SUBHAM SUGAR SUPPLIERS,AHMEDABAD V. THE ITO, WARD-1(1)(3), AHMEDABAD

ITA 2200/AHD/2024

AI Insights

The case involves Subham Sugar Suppliers, a partnership firm engaged in sugar trading, which faced exparte assessment orders for the Assessment Years 2015-16 to 2018-19 due to non-response to notices and non-filing of Returns of Income. The assessments were based on unexplained credit transactions in a bank account. The CIT(A) dismissed the appeals for delay in filing, attributing the delay to the managing partner's health issues without sufficient medical documentation. The Tribunal found that the CIT(A) had not provided an opportunity for the assessee to explain the delay or present medical records, which constituted a violation of the principles of natural justice. The Tribunal also considered the medical affidavit and certificate provided by the assessee, acknowledging the managing partner's serious health issues during the relevant period.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 42071 (ITAT-AHMEDABAD)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-03-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2018-2019
• Other Referred Cases: Rajeev Bansal
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Set aside; Reasonable cause; Reassessment proceedings; Principle of natural justice
• Section: 148; 69A; 191; 264

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD “B” BENCH Before: DR. BRR Kumar, Vice President And Shri T. R. Senthil Kumar, Judicial Member Subham Sugar Suppliers 419 Madhupura Comm. Center, Hathipur Chowk Madhupura, Ahmedabad, Gujarat PAN: ACOFS2276E (Appellant) Vs Income Tax Officer, Ward-1(1)(3), Ahmedabad (Respondent) Assessee Represented: Shri Jignesh Parikh, A.R. & Shri Mehul Doshi, A.R. Revenue Represented: Shri Kavan Limbasiya, Sr. D.R. Date of hearing : 18-03-2025 Date of pronouncement : 21-03-2025 आदेश/ORDER PER BENCH:- These four appeals are filed by the Assessee as against separate appellate orders all dated 28.11.2024 passed by the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, (in short referred to as “CIT(A)”), refusing to condone the delay in filing the appeals relating to Assessment Years 2015- 16 to 2018-19. Since common issues are involved in all the above ITA Nos: 2197 to 2200/Ahd/2024 Assessment Years: 2015-16 to 2018-19 I.T.A Nos. 2197 to 2200/Ahd/2024 A.Ys. 2015-16 to 2018-19 Page No Subham Sugar Suppliers vs. ITO 2 appeals for the sake of convenience, the same are disposed of by this common order. 2. Brief facts of the case is that the assessee is a Partnership Firm engaged in the business of trading of sugar. The assessee failed to file Returns of Income since the assessee did not carry out business activities post 2016-17. Further the Managing Partner Mr. Manoj V Mohta was diagnosed with Cancer in the year 2014. The assessments were reopened by issuing u/s. 148 notice dated 30- 06-2021 on the ground that the credit transactions in the account maintained with Yes Bank Ltd., Ahmedabad Branch was not offered for tax. In spite of service of notices, the assessee failed to respond to the notices as well as the assessee not filed the Return of Income which has resulted in passing exparte assessment orders treating the credit transactions in the bank account as the unexplained income and also taxed u/s. 115BBE of the Act for the Asst. Years 2015-16 to 2018-19 and demanded tax thereon. 3. Aggrieved against the assessment orders, assessee filed four appeals before Ld. CIT(A) with a delay of 127 days for the Asst. Years 2015-16 to 2017-18 and 191 days relating to the Asst. Year 2018-19. The Ld. CIT(A) held that there is no medical documentation provided namely treatment records, hospitalization details, or a medical certificate to establish how medical condition specifically impacted compliance with assessment or appellate timelines. The cancer diagnosis dates back to 2014, whereas the assessment proceedings pertain to later periods. Thus no reasonable cause was made out by the assessee in the delay of 127 I.T.A Nos. 2197 to 2200/Ahd/2024 A.Ys. 2015-16 to 2018-19 Page No Subham Sugar Suppliers vs. ITO 3 days and 191 days in filing the appeals, thereby dismissed the appeals as in limine. 4. Aggrieved against the appellate order, the assessee is in appeal before us raising the following Grounds of Appeal in ITA No. 2197/Ahd/2024: 1. The learned Commissioner of Income-tax (Appeals) erred in not condoning the delay in filing the appeal despite the delay being attributable to genuine medical reasons (cancer of the managing partner) and the time required for extensive discussions with Chartered Accountants and Advocates. 