SHIVRATAN MOTILALJI RATHI HUF,PUNE V. ITO, JALNA, JALNA

ITA 604/PUN/2025

AI Insights

The case involves Shivratan Motilalji Rathi HUF, who appealed against the order of the CIT(A)/NFAC for the assessment year 2007-08. The primary contention was the addition of Rs.5,83,870 as unexplained investment under section 69 of the Income Tax Act, 1961, which was based on a valuation report from the Departmental Valuation Officer (DVO). The CIT(A)/NFAC dismissed the appeal without admission, citing non-payment of advance tax as per section 249(4)(b) of the Income Tax Act. The Tribunal found that the assessee was not required to pay advance tax as his income was below the taxable limit and noted similar cases where the CIT(A)/NFAC had dismissed appeals without merit. Consequently, the Tribunal remanded the case back to the CIT(A)/NFAC for a fresh examination on its merits.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 712466 (ITAT-PUNE)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-07-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Assessment Year: 2007-2008
• Other Referred Cases: Dilip Hiralal Chaudhari vs. ITO, Vishnusharan Chandravanshi vs. ITO, Govidappa Setty vs. ITO
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: AKHILESH SRIVASTVA
• Assessee Lawyers: MISS SMRUTI SABNIS
• Keywords: Opportunity of being heard; Additional evidence; Unexplained investment; Valuation report; Reason to believe
• Section: 147; 148; 142(1); 271(1)(c); 69

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH “B”, PUNE BEFORE SHRI R. K. PANDA, VICE PRESIDENT AND SHRI VINAY BHAMORE, JUDICIAL MEMBER आयकर अपील सं. / ITA No.604/PUN/2025 िनधाŊरण वषŊ / Assessment Year : 2007-08 Shivratan Motilalji Rathi HUF, Rathi Rathi and Co., 501-504, Akshay Landmarks, Opp. Pu La Garden, Sinhagad Road, Jalna- 411030. PAN : AAEHR5318G Vs. ITO, Ward-1, Jalna. Appellant Respondent आदेश / ORDER PER VINAY BHAMORE, JM: This appeal filed by the assessee is directed against the order dated 21.10.2024 passed by Ld. CIT(A)/NFAC for the assessment year 2007-08. 2. The assessee has raised the following grounds of appeal :- “Ground 1. The appellant requests your honor to condone the delay of 64 days in filing the appeal as the delay was due to unforeseen circumstances beyond the control of the appellant. Assessee by : Miss Smruti Sabnis Revenue by : Shri Akhilesh Srivastva Date of hearing : 24.07.2025 Date of pronouncement : 29.07.2025 Printed from counselvise.com ITA No.604/PUN/2025 2 Ground 2. Learned CIT(A) has erred in maintaining the addition made by Ld. AO of Rs.5,83,870/- on account of unexplained Investment under section 69 of the Income tax Act, 1961. Ground 3. Without prejudice to above ground, the Learned CIT(A) has erred in maintaining the addition made by the Ld.AO of Rs. 5,83,870/- on account of unexplained Investment under section 69 of the Income Tax Act, 1961 without appreciating the fact that the reopening of the assessment of the assessee is solely based on the valuation report of DVO without satisfying provisions of Section 147 of the Act. Ground 4. On the facts and circumstances of the case and in law, the learned NFAC erred in dismissing the appeal filed by the Appellant based on the provisions of Section 249(4) of the Income-tax Act, 1961 without providing an opportunity of being heard even though the said provisions do not apply in the present case. Ground 5. The appellant craves leave to add, alter, vary, omit, amend, or delete the above grounds of appeal at any time before, or at the time of the hearing of the appeal, so as to enable the Hon'ble Income-tax Appellate Tribunal (Appeals) to decide this appeal according to law.” 3. There is delay of 64 days in filing of the present appeal. We are satisfied with the reasons mentioned in the affidavit for condonation that the applicant was prevented by sufficient cause for not filing the appeal within the prescribed time limit. Ld. DR has not raised any serious objection to condone the delay, therefore we condone the delay of 64 days and proceed to adjudicate the appeal. 