VIQARALI YUSUFALI SHABBIRALI SAYED,MUMBAI V. ITO - 22(3)(1), MUMBAI

ITA 3594/MUM/2025

AI Insights

The case involves Viqarali Yusufali Shabbirali Sayed, the appellant, who contested an order from the National Faceless Appeal Centre (NFAC), Delhi, which dismissed his appeal against an assessment order. The assessment order added INR 48,26,700 as deemed income under Section 69A of the Income Tax Act, 1961, based on alleged cash deposits in an overdraft account not owned by the assessee. The CIT(A) dismissed the appeal without adequately considering the appellant's adjournment request and incorrectly stated the issuance of notices. The Tribunal found that the CIT(A) had not provided a fair opportunity for the appellant to present his case, leading to the setting aside of the CIT(A)'s order and a directive for a fresh hearing.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 713086 (ITAT-MUMBAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-07-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Assessment Year: 2019-2020
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: ASSESSEE
• Keywords: Set aside; Opportunity of being heard; Deemed to accrue or arise in india
• Section: 147; 143(3)

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL “K (SMC)” BENCH, MUMBAI SHRI OM PRAKASH KANT, ACCOUNTANT MEMBER SHRI RAHUL CHAUDHARY, JUDICIAL MEMBER ITA No.3594/MUM/2025 (Assessment Year: 2019-2020) Viqarali Yusufali Shabbirali Sayed Shop No.8A, Metro Soap Centre, Hari Market, 3rd Road, Khar-West, Mumbai - 400052 Maharashtra. [PAN:AWRPS0848M] …………. Appellant Income Tax Officer 22(3)(1), Mumbai Piramal Chambers, Lower Parel, Mumbai – 400012. Vs …………. Respondent Appearance For the Appellant/Assessee For the Respondent/Department : : Shri Rahul Sarda Shri Bhagirath Ramawat Date Conclusion of hearing Pronouncement of order : : 21.07.2025 28.07.2025 O R D E R [ Per Rahul Chaudhary, Judicial Member: 1. The present appeal preferred by the Assessee is directed against the order, dated 25/03/2025, passed by the National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as ‘the CIT(A)’] under Section 250 of the Income Tax Act, 1961 [hereinafter referred to as ‘the Act’] whereby the Ld. CIT(A) had dismissed the appeal against the Assessment Order, dated 19/03/2024, passed under Section 143(3) of the Act for the Assessment Year 2019-2020. 2. The Assessee has raised following grounds of appeal : “1. Ground No.1:- Addition under section 69A as deemed income of an amount of Rs.48,26,700/- on the basis of information of cash deposit in an OD account not Printed from counselvise.com ITA No.3594/Mum/2025 Assessment Year 2019-2020 2 belonging to the assessee. 1.1. The Learned Assessing Officer has erred in law and in facts in making addition u/s.69A of the Income Tax Act, 1961 of Rs.48,26,700/- by treating the same as deemed income of the assessee. 1.2. The Learned Assessing Officer has passed the order without appreciating the fact that the assessee does not hold any overdraft account in Rajapur Sahakari Bank Limited. 1.3. The Learned CIT(A) has mentioned in his order that he had issued four notices dated 01/05/2024, 31/01/2025, 11/02/2025 and 13/03/2025, but the Learned CIT(A) has erred in the facts as no notice was issued on 13/03/2025. 1.4. The Learned CIT(A) while passing the order has also ignored the assessee plea of adjournment which was sought by the assessee on 13th March 2025 for a period of 2 weeks, and the same was sought up to 27th March 2025. 1.5. The Learned CIT(A) ought to have given one more fair opportunity to the appellant to submit the evidence and to furnish the written submissions before the appellate order is made and having failed to do so the impugned order is liable to set aside. 2. The appellant prays that the order passed by the Learned Commissioner of Income Tax (Appeals) be set aside.” 