SHAILESH HATMAL JAIN,MUMBAI V. ITO-19(3)(1), MUMBAI, MUMBAI

ITA 3197/MUM/2025

AI Insights

The case involves Shailesh Hatmal Jain, the Appellant, who appealed against the order of the National Faceless Appeal Centre (NFAC), Delhi, which had dismissed his appeal against the Assessment Order for the year 2011-2012. The primary contention was the non-receipt of communication regarding the CIT(A)'s order, leading to a delayed appeal filing. The Assessee argued that the delay was due to genuine and bona fide reasons beyond his control, including issues with the chartered accountant handling his case and changes in email communication. The Department supported the CIT(A)'s decision, arguing that the Assessee failed to respond to notices. The Tribunal found merit in the Assessee's arguments, noting the lack of proper communication and representation, and thus allowed the appeal for statistical purposes and restored the matter for fresh consideration.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 668712 (ITAT-MUMBAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-06-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: J
• Assessment Year: 2011-2012
• Other Referred Cases: Collector of Land Acquisition Vs. Mst. Katiji and Others, N.Balakrishnan Vs. M. Krishnan, Ahmedabad Electricity Co. Ltd. Vs. Electricity Mazdoor Sabha & Anr., Sonerao Sadashivrao Patil Vs. Godawarbhai, Smt. Pari Bai and Ors. Vs. Bhagat Ram and Ors.
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: ASSESSEE
• Keywords: Opportunity of being heard; Bogus purchase; Principle of natural justice; Bogus
• Section: 147; 143(3); 2

