SHAILESH K. KOTHARI,MUMBAI V. INCOME TAX OFFICER, WD-19(3)(5), MUMBAI

ITA 121/MUM/2025

AI Insights

The case involves Shailesh K. Kothari, the appellant, who appealed against the order of the CIT(A), National Faceless Appeal Centre, which confirmed the additions made by the Income Tax Officer under sections 68 and 144 r.w.s. 147 of the Income-tax Act for the Assessment Year 2011-12. The additions pertained to the entire sale consideration of an immovable property and cash deposits in bank accounts, which were alleged to be unexplained income. The appellant did not participate in the initial assessment and appeal proceedings due to non-receipt of notices and medical issues. The Tribunal considered the affidavit and medical records provided by the appellant, which explained his non-compliance as being due to bona fide reasons and compelling circumstances beyond his control.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 33404 (ITAT-MUMBAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-02-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: K
• Assessment Year: 2011-2012
• Laws Referred To: Income-tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Opportunity of being heard; Additional evidence; Reasonable cause; Assessment record
• Section: 144

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL “K”(SMC) BENCH MUMBAI BEFORE SHRI SANDEEP SINGH KARHAIL, JUDICIAL MEMBER AND SHRI GIRISH AGRAWAL, ACCOUNTANT MEMBER ITA No. 121/MUM/2025 Assessment Year: 2011-12 Shailesh K. Kothari, F/641, LBS Marg, Garden Court Building, Ghatkopar (West), Mumbai – 400 086 (PAN : AGDPK8457A) Vs. Income-tax Officer, Ward- 19(3)(5), Mumbai (Appellant) (Respondent) Present for: Assessee : Shri Prakash Jhunjhunwala, CA Revenue : Shri Kiran Unavekar, Sr. DR Date of Hearing : 12.02.2024 Date of Pronouncement : 25.02.2025 O R D E R PER GIRISH AGRAWAL, ACCOUNTANT MEMBER: This appeal filed by the assessee is against the order of Ld. CIT(A), National Faceless Appeal Centre (NFAC), vide order no. ITBA/NFAC/S/250/2023-24/1070470354(1), dated 19.11.2024 passed against the assessment order by Income Tax Officer, Ward 19(3)(5), Mumbai, u/s. 144 r.w.s. 147 of the Income-tax Act (hereinafter referred to as the “Act”), dated 17.12.2018 for Assessment Year 2011-12. 2. Grounds taken by the assessee are reproduced as under: prejudice to any other:- “1.0 On facts and circumstances of the case and in Law, Ld. CIT(A) ought to have considered the reasonable cause that had precluded the appellant to participate in assessment and appeal proceeding; 2 ITA No.121/MUM/2025 Shailesh K. Kothari, AY 2011-12 2.0 On facts and circumstances of the case and in Law, Ld. CIT(A) erred in confirming the addition u/s.68 of entire sale consideration of immovable property sold during the year of Rs.35,13,615/- and ought to have assessed the income as 'Long Term Capital Gain, after allowing the reduction of cost of acquisition of such property; 3.0 Without prejudice to Ground no.2.0, Ld. AO erred seriously in making the addition of entire sale consideration of Rs.35,13,615/- in hands of the appellant (1 co-owner), on ignoring the fact that share of other 2 co-owners cannot be taxed in hands of the appellant; 4.0 On facts and circumstances of the case and in Law, Ld. CIT(A) erred in confirming the addition u/s.68 of cash deposits made in bank account of Rs. 12,00,000/-, though such sum had been received on sale of long term capital asset (Property-residential house); 5.0 Without prejudice to Ground no.4.0, Ld. AO erred in making a separate addition u/s 68 of Rs. 12,00,000/-, though such sum is a part of sales consideration already brought to tax of Rs.35,13,615, thereby resulting into double taxation.” 3. Brief facts of the case are that assessee did not file his return of income. Case was taken up u/s.147 of the Act by issuing notice u/s.148, dated 26.03.2018. Case was reopened on the basis of AIR/CIB/ITS information that during the year assessee has made cash deposit in bank account amounting to Rs.12 lakhs and sold property for Rs.35,13,615/-. In the entire assessment proceedings, assessee did not respond to any of the notices issued by the ld. Assessing Officer, hence the assessment was completed u/s.144 r.w.s. 147, whereby total income was assessed at Rs.47,13,615/-. Assessee went in appeal before the ld. CIT(A), but before him also failed to avail several opportunities of hearing. Therefore, the appeal was dismissed by upholding the additions made on account of non-responsiveness on the part of the assessee. Aggrieved, assessee is in appeal before the Tribunal. 