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Before: SHRI BEENA PILLAI & SMT.RENU JAUHRI
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.
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.
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.
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.
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.
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.
The appellant craves leave to add to, alter, amend and / or delete in all the foregoing grounds of appeal.”
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-
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.
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.
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).
In the result, the appeal of the assessee is allowed for statistical purposes.