SUMATINATH BUILDERS,NALLASOPARA vs. ACIT, CIRCLE 4, THANE, THANE

The Hon. CIT (A), National Faceless Appeal Centre (NFAC), Delhi erred in dismissing the appeal ex-parte, for alleged non-compliance to appeal notices, when in reality, written submission along with documentary evidences was already filed on 24.10.2018 before the Hon. CIT(A) 3, Thane, the appeal was physically heard on the said date by the Hon. CIT(A) 3, Thane and therefore the order dismissing the appeal for non-attendance is not justified and may kindly be over turned and set aside.

The Hon. CIT (A), National Faceless Appeal Centre (NFAC), Delhi erred in dismissing the appeal ex-parte, for alleged non-compliance to appeal notices, when the appellant was not aware of such notices issued and for this reason, the order dismissing the appeal for non-attendance is not justified and may kindly be quashed/set aside.

The Hon. CIT(A) erred in upholding the action of the Id AO in making addition of Rs.3,00,00,000/- u/s. 68 of the IT Act, 1961 as unexplained cash credit (after first reducing the same from declared income), not appreciating that the said additional income was declared by the appellant in the course of survey action u/s 133A on 20.11.2014, credited to the profit and loss account and offered to tax as part of income tax return filed u/s 139(1) of the I. Tax Act, 1961 and therefore the action of the Id AO in re-computing the said income and initiating penalty u/s 271(1)(c) thereon as confirmed by the Hon. CIT(A) is not justified and bears to be deleted.

The Hon. CIT(A) erred in upholding the addition of Rs.79,48,000/- u/s 43CA of the 1.T Act 1961, on account of difference between the value as per stamp valuation authority and actual sale consideration, in respect of one flat and three shops for which agreements for sale were executed with customers for the project Shalibhadra Classic, not appreciating that the appellant firm has recognized sale in its books of accounts as per revised sale consideration as mentioned in Deed of Rectification dt.13.03.2018 and accordingly there is no justification for making any addition u/s 43CA of the 1. T. Act 1961. 5. The Hon. CIT(A) erred in upholding the addition of Rs. 79,48,000/- u/s 43CA of the I.T Act 1961, by imposing the values as per stamp valuation authority to be the deemed sale consideration in respect of one flat and three shops, without referring the valuation to the valuation officer as provided u/s 43CA(2) of the 1.T Act 1961. 6. The appellant craves leave to add, alter, amend, delete and/or vary any of the above grounds of appeal at any time before the decision of the appeal. Asst. Year : 2015-16

The brief facts of the case are that a survey action u/s.133A of the Act was carried out in the case of M/s. Sumatinath Builders on 20.11.2014. During the course of survey action various incriminating documents relating to Financial year 2014-15 was found which was indicating receipt of cash/on-money amounting to Rs. 2,99,10,000/-. During the course of survey action, statement of Shri Dinesh Jain, one of the partner was recorded wherein he admitted the receipt of on-money based on the impounded material (Blue Colour Chairman Spiral Pad) and therefore, offered on money to the extent of Rs.2,99,10,000/- as additional income over and above regular income of the firm for Financial Year2015-16. The return of income was filed by the assesse- firm on 30.03.2016 for the Assessment Year 2015-16, thereby declaring total income at Rs. 3,11,14,710/-. The assessee’s case was selected for limited scrutiny to verify high increase in sundry creditors as compared to preceding year, high interest expenses as compared to business turnover, mismatch in sales turnover reported in Audit Report and ITR, high interest expenditure against new capital added in work progress or addition fixed assets. Accordingly, statutory notices were issued u/s.143(2) and 142(1) of the Act and duly served upon the assesse. In response to the said notices the Authorized Representative and CA attended the proceedings and submitted various details. The Assessing Officer observed that the assesse-firm is Builder and Developers. During the assessment proceedings the Authorized Representative of the assesse submitted information in support of his return of income viz. Asst. Year : 2015-16

Being aggrieved by the Assessment Order, the assesse filed appeal before the CIT(A). The CIT(A) partly allowed the appeal of the assessee.

At the time of hearing none appeared on behalf of the assesse. An affidavit for delay in filling the appeal has been filed by the partner of the assessee-firm thereby stating that the assessee could not respond to the notices of the CIT(A) which was sent to the email Id of taxauj@gmail.com. In fact, the said Email-Id is incorrect and hence the notices were not on the Email Id rdlukad@gmail.com which was mentioned in Form No. 35. As regards to the phone number mentioned in Form No.35, the same belongs to the partner of the assessee-firm who retired from assesse- firm in the month of October,2019 and the said notices were also not forwarded to the assessee. Therefore, the assessee could not represent his case before the CIT(A). The assessee in the said affidavit mentioned at para 11 that the assessee became aware of the passing of ex-parte order by the CIT(A) only when the assessee firm was in the receipt of demand recovery notice on 05.06.2025. There is a delay of 601 days in filling the appeal before the Tribunal. But after going through the details of the affidavit, it appears that the delay is not deliberate on the part of the assessee and hence the delay is condoned.

The Ld. DR relied upon the Assessment Order and the Order of the CIT(A). Asst. Year : 2015-16

We have heard the Ld. DR and perused the affidavit filed by the assesse. It appears that the CIT(A) has passed ex-parte order and has not given proper notice at the correct email ID address and decided the matter ex-parte. Therefore, it will be appropriate to remand this matter to the file of the CIT(A) for proper adjudication of the issues contested by the assessee therein and decide the same on merit as per the Income tax statue. Needless to say, the assessee be given opportunity of hearing by following the Principle of Natural Justice. It is hereby directed to the assessee that the assessee should take utmost care while responding to the notices of hearing and co-operate fully with the appellate authorities without seeking any unnecessary adjournments. Hence, the appeal of the assessee is partly allowed for statistical purposes.

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

अपीलाथŎ / The Appellant 2. ŮȑथŎ / The Respondent. 3. संबंिधतआयकरआयुƅ / Concerned CIT 4. आयकरआयुƅ(अपील) / The CIT(A)- 5. िवभागीयŮितिनिध, आयकरअपीलीयअिधकरण, मुंबई / DR, ITAT, मुंबई 6. गाडŊ फाईल/ Guard file.