4. Facts of the case, in brief, are that the assessee is a HUF & has not furnished its return of income. On the basis of information Printed from counselvise.com ITA No.604/PUN/2025 3 that the assessee HUF has constructed a residential apartment consisting of flat and hospital building and the investment was made between financial years 2006-07 to 2009-10, but the aforesaid construction activities of the assessee was found undisclosed in the return of income, therefore in order to determine unexplained investment into the cost of construction a reference under section 142A of the IT Act was made to the Departmental Valuation Officer, Nagpur. The DVO evaluated cost of construction of the above property at Rs.2,24,51,000/- for various years starting from financial year 2006-07 to financial year 2010- 11. The DVO calculated the value of investment at Rs.5,83,869/- (Rs.11,67,738 / 2 = Rs.5,83,869) by assessee for assessment year 2007-08. Therefore, as per the AO, there was reason to believe that within the meaning of section 147 assessee’s income chargeable to tax at Rs.5,83,869/- being his 50% share into the above property has escaped assessment, Accordingly, after seeking approval u/s 151 of the IT Act for assessment year 2007- 08 a notice u/s 148 was issued to the assessee & subsequently notices u/s 142(1) was also issued to the assessee. The Assessing Officer completed the assessment u/s 144/147 and treated an Printed from counselvise.com ITA No.604/PUN/2025 4 amount of Rs.5,83,869/- in the hands of the assessee on protective basis (since substantive addition was made in the hands of Karta) as unexplained investment u/s 69 of the IT Act and also initiated penalty proceedings u/s 271(1)(c) of the IT Act. 5. Against the above ex-parte assessment order, the assessee HUF preferred appeal before Ld. CIT(A)/NFAC. Since the assessee HUF neither furnished its return of income nor paid any advance tax, Ld. CIT(A)/NFAC was of the view that the assessee has not satisfied the condition of making payment of advance tax as per the provisions of section 249(4)(b) of the IT Act, therefore Ld. CIT(A)/NFAC dismissed the appeal filed by the assessee without admitting the same by observing as under :- “5. The appellant has offered ‘No’ comments at sl. No. 9 of Form- 35 and the appellant failed to made payment of amount equal to the advance tax which was due on its income. It is, therefore, clear that information, given at sl. no. 9 of Form-35 is correct and the appellant has not made payment of amount equal to the advance tax which was due on its income. The appellant has also not requested for exemption from operation of the provisions of clause (b) of sub-section (4) of section 249 of the Act. 6. Since the appellant has not filed return of income as well as not paid an amount equal to the amount of advance tax which was payable by it, present appeal is not liable to be admitted. The appeal is infructuous and is, therefore, dismissed. 7. The appeal is dismissed.” 6. It is the above order against which the assessee is in appeal before this Tribunal. Printed from counselvise.com ITA No.604/PUN/2025 5 7. Ld. AR appearing from side of the assessee submitted before us that the order passed by Ld. CIT(A)/NFAC is unjustified. Ld. AR submitted before the bench that Ld. CIT(A)/NFAC has not provided any opportunity to the assessee before dismissing the appeal or to substantiate the grounds raised in the appeal. Ld. AR further submitted before the bench that time and again coordinate benches of this Tribunal have held that the assessee, as per the provisions of section 249(4)(b) of the IT Act, is not required to make payment of advance tax on the basis of assessed income instead he is required to make payment of advance tax as per the income accepted by him and in the instant case according to the assessee his income was below taxable limit therefore he did not paid any advance