SHYAM CHELARAMJI RANGWANI,KHEDA V. THE ITO, WARD-5, NADIAD

ITA 1947/AHD/2024

AI Insights

The case involves Shyam Chelaramji Rangwani, the appellant, who contested the reassessment order passed by the Assessing Officer (AO) under Sections 144 and 147 of the Income Tax Act, 1961, for the Assessment Year 2012-13. The AO had made an addition of Rs.93,00,000 as unexplained investment based on information that the appellant had invested in a property during the relevant assessment year. The appellant argued that the reassessment was invalid due to incorrect PAN usage and failure to fulfill the conditions precedent under Section 147. The CIT(A) initially dismissed the appeal for non-prosecution without adjudicating on the merits, leading to the current appeal before the Tribunal.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 29603 (ITAT-AHMEDABAD)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-02-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2012-2013
• Other Referred Cases: CIT vs. B.N. Bhattacharjee & Others (1970) 10 CTR 354 (SC), CIT vs. Multiplan India Pvt. Ltd. (1991) 38 ITD 320 (Del), ITAT
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KAVAN LIMBASIYA
• Assessee Lawyers: MANISH J. SHAH; SHYRI RUSHIN PATEL; ARS
• Keywords: Set aside; Unexplained investment; Principle of natural justice
• Section: 148; 144; 142(1); 69A

