 6638MUM/2024 Mrs. Sarika Sajjan Agrawal 4 before the Ld. Commissioner has duly filed the following documents: (i) Bank statement (ii) Broker’s ledger account for the A.Y. 2012-13 (iii) Date-wise penny stock from A.Y. 2012-13 (iv) D-mat account for the A.Y. 2012-13 (v) Brokers’ ledger account – A.Y. 2012-13 (vi) Reply of notice u/s 250-01-09-2022 etc. 8. Admittedly the Assessee vide the e-proceeding response acknowledgements dated 31.08.2023, 13.12.2023, 19.04.2024, 16.10.2024 also made specific requests to the Ld. Commissioner for grant of personal hearings, however, of no avail. 9. We have given thoughtful considerations to the above documents and sequences and observe that the Ld. Commissioner may be inadvertently or due to overlooking, failed to examine the aforesaid documents. 10. Thus, considering the peculiar facts and circumstances in totality, as the Ld. Commissioner without considering application filed u/r 46A of the Rules and admitting the evidences filed and providing the opportunity of personal hearing even inspite of asking specifically by the Assessee, decided the appeal of the Assessee and therefore violated the principle of natural justice and thus for just and proper and just decision of the case and substantial justice, we are inclined to set aside the impugned order and consequently remanding the instant case to the file of the Ld. Commissioner for decision afresh, suffice to say by taking into consideration the application u/r 46A of the Rules filed along with the relevant documents/evidences and affording reasonable opportunity of being heard to the Assessee. ITA No. 6638MUM/2024 Mrs. Sarika Sajjan Agrawal 5 11. In the result, the appeal filed by the Assessee stands allowed for statistical purposes. Order pronounced in the open court on 10.06.2025. Sd/- Sd/- (OMKARESHWAR CHIDARA) (NARENDER KUMAR CHOUDHRY) ACCOUNTANT MEMBER JUDICIAL MEMBER * Kishore, Sr. P.S. Copy to: The Appellant The Respondent The CIT, Concerned, Mumbai The DR Concerned Bench //True Copy// By Order Dy/Asstt. Registrar, ITAT, Mumbai. "