SHRI DILIP KUMAR TEJWANI, RAIPUR,RAIPUR V. .ACIT, CENTRAL CIRCLE-1, RAIPUR, RAIPUR

ITA 505/RPR/2024

AI Insights

The case involves Shri Dilip Kumar Tejwani, the appellant, contesting the additions made by the Assistant Commissioner of Income Tax, Central Circle-1, Raipur, under sections 56(2)(vii)(b) and 69 of the Income Tax Act, 1961, related to unexplained investments and income from other sources for the assessment year 2014-15. The additions were based on a property purchase where the stamp duty value significantly exceeded the actual transaction value. The CIT(Appeals) dismissed the appeal due to non-compliance by the assessee, which led to the matter being taken up by the Tribunal. The Tribunal found procedural lapses in notice delivery and restored the case to the CIT(Appeals) for a fresh hearing.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 46704 (ITAT-RAIPUR)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-12-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2014-2015
• Other Referred Cases: Estate of Late Tukojirao Holkar vs. CWT, Kalsaria Diamonds Pvt Ltd vs Addl.CIT
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PRIYANKA PATEL
• Assessee Lawyers: SHAKSHI GOPAL AGRAWAL
• Keywords: Opportunity of being heard; Unexplained investment; Sale consideration of property below Jantri Value; Fair market value; Deemed to accrue or arise in india; Right to appeal
• Section: 142(1); 132; 153A; 56(2)(vii)(b); 56(2); 139; 153C

Judgement Text

"आयकर अपीलीय अधिकरण न्यायपीठ “एक-सदस्य” मामला रायपुर में IN THE INCOME TAX APPELLATE TRIBUNAL RAIPUR BENCH “SMC”, RAIPUR श्री रवीश सूद, न्याययक सदस्य क े समक्ष BEFORE SHRI RAVISH SOOD, JUDICIAL MEMBER आयकर अपील सं. / ITA No. 505/RPR/2024 यििाारण वर्ा / Assessment Year : 2014-15 Shri Dilip Kumar Tejwani 1, Opposite SBI Fafadih Branch, Kamra Medicals, Fafadih, Raipur-492 001 (C.G.) PAN : ABLPT6093Q .......अपीलार्थी / Appellant बिाम / V/s. The Assistant Commissioner of Income Tax, Central Circle-1, Raipur (C.G.) ……प्रत्यर्थी / Respondent Assessee by : Shri Shakshi Gopal Agrawal, CA Revenue by : Dr. Priyanka Patel, Sr. DR सुनवाई की तारीख / Date of Hearing : 16.12.2024 घोषणा की तारीख / Date of Pronouncement : 20.12.2024 2 Shri Dilip Kumar Tejwani Vs. ACIT, Central Circle-1, Raipur ITA No. 505/RPR/2024 आदेश / ORDER PER RAVISH SOOD, JM: The present appeal filed by the assessee is directed against the order passed by the CIT(Appeals), Raipur-3, dated 26.09.2024, which in turn arises from the order passed by the A.O under Sec. 153C r.w.s.143(3) of the Income-tax Act, 1961 (in short ‘the Act’) dated 01.06.2021 for the assessment year 2014-15. The assessee has assailed the impugned order on the following grounds of appeal: “1. The ACIT-(Central)-1, Raipur has been erred for making addition of Rs.13,05,000/- u/s. 56(2)(vii)(b) of the Income Tax Act, 1961. 2. The ACIT-(Central)-1, Raipur has been erred for making addition of Rs.16,25,000/- u/s. 69 of the Income Tax Act, 1961. 3. The ACIT-(Central)-1, Raipur has been erred for passing an order u/s. 153C r.w.s. 153A of the Income Tax Act, 1961, which is bad in law. The appellant craves leave to substantiate above ground at the time of hearing.” 2. Shri Shakshi Gopal Agrawal, Ld. Authorized Representative (for short `AR') for the assessee on being queried about the delay of 3 days involved in filing of the appeal, as pointed out by the registry, submitted that pursuant to the amendment made available on the statute to Section 253(3) of the Act, vide the Finance (No.2) Act, 2024 w.e.f. 01.10.2024, the present appeal has been filed well within the stipulated time period. The Ld. AR referring to the 3 Shri Dilip Kumar Tejwani Vs. ACIT, Central Circle-1, Raipur ITA No. 505/RPR/2024 aforesaid amendment submitted that the assessee/revenue is w.e.f. 01.10.2024 vested with the statutory right to file an appeal within two months from the end of the month in which the order sought to be appealed against is communicated to the assessee or to the Pr. Commissioner or Commissioner as the case may be. The Ld. AR submitted that as the present appeal has been filed on 29.11.2024 i.e. subsequent to the cut-off date, i.e. 01.10.2024, therefore, the same has been filed well within the stipulated time period contemplated in the post-amended Section 253(3) of the Act. 3. Dr. Priyanka Patel, Ld. Sr. Departmental Representative (for short DR) fairly submitted that no delay is involved in filing of the present appeal. 