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Facts
The assessee, engaged in cloth trading and finance agency, filed his return for AY 2013-14. The case was reopened under Section 147 as the assessee allegedly did not disclose total receipts/sales. An addition was made for undisclosed commission.
Held
The Tribunal held that the assessee may be given one more opportunity to present his case before the first appellate authority, adhering to the principles of natural justice. The issues were remanded for de novo adjudication.
Key Issues
Whether the assessee should be granted another opportunity before the CIT(A) for de novo adjudication, considering the principles of natural justice, despite past non-compliance.
Sections Cited
250, 147, 148, 142(1), 144B
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Income Tax Appellate Tribunal, “SMC” BENCH, MUMBAI
(Assessment Year: 2013-14) Gunomal Santumal Rochlani Income Tax Officer, Ward 2(1), 48, Roshan Apartment, Netaji Road, Kalyan Vs. Ulhasnagar, Thane – 421004. PAN/GIR No. AHPPR0832B (Appellant) : (Respondent) Assessee by : Shri Sunil Makhija (Virtually appeared) Respondent by : Shri Sandeep Jumale, Addl. CIT Date of Hearing : 05.08.2025 Date of Pronouncement : 29.08.2025 O R D E R Per Kavitha Rajagopal, J M: This appeal has been filed by the assessee, challenging the order of the learned Commissioner of Income Tax (Appeals) Delhi (‘ld. CIT(A)’ for short), National Faceless Appeal Centre (‘NFAC’ for short) passed u/s.250 of the Income Tax Act, 1961 (‘the Act'), pertaining to the Assessment Year (‘A.Y.’ for short) 2013-14.
The assessee has raised the following grounds of appeal:
1. The Hon'ble CIT(A) has erred in passing an ex-parte order, without appreciating(disregarding) the facts / reasons for which appellant had requested for adjournment.
2. The Hon'ble CIT(A)[NFAC] has failed in appreciating that Ld. Assessing Officer has erred in initiating proceedings u/s 147 of the I.T. Act, 1961 merely on the basis of the alleged information stated to have been received without making any independent enquiries.
(A.Y. 2013-14) Gunomal Santumal Rochlani
Without prejudice to above, the appellant submits that the Hon'ble CIT(A)[NFAC] has failed in appreciating that Ld. Assessing Officer has erred in completing the assessment without providing the copy of reasons recorded thereby making the assessment order passed ab initio void and bad in law.
4. The Hon'ble CIT(A)[NFAC] has failed in appreciating that Ld. Assessing Officer has erred in not considering the appellant's submission dated 25/09/2021 in proper prospective, inspite of the same being supported by the facts and figures in support of the appellant's contention that in no case gross commission could exceed 1%, out of which too one has to incur minimal expenses after which the net commission income can in no case exceed 0.5% to 0.75% of the gross receipts 5. The Hon'ble CIT(A)[NFAC] has failed in appreciating that Ld. Assessing officer has erred in rejecting the appellant's submission dated 25/09/2021 and making addition on account of the following 3. Brief facts of the case are that the assessee is an individual engaged in the business of cloth trading and a finance agent earning commission and brokerage and also the assessee is proprietor of M/s. Ganesh Textiles. The assessee had filed his return of income dated 28.09.2013, declaring total income at Rs. 4,77,680/- showing gross business receipts of Rs. 84,26,763/- as net Profit received from M/s. Ganesh Textiles and also income from other sources by way of interest income received from various firms. It is observed that the assessee was maintaining 5 bank accounts viz. three accounts with Bank of Baroda and two accounts with ICICI Bank and had deposited huge cash and other than cash amounting to Rs. 12,02,49,751/- for the year under consideration and further the assessee is said to have not disclosed his total receipts/sale in the ITR for which reasons the assessee’s case was reopened u/s. 147, and notice u/s. 148, dated 26.02.2020 was issued with prior approval of the Pr. CIT-3, Thane and notices u/s. 142(1) of the Act were duly issued and served upon the assessee. In response to the notice u/s. 148, the assessee filed his return of income dated 12.03.2021, (A.Y. 2013-14) Gunomal Santumal Rochlani declaring total income at Rs. 4,77,680/-and showing same gross business receipts of Rs. 84,26,763/- as that of the original returns. As the assessee failed to furnish the complete details/information as required vide statutory notices issued by the ld. AO, inspite of several opportunities, the ld. AO contended that the assessee failed to offer the actual gross receipts with a difference of Rs.11,82,22,988/- (Rs. 12,02,49,751 (–) Rs. 84,26,763) and made an addition of Rs. 22,36,460/- being 2% on the difference in the commission income and then passed the assessment order u/s. 147 r.w.s. 144B of the Act dated 05.03.2021, determining total income at Rs. 27,14,140/- after making addition of Rs. 22,36,460/- as undisclosed commission.
Aggrieved the assessee was in appeal before the first appellate authority, who vide an ex parte order dated 29.04.2025, dismissed the appeal filed by the assessee on the ground that the assessee has failed to furnish any explanation/ documents in support of his claim.
The assessee is in appeal before us, challenging the impugned order of the ld. CIT(A).
We have heard the rival submissions and perused the materials available on record. It is observed that the assessee has challenged the addition made by the ld. AO before the first appellate authority but has been non-compliant throughout the appellate proceeding.
The learned Authorised Representative ('ld. AR' for short) for the assessee contended that the assessee has got a good case on the merits and prayed that the assessee may be given one more opportunity to present his case before the ld. CIT(A).
(A.Y. 2013-14) Gunomal Santumal Rochlani 8. The learned Departmental Representative ('ld. DR' for short) vehemently opposed to setting aside the issue to the file of the ld. CIT(A) for the reason that the assessee was given several opportunities by the ld. CIT(A) which was not availed by the assessee.
On the above facts of the case, we are of the considered view that the assessee may be given one more opportunity to present his case before the first appellate authority by adhering to the principles of natural justice and in the interest of justice dispensation. We, therefore, remand all these issues back to the file of