MUSTAK PANIRWALA,MUMBAI vs. DCIT, CIRCLE 19(1), MUMBAI

The assessee is an individual and proprietor of “Techno Repair Construction” engaged in construction activity. The assessee filed his return of income on 15.02.2021 declaring total income of Rs. 49,76,850/-. The case was selected for complete scrutiny under the Faceless Assessment Scheme on the basis of information regarding (i) large investment in immovable property as per Form 26QB, (ii) purchase consideration being lower than stamp duty value, and (iii) high liabilities as compared to income. During the course of assessment proceedings, notices under sections 143(2) and 142(1) were issued. As recorded by the Assessing Officer, there was initially no compliance to the statutory notices and partial compliance was made only at a later stage in response to show cause notices.

1 On verification of records, the Assessing Officer observed that the assessee had shown secured loans of Rs. 6,93,14,917/- as against nil in the preceding year and sundry creditors of Rs. 5,64,17,395/- as against Rs. 83,17,101/- in the earlier year. The assessee was called upon to furnish complete details including identity, creditworthiness and genuineness of loan creditors along with documentary evidences. The assessee furnished partial details. The Assessing Officer, after considering submissions, accepted bank loans aggregating to Rs. 4,98,14,913/- but treated

2 The assessee preferred appeal before the learned CIT(A). The learned CIT(A), however, dismissed the appeal ex parte without adjudicating the issues on merits.

Aggrieved by the order of CIT(A), the assessee is in appeal before us raising following grounds of appeal:

The learned Authorised Representative (AR) submitted that the learned CIT(A) has erred in dismissing the appeal ex parte without granting effective opportunity of hearing. It was submitted that the assessee had responded to the notice issued under section 250 through the e-proceedings portal and had sought adjournment on account of the authorised representative being engaged in tax audit work, requesting extension of time to furnish submissions. However, the learned CIT(A) passed the order ex parte without considering the said request.

1 The learned AR further submitted that an affidavit has been filed before the Tribunal explaining the reasons for non- appearance before the learned CIT(A). In the said affidavit, the assessee has stated that the person handling tax matters, being his brother, was seriously ill and subsequently expired, and due to such circumstances and change in professional representation, the assessee could not properly comply with appellate proceedings. It has been affirmed that there was no willful or deliberate default on the part of the assessee.

2 It was further submitted that the addition under section 56(2)(x) pertains to a property which is jointly owned and identical issue has been considered by the co-ordinate bench in the case of the co-owner, Smt. Sophia Mushtaq Panirwala (ITA No.7242/Mum/2025), wherein the matter has been restored to the file of the Assessing Officer for de novo adjudication.

3 On the strength of the said decision and on parity of facts, it was prayed that the present matter may also be restored to the file of the Assessing Officer.

The learned Departmental Representative fairly submitted that he has no objection if the matter is restored to the file of the Assessing Officer for fresh adjudication.

We have heard the rival submissions and perused the material on record.

1 It is an admitted position that the learned CIT(A) has passed the impugned order ex parte without adjudicating the issues on merits. The material placed before us, including the e- proceedings response acknowledgement, demonstrates that the assessee had sought adjournment and extension of time to file submissions. The said request was not considered before passing the impugned order. Further, the assessee has filed an affidavit before us explaining the circumstances which led to non- compliance before the learned CIT(A). The contents of the affidavit indicate that the assessee was prevented by reasonable cause

2 We also note that the issue relating to addition under section 56(2)(x) arises from a property transaction which is jointly owned and identical issue has been restored by the co-ordinate bench in the case of the co-owner to the file of the Assessing Officer for fresh adjudication after considering evidences and making reference to the DVO.

3 Considering the parity of facts, the principles of natural justice, and to maintain judicial consistency, we are of the view that the present matter also requires to be restored to the file of the Assessing Officer.

4 In view of the foregoing, we set aside the order of the learned CIT(A) and restore the entire matter to the file of the Assessing Officer for de novo adjudication on merits in accordance with law. The Assessing Officer shall consider all evidences and submissions that may be filed by the assessee and shall also take into consideration the decision of the co-ordinate bench in the case of the co-owner.

5 Needless to say, the assessee shall be afforded reasonable opportunity of being heard. The assessee is also directed to cooperate in the set-aside proceedings and furnish requisite details.

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