2. The learned CIT(A) further erred in rejecting the appeal without issuing a Show Cause Notice to the appellant, thereby violating the principles of natural justice. 3. The learned CIT(A) has overlooked the submissions made by the appellant, including reliance on the recent decision of the Hon'ble Supreme Court in the case of Rajeev Bansal, which supports the appellant's claim that reassessment proceedings are illegal and bad in law and deserve to be quashed. 4. The Ld AO has erred in law and in facts in carrying out reopening u/s 147 of the Income Tax Act, 1961. 5. The Assessment Unit, the National Faceless Assessment Centre, Delhi has erred in law and in facts in making addition u/s 69A to the tune of Rs.1,14,42,510/- 6. The appellant prays that the delay in filing the appeal be condoned, the order of the CIT(A) be set aside, and the matter be remanded for fresh consideration. 7. The appellant craves leave to add, amend, alter, edit, delete, modify or change all or any of the grounds of appeal at the time of or before the hearing of the appeal. 5. Ld. Counsel filed a Notarised Affidavit from the Managing Partner stating that the reassessment orders for the Asst. Years 2015-16 to I.T.A Nos. 2197 to 2200/Ahd/2024 A.Ys. 2015-16 to 2018-19 Page No Subham Sugar Suppliers vs. ITO 4 2017-18 passed on 24-05-2023 and assessment order for Asst. Year 2018-19 passed on 21-03-2023 and he was undergoing continuous medical consultation from March 2023 to October 2023, which significantly impaired his ability to engage in legal proceedings and make timely decisions regarding the appeal process or to file Revision application u/s. 264 of the Act. A Medical Certificate dated 01-03-2025 was enclosed from Dr. Bhargav Maharaja, Senior Onco Surgeon stating that he was under continuous medical supervision from March 2023 to October 2023. Thus the assessee did not gain any undue advantage on the delay which is neither intentional nor due to negligence on the part of the assessee but solely due to circumstances beyond control and medical reasons, therefore requested to condone the delay in filing the above appeals. 6. Per contra Ld. Sr. D.R. appearing for the Revenue submitted that even in the assessment proceedings, nine opportunities of hearing including to two show cause notices were given to the assessee, which were not even replied by the assessee and no Return of Income filed in response to the notices. Therefore the Ld. CIT(A) is correct in dismissing the appeal, which does not require any interference. 7. We have given our thoughtful consideration and perused the materials available on record. From the impugned appellate orders, the Ld. CIT(A) has not given any opportunity of hearing to the assessee to explain the delay in filing the above appeals and also adduce necessary medical records in support for the delay. Without I.T.A Nos. 2197 to 2200/Ahd/2024 A.Ys. 2015-16 to 2018-19 Page No Subham Sugar Suppliers vs. ITO 5 giving such an opportunity by the Ld. CIT(A) is against the Principle of Natural Justice. However before us, the assessee has filed Notarized Affidavit as well as Medical Certificate for continuous medical supervision from March 2023 to October 2023. Further perusal of records, we find that the assessee was justified in not responding to the notices issued by the Assessing Officer from June 2021 till May 2023 which has resulted in passing exparte assessment orders by the Assessing Officer. Thus the appellate orders passed by the Ld. CIT(A) is hereby set aside with a direction to pass fresh orders on merits by giving proper opportunity of hearing to the assessee. Needless to say the assessee to make use of this opportunity and file all necessary documents and details before Ld. CIT(A) for passing order on merits of the case. 8. In the result, the appeals filed by the Assessee are allowed for statistical purposes. Order pronounced in the open court on 21-03-2025 Sd/- Sd/- (DR. BRR KUMAR) (T.R. SENTHIL KUMAR) VICE PRESIDENT JUDICIAL MEMBER Ahmedabad : Dated 21/03/2025 आदेश कȧ ĤǓतͧलͪप अĒेͪषत / Copy of Order Forwarded to:- 1. Assessee 2. Revenue 3. Concerned CIT 4. CIT (A) I.T.A Nos. 2197 to 2200/Ahd/2024 A.Ys. 2015-16 to 2018-19 Page No Subham Sugar Suppliers vs. ITO 6 5. DR, ITAT, Ahmedabad 6. Guard file. By order/आदेश से, उप/सहायक पंजीकार आयकर अपीलȣय अͬधकरण, अहमदाबाद "