tax. In support of this contention, Ld. AR relied on the decision passed by coordinate bench of this Tribunal in the case of Dilip Hiralal Chaudhari vs. ITO in ITA No.642/PUN/2024 order dated 05.06.2024 and in the case of Vishnusharan Chandravanshi vs. ITO in ITA No.73/RPR/2024 order dated 10.04.2024 and also relied on the judgement passed by Hon’ble Karnataka High Court in the case of Govidappa Setty vs. ITO, 232 ITR 892 (Karnataka). Printed from counselvise.com ITA No.604/PUN/2025 6 8. Apart from above Ld. AR also submitted before the bench that similar addition were made in the case of assessee itself for the assessment years 2008-09 and 2011-12 and Ld. CIT(A)/NFAC without admitting the appeal for adjudication, dismissed the appeal in similar manner & a coordinate bench of this tribunal in ITA Nos.2600 & 2601/PUN/2024 vide order dated 14.02.2025, has already set-aside the orders passed by Ld. CIT(A)/NFAC and remanded the issues back to the file of Ld. CIT(A)/NFAC for de novo adjudication on merits of the case. Accordingly, Ld. AR requested before the bench to provide relief by passing appropriate order. 9. Ld. DR appearing from side of the revenue relied on the orders passed by the subordinate authorities and requested to confirm the same. 10. We have heard Ld. Counsels from both the sides and perused the material available on record including the paper book furnished and case laws relied on by the assessee. In this regard, we find that Ld. CIT(A)/NFAC has neither admitted the appeal nor adjudicated the appeal on merits of the case and dismissed the same. In view of the decisions relied upon by the assessee, we are of the considered opinion that the assessee was not required to make Printed from counselvise.com ITA No.604/PUN/2025 7 payment of advance tax, since his income was below the taxable limit, as per his calculation. We further find that similar additions were made in the case of assessee itself for other assessment years and Ld. CIT(A)/NFAC also dismissed the appeals summarily without admitting the same for adjudication on the ground of non- payment of advance tax by the assessee and a coordinate bench of this Tribunal has already set-aside the orders passed by Ld. CIT(A)/NFAC and remanded the matter back to the file of Ld. CIT(A)/NFAC for de novo adjudication of appeal on merits of the case. Therefore, considering the fact that the coordinate bench of this Tribunal in ITA Nos.2600 & 2601/PUN/2024 has already set- aside the orders passed by Ld. CIT(A)/NFAC in the case of assesse itself for other assessment years, we deem it appropriate to set- aside the impugned order passed by Ld. CIT(A)/NFAC and remand the matter back to him with a direction to decide the appeal afresh on the merits of the case, in accordance with facts and law, after providing a reasonable opportunity of hearing to the assessee. The assessee is also hereby directed to respond to the notices issued by Ld. CIT(A)/NFAC in this regard, and to produce the requisite documents/additional evidence, if any, in support of the grounds of appeal, without seeking any adjournment under any Printed from counselvise.com ITA No.604/PUN/2025 8 pretext, otherwise Ld. CIT(A)/NFAC shall be at liberty to pass an appropriate order as per law. Accordingly, the grounds of appeal raised by the assessee in this appeal are partly allowed. 11. In the result, the appeal filed by the assessee is partly allowed for statistical purposes. Order pronounced on this 29th day of July, 2025. Sd/- Sd/- (R. K. PANDA) (VINAY BHAMORE) VICE PRESIDENT JUDICIAL MEMBER पुणे / Pune; ᳰदनांक / Dated : 29th July, 2025. Sujeet आदेश कᳱ ᮧितिलिप अᮕेिषत / Copy of the Order forwarded to : 1. अपीलाथᱮ / The Appellant. 2. ᮧ᭜यथᱮ / The Respondent. 3. The Pr. CIT concerned. 4. िवभागीय ᮧितिनिध, आयकर अपीलीय अिधकरण, “B” बᱶच, पुणे / DR, ITAT, “B” Bench, Pune. 5. गाडᭅ फ़ाइल / Guard File. आदेशानुसार / BY ORDER, // True Copy // Senior Private Secretary आयकर अपीलीय अिधकरण, पुणे / ITAT, Pune. Printed from counselvise.com "