R VIT & CO,MUMBAI vs. ITO 23(3)(5), MUMBAI

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ITA 696/MUM/2023Status: DisposedITAT Mumbai10 May 2023AY 2015-165 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that the CIT(A) passed the impugned order ex-parte without providing the assessee with an adequate opportunity of being heard. Therefore, the order was set aside to be decided afresh.

What were the facts?

The assessee company availed loans totaling Rs. 1,30,61,349/- from three parties. The Assessing Officer added Rs. 4,19,000/- to the assessee's income under Section 68 as unexplained cash credit. The CIT(A) dismissed the assessee's appeal ex-parte.

What were the issues?

Whether the CIT(A) erred in passing an ex-parte order without providing an adequate opportunity of being heard to the assessee. Whether the addition under Section 68 was justified without proper adjudication on merits.

Which sections of the Income-tax Act were involved?

Section 68,Section 271(1)(c),Section 234

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘ SMC‘ BENCH

Before: SHRI KULDIP SINGH

For Appellant: Shri Bhupendra Shah
For Respondent: Shri Jogendra Singh, Sr. AR
Hearing: 10/05/2023Pronounced: 10/05/2023

O R D E R PER KULDIP SINGH (J.M):

The Appellant, R VIR & CO. (hereinafter referred to as the ‘assessee’) by filing the present appeal, sought to set aside the impugned order dated 16.02.2023 passed by the National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as the ‘CIT(A)’] qua the assessment order for Assessment year 2015-16 on the grounds inter-alia that:-

“1) In the facts and circumstances of the case and in law the learned Assessing Officer erred in adding Rs4,19,000/- u/s 68 as unexplained cash credit by way of undisclosed income in the hand of the Appellant:

Without appreciating the fact that the Appellant is not required to explain source of source of income as was held in various judgments of multiple courts. b) Without issuing show cause notice before making addition. 2) In the facts and circumstances of the case and in law the learned Assessing Officer erred in initiating penalty proceedings u/s 271(1)(c) and also levying interest on the same u/s 234. 3) In the facts and circumstances of the case and in law the learned cit[A] erred passing order ex parte a) Without deciding matter on merits b) Without considering adjournment request uploaded online on 13.02.2023 c) By granting time of less than 7 days vide notice dated 10.02.2023for making submission for which adjournment application was ignored d) Notices dated 09.02.2021, 24.06.2021 could not be attended due to Covid19 period. Relief Prayed: The appellant therefore prays Your Honour, 1) To quash the order passed without issuing show cause notice. 2) To delete the addition of Rs4,19,000/- u/s 68 as unexplained cash credit. 3) To delete the interest u/s 234 and penalty u's 271(1)(e). 4) To quash the Appellate order passed exparte which is against the scheme od faceless appeal General:- . The appellant reserves rights to add alter or delete any portion of this appeal before its conclusion. . This appeal is filed in time and may please be allowed in full. A Detailed paper book along with case laws will be submitted at the time of hearing.”

2.

Briefly stated, facts necessary for consideration and adjudication of the issues at hand are : The assessee company being a partnership firm filed its return of income declaring total income of Rs.13,31,210/, which was subjected to scrutiny. The AO noticed that during the year under Rs.

1,30,61,349/- from 3 parties. On failure of the assessee to explain the source of deposits in the bank accounts concerned, treated the same as undisclosed income under section 68 of the Income Tax Act, 1961 (in short, “the Act”) and thereby framed assessment under section 143 of the Act.

3.

Assessee carried the matter before the Ld. CIT(A) by way of filing appeal who has confirmed the disallowance by dismissing the appeal filed by the assessee. Feeling aggrieved with the impugned order passed by the Ld. CIT(A), assessee has come up before the Tribunal by way of filing the present appeal.

4.

I have heard the Ld. Authorised representative of the parties to the appeal, perused the order passed Ld. Lower Revenue Authorities and material available on record in the light of the case law applicable.

5.

At the very outset, it is brought to the notice of the Bench by the Ld. AR for the assessee that impugned order is passed by Ld. CIT(A) at back of the assessee without providing opportunity of being heard and without deciding the case on merits, which fact is not controverted by the ld. DR for the Revenue.

6.

On perusal of the impugned order passed by Ld. CIT(A) particularly para-4 shows that ld. CIT(A) stated to have given 3 notices to the assessee but failed to record if such notices were ever served upon the assessee.

Rather the ld. CIT(A) has proceeded to dispose of the appeal ex-parte due to non-prosecution without deciding the merits.

7.

In view of what has been discussed above. I am of the considered view that adequate opportunity of being heard has not been given to the assessee by the ld. CIT(A). To advance the cause of justice and to stop the multiplicity of the providing adequate opportunity of being heard is required to be given to the assessee, hence the impugned order passed by the ld. CIT(A) is set aside to be diceded afresh after providing opportunity of being heard to the assessee by the ld. CIT(A).

8.

Resultantly, appeal filed by the assessee is allowed for statistical purposes.

Order pronounced in the open court on 10/05/2023.

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