VINAY DALCHAND MEHTA,DOMBIVALI V. INCOME TAX OFFICER PNE-W-(75)(94), KALYAN

ITA 4430/MUM/2025

AI Insights

This case involves an appeal by Vinay Dalchand Mehta against the order of the National Faceless Appeal Centre (NFAC), Delhi, which confirmed the addition of Rs.5,93,63,688 as profit earned from unaccounted sales based on unexplained deposits in bank accounts and incorrect reporting by the auditor regarding GST demands. The assessee contested that the additions were based on internal bank transfers and not unaccounted sales, and that the auditor's report was factually incorrect. The initial assessments and subsequent appeals were dismissed due to non-compliance and non-attendance, leading to this appeal before the Tribunal. The Tribunal, acknowledging the repeated defaults but in the interest of justice, decided to remand the case for fresh adjudication with conditions.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 773454 (ITAT-MUMBAI)
• Duration Of Justice: 2 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-09-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Assessment Year: 2022-2023
• Appeal Filed On: 08-07-2025
• Other Referred Cases: Birsa Gramin Vikash Evam Prashikshan Sanstha V/s D.C.I.T, Bhupendra Kumar Phoolchand Bind H No. 242 V/s. Income Tax Officer 1(1), Ravi Prakash Sharma V/s. Income Tax Officer Ward-2(5), Jaipur
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KAVITA P. KAUSHIK
• Assessee Lawyers: SUMEDH HINGE
• Keywords: Opportunity of being heard; Principle of natural justice; Audi alteram partem
• Section: 143(3); 44AD