4. I have given thoughtful consideration to the contentions advanced by the Ld. Authorized Representatives of both the parties, and concur with the Ld. AR that pursuant to the post-amended provisions made available on the statute vide the Finance (No.2) Act, 2024 w.e.f. 01.10.2024, the present appeal has been filed by the assessee well within the stipulated time period. 5. Succinctly stated, search proceedings u/s. 132 of the Act were conducted on “Nachrani group” on 11.09.2018, wherein a bunch of loose had surfaced, as per which, Shri Dilip Kumar Tejwani (i.e assessee) alongwith Shri Santosh Kumar Ratnani had jointly purchased a property vide a registered sale deed dated 17.02.2014 for a consideration of Rs.32.50 lac. 4 Shri Dilip Kumar Tejwani Vs. ACIT, Central Circle-1, Raipur ITA No. 505/RPR/2024 6. The A.O observed that the segment rate/guideline value of the aforesaid property was fixed by Stamp Valuation Officer at Rs.58,60,000/-. The A.O based on the aforesaid information issued notice u/s. 153C of the Act, dated 12.10.2020 to the assessee. As the assessee failed to comply with the aforesaid notice, therefore, the A.O was constrained to proceed with and frame the assessment vide an ex-parte order passed u/s. 153C r.w.s. 144 of the Act, dated 01.06.2021, wherein he made two-fold additions viz. (i) treating the investment made by the assessee towards purchase of the property as an unexplained investment: Rs.16,25,000/-; and (ii) addition of the difference between the segment rate/stamp duty value of the property purchased vis-à-vis actual purchase consideration falling to the share of the assessee u/s.56(2)(viib) of the Act: Rs.13,05,000/-. Accordingly, the A.O vide his order passed u/s. 153C r.w.s. 144 of the Act, dated 01.06.2021 determined the income of the assessee at Rs.33,96,290/-. 7. Aggrieved, the assessee carried the matter in appeal before the CIT(Appeals). As the assessee despite having been afforded sufficient opportunity had failed to participate in the proceedings before the first appellate authority, therefore, the latter was constrained to proceed with and dismiss the appeal. For the sake of clarity, the observations of the CIT(Appeals) are culled out as under: “Decision on merits:- 5 Shri Dilip Kumar Tejwani Vs. ACIT, Central Circle-1, Raipur ITA No. 505/RPR/2024 5. Ground No. 1, 2 & 3: During the assessment proceedings, non- compliance attitude of the assessee the assessment is completed by invoking the provision of section 144 of the I. T. Act. On verification of the returns filed u/s 139 of the Act, it is seen that no such transactions have been disclosed in the return of income. No such income from other sources is seen in the ROI for the relevant year A.Y. 2014-15. The difference of Rs. 2610000/- (Rs. 5860000/- stamp duty valuation (-) Rs. 3250000/- sale price) is covered by sec. 56(2)(vil)(b) of the I.T.Act and is income from other sources. Since assessee is co-seller, his income is half of this amount i.e. Rs. 13,05,000/-. Accordingly Rs. 13,05,000/- is included in his income as per provision of sec. 56(2)(vii)(b) of the I.T.Act. Further, as the assessee has not disclosed this asset so his share in this asset (half of Rs. 32,50,000/- i.e. Rs. 16,25,000/- is deemed income u/s 69 of I.T.Act, 1961. During the appeal proceedings, the appellant has not filed any written submission, the appellant has shown that he is not interested in pursuing the appeal. The laws