TRANS OCEAN AGENCY,J.B. NAGAR ANDHERI(WEST) V. INCOME TAX OFFICER, 33(1)(1),MUMBAI, KAUTILYA BHAVAN, MUMBAI

ITA 1297/MUM/2025

AI Insights

The case involves Trans Ocean Agency, a partnership firm engaged in ship brokerage and consultancy, which appealed against the order of the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre. The appeal challenged the additions made by the Assessing Officer under section 68 of the Income Tax Act, 1961, related to unexplained cash deposits and unsecured loans, as well as disallowances for non-deposit of TDS. The Tribunal noted the assessee's non-compliance during the appellate proceedings but decided to remand the case for a fresh hearing to ensure fair opportunity and adherence to natural justice.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 312772 (ITAT-MUMBAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-04-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Assessment Year: 2017-2018
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AJIT PAL SINGH
• Assessee Lawyers: PRATEEK JAIN
• Keywords: Opportunity of being heard; Unexplained cash credit; Principle of natural justice; TDS
• Section: 143(3); 142(1); 68; 40(a)(ia)

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL “E” BENCH, MUMBAI BEFORE MS. KAVITHA RAJAGOPAL, JM AND SMT. RENU JAUHRI, AM ITA No. 1297/Mum/2025 (Assessment Year: 2017-18) Trans Ocean Agency 501-504, A Wing, Bonanza Sahar Plaza, J. B. Nagar, Andheri (West) Mumbai – 400059. Vs. Income Tax Officer, 33(1)(1) Kautilya Bhavan, Mumbai PAN/GIR No. AAAFT0647A (Appellant) : (Respondent) Assessee by : Shri. Prateek Jain Respondent by : Shri. Ajit Pal Singh, SR. DR. Date of Hearing : 16.04.2025 Date of Pronouncement : 29.04.2025 O R D E R Per Kavitha Rajagopal, J M: This appeal has been filed by the assessee, challenging the order of the learned Commissioner of Income Tax (Appeals) Delhi (‘ld. CIT(A)’ for short), National Faceless Appeal Centre (‘NFAC’ for short) passed u/s.250 of the Income Tax Act, 1961 (‘the Act'), pertaining to the Assessment Year (‘A.Y.’ for short) 2017-18. 2. The assessee has raised the following grounds of appeal: “1. On the facts and circumstances of the Appellant's case and in law the id. CIT(A) erred in passing an ex-parte order, without providing adequate opportunity of being heard to the assessee. 2. On the facts and circumstances of the Appellant's case and in law the Id. CIT (A) erred in holding the action of Ld. A.O. in invoking the provisions of section 68 of the Income Tax Act, 1961 in the appellant's case, for reasons stated in the impugned order or otherwise. ITA No. 1297/Mum/2025 (A.Y. 2017-18) Trans Ocean Agency 2 3. On the facts and circumstances of Appellant's case and in law the id. CIT (A) erred in holding the action of Ld. A.O. in making an addition of Rs. 1,43,89,901/- on account of cash deposit during the demonetization period, by invoking provisions of section 68 of the Act, for the reasons mentioned in the impugned order or otherwise. 4. On the facts and circumstances of Appellant's case and in law the Id. CIT (A) erred in holding the action of Id. A.O. in making an addition of Rs. 26,39,500/-on account of unsecured loan taken by the appellant, by invoking provisions of section 68 of the Act, for the reasons stated in the impugned order or otherwise. 5. On the facts and circumstances of Appellant's case and in law the Id. CIT (A) erred in holding the action of Ld. A.O. in disallowing of Rs. 87,45,236/- (being 30% of Rs. 2,91,50,786/-) is on account of non-depositing of TDS u/s 40(a)(ia) of the Act.” 3. Brief facts of the case are that the assessee is a partnership firm and engaged in the business of ship brokerage and ship consultancy. The assessee had e-filed its return of income dated 07.11.2017, declaring total income at Rs. 89,34,130/-. The assessee’s case was selected for scrutiny under CASS and notices u/s. 143(2) and 142(1) of the Act were duly issued and served upon the assessee. During the assessment proceedings, the learned Assessing Officer (ld. A.O. for short) observed that the assessee has made cash deposit in the bank accounts to the tune of Rs. 4,07,61,500/- in old demonetized currency notes, where the nature and source of above cash deposit remained unexplained. The ld. AO issued show cause notice dated 25.11.2019 and in reply to the same, found that the assessee has deposited Rs. 4,26,08,299/- in SBN notes in its bank account during demonetization period and made addition on part of total cash deposit in SBNs for Rs. 1,43,89,901/- as unaccounted cash u/s. 68 r.w.s. 115BBE of the Act. The ld. AO further made an addition of Rs. 26,39,500/- u/s. 68 of the Act as unexplained cash credit being unsecured loan and also disallowance u/s. 40(a)(ia) on account of non deposit of TDS amounting to Rs. 87,45,236/-. The ld. AO had passed the assessment ITA No. 1297/Mum/2025 (A.Y. 2017-18) Trans Ocean Agency 3 order u/s. 143(3) of the Act, dated 26.12.2019, determining the total income at Rs. 3,47,08,770/- after making various addition/disallowances. 4. Aggrieved the assessee was in appeal before the first appellate authority, challenging the assessment order. 5. The ld. CIT(A) vide an ex parte order dated 20.12.2024, upheld the order of the ld. A.O. for the reason that inspite of several opportunities, the assessee has failed to substantiate its claim and has been non-compliant throughout the appellate proceedings. 6. The assessee is in appeal before us, challenging the impugned order of the ld. CIT(A). 7. The learned Authorised Representative ('ld. AR' for short) for the assessee contended that the assessee has got a good case on the merits and prayed that the assessee may be given one more opportunity to present its case before the ld. CIT(A). 8. The learned Departmental Representative ('ld. DR' for short) vehemently opposed to setting aside the issue to the file of the ld. CIT(A) for the reason that the assessee was given several opportunities by the ld. CIT(A) which was not availed by the assessee. 9. We have heard the rival submissions and perused the materials available on record. It is observed that the assessee has challenged the additions/disallowances made by the ld. A.O. before the first appellate authority but has been non-compliant throughout the appellate proceeding. 10. On the above facts of the case, we are of the considered view that the assessee may be given one more opportunity to present its case before the first appellate authority by adhering to the principles of natural justice. We, therefore, remand this issue back to the file of the ld. CIT(A) for de novo adjudication. The assessee is directed to comply ITA No. 1297/Mum/2025 (A.Y. 2017-18) Trans Ocean Agency 4 with the proceedings without any undue delay on its side and needless it is to say that sufficient opportunity of hearing is to be given to the assessee. 11. In the result, the appeal filed by the assessee is allowed for statistical purpose. Order pronounced in the open court on 29.04.2025 Sd/- Sd/- (RENU JAUHRI) (KAVITHA RAJAGOPAL) ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai; Dated: 29.04.2025 Karishma J. Pawar (Stenographer) Copy of the Order forwarded to: 1. The Appellant 2. The Respondent 3. CIT- concerned 4. DR, ITAT, Mumbai 5. Guard File BY ORDER, (Dy./Asstt.Registrar) ITAT, Mumbai "