3. Before us, ld. Counsel for the assessee has placed on record an affidavit of the assessee to explain the reasons for not attending the 3 ITA No.121/MUM/2025 Shailesh K. Kothari, AY 2011-12 proceedings before the authorities below. The same are reproduced as under: \"2.0 THAT, I could not participate in the assessment and 1 appeal proceedings related to Assessment year 2011-12 and accordingly, Ld. AO passed the assessment order exparte u/s 144 and Ld. CIT(A) had dismissed the appeal in limeline. I state and declare that my non-compliance during course of assessment and 1\" appeal proceeding had occurred under the bonafide reasons and compelling circumstances beyond my control, stated as under :- a) As per assessment order, Ld. AO had issued only I notice of hearing on 17/07/2018. However, the said notice was not served to me, since may have been dispatched at my old address situated at 165-B, Navshanti Nagar, 98, Nepean Sea Road, Mumbai -400006. I had shifted my place of residence at F-641, Garden Court Building, LBS Marg, Ghatkopar (West), Mumbai 400086. The intimation of change of my address had provided to the Income tax department, however the page-2 of assessment order discloses the service of notice of hearing by affixture. The Ld. AO, though aware of my above stated residential address (since registered sale agreement under his possession disclosed my residential address of Ghatkopar, Mumbai) had dispatched the notice of hearing at my old address situated at Nepean Sea Road, Mumbai. It is due to non-receipt of notice of hearing, I could not furnish the relevant details/documents on assessment record; c) I could not attend the 1st appeal proceeding, since I was suffering from serious medical illness related to neurological disorder, depression and travel phobia. In support, copies of my medical reports and prescriptions are enclosed herewith; d) My earlier Chartered Accountant Mr. Rajesh Jain deserted me and did not advise me to furnish the details and documents on record. I am an undergraduate and am not conversant with the Income Tax Law and therefore, I could not furnish the relevant details/documents on record. I state and declare that there was no gross negligence or willful attempt to avoid the furnishing of details/documents before the assessing officer and 1 Appellate authority. I make a humble and respectful prayer before the Hon'ble ITAT to adopt a liberal approach and admit the relied documents filed as additional evidence and grant me a final opportunity to dispute the additions made in the assessment order.\" 4.1. He also placed on record information made available on the portal of the Department about change of his address. Assessee also furnished medical records to support the averments in the affidavit, with respect to medical issues faced by him. 4 ITA No.121/MUM/2025 Shailesh K. Kothari, AY 2011-12 5. We have considered the submissions made by the ld. Counsel, seeking restoration of the matter back to the file of ld. Assessing Officer. Considering the aforesaid submissions, in the interest of justice and fair play, we find it appropriate to remit the matter back to the file of ld. Assessing Officer for denovo meritorious adjudication, on the issues raised by the assessee in his appeal. Needless to say, assessee be given reasonable opportunity of being heard and to make any further submissions, if so desired. Assessee is also directed to be diligent in attending the hearing proceedings. Accordingly, grounds taken by the assessee are allowed for statistical purposes. 8. In the result, appeal by the assessee is allowed for statistical purposes. Order is pronounced in the open court on 25 February, 2025 Sd/- Sd/- (Sandeep Singh Karhail) (Girish Agrawal) Judicial Member Accountant Member Dated: 25 February, 2025 MP, Sr.P.S. Copy to : 1. The Appellant 2. The Respondent 3. DR, ITAT, Mumbai 4. 5. Guard File CIT BY ORDER, (Dy./Asstt.Registrar) ITAT, Mumbai "