aid those who are vigilant, not those who sleep upon their rights. Under these circumstances, in my opinion the appellant is not interest in the appeal. In view of these facts, the appeal of the appellant deserves to be dismissed as it cannot be kept pending adjudication for indefinite period. It is the duty of the appellant to make necessary arrangements for effective representation on the appointed date. Mere filing of an appeal is not enough, rather it requires effective hearing also. Therefore, the appeal is found liable for dismissal. This view is supported by the following judicial pronouncements:- (i) In the case of Estate of Late Tukojirao Holkar vs. CWT 223 ITR 480 (M.P.) Hon'ble MP High Court has held as under:- 4. As held in Jamunadas v. CST [1993] 38 MPLJ 462 (MP) and the common order passed in Miscellaneous Civil Case No. 303 of 1986-B. R. Phosphate v. CST and Miscellaneous Civil Case No. 304 of 1986-B. R. Phosphate v. CST by this court on November 6, 1995, this court is not bound to answer the reference. In Jamunadas v. CST [1993] 38 MPLJ 462, it is held as under: \"For the foregoing reasons, we are of the opinion that if the party at whose instance the reference is made, fails to appear at the hearing, or fails in taking steps for preparation of the paper books so as to enable hearing of the reference, this court is not bound to answer the 6 Shri Dilip Kumar Tejwani Vs. ACIT, Central Circle-1, Raipur ITA No. 505/RPR/2024 reference. We refuse to answer the reference and also saddle the assessee with the costs of the Department quantified at Rs. 150.\" (ii) In the case of Kalsaria Diamonds Pvt Ltd vs Addl.CIT in ITA NO 1783/Mum/2012 dated 05.09.2013, Hon'ble Mumbai ITAT placing reliance on decision of Hon'ble MP High court in the case of Estate of Late Tukojirao Holkar (supra) has held as under:- \"2. Earlier this appeal was fixed for hearing on 21/3/2013, when nobody attended on behalf of the assessee, therefore. as per directions of the Tribunal the matter was adjourned to 05/09/2013 and notice was directed to be issued through RPAD. Accordingly, notice was sent through RPAD at the address given in Form No 36. However, the said notice was received back from the postal authorities with the remark \"Unclaimed -Return to Sender The assessee has not intimated any change of address to the registry. Adjournment application has also not been filed. Therefore, in the facts and circumstances of the case, we presume that the assessee is not interested in prosecuting this appeal. Following the decision of the Tribunal reported in the case of CIT vs. Multiplan India (P) Ltd.38 ITD 320 (Del) and the decision of the Hon'ble Madhya Pradesh High Court in the case of Estate of Late Tukojirao Holkar vs CWT. 223 ITR 480 (M.P) we dismiss the appeal filed by the assessee in limine.\" No explanation has been furnished by the appellant at this stage on the findings and conclusion of the Ld. AO. In absence of any explanation & on the basis of facts gathered and discussed by the Ld. AO, considering entire facts in the assessment order. I find that Ld. AO is justified in assessing the total income of the appellant as discussed above. when repeated opportunity in this regard was provided clearly shows that the appellant is not interested in pursuing the appeal. In these circumstances, I have no option but to confirm the addition made by the Ld. AO and dismiss the grounds of appeal of the appellant. Respectfully, following the view taken in the case cited above, the appeal filed by the appellant deserves to be dismissed. Therefore, appeal on these grounds are dismissed. 6. In the result, appeals are dismissed.” 7 Shri Dilip Kumar Tejwani Vs. ACIT, Central Circle-1, Raipur ITA No. 505/RPR/2024 8. The assessee being aggrieved with the order of the CIT(Appeals) has carried the matter in appeal before the Tribunal. 