DISHA JAY THAKKAR,DAHISAR EAST vs. THE COMMISSIONER OF INCOME TAX (APPEAL)-45, MUMBAI, DELHI

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ITA 2497/MUM/2025Status: DisposedITAT Mumbai31 October 2025AY 2011-125 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal noted that the CIT(A) had passed an ex-parte order because the assessee failed to file any response or submissions despite several opportunities. Considering the peculiar facts and circumstances, the Tribunal deemed it appropriate to remand the matter back to the CIT(A) for fresh adjudication on merits. The assessee was directed to make requisite compliance before the CIT(A). The Tribunal allowed the appeal of the assessee for statistical purposes. The specific findings on each ground of appeal were not detailed as the matter was remanded. The issue of levying interest under Sections 234B and 234C was implicitly to be decided by the CIT(A) upon remand.

What were the facts?

The assessee, M/s. Disha Jay Thakkar, is appealing an order dated July 18, 2022, passed by the Commissioner of Income Tax (Appeals)-45, Mumbai (also referred to as the National Faceless Appeal Centre, Delhi) for Assessment Year 2011-12. The assessee, a 21-year-old college student during the relevant financial year, had share transactions in her name concerning M/s. Regency Trust Ltd. As she had not filed a return, a notice under Section 148 was issued on March 27, 2018. She subsequently filed a return declaring an income of Rs. 848. The Assessing Officer (AO) made an assessment under Section 143(3) on December 26, 2018, determining an assessed income of Rs. 4,38,03,280/-. The assessee claimed that her father's friend, Shri Narendra R. Shah, conducted these transactions using her PAN and bank account. The CIT(A) dismissed her appeal, upholding the AO's assessment.

What were the issues?

1. Whether the learned Commissioner of Income Tax (Appeals) erred in law and facts by passing an ex-parte order, thereby violating natural justice, as per ground 1. 2. Whether the learned Commissioner of Income Tax (Appeals) erred in law and facts by adding nearly all deposit amounts as income in the assessee's hands, when transactions were conducted by a third party, Shri Narendra Shah, who controlled the share transactions, as per grounds 2, 3, 4, 6, and 7. 3. Whether the learned Commissioner of Income Tax (Appeals) erred in law and facts by ignoring that a search operation was conducted on Shri Narendra Shah, who accepted conducting accommodation entry transactions, as per ground 5. 4. Whether the learned Commissioner of Income Tax (Appeals) erred in law and facts by not considering the reply submitted by the assessee and passing an order with prejudice, as per grounds 8 and 9. 5. Whether the learned Commissioner of Income Tax (Appeals) erred in law and facts by levying interest under Sections 234B and 234C of the Act, as per ground 10. Assessee's Contentions: The assessee argued that she was cheated by Shri Narendra R. Shah and was unaware of the transactions. She stated that her father's friend, Shri Narendra R. Shah, a stockbroker, advised opening an account in her name and was given a signed cheque book. A complaint of cheating was filed against Shri Narendra Shah on August 18, 2025. The assessee requested the ex-parte order of the CIT(A) be set aside to allow her due opportunity to make submissions. Revenue's Contentions: The learned Departmental Representative (DR) strongly relied on the orders of the lower authorities.

Which sections of the Income-tax Act were involved?

Section 250,Section 148,Section 143(3),Section 234B,Section 234C

AI-generated summary — verify with the full judgment below

Before: SHRI BEENA PILLAI & SMT.RENU JAUHRI

For Appellant: Shri Mukesh Chokshi
For Respondent: Shri Annavaran Kosuri- Sr. AR
Hearing: 14.10.2025Pronounced: 31.10.2025

Date of Hearing 14.10.2025 Date of Pronouncement 31.10.2025 आदेश / O R D E R PER RENU JAUHRI [A.M.] :-

This appeal is filed by the assessee against the order of the Learned Commissioner of Income-tax (Appeals), Mumbai/National Faceless Appeal Centre, Delhi [hereinafter referred to as “CIT(A)”] dated 18.07.2022 passed u/s. 250 of the Income-tax Act, 1961 [hereinafter referred to as “Act”] for the Assessment Year [A.Y.] 2011-12.

2.

The grounds of appeal are as follows:

“1. The learned Commissioner of Income Tax Appeal has erred in law and in facts by passing the ex- party order therefore against the natural justice 2. The learned Commissioner of Income Tax Appeal has erred in law and in facts that nearly all deposit amount added as the income in the hands of the assessee while transactions were conducted by third party who is responsible for the transactions conducted in the shares of Regency Investment. Shri Narendra Shah is a hole and sole of controlling the shares transactions.

3. The learned Assessing Officer and Commissioner of Income Tax Appeal has erred in law and in facts by ignoring the facts that assessee was hardly 21 years old and she was not capable to conduct any share transactions.

4. The learned Assessing Officer and Commissioner of Income Tax Appeal has erred in law and in facts by treating short term capital gain is an income of the assessee while the benefit of short term capital gain has been received by Shri Narendra Shah.

5. The learned Assessing Officer and Commissioner of Income Tax Appeal has erred in law and in facts by ignoring that there was a search operation were conducted on Shri Narendra Shah and he has accepted that he was conducting all the shares transactions which are accommodation entries.

6. The learned Assessing Officer and Commissioner of Income Tax Appeal has erred in law and in facts by ignoring the facts that assessee was hardly 21 years old and she was a college student and is was beyond her capacity to carry out accommodation entry business.

7.

The learned Assessing Officer and Commissioner of Income Tax Appeal has erred in law and in facts the income assessed is a assumed income & made the additions of Rs. 4,30,91,035/- was not made out of the income earned and not made investment & the transaction mentioned are not corroborated by banking entries. The amount has been borrowed from the parties belonging to Shri Narendra Shah and not a single party has been verified and there credit worthiness and genius of transactions.

8.

The learned Assessing Officer and Commissioner of Income Tax Appeal has erred in law and in facts that Reply submitted was not considered by ITO. And order passed with prejudice mindset on having personal meeting with Mr. Narendra shah and argument made by him.

9.

The learned Assessing Officer and Commissioner of Income Tax Appeal has erred in law and in facts that Relevant Documents submitted was also not verified by ITO and said on personal visit to him that I do not have time for it" So order is not proper and passed without considering the details submitted at the time of hearing.

10.

The learned Assessing Officer and Commissioner of Income Tax Appeal has erred in law and in facts levying interest u/s. 234B and 234C of the Act.

11.

The appellant craves leave to add to, alter, amend and / or delete in all the foregoing grounds of appeal.”

3.

The brief fact of the case are that the assessee was a 21 year old college student during the F.Y. relevant to A.Y. 2011-12. Ld. AO noticed that there were transactions of sales and purchase of shares of M/s. Regency Trust Ltd. in her name however no return was filed by her for A.Y. 2011-

12.

Therefore, a notice u/s. 148 was issued on 27.03.2018, in response to which return was filed on 22.12.2018 declaring income of Rs. 848/- only. Subsequently, assessment u/s. 143(3) was made on 26.12.2018 at an assessed income of Rs. 4,38,03,280/-.

Aggrieved, the assessee filed an appeal before ld. CIT(A). It is stated by the assessee that one Shri. Narendra R. Shah, her father’s friend made the impugned transaction using her PAN & bank account. Accordingly, on receipt of notice u/s. 148, the assessee requested Shri. Narendra R Shah to do the needful. However, ld. CIT(A) observed that the plea of the assessee that she was manipulated and her account was misused does not absolve her from the liability under the Income Tax Act. Since the assessment had been made by the AO on the basis of credible information received from the Investigation Wing, ld. CIT(A) upheld the same, dismissing the assessee’s contention. Further aggrieved, the assessee has filed the present appeal before the Tribunal.

4.

Before us, ld. AR has reiterated the assessee’s submission that she had been cheated by Shri. Narendra R. Shah and she was totally unaware about the impugned transactions. It has been submitted that the assessee’s father Shri Bharat Takwani, was known to Shri. Narendra R Shah who was a stock broker and on his advice an account was opened in the name of assessee and cheque book duly signed by assessee, was handed over to him. In this regard, the assessee has also filed a complaint of cheating against Shri. Narendra Shah with the Kandivali Police Station on 18.08.2025, a copy of which has been placed on record.

Under these circumstances, ld. AR has requested that the ex-parte order of ld. CIT(A) be set aside to provide due opportunity to the assessee to make requisite submissions. On the other hand, ld. DR has strongly relied on the orders of the lower authorities.

5.

We have considered the rival submissions and paused the material placed on record. It is noted that ld. CIT(A) had passed an ex-parte order on the ground that despite several opportunities provided to the assessee no response/submission had been filed. After considering the peculiar facts and circumstances of the case, we deem it appropriate to remand the matter back to ld. CIT(A) for fresh adjudication on merits after giving due opportunity to the assessee who is also directed to make requisite compliance before the ld. CIT(A).

6.

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

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