3. The Assessee is an individual carrying retail business at the relevant time. The cash collected in aforesaid retail business was deposited in bank account on daily basis and the amounts so deposited in the bank account were used to make the payment to the distributors. For the Assessment Year 2019-2020. The Assessing Officer completed the assessment under Section 147 read with Section 144B of the Act vide Assessment Order, dated 19/03/2024 after making addition of INR.48,26,700/- under Section 69A of the Act in respect of cash deposited in the bank account during the relevant previous year. The appeal preferred by the Assessee against the aforesaid order was dismissed by the Learned CIT(A) vide order dated 25/03/2025, impugned by way of the present appeal. Printed from counselvise.com ITA No.3594/Mum/2025 Assessment Year 2019-2020 3 4. We have heard both the sides and have perused the material on record. 5. The primary contention advance on behalf of the Assessee is that Learned CIT(A) had dismissed the appeal without granting fair opportunity to the Assessee. It was submitted that in response to notice, dated 13/03/2025, the Assessee had moved application for seeking adjournment for two weeks. However, CIT(A) proceeded to dismiss the appeal without considering the said application for seeking adjournment. It was submitted that while passing the order, the CIT(A) has stated that four noticed dated 01/05/2024, 31/01/2025, 11/02/2025 and 13/03/2025 were issued to the Assessee whereas no notice dated 13/03/2025 were issued to the Assessee. 6. Per contra the Learned Departmental Representative supported the order passed by the Learned CIT(A) and submitted that despite having been granting four opportunities, the Assessee had failed to make proper representation before the CIT(A) and therefore, the contention of the Assessee that the CIT(A) had failed to provide fair opportunity to the Assessee is factually incorrect. 7. Having considered the rival submissions and on perusal of record, we find that the factual averments made by the Assessee are correct. A notice of hearing was issued by the CIT(A) for fixing hearing on 13/03/2025 and in response to the same, the Assessee had moved an adjournment application seeking two weeks time. However, the CIT(A) dismissed the appeal vide order, dated 25/03/2025. Therefore, on perusal of record we find that no notice dated 13/03/2025 was issued by the Learned CIT(A). Further, we find that CIT(A) had proceeded to adjudicate the appeal ex-parte after giving two notices on 31/01/2025 and 11/02/2025 (spreading over a period of 15 days) and without considering/rejecting the Printed from counselvise.com ITA No.3594/Mum/2025 Assessment Year 2019-2020 4 application seeking adjournment filed by the Assessee. Accordingly, we accept the contention advanced on behalf of the Assessee that a fair opportunity of being heard was not granted to the Assessee. Therefore, we deem it appropriate to set aside the impugned order, dated 25/03/2025, passed by the Learned CIT(A) and restore the issue back to the file of the CIT(A) with the directions to adjudicate the appeal afresh after granting the Assessee a reasonable opportunity of being heard. The Assessee directed to cooperate in the appellate proceedings and forthwith file details, documents & submission in support of its claims/contentions before the CIT(A). The CIT(A) is directed to consider the same as per law. It is clarified that in case the Assessee fails to enter appearance and/or fails to file details/documents/submission in response to notice of hearing issued by the CIT(A), the CIT(A) shall be at liberty to decide the issues on merits on the basis of material on record. Since, we have not adjudicated the issues raised on merits, all the rights and contentions of both the sides are left open. In terms of the aforesaid, the Ground No.1 to 2 raised by the Assessee are treated as allowed for statistical purposes. 8. In result the appeal preferred by the Assessee is treated as allowed for statistical purpose. Order pronounced on 28.07.2025. Sd/- Sd/- (Om Prakash Kant) Accountant Member (Rahul Chaudhary) Judicial Member म ुंबई Mumbai; दिन ुंक Dated :28.07.2025 Milan,LDC Printed from counselvise.com ITA No.3594/Mum/2025 Assessment Year 2019-2020 5 आदेश की प्रतितिति अग्रेतिि/Copy of the Order forwarded to : 1. अपील र्थी / The Appellant 2. प्रत्यर्थी / The Respondent. 3. आयकर आय क्त/ The CIT 4. प्रध न आयकर आय क्त / Pr.CIT 5. दिभ गीय प्रदिदनदध ,आयकर अपीलीय अदधकरण ,म ुंबई / DR, ITAT, Mumbai 6. ग र्ड फ ईल / Guard file. आिेश न स र/ BY ORDER, सत्य दपि प्रदि //True Copy// उप/सह यक पुंजीक र /(Dy./Asstt. Registrar) आयकर अपीलीय अदधकरण, म ुंबई / ITAT, Mumbai Printed from counselvise.com "