SHREE SHAGUN FINANCIAL SERVICES,MUMBAI vs. ITO-33(2)(3), MUMBAI

PDF · subscribers
ITA 1558/MUM/2023Status: DisposedITAT Mumbai19 July 2023AY 2012-135 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal noted that the CIT(A) had dismissed the appeal ex-parte without considering the merits, despite the assessee raising grounds challenging the additions. Upholding principles of natural justice, the Tribunal set aside the CIT(A)'s order.

What were the facts?

The assessee, a partnership firm, was alleged to be engaged in providing accommodation entries. The Assessing Officer (AO) initiated reassessment proceedings due to alleged escaped income and made additions based on non-compliance by the assessee. The CIT(A) confirmed the AO's order ex-parte due to the assessee's non-appearance.

What were the issues?

Whether the CIT(A) erred in confirming additions without providing a proper opportunity for the assessee to present their case, and whether the principles of natural justice were violated.

Which sections of the Income-tax Act were involved?

Section 148,Section 142(1),Section 131,Section 144,Section 69A,Section 250

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “G” BENCH MUMBAI

Before: SHRI PAVAN KUMAR GADALE & MS PADMAVATHY SDr. Vhigasa Street,

Hearing: 18/07/2023Pronounced: 19/07/2023

आदेश / ORDER

PER PAVAN KUMAR GADALE - JM:

1.

The appeal is filed by the assessee against the order of the National Faceless Appeal Centre (NFAC), Delhi / CIT(A) passed u/s 250 of the Act. The assessee has raised the following grounds of appeal:

1. The Ld. CIT(A) erred in confirming the AO order by assuming and primarily estimating commission income on both debit and credit side @ 2.5% without giving proper opportunity to represent the case.

2. The Ld. CIT(A) erred in not allowing basic expenses for the survival and administration of the company.

Shree Shagun financial Services, Mumbai

3. The Ld. CIT(A) erred in adding cash deposited in bank total income amounting to Rs. 1,03,69,500/- even though the Ld. AO and commissioner has determined Rs. 4,02,78,318/- as total income based on bank records, leading to double taxation.

2.

The brief facts of the case are that, the assessee is a partnership firm, the Assessing Officer (AO) has received the information that the assessee firm is engaged in providing accommodation entries as per high value transactions of debits and RTGS in the bank accounts. The AO has a reason to believe that the income has escaped assessment and issued notice u/s 148 of the Act and there was no compliance. Further the AO has issued notice u/s 142(1) and the summons U/sec131 of the Act, there was no proper compliances. Whereas, the assessee has filed submissions in lieu of notice dated 20.11.2019 referred at Para 3 of the assessment order. The AO was not satisfied with the explanations in respect of accommodation entries provided and a show cause notice was issued to explain the sources of cash deposits in the bank account. Since there was no compliance by the assessee in submitting the information, the AO has invoked the provisions of section 144 of the Act and made addition of Rs.5,06,47,818/- u/sec69A of the Act and assessed the total income of Rs.5,06,47,818/- and passed the order u/s 144 r.w.s 147 of the Act dated 30.12.2019.

Shree Shagun financial Services, Mumbai

3.

Aggrieved by the order, the assessee has filed an appeal before the CIT(A),whereas the CIT(A) has considered the grounds of appeal

, statement of facts and findings of the AO and has issued notices of hearing and since there was no compliance by the assessee to notices. Therefore the CIT(A) considering the information on record has confirmed the action of the A.O and dismissed the appeal. Aggrieved by the order of the CIT(A), the assessee has filed an appeal before the Hon’ble Tribunal.

4. At the time of hearing, none appeared on behalf of the assessee and the Ld. DR submitted that the assessee has not complied with notices in the assessment proceedings and relied on the order of the CIT(A).

5. We heard the Ld.DR submissions and perused the material on record. Prima-facie the CIT(A) has passed the order considering the fact that there is no appearance in spite of providing adequate opportunity of hearing and the notices were issued. Therefore, the CIT(A) was of the opinion that the assessee is not interested in prosecuting the appeal and dismissed the appeal ex-parte confirming the action of the assessing officer. The Ld. CIT(A) has issued the notices of hearing referred at Page 5 Para 6 of the order, but there was no response and thus the Ld.CIT(A) came to a conclusion that the assessee is not interested and decided the appeal based on the information available on record. Whereas the assessee has raised grounds of appeal challenging the Shree Shagun financial Services, Mumbai additions of the A.O and there could be various reasons for non appearance which cannot be overruled. Therefore, considering the principles of natural justice shall provide one more opportunity of hearing to the assessee to substantiate the case with evidences and information. Accordingly, we set aside the order of the CIT(A) and remit the entire disputed issues to the file of the CIT(A) to adjudicate afresh and the assessee should be provided adequate opportunity of hearing and shall cooperate in submitting the information for early disposal of the appeal. And the grounds of appeal of the assessee are allowed for statistical purposes.

6. In the result, the appeal filed by assessee is allowed for statistical purposes. Order pronounced in the open court on 19.07.2023.

Sd/- Sd/- (PADMAVATHY S) (PAVAN KUMAR GADALE) ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai, Dated 19/07/2023 KRK, PS आदेश की �ितिलिप अ�ेिषत/Copy of the Order forwarded to : अपीलाथ� / The Appellant 1. ��थ� / The Respondent. 2. संबंिधत आयकर आयु� / The CIT(A) 3. आयकर आयु�(अपील) / Concerned CIT 4. िवभागीय �ितिनिध, आयकर अपीलीय अिधकरण, मु�बई / DR, ITAT, Mumbai 5.

Shree Shagun financial Services, Mumbai

More judgments on Section 148

All 35,022 judgments and leading authorities on Section 148 →

Recent GST High Court judgments

Search GST case law →