Judgement Text

" आयकर अपीलीय अिधकरण, अहमदा बा द \u0012ा यपीठ “बी“, अहमदा बा द । IN THE INCOME TAX APPELLATE TRIBUNAL “ B” BENCH, AHMEDABAD सु\u0017ी सुिच\u0019ा का \u001aले, \u0012ा ियक सद\u001c एवं \u0017ी मकरंद वसंत महा देवकर, लेखा सद\u001c क े सम\"। ] ] BEFORE MS. SUCHITRA KAMBLE, JUDICIAL MEMBER AND SHRI MAKARAND V. MAHADEOKAR, ACCOUNTANT MEMBER आयकर अपील सं /ITA No.1947/Ahd/2024 िनधा \u0010रण वष\u0010 /Assessment Year : 2012-13 Shyam Chelaramji Rangwani 2, Vasant Vihar, Nr. Zalak Hotel Petlad Road, Nadiad, Kheda – 387 002 (Gujarat) बनाम/ v/s. The ITO Ward-5 Nadiad – 387 002 (Gujarat) \u0014थायी लेखा सं./PAN: AIVPR 8944 H अपीलाथ%/ (Appellant) &' यथ%/ (Respondent) Assessee by : Shri Manish J. Shah & Shyri Rushin Patel, ARs Revenue by : Shri Kavan Limbasiya, Sr.DR सुनवाई की तारीख/Date of Hearing : 13/02/2025 घोषणा की तारीख /Date of Pronouncement: 18/02/2025 आदेश/O R D E R PER MAKARAND V. MAHADEOKAR, AM: This appeal is filed by the assessee against the order of the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as “CIT(A)”], dated 14-10-2024, which upheld the assessment order passed under Section 144 r.w.s. 147 of the Income Tax Act, 1961 [hereinafter referred to as “the Act”] by the Assessing Officer, Ward-5, Nadiad [hereinafter referred to as “AO”], for Assessment Year (AY) 2012-13. ITA No.1947/Ahd/2024 Shyam Chelaramji Rangwani vs. The ITO Asst. Year : 2012-13 2 Facts of the case: 2. The case was reopened based on information received from ACIT, Circle-2(4), Ahmedabad, indicating that the assessee had allegedly invested Rs.93,00,000/- in Tower B/303, Iscon Platinum, Ahmedabad during A.Y. 2012-13. The AO issued a notice under Section 148 dated 30.03.2019, which was served on the assessee under PAN: ABQPR2834L. The assessee, however, contended that this PAN was not known to him and that he had always filed his income tax returns under PAN: AIVPR8944H. 3. As per the AO’s findings, the alleged investment consisted of Rs.21,00,000/- paid via cheque and Rs.72,00,000/- paid in cash. The total consideration was Rs.93,00,000/-, and the AO sought an explanation for the source of the investment. 3.1. The AO issued multiple notices under Section 142(1) of the Act on 13.05.2019, 09.08.2019, and 28.08.2019, which were duly served on the assessee. However, the assessee failed to file a reply or furnish any supporting documents. 3.2. The assessee submitted a written response on 11.10.2019, wherein he denied knowledge of PAN: ABQPR2834L and stated that he had been filing returns under PAN: AIVPR8944H since A.Y. 2011-12. The assessee claimed that he had not received any notice under Section 148 on the correct PAN. The AO found this explanation unsatisfactory, stating that department records clearly showed that the assessee held two PANs: ABQPR2834L and AIVPR8944H. A show-cause notice was issued on 06.12.2019, asking the ITA No.1947/Ahd/2024 Shyam Chelaramji Rangwani vs. The ITO Asst. Year : 2012-13 3 assessee to explain why the investment should not be treated as unexplained under Section 69A of the Act. Since the assessee failed to respond to the show cause notice, the AO made an addition of Rs.93,00,000/- under Section 69A of the Act as unexplained investment and completed the assessment ex-parte under Section 144 r.w.s. 147 of the Act on 12.12.2019. 4. The assessee filed an appeal before CIT(A), Vadodara, raising the grounds that the notice under Section 148 was not validly served, as it was issued under wrong PAN (ABQPR2834L) and the AO failed to fulfil the conditions under Section 147 of the Act, making the reassessment invalid. The assessee also argued that the investment was actually recorded in A.Y. 2014- 15, not A.Y. 2012-13, and the flat booking was cancelled on 14.12.2015. The assessee further argued that the AO ignored key documentary evidence submitted during assessment. The assessee argued that the entire reassessment under PAN: ABQPR2834L was invalid, as the correct PAN was AIVPR8944H. 4.1. The CIT(A) issued a notice on 25.01.2021, asking the assessee to furnish written submissions by 09.02.2021. However, the assessee did not respond to this notice. The CIT(A) dismissed the appeal for non-prosecution, without adjudicating the grounds on merits. The CIT(A) relied on judicial precedents that permit dismissal for non-prosecution, including CIT vs. B.N. Bhattacharjee & Others (1970) 10 CTR 354 (SC) and CIT vs. Multiplan India Pvt. Ltd. (1991) 38 ITD 320 (Del), ITAT. 5. Aggrieved by the order of CIT(A), the assessee is in appeal before us with following grounds of appeal: ITA No.1947/Ahd/2024 Shyam Chelaramji Rangwani vs. The ITO Asst. Year : 2012-13 4 1. Notice issued u/s.148 dated 30.03.2019 and order passed u/s.144 r.W.S. 147 dated 12.12.2019 along with the demand notice issued u/s.156 are bad in law for want of valid service of notice issued u/s. 148. 2. Notice issued u/s.148 dated 30.03.2019 and order passed u/s.144 r.W.S. 147 dated 12.12.2019 along with the demand notice issued u/s. 156 are bad in law as the notice u/s. 148 was issued without fulfilling the condition precedent u/s.147 r.w.s. 148 of the Act and without acquiring valid jurisdiction to issue notice u/s.148. 3. The Id. CIT(Appeals) erred in law and on facts in dismissing the appeal of the appellant for non-prosecution and thereby confirming the addition of Rs.93,00,000/- made by the Assessing Officer u/s.69A on PAN: ABQPR2834L vide order dated 12.12.2019 without appreciating facts and law of the case properly. 4. The appellant craves leave to add, amend or alter the grounds of appeal at the time of hearing, if need arise. 