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL “J (SMC)” BENCH, MUMBAI SHRI RAHUL CHAUDHARY, JUDICIAL MEMBER SHRI OMKARESHWAR CHIDARA, ACCOUNTANT MEMBER ITA No.3197/MUM/2025 (Assessment Year: 2011-2012) Shailesh Hatmal Jain 122, D- Wing, 2nd Floor, Goragandhi Palace, 8th Khetwadi Back Road, Khetwadi, Mumbai - 400004.Maharashtra. [PAN:AGDPJ0728M] …………. Appellant Income Tax Officer 19(3)(1) Piramal Chambers, Mumbai – 400012, Maharashtra. Vs …………. Respondent Appearance For the Appellant/Assessee For the Respondent/Department : : Shri Dhaval Shah & Ms. Tisha Bagh Shri Asif Karmali Date Conclusion of hearing Pronouncement of order : : 26.06.2025 27.06.2025 O R D E R [ Per Rahul Chaudhary, Judicial Member: 1. The present appeal preferred by the Assessee is directed against the order dated 19/08/2024, passed by the National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as the ‘CIT(A)’], whereby the Ld. CIT(A) had dismissed the appeal of the Assessee against the Assessment Order, dated 17/03/2016, passed under Section 143(3) read with Section 147 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) for the Assessment Year 2011- 2012. 2. The Assessee has raised following grounds of appeal : “1. The Ld. CIT(A) has erred in law and in facts in passing ITA No.3197/Mum/2025 Assessment Year 2011-2012 2 the order u/s.250 of the Act dated 19.08.2024 dismissing the appeal of the appellant and confirming the order passed by the AO u/s.143(3) r.w.s.147 of the Act which is bad and invalid in the eyes of law. 2. The Ld. CIT(A) has erred in law and in facts in confirming the action of the Ld. AO in reopening the assessment u/s.147 of the Act which is bad and invalid in the eyes of law. 3. The Ld. CIT(A) has erred in law and in facts in passing the order u/s.250 of the Act dated 19.08.2024 exparte in violation of principles of natural justice. 4. The Ld. CIT(A) has erred in law and in facts in confirming the action of the Ld. AO in making an ad hoc estimate of profit element of 12.5% on the alleged bogus purchases of Rs.3,12,68,911/- resulting in the disallowance of Rs.39,08,614/- which is bad and invalid in the eyes of law. 5. The Ld. CIT(A) has erred in law and in facts in confirming the action of the Ld. AO in rejecting the books of account u/s.145(3) of the Act. 6. The Ld. CIT(A) has erred in law and in facts in confirming the action of Ld. AO in charging interest u/s.234A, 234B, 234C and 234D of the Act. 7. The Ld. CIT(A) has erred in law and in facts in confirming the action of Ld. AO in initiating penalty proceedings u/s.271(1)(c) r.w.s.274 of the Act.” 3. When the appeal was taken up for hearing the Learned Authorized Representative for the Assessee, at the outset, requested for restoring the appeal back to the file of the CIT(A) for denovo adjudication of the appeal preferred by the Assessee. It was submitted that the impugned order dated, 19/08/2024, was passed by the Learned CIT(A) and uploaded on the Income Tax Portal on 19/08/2024. By way of the impugned order the appeal filed by the Assessee was dismissed in limine on the ground of non-compliance by the Assessee. Thereafter, the present appeal was filed by the ITA No.3197/Mum/2025 Assessment Year 2011-2012 3 Assessee on 06/05/2025. It was submitted that in case the date of passing of the impugned order is taken as the date of communication of the said order, there is a delay of 187 days [6 months, 7 days] in filing the present appeal. However, the Assessee did not have knowledge of the order passed by the CIT(A). It was submitted that the delay in filing the appeal and non-compliance before the Ld. CIT(A) was due to genuineness and bona fide reasons and circumstances beyond the control of the Assessee. It is submitted that for Assessment Year 2011-2012, the Assessee was engaged in the business of trading in iron and steel. The assessment proceedings were carried out and completed vide Assessment Order dated 17/03/2016, passed under Section 143(3) read with Section 147 of the Act. Being aggrieved, the Assessee filed appeal before Ld. CIT(A). It is submitted that the chartered accountant handling assessment and appellate proceedings for the relevant assessment year gave his Email address [i.e., ‘[e-mail]’] in the appeal memorandum. Even on the Income Tax Portal, the Email addresses of the chartered accountant ['[e-mail]' & ‘[e-mail]'] were registered up to September 2023. Accordingly, notices were issued on the aforesaid email addresses and the Assessee did not receive the same. Meanwhile, on account of internal issues, the said chartered accountant stopped handling litigation matters of the Assessee. Therefore, the notice of hearing issued by Ld. CIT(A) were neither complied with nor communicated to the Assessee. Subsequently, in October 2023, the Assessee updated the primary Email Address on the income tax portal as '[e-mail]'. The Assessee was under a bonafide impression that as the Email address on the portal was changed, the communication from the Ld. CIT(A) would be received on his personal email address. However, the subsequent notices issued from December 2023 and the impugned order were sent only on the secondary email id ITA No.3197/Mum/2025 Assessment Year 2011-2012 4 ['[e-mail]'] mentioned in the appeal memo which was not changed by the Assessee. The Assessee was not aware of notice of hearing issued by the Ld. CIT(A) and the passing of the impugned order. In April 2025, when the Assessee engaged a new consultant for filing returns from Assessment Year 2025-2026 onwards, it came to the knowledge of the Assessee that impugned order had been passed by the Ld. CIT(A) on 19/08/2024 for Assessment Year 2011-2012. The new consultant immediately informed the Assessee, and without any further delay, the Assessee filed appeal before the Tribunal on 06/05/2025, resulting in a delay of 187 days. Learned Authorized Representative for the Assessee submitted that the delay in filing the appeal was bonafide and beyond control of the Assessee and therefore, the same be condoned. Reliance was also placed upon the following judicial precedents: (i) Judgment of the Hon’ble Supreme Court in the case of Collector of Land Acquisition Vs. Mst. Katiji and Others [167 ITR 471]. (ii) Judgment of the Hon’ble Supreme Court in the case of N.Balakrishnan Vs. M. Krishnan [(1998) 7 SCC 123]. (iii) Judgment of the Hon’ble Gujarat High Court in the case of Ahmedabad Electricity Co. Ltd. Vs. Electricity Mazdoor Sabha & Anr. [XXX GLR 823 (Guj.)]. (iv) Judgment of the Hon’ble Bombay High Court in the case of Sonerao Sadashivrao Patil Vs. Godawarbhai [1999 (2) Mh.L.J. 272]. (v) Judgment of the Hon’ble Allahabad High Court in the case of Smt. Pari Bai and Ors. Vs. Bhagat Ram and Ors. [AIR 1977 AII 549]. 4. Per contra, the Learned Departmental Representative supported the order passed by the Learned CIT(A) and submitted that there was no infirmity in the order impugned. Admittedly, the notice of hearing was sent by the Learned CIT(A) on the email address furnished in ITA No.3197/Mum/2025 Assessment Year 2011-2012 5 Form 35. Since the Assessee failed to respond to the aforesaid notices, the CIT(A) proceeded to decide the appeal based upon the material on record. 5. We have given thoughtful consideration to the rival submissions and have perused the material on record. For the reasons stated by the Learned Authorized Representative for the Assessee, which are supported by duly sworn affidavit of the Assessee, we condone the delay of 187 days in filing the appeal as we are of the view that the Assessee was prevented by sufficient cause from presenting the appeal in time before the Tribunal. Further, since the Assessee was proceeded ex-parte and did not have an opportunity to make proper representation before the Learned CIT(A), we deem it appropriate and in the interest of justice to restore the issue back to the file of the CIT(A) for denovo adjudication as per law after granting the Assessee a reasonable opportunity of being heard. Assessee is directed to be vigilant and track the appellate proceedings through Income Tax Business Application (ITBA). It is clarified that in case the Assessee fails to file submission and/or fails to enter appearance, the Learned CIT(A) would be at liberty to adjudicate to grounds raised in appeal on merits based upon materials on record. In terms of the aforesaid Ground No.3 raised by the Assessee is allowed for statistical purposes while the balance grounds raised by the Assessee are dismissed as having been rendered infructuous. 6. In result, the present appeal preferred by the Assessee is treated as allowed for statistical purpose. Order pronounced on 27.06.2025. Sd/- Sd/- (Omkareshwar Chidara) Accountant Member (Rahul Chaudhary) Judicial Member म ुंबई Mumbai; दिन ुंक Dated : 27.06.2025 Milan,LDC ITA No.3197/Mum/2025 Assessment Year 2011-2012 6 आदेश की प्रतितिति अग्रेतिि/Copy of the Order forwarded to : 1. अपील र्थी / The Appellant 2. प्रत्यर्थी / The Respondent. 3. आयकर आय क्त/ The CIT 4. प्रध न आयकर आय क्त / Pr.CIT 5. दिभ गीय प्रदिदनदध ,आयकर अपीलीय अदधकरण ,म ुंबई / DR, ITAT, Mumbai 6. ग र्ड फ ईल / Guard file. आिेश न स र/ BY ORDER, सत्य दपि प्रदि //True Copy// उप/सह यक पुंजीक र /(Dy./Asstt. Registrar) आयकर अपीलीय अदधकरण, म ुंबई / ITAT, Mumbai "