9. Shri Shakshi Gopal Agrawal, Ld.AR submitted that both the lower authorities had grossly erred in making/sustaining the impugned additions, viz. (i) treating the investment made by the assessee for purchase of property as an unexplained investment : Rs.16,25,000/-; and (ii) addition of the difference between the segment rate/stamp duty value of the property purchased vis-à-vis actual purchase consideration (falling to the share of the assessee) u/s.56(2)(viib) of the Act: Rs.13,05,000/-. The Ld. AR submitted that though the assessee had made investment towards purchase of the property vide a registered deed out of his duly explained sources but the A.O had most arbitrarily held the same as an unexplained investment u/s. 69 of the Act. The Ld.AR to fortify his aforesaid contention had taken me through the assessment order wherein there was no whisper by the A.O as to why the investment made by the assessee towards purchase of the subject property was being held by him as an unexplained investment. 10. The Ld.AR submitted that the A.O prior to drawing of adverse inferences and making addition of the difference between the stamp duty value/segment rate of the property vis-à-vis the actual purchase consideration paid by the assessee ought to have made a reference to the Valuation Officer as per the mandate of the “1st proviso” to Section 56(2) 8 Shri Dilip Kumar Tejwani Vs. ACIT, Central Circle-1, Raipur ITA No. 505/RPR/2024 (viii)(c) of the Act. The Ld.AR submitted that making of a reference to the valuation cell was all the more important as the subject property because the subject property being a land locked one, thus, its Fair Market Value FMV) for the said reason was below the stamp duty value/segment rate fixed by the government. 11. The Ld.AR submitted that though the assessee had in the memorandum of appeal in “Form 35” provided the e-mail account [e-mail] for receiving notice/communications from the office of the CIT(Appeals), but as gathered from the ITBA portal on both the two occasions when the hearing of the appeal is stated to have been fixed, the notices were dropped in the email account, viz. manojdhamecha @yahoo.com. Also, the Ld.AR submitted that no notice dated 02.09.2022 fixing the hearing of the appeal for 27.09.2022 as was claimed by the Ld. DR was ever physically served upon the assessee. The Ld.AR in support of his aforesaid contention has filed with us an “affidavit” dated 14.12.2024. For the sake of clarity, the same is culled out as under: 9 Shri Dilip Kumar Tejwani Vs. ACIT, Central Circle-1, Raipur ITA No. 505/RPR/2024 10 Shri Dilip Kumar Tejwani Vs. ACIT, Central Circle-1, Raipur ITA No. 505/RPR/2024 12. The Ld.AR submitted that as the CIT(Appeals) had never put the assessee to notice about the fixation of hearing of the appeal, and thus, had remained divested of an opportunity to assail the impugned additions that were made by the A.O, therefore, the matter in all fairness be restored to his file with a direction to re-adjudicate the same after affording a reasonable opportunity of being heard to the assessee. 13. Per contra, Dr. Priyanka Patel, Ld. Sr. Departmental Representative ( for short ‘DR’) submitted that as the assessee had adopted a lackadaisical approach and failed to participate in the assessment proceedings, therefore, the A.O was constrained to proceed with and frame the assessment to the best of his judgment vide his order passed u/s. 153C r.w.s. 144 of the Act, dated 01.06.2021. Elaborating further, the Ld. DR fairly submitted that the CIT(Appeals) without adverting to the facts and the issues involved in the appeal had summarily disposed of the same. 14. Rebutting the contention of the Ld. DR, the Ld.AR submitted that the notice u/s.142(1) of the Act dated 06.03.2021 (through e-proceedings ITBA module) issued by the A.O was not served upon the assessee. Elaborating on his contention, the Ld.AR submitted that the aforesaid notice u/s 142(1), dated 06.03.2021 is not found uploaded on the ITBA portal. The Ld.AR in support of his aforesaid contention had taken me through the screen shot of ITBA portal, Page 30 of APB. It was submitted by the Ld.AR that though 11 Shri Dilip Kumar Tejwani Vs. ACIT, Central Circle-1, Raipur ITA No. 505/RPR/2024 it was the claim of the department that the notice u/s. 142(1) of the Act, dated 06.03.2021 was issued to the assessee, but there is no attachment available in the ITBA portal from where the same could have been downloaded. The Ld.AR submitted that as no notice u/s. 142(1) of the Act, dated 06.03.2021 was served upon the assessee, therefore, it was for the said reason that he had failed to participate in the assessment proceedings. 15 I have thoughtfully considered the contentions advanced by the Ld. Authorized Representatives of both the parties in the backdrop of the orders of the lower authorities. Ostensibly, I find that though the assessee had in the memorandum of appeal i.e in “Form 35” had provided the email account [e-mail] for receiving notices /communications from the office of the CIT(Appeals), but as gathered from the ITBA portal on both the two occasions i.e. on 14.11.2024 and 06.09.2024 the notices were dropped in the email account, viz. [e-mail]. Apropos the notice dated 02.09.2022 (supra), wherein the assessee is stated to have been validly put to notice about the fixation of hearing of the appeal on 27.09.2022, the Ld.AR stated at Bar that no such notice was ever served upon the assessee. 16. Be that as it may, I am of a firm conviction that as the assessee had on occasion validly been put to notice about the fixation of hearing of the appeal by the CIT(Appeals), therefore, there is substance in the claim of the 12 Shri Dilip Kumar Tejwani Vs. ACIT, Central Circle-1, Raipur ITA No. 505/RPR/2024 Ld.AR that he had remained divested of an opportunity to demonstrate before the said first appellate authority that no such addition was called for in his case. Considering the totality of the facts involved in the present case, I am of the view that the matter in all fairness requires to be restored to the file of the CIT(Appeals) with a direction to re-adjudicate the same. Needless to say, the CIT(Appeals) shall in the course of set-aside proceedings afford a reasonable opportunity of being heard to the assessee who shall remain at a liberty to substantiate his claim on the basis of fresh documentary evidence, if any. 17. As I have restored to the matter to the file of the CIT(Appeals) for re- deciding the appeal afresh, therefore, I refrain from adverting to the grounds raised by the assessee qua the additions which, thus, are left open. 18. In the result, appeal of the assessee is allowed for statistical purposes in terms of the aforesaid observations. Order pronounced in open court on 20th day of December, 2024. Sd/- (रवीश सूद /RAVISH SOOD) न्याययक सदस्य/JUDICIAL MEMBER रायपुर/ RAIPUR ; ददनाांक / Dated : 20th December, 2024. **SB, Sr. PS आदेश की प्रयिललपप अग्रेपर्ि / Copy of the Order forwarded to : 1. अपीलार्थी / The Appellant. 13 Shri Dilip Kumar Tejwani Vs. ACIT, Central Circle-1, Raipur ITA No. 505/RPR/2024 2. प्रत्यर्थी / The Respondent. 3. The CIT(Appeals)-1, Raipur (C.G) 4. The Pr. CIT-1, Raipur (C.G) 5. ववभागीय प्रयतयनधि, आयकर अपीलीय अधिकरण,रायपुर बेंच, रायपुर / DR, ITAT, Raipur Bench, Raipur. 6. गार्ड फ़ाइल / Guard File. आदेशानुसार / BY ORDER, // True Copy // Senior Private Secretary आयकर अपीलीय अधिकरण, रायपुर / ITAT, Raipur. 14 Shri Dilip Kumar Tejwani Vs. ACIT, Central Circle-1, Raipur ITA No. 505/RPR/2024 Date 1 Draft dictated on Sr.PS/PS 2 Draft placed before author Sr.PS/PS 3 Draft proposed and placed before the second Member JM/AM 4 Draft discussed/approved by second Member AM/JM 5 Approved draft comes to the Sr. PS/PS Sr.PS/PS 6 Kept for pronouncement on Sr.PS/PS 7 Date of uploading of order Sr.PS/PS 8 File sent to Bench Clerk Sr.PS/PS 9 Date on which the file goes to the Head Clerk 10 Date on which file goes to the A.R 11 Date of dispatch of order "