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL “F” BENCH MUMBAI BEFORE MS. KAVITHA RAJAGOPAL, JUDICIAL MEMBER AND SMT. RENU JAUHRI, ACCOUNTANT MEMBER ITA No. 4430/MUM/2025 (Assessment Year: 2022-23) Vinay Dalchand Mehta Flat No. 7, Moreshwar Cooperative Housing Society Limited, R.P. Road, Dombivli, 421201 Vs. Income Tax Officer PNE Ward (75)(94) 2nd Floor, Rani Mansion Kalyan Murbad Road, Above Canara Bank, Kalyan 421301 स्थायी लेखा सं./जीआइआर सं./PAN/GIR No: AAZPM0583F (Appellant) (Respondent) निर्ााररती की ओर से / Assessee by: Shri. Sumedh Hinge /Revenue by: Ms. Kavita P. Kaushik SR. DR Date of Hearing 20.08.2025 Date of Pronouncement 24.09.2025 आदेश/O R D E R PER RENU JAUHRI [A.M]: This appeal is filed by the assessee against the order of the National Faceless Appeal Centre (NFAC), Delhi (hereinafter referred to as \"CIT(A)\"] dated 27.03.2025 passed u/s. 250 of the Income-tax Act, 1961 [hereinafter referred to as \"Act\"] for Assessment Year [A.Y.] 2022-23. 2. The assessee has raised the following grounds of appeal: “On facts and in law, 1] The learned CIT(A) erred in confirming the addition of Rs.5,93,63,688/- on account of profit earned from Un-Accounted sales of Rs. 74,20,46,102/- on the basis of unexplained deposits in the Bank Accounts and wrong reporting by the Auditor in the Audit Report filed under Income Tax for the AY 2022-23 which states that GST Authorities has raised demand of Rs.3,06,33,976/- against the Appellant. Printed from counselvise.com P a g e | 2 ITA No 4430/Mum/2025 Ay 2022-23 Vinay Dalchand Mehta 2] The learned CITA(A) and learned Assessing Officer did not consider the fact that the amount credited in Account No …………………….. are mainly internal bank transfer carried out from Account No. …………… by the Assessee for the business purpose. 3] The learned CIT(A) erred in holding that the Assessee failed to prove that the amount credited in the bank accounts is not made out of any un-accounted sales and decided the matter ex-parte. 4] The Appellant also states that the reporting made by the Auditor in the Audit Report filed for the AY-2022-23 which states that the GST Department has levied demand of Rs.3,06,33,976/- is factually wrong, as no such demand was raised against the Appellant by the GST Department. 5] The Appellant states that the Learned Assessing Officer made the addition of Rs.5,93,63,688 as Profit at 8% as per Section 44AD of Income Tax Act earned from un-accounted sales of Rs.74,20,46,102 merely on the basis of the amount deposited in the bank accounts and wrong reporting by the Auditor regarding the demand raised by GST Department is wrong. 6] The Appellant states that he has time to time informed to the concerned Chartered Accountant/Tax Consultant about the intimations/notices received from the department and asked him to submit the reply thereto within due time. The Appellant states that he was totally depended upon his chartered accountant to attend all the tax related matters. Because of non-attendance of the Chartered Accountant/Tax Consultant the said assessment/appeal was decide ex parte. 7] The Appellant prays that regarding enhancement of turnover of sales and levy of tax thereon the appellant submits that the opportunity to produce the books of accounts be given to him and the appeal/assessment order be modified by reducing the said enhancement and tax. 8] The Appellant states that he should not be punished for non-attendance of the concerned Chartered Accountant/Tax Consultant as it violates the principles of Natural Justice. 9] Section 250 sub section 2(a) of \"the Act\" provides that The following shall have the right to be heard at the hearing of the appeal: - a. The appellant, either in person or by an authorised representative;\" 10] The Appellant states that because of Non-Attendance of his Chartered Accountant/Tax Consultant he has been deprived from the Right to be heard Therefore Appellant prays that the opportunity to explain his case given to him. 11] Supreme Court in the case of Delhi Transport Corporation (DTC) v. DTC Mazdoor Union, inter alia held that Article 14 guarantees a right of hearing to a person who is adversely affected by an administrative order. The principle of audi alteram partem is a part of Article 14 of the Constitution of India. Considering the said decision, the Appellant ought to have been granted an opportunity of being heard which, partakes the characteristic of the fundamental right under Article 14 of the Constitution of India 12] The Appellant relays on following judgements of the Hon'ble Income Tax Appellate Tribunal which supports Appellant's contention. Printed from counselvise.com P a g e | 3 ITA No 4430/Mum/2025 Ay 2022-23 Vinay Dalchand Mehta (i) Birsa Gramin Vikash Evam Prashikshan Sanstha V/s D.C.I.T [ITA No. 365/Ran/2024] (ii) Bhupendra Kumar Phoolchand Bind H No. 242 V/s. Income Tax Officer 1(1) [ITA No. 2598/MUM/2024] (iii) Ravi Prakash Sharma V/s. Income Tax Officer Ward-2(5), Jaipur. [ITA No. 265 & 266/JPR/2023] 13] The appellant craves leave to add, alter, amend or delete any of the above grounds of appeal.” 3. Brief facts of the case are that the assessee is running a proprietary concern M/s. Vinayaka Metal Corporation and filed its return declaring income of Rs. 21,11,120/- for AY 2022-23. The case was selected for scrutiny and notice was issued by the Ld. AO. However, due to non-compliance by the assessee, Ld. AO passed an ex-parte assessment order u/s. 143(3) r.w.s. 144B on 25.03.2024 after adding profit calculated @ 8% on unaccounted sales of Rs. 7,42,04,610/. Aggrieved with the order of the AO, the assessee preferred an appeal before the Ld. CIT(A). However, in the absence of any compliance to various notices issued by the Ld. CIT(A), the appeal was dismissed ex-parte non-attendance vide order dated 27.03.2025. Aggrieved with the order of Ld. CIT(A), the assessee has filed an appeal before the Tribunal. 4. Before us, Ld. AR has submitted that the matter may be remanded back to give one more opportunity to the assessee to properly represent his case. After hearing the rival submissions we are of the view that the assessee has repeatedly defaulted in making compliance during the assessment as well as appellate proceedings. However, in the interest of justice, we deem it appropriate to restore the matter back to the Ld. Jurisdictional Assessing Printed from counselvise.com P a g e | 4 ITA No 4430/Mum/2025 Ay 2022-23 Vinay Dalchand Mehta Officer (JAO) for fresh adjudication, subject to the payment of cost of Rs. 25,000/- to the PM Relief Fund by the assessee. The assessee is directed to deposit this amount and furnish proof of payment before the Ld. AO. The assessee is further directed to make requisite compliance before the Ld. AO to enable fresh adjudication on merits. 5. In the result, appeal of the assessee is allowed for statistical purposes. Order is pronounced in the open court on 24.09.2025 Sd/- Sd/- KAVITHA RAJAGOPAL RENU JAUHRI (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) Place: Mumbai Dated:24.09.2025 Divya R. Nandgaonkar Stenographer आदेश की प्रनतनलनि अग्रेनित/Copy of the Order forwarded to: 1. अिीलाथी / The Appellant 2. प्रत्यथी / The Respondent. 3. आयकर आयुक्त / CIT 4. निभागीय प्रनतनिनर्, आयकर अिीलीय अनर्करण DR, ITAT, Mumbai 5. गार्ा फाईल / Guard file. सत्यानित प्रनत //True Copy// आदेशािुसार / BY ORDER, सहायक िंजीकार (Asstt. Registrar) आयकर अिीलीय अनर्करण / ITAT, Bench, Mumbai. Printed from counselvise.com "