6. During the course of hearing before us, the Authorized Representative (AR) of the assessee argued that CIT(A) did not pass a speaking order and dismissed the appeal for non-prosecution without adjudicating the facts and legal contentions. The AR also stated that a separate appeal under the correct PAN (AIVPR8944H) is still pending before CIT(A), which requires adjudication. The AR placed on record the copy of Form No.35 of the appeal filed under PAN: AIVPR 8944 H (Acknowledgement No.290205300100120). 7. The Departmental Representative (DR), on the other hand, submitted that the assessee did not appear before CIT(A) despite being given multiple opportunities. However, the DR also acknowledged that CIT(A) did not pass a speaking order addressing the merits of the case. Considering these facts, the DR agreed that, in the interest of justice, the matter should be remanded back to CIT(A) for fresh adjudication. ITA No.1947/Ahd/2024 Shyam Chelaramji Rangwani vs. The ITO Asst. Year : 2012-13 5 8. We have carefully considered the rival submissions, perused the assessment order and the order of CIT(A), and examined the material on record. It is observed that the original assessment order was passed under PAN ABQPR2834L, whereas the order of CIT(A) was passed under PAN AIVPR8944H. Further, the assessee had filed Form 35 for the appeal against PAN ABQPR2834L, but the verification was done using PAN AIVPR8944H through Aadhaar OTP. This raises a serious concern regarding procedural lapses in the appellate proceedings. If the appeal was filed under one PAN but verified using another PAN-linked Aadhaar, how was it processed and entertained without addressing this inconsistency? Such a fundamental mismatch in PAN details should have been flagged by the system or reviewed by CIT(A) before proceeding with adjudication. The failure to do so indicates a lack of proper verification at the appellate stage, which may have significant jurisdictional implications. 8.1. We further observe that CIT(A) has dismissed the appeal for non- prosecution without passing a speaking order, thereby failing to adjudicate the grounds raised by the assessee on merits. It is a settled legal principle that CIT(A), being a quasi-judicial authority, is required to pass a reasoned and speaking order even in the absence of the assessee’s appearance. The failure to do so amounts to a violation of the principles of natural justice. The Departmental Representative (DR), while contending that the assessee did not appear before CIT(A) despite being given multiple opportunities, also conceded that CIT(A) did not pass a speaking order addressing the merits of ITA No.1947/Ahd/2024 Shyam Chelaramji Rangwani vs. The ITO Asst. Year : 2012-13 6 the case. Considering these facts, the DR agreed that, in the interest of justice, the matter should be remanded back to CIT(A) for fresh adjudication. 8.2. We also express our concern as to how such a fundamental discrepancy regarding the PAN could remain unaddressed at the appellate stage. The appellate authority, while examining the appeal, is expected to verify the correctness of the PAN and other jurisdictional aspects before proceeding to adjudicate the matter. The fact that the appeal was disposed of under a different PAN without addressing this issue reflects a lack of due diligence at the CIT(A) level. Such an oversight can lead to serious consequences, including conflicting orders for the same assessee under different PANs, creating unnecessary litigation and hardship. CIT(A) is expected to exercise greater caution and diligence while handling cases, particularly where jurisdictional issues are involved. 8.3. In light of the above observations, we deem it appropriate to set aside the order of CIT(A) and restore the matter to his file with a direction to first determine the correct PAN of the assessee and take necessary steps for de- duplication of PANs. Further, both appeals—one under PAN ABQPR2834L and the other under PAN AIVPR8944H—shall be heard together and disposed of jointly to avoid conflicting decisions. CIT(A) shall adjudicate the appeal on merits and pass a speaking order dealing with the validity of the notice under Section 148, the correctness of the assessment year in which the investment is taxed, and the applicability of Section 69A based on the facts and evidence submitted by the assessee. The assessee is directed to fully cooperate in the proceedings and furnish all supporting documents, and ITA No.1947/Ahd/2024 Shyam Chelaramji Rangwani vs. The ITO Asst. Year : 2012-13 7 CIT(A) shall provide a reasonable opportunity of hearing to both parties efore passing the final order. 9. Accordingly, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the Open Court on 18th February, 2025 at Ahmedabad. Sd/- Sd/- (SUCHITRA KAMBLE) JUDICIAL MEMBER (MAKARAND V. MAHADEOKAR) ACCOUNTANT MEMBER अहमदाबाद/Ahmedabad, िदनांक/Dated 18/02/2025 टी.सी.नायर, व.िन.स./T.C. NAIR, Sr. PS आदेश की #ितिलिप अ$ेिषत/Copy of the Order forwarded to : 1. अपीलाथ% / The Appellant 2. #&थ% / The Respondent. 3. संबंिधत आयकर आयु' / Concerned CIT 4. आयकर आयु' ) अपील ( / The CIT(A)-(NFAC), Delhi 5. िवभागीय #ितिनिध , आयकर अपीलीय अिधकरण , राजोकट/DR,ITAT, Ahmedabad, 6. गाड\u0010 फाईल / Guard file. आदेशानुसार/ BY ORDER, स&ािपत #ित //True Copy// सहायक पंजीकार (Asstt. Registrar) आयकर अपीलीय अिधकरण, ITAT, Ahmedabad 1. Date of dictation (word processed by Hon’ble AM in his laptop) : 14.2.2025 2. Date on which the typed draft is placed before the Dictating Member. : 14.2.2025 3. Date on which the approved draft comes to the Sr.P.S./P.S : 4. Date on which the fair order is placed before the Dictating Member for pronouncement. : 5. Date on which fair order placed before Other Member : 6. Date on which the fair order comes back to the Sr.P.S./P.S. : 18.2.25 7. Date on which the file goes to the Bench Clerk. : 18.2.25 8. Date on which the file goes to the Head Clerk. : 9. The date on which the file goes to the Assistant Registrar for signature on the order. : 10. Date of Despatch of the Order : "