MANIBEN BABUBHAI PATEL,MUMBAI vs. CIT (A), DELHI

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ITA 266/MUM/2023Status: DisposedITAT Mumbai05 April 2023AY 2010-20116 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal set aside the CIT(A)'s order and remanded the case back to the CIT(A) to consider the delay condonation application and adjudicate the appeal afresh. The assessee was granted one more opportunity for hearing.

What were the facts?

The assessee's appeal was dismissed by the CIT(A) for delay and non-compliance, despite grounds challenging an addition of Rs. 2,44,332 as commission income. The AO had made this addition based on information regarding accommodation entries.

What were the issues?

Whether the CIT(A) erred in dismissing the appeal without considering the delay condonation application and providing an opportunity for a hearing on merits. Whether the addition of commission income was arbitrary and without application of mind.

Which sections of the Income-tax Act were involved?

Section 250,Section 148,Section 143(2),Section 142(1),Section 144,Section 147,Section 132

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “SMC” BENCH, MUMBAI

For Respondent: Ms. Jayashree Thakur
Hearing: 25.04.2023Pronounced: 27.04.2023

O R D E R

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/sec 250 of the Act. The assessee has raised the following grounds of appeal:

1. That on the facts and circumstances of the case, the order passed by the Commissioner of Income Tax (Appeals) (hereinafter as "CIT(A)") u/s 250 of the Income Tax Act, 1961 (hereinafter as "the Act") dated 28.11.2022 are bad in law.

Maniben Babubhai Patel, Mumbai. - 2 -

2.

That on the facts and circumstances of the case, the learned CIT(A) erred in not condoning the appellant's appeal, without considering the appellants submission dated 14.04.2021. Appellant should not be precluded an opportunity of hearing merits, simply on account of a delay in filing appeal.

3. That on the facts and circumstances of the case, the learned CIT(A) erred in confirming the addition of Rs. 2,44,332 (2% of 1,22,16,610) as commission income is arbitrary and without application of mind. 4. That the addition made is illegal, unjust and bad in law and based on mere surmises and conjunctures and the same cannot be justified by any material on record and the same are arbitrary and highly excessive. 5. The Appellant craves leave to add alter amend and or vary any of the above grounds of appeal relief claimed at any time before the decision of the appeal

2. The brief facts of the case are that, the assessee is engaged in the business and filed the return of income for the A.Y 2010-11 on 06.03.2012 disclosing a total income of Rs.2,62,350/-.The Assessing Officer (AO) has received the information from DDIT(Inv) that there was search operations U/sec132 of the Act in the case of the Vipul vidur Bhatt group entities and these group concerns were engaged in providing the accommodation entries and the assessee is one of Maniben Babubhai Patel, Mumbai. - 3 - the beneficiary. The AO has reason to believe that the income has escaped assessment and issued notice u/s 148 of the Act. The assessee has filed the revised return of income on 24-04-2017 with total income of Rs.2,62,347/- Subsequently notice u/sec143(2) and U/sec142(1) of the Act was issued. Further the A.O. has called for additional details and the assessee was also issued show cause notice but no reply was filed. The AO was not satisfied with the information and observed that the genuineness of transactions could not be established and made addition by estimating commission @2% of bogus accommodation entries, which works out to Rs. 2,44,322/- and assessed the total income of Rs.5,06,679/-and passed the order u/sec 144 r.w.s 147 of the Act dated 21-12-2017.

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 there was delay in filling the appeal. Since there was no compliance by the assessee to notices. Therefore the CIT(A) considering the information on record has not admitted the appeal Maniben Babubhai Patel, Mumbai. - 4 - and dismissed. 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 Contra, the Ld. DR supported the order of the CIT(A).

5.

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 without condoning the delay in filling the appeal. The Ld.CIT(A) has issued the notices of hearing referred at Page 2 Para 3 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 reasonable cause for the delay is not explained. Whereas the assessee has raised grounds of appeal challenging the additions of the A.O and there could be various reasons for non appearance which cannot be overruled. Therefore, Maniben Babubhai Patel, Mumbai. - 5 - considering the principles of natural justice shall provide one more opportunity of hearing to the assessee to substantiate with the condonation application. Accordingly, set aside the order of the CIT(A) and remit the entire disputed issues to the file of the CIT(A) to consider the application explaining the reasonable cause on the delay and to adjudicate afresh. The assessee should be provided adequate opportunity of hearing and shall cooperate in submitting the information for early disposal of the appeal. Accordingly, allow the grounds of appeal of the assessee for statistical purposes.

6.

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

Order pronounced in the open court on 27.04.2023.

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