SHRIRANG GOVIND PHADTARE,PUNE V. ITO WARD 10(1), PUNE, PUNE

ITA 17/PUN/2025

AI Insights

This case involves an appeal by Shrirang Govind Phadtare against the order of the CIT(A) National Faceless Appeal Centre, which upheld the assessment made by the ITO, Ward 10(1), Pune for the Assessment Year 2016-17. The primary contention was the ex-parte nature of the CIT(A)'s decision, which did not allow for a proper hearing, thus violating the principles of natural justice. The assessee argued that the delay in filing the appeal was due to health issues and the appointment of a tax consultant, which the CIT(A) did not condone. The ITAT found merit in the assessee's arguments, particularly regarding the need for a fair hearing and the consideration of the appeal on its merits.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 469584 (ITAT-PUNE)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-02-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2016-2017
• Other Referred Cases: Pr.CIT(Central) Vs. Premkumar Arjundas Luthra (HUF)
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ABHISHEK MESHR AM
• Keywords: Set aside; Reasonable cause; Unexplained cash credit; Principle of natural justice; Accommodation entries; Bogus
• Section: 68

Judgement Text

"आयकर अपीलीय अधिकरण \"एस एम सी\" न्यायपीठ पुणे में । IN THE INCOME TAX APPELLATE TRIBUNAL \"SMC\" BENCH, PUNE BEFORE Dr. MANISH BORAD, ACCOUNTANT MEMBER AND MS ASTHA CHANDRA, JUDICIAL MEMBER आयकर अपील सं. / ITA No.17/PUN/2025 धििाारण वषा / Assessment Year: 2016-2017 Shrirang Govind Phadtare, 01 Alephata, Junnar, Pune- 412411 Maharashtra PAN-AARPP6204E Vs ITO, Ward 10(1), Pune Appellant Respondent Assessee by : None Revenue by : Shri Abhishek Meshram Addl. CIT Date of hearing : 11.02.2025 Date of pronouncement : 20.02.2025 आदेश/ORDER PER DR. MANISH BORAD, ACCOUNTANT MEMBER : This appeal by the assessee pertaining to Assessment Year 2016- 17 is directed against the order dated 18.11.2024 passed by CIT(A) National Faceless Appeal Centre, (NFAC) Delhi u/s.250 of the Income- tax Act, 1961 (herein after also called ‘the Act’) which in turn is arising out of the Assessment Order passed u/s.147 r.w.s.144 dated 29.03.2022. 2. The Assessee has raised following grounds of appeal:- 1. The learned CIT(A), National Faceless Appeal Centre (NFAC), erred in law and on facts in passing an ex-parte appellate order without granting an appropriate opportunity for hearing thus violating the principle of natural justice. Learned CIT(A)- NFAC ought to have: i. Condoned the delay in filing the appeal as the delay was due to time lost in appointment of tax consultant and health issues of the appellant. ii. Adjudicated the appeal on merit and the submission made by the appellant on merit. 2. The learned CIT(A) erred in law and on facts in upholding the action of learned AOin assessing the total income of appellant at Rs. 36,36,461 instead of the 2 ITA No.17/PUN/2025 returned income of Rs. 13,91,730, thereby making the addition of Rs. 22,44,731 under various sections of the ITA, 1961. 3. The learned I-T authorities erred in law and on facts in not providing requisite documentary evidence and cross examination to appellant. Appellant contends that the order passed by the learned AO is bad in law, as it violates the principal of natural justice. 4. The learned I-T authorities erred on facts and ought to appreciate that mere suspicious, howsoever strong it is not sameas findings of facts. As a matter of facts suspicious cannot take place the place of proof. 5. The learned I-T authorities failed to appreciate that - i. The share transactions were properly supported by the contract notes, entries in bank account etc. ii. The sale proceeds supported by contract notes, were duly received through banking channel which indicate that the sale transaction were genuine. iii. The appellant had no relation with the company management and hence, it was impossible to believe that the assessee could manipulate all the transaction and documents like contract notes, demat account entries, market value of the shares in stock exchanged etc. etc. iv. Simply because the share price had increased substantially, there was no reason to hold that appellant has traded in stock where manipulation by way of complex web of prearranged or artificial web of transaction was carried out to book bogus LTCG/STCL accommodation entries to the beneficiaries. 6. The learned I-T authorities erred in law and on facts in making addition of Rs. 12,66,262 u/s 68 of ITA, 1961 being unexplained cash credit on account of difference in long term capital gain. Appellant contend that since all the transactions are duly supported by documentary evidences, addition u/s 68 of (TA, 1961 is uncalled for. 7. The appellant craves leave to add/modify/delete / amend all / any of the grounds of appeal. 3. At the outset from records we noticed that the ld. CIT(A) has dismissed the appeal by not condoning the delay of 293 days and has also not dealt with the merits of the case. When the case was called, none appeared on behalf of the assessee. However, considering the grounds of appeal and perusal of records showing that ex-parte order has been framed by ld. CIT(A), we decide to adjudicate the appeal of the assessee with the assistance of ld. DR. 4. On the other hand, ld. DR vehemently supported the order of the lower authorities and submitted that there was an inordinate delay by 293 days. 3 ITA No.17/PUN/2025 5. We have heard the rival contentions and perused the records placed before us. Ld. CIT(A) has dismissed the assessee’s appeal by not condoning the delay of 293 days. The reasons cited by the assessee for delay in filing the appeal has been mentioned which mainly includes first instance of Income Tax scrutiny, exchange of files between Tax Consultants and poor medical conditions of the appellant. Considering the same that there was a reasonable cause which prevented the assessee from filing the appeal in time and we therefore condone the delay of 293 days in filing of appeal before ld. CIT(A). 6. So far as merits of the case are concerned on perusal of the impugned orders, it reveals that they were passed ex-parte qua the assessee. The Id. CIT(A) has merely dismissed the appeal in limine, without discussing anything on merits of the issues. The settled position of law mandates that the ld.CIT(A) to dispose of the appeal by adjudicating the issues raised in appeal on merits as contemplated u/s 250(6) of the Act giving reasons thereof. In this regard, reference is being made to a decision of the Hon'ble Bombay High Court in the case of Pr.CIT(Central) Vs. Premkumar Arjundas Luthra (HUF) Bombay/(2017) 297 CTR 614 (Bombay) wherein it was held that Id.CIT(A) NFAC is obliged to dispose of the appeal on merits even in an ex-parte order. Considering the totality of the facts of the case and the submissions made by the Id. Counsel for the assessee and there being no objection from the side of ld. Departmental Representative, we in the interest of justice deem it proper to give an opportunity to the assessee. In view thereof without dwelling into merits of the issue, the issues on merits in the instant appeals are being remitted to the file of Id.CIT(A) for necessary adjudication. Assessee is at liberty to file any evidence as it deems expedient and ld.CIT(A) shall consider all the submissions of the assessee and pass the orders in conformity with the provisions envisaged u/s 250(6) of the Act. Assessee is also directed to provide correct email id to the department for receiving the hearing notices from the ITBA portal. Assessee is further directed to remain vigilant and not to take adjournment unless otherwise required for reasonable cause, failing which the Id.CIT(A) shall be free to proceed in accordance with law. 4 ITA No.17/PUN/2025 Findings of the ld.CIT(A) are set aside and effective grounds of appeal raised by the assessee for the year under appeal are allowed for statistical purposes. 7. In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced on this 20th day of February, 2025. Sd/- Sd/- (ASTHA CHANDRA) (MANISH BORAD) JUDICIAL MEMBER ACCOUNTANT MEMBER पुणे/ Pune; दििांक / Dated: 20th February, 2025. Neeta आिेश की प्रधिधलधप अग्रेधषि / Copy of the Order forwarded to: 1. अपीलार्थी / The Appellant. 2. प्रत्यर्थी / The Respondent. 3. The Pr. CIT concerned. 4. धवभागीय प्रधिधिधि, आयकर अपीलीय अधिकरण, \"SMC\" बेंच, पुणे / DR, ITAT, \"SMC\" Bench, Pune. 5. गार्ा फाइल / Guard File. आिेशािुसार / BY ORDER, // True Copy // Senior Private Secretary आयकर अपीलीय अधिकरण, पुणे / ITAT, Pune. "