RASHIDA ZOHER KARACHIWALA,MUMBAI vs. ITO 22(3)(1), MUMBAI, MUMBAI

The brief facts of the case are that the assessee is an individual capacity filed the return by declaring total income amount to Rs.7,36,000/-. As per the information received by the Ld. AO, the assessee has taken an accommodation entry through ‘Shree Riddhi’ controlled and managed by Shri Lokesh Kumar Khabya amount to Rs.25,91,891 for F.Y. 2019-20 relevant AY 2020-21. The assessee’s case was reopened. During the assessment the Ld. AO found that the assessee had received loan from ‘Shree Riddhi’ controlled and managed by Shri Lokesh Kumar Khabya which is treated as bogus. Also the assessee had received the amount to Rs.6,19,516/- from India first Life Insurance Company on which the TDS has been deducted. But the said amount was not declared in the return income of the assessee. Finally, the Ld. AO made the additions of loan amount to Rs.25,91,891/- and amount received from India First Life Insurance Company amount to Rs.6,19,516/- which comes to total amount to Rs.32,11,407/- are added back with the total income of the assessee. The aggrieved assessee filed an appeal before the Ld. CIT(A). But the Ld. CIT(A) rejected the appeal for non-prosecution without considering merit of the case. Being aggrieved assessee filed an appeal before us.

The Ld. AR argued and contended that the assessee had submitted the relevant documents during the assessment proceeding. But in the impugned appellate proceedings, the assessee was unable to comply the notices issued by the Ld. CIT(A). The Ld. AR prayed to restore the matter to the file of Ld. CIT(A) for further adjudication denovo.

The Ld. DR argued and contended that the assessee had not complied the notices issued by the Ld. CIT(A). No such proper explanation was filed for non-compliance before the Ld. CIT(A). The Ld. DR stands in favor of the orders of revenue authorities.

We heard the rival submission and considered the documents available in the record. The assessee filed the return and the assessee’s case was reopened related to the loan transactions with ‘Shree Riddhi’ controlled and managed by Mr. Lokesh Kumar Khabya amount to Rs.25,91,891/-. The Ld. AO treated this loan as a fictitious loan transaction and added back with the total income of the assessee. Further the assessee has received the amount of Rs.6,19,516/- from India First Life Insurance Company which was not declared in the return of income and the same amount was also added back with the total income of the assessee. Being aggrieved on assessment order the assessee has preferred an appeal before the Ld. CIT(A). However, the appeal was disposed of exparte due to nonappearance on the part of assessee. During the course of hearing before us, the Ld. AR was unable to satisfactorily explained the reasons for non-compliance during appellate proceeding. The Ld. DR objected to the assessee’s plea and submitted that the reasons for non- compliance had not been properly substantiated or supported by any cogent material. Therefore, in the interest of substantial justice, and principle of natural justice, we are of the considered view that the assessee deserves one more opportunity to present its case before the Ld. CIT(A). during the course of hearing, the Ld. AR was ready to bear the reasonable costs for non-appearance in the appellate proceedings. Accordingly, the acceptance of the Ld. AR was fairly accepted by the Ld. DR. So, we impose a cost of Rupees Five Thousand (Rs.5000/-) upon assessee which shall be deposited under the “other head” of the Income Tax Department within one month from the date of receipt of this order. Subject to verification of payment of the aforesaid cost, by the Ld. CIT(A), all the issues are restored to the file of Ld. CIT(A) for adjudication afresh on merits in accordance with law. We make it clear that we have not expressed any opinion on merit of the case. So, as to ensure that the appellate proceedings before the Ld. CIT(A) remain uninfluenced. Needless to say, the assessee shall be afforded a reasonable opportunity of being heard and shall also extend full cooperation for expeditious disposal of the appellate proceedings.

In the result, the appeal of the assessee bearing ITA No.2511/Mum/2026 is allowed for statistical purpose.