SHAH BINIT CHANDRAVADAN, HUF,AHMEDABAD V. THE ITO, WARD-5(3)(1), AHMEDABAD

ITA 1198/AHD/2024

AI Insights

The case involves Shah Binit Chandravadan, HUF, who appealed against the order of the National Faceless Appeal Centre (NFAC), Delhi, for the Assessment Year 2017-18. The primary contention was regarding the additions made by the Assessing Officer (AO) under sections 68 and 69C of the Income Tax Act, which pertained to a Long Term Capital Gain (LTCG) and unexplained expenditure, respectively. The CIT(A) had dismissed the appeal, leading to the current appeal before the Income Tax Appellate Tribunal. The Tribunal found procedural improprieties in the CIT(A)'s handling of the case, particularly the premature passing of the order without allowing the assessee the full time to respond, as previously granted.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 25176 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-10-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 23-09-2024
• Assessment Year: 2017-2018
• Appeal Filed On: 06-06-2024
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KETAKI DESAI
• Assessee Lawyers: S.N. SOPARKAR
• Keywords: Set aside; Opportunity of being heard; Unexplained expenditure; Principle of natural justice; Wrong claim; Bogus
• Section: 147; 148; 250; 153; 68; 69C

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH, AHMEDABAD BEFORE Ms. SUCHITRA KAMBLE, JUDICAL MEMBER & SHRI NARENDRA PRASAD SINHA, ACCOUNTANT MEMBER आयकर अपील सं./I.T.A. Nos. 1198/Ahd/2024 (िनधाᭅरण वषᭅ / Assessment Year : 2017-18) Shah Binit Chandravadan, HUF At: Ladol, TA: Vijapur, B/81, Riveria Elegance, Opp. Prahladnagar Garden, Corporate Road, Ahmedabad, Gujarat, 380015 बनाम/ Vs. ITO ward 5(3)(1) Ahmedabad ᭭थायी लेखा सं./जीआइआर सं./PAN/GIR No. : AARHS4898B (Appellant) .. (Respondent) अपीलाथᱮ ओर से /Appellant by : Shri S. N. Soparkar, Sr. Advocate ᮧ᭜यथᱮ कᳱ ओर से/Respondent by : Ms. Ketaki Desai, Sr. DR Date of Hearing 23/09/2024 Date of Pronouncement 01/10/2024 O R D E R PER SHRI NARENDRA PRASAD SINHA, AM: This appeal is filed by the assessee against the order of the National Faceless Appeal Centre (NFAC), Delhi, (in short ‘the CIT(A)’), dated 18.04.2024 for the Assessment Year (A.Y.) 2017-18. 2. The brief facts of the case are that the assessee had filed its return of income for A.Y. 2017-18 on 03.11.2017 declaring total ITA Nos. 1198/Ahd/2024 [Shah Binit Chandravadan vs. ITO] - 2 – income of Rs.18.85,920/-. The Assessing Officer (AO) had issued a notice under section 148 of the Act on 30.03.2021 in response to which the assessee had filed return on 27.04.2021. The assessment was completed u/s 147 rws 144B of the Act at total income of Rs.3,29,68,810/-. The AO had made addition of Rs.3,04,73,424/- in respect of LTCG which was considered as accommodation entry. Another addition of Rs.6,09,468/- was also made in respect of unexplained expenditure. Aggrieved with the order of the AO the assessee had filed an appeal before the First Appellate Authority which was decided by the CIT(A) vide the impugned order and the appeal of the assessee was dismissed. 3. The assessee is now appeal before us. Following grounds have been taken in this appeal: 1. Ld. CIT(A) (NFAC) erred in law and on facts confirming action of AO denying Long Term Capital Gain claimed of Rs.3,04,73,424/- by treating the same as bogus claim and making addition u/s 68 of the Act. 2. Ld. CIT(A) (NFAC) erred in law and on facts confirming action of AO adding Rs.6,09,468/- as unexplained expenditure u/s 69C of the Act. 3. Ld. CIT(A) (NFAC) erred in law and on facts Not adjudicating Ground #3 challenging action of AO making assessment u/s 147 rws 144B of the Act instead of Sec. 153 C of the Act. 4. Ld. CIT(A) (NFAC) erred in law and on facts simply confirming the order of AO making additions denying genuine claim of expenditure u/s 10(38) of the Act without independently analyzing ITA Nos. 1198/Ahd/2024 [Shah Binit Chandravadan vs. ITO] - 3 – detailed submission and evidences submitted in response to Show Cause Notice during assessment proceedings. 5. Ld. CIT(A) (NFAC) grievously erred in law and on facts passing the order of dismissal on 18.04.2024 when notice u/s 250 of the Act specifically required the appellant to furnish submissions on or before 19.04.2024 which is against the principle of natural justice. 6. It is respectfully submitted that the order of being perverse and against the tenets of natural justice deserves to be quashed when passed without affording adequate opportunity to the appellant to prove genuineness of the claim of Long Term Capital Gain. 7. Levy of interest u/s 234A/234B & 234C of the Act is unjustified. 8. Initiation of penalty proceeding u/s 270A/271AAC of the Act is unjustified. 4. Sri S. N. Soparkar, ld. Sr. Advocate appearing for the assessee submitted that the assessee was not allowed proper opportunity by the ld. CIT(A) and there was denial of natural justice. He explained that the ld. CIT(A) vide notice dated 12th April 2024 had allowed time till 19th April 2024 to the assessee to furnish the written submission and to submit the documents in support of the grounds as taken in the appeal. However, the ld. CIT(A) without waiting till 19th April 2024 for the assessee to submit his reply; had passed his order on 18th April 2024 itself. Thus, there was denial of natural justice to the assessee. The ld. Sr. Advocate, therefore, requested that the matter may please be set aside to the file of the ld. CIT(A) with a direction to allow a proper opportunity of being heard to the assessee. ITA Nos. 1198/Ahd/2024 [Shah Binit Chandravadan vs. ITO] - 4 – 5. Per contra, Smt. Ketaki Desai, Ld. Sr. DR submitted that ld. CIT(A) had allowed five opportunities to the assessee but no compliance was made on any of the occasions. She, however, had no objection if the matter was set aside to ld. CIT(A) for allowing another opportunity to the assessee, considering the discrepancy as pointed out by the assessee. 6. We have carefully considered the rival submissions. It is true that the ld. CIT(A) had allowed five opportunities to the assessee on 18/08/2022, 28/07/2023,11/03/2024, 03/04/2024 and finally on 19.04.2024. The assessee did not comply on the first four opportunities as provided. The last opportunity was provided vide notice dated 12/04/2024, a copy of which has been brought on record. As per this notice the assessee was required to submit his written submissions and supporting documents/evidences on or before 19/04/2024. However, the ld. CIT(A) without waiting till 19th April, 2024, for the assessee to comply to the requirements of the notice dated 12/04/2024; had passed his order on 18th April,2024 itself. Such an action of ld. CIT(A) cannot be held as correct and in accordance with the principle of natural justice. When time was allowed by him till 19th April, 2024 for the assessee to comply to the notice, it was incumbent upon him to wait till that date and he should have passed his order only thereafter. By passing the order prematurely on 18th April 2024, the ld. CIT(A) has violated the principle of natural justice and denied proper opportunity of ITA Nos. 1198/Ahd/2024 [Shah Binit Chandravadan vs. ITO] - 5 – being heard to the assessee. Therefore, the order as passed by the ld. CIT(A) suffers from serious infirmity on the ground of natural justice. We, therefore, deem it proper to set aside the matter to the file of ld. CIT(A) with a direction to allow proper opportunity of being heard to the assessee. The assessee is also directed to make compliance before the ld. CIT(A) and not to seek unnecessary adjournment without any valid reason. 7. In the result, the appeal of the assessee is allowed for statistical purpose. This Order pronounced on 01/10/2024 Sd/- Sd/- (SUCHITRA KAMBLE) (NARENDRA PRASAD SINHA) JUDICIAL MEMBER ACCOUNTANT MEMBER (True Copy) Ahmedabad; Dated 01/10/2024 "