INCOME TAX OFFICER WARD 20(2)(1) MUMBAI, MUMBAI vs. NIPA PREMAL DOSHI, MUMBAI

Briefly stated the facts are, the assessee is a resident individual. In course of search and seizure operation conducted u/s. 132 of the Income Tax Act, 1961 (‘Act’ for short) in the case of Shri Praveen Kumar Jain and his group entities, it was found that they are engaged in providing accommodation entries through unsecured loans in an organized manner through various entities. It was found that the assessee is one of beneficiaries of such accommodation entries by availing unsecured loans through entities controlled by Shri Praveen

Before us, learned DR submitted that while deciding the appeals of Shri Praveen Kumar Jain and some other assessees, the Tribunal has held that Shri Praveen Kumar Jain was providing accommodation entries to various entities and accordingly sustained the additions made by the AO. He submitted that the First Appellate Authority, while deciding the appeals of the assessee, has not taken cognizance of the order of the Tribunal, hence the orders should be set aside.

The learned counsel appearing for the assessee submitted that the First Appellate Authority has not only decided the issue on merits, but also held the reopening of the assessment to be invalid. He submitted that since the department has not raised any ground challenging the decision of the First

We have considered rival submissions and perused the materials on record. On carefully going through the respective orders of the First Appellate Authority, we find that though the assessee had raised specific grounds challenging the validity of reopening of assessment as also made submissions on them, however, the First Appellate Authority has neither discussed the issue nor has given any finding on them. Only in the concluding part of the order, he has recorded as under :-

When the Bench brought to the notice of the learned counsel of the assessee that there is absolutely no discussion or finding of the First Appellate Authority on the issue of validity of reopening of assessment and the order on the issue is bereft of any reasoning, the learned counsel fairly submitted that the issues may be restored back to the file of the First Appellate Authority with a direction to decide the legal issues raised by the assessee challenging the validity of reopening of assessment first and thereafter proceed to decide the issues on merit. The learned DR did not object to the aforesaid proposition put forward by the learned counsel for the assessee.

In view of the aforesaid, we are inclined to set aside the impugned orders of the First Appellate Authority and restore the issues back to him for de novo adjudication after providing due and reasonable opportunity of being heard to the assessee. It is made clear that the learned First Appellate Authority must

In the result, appeals are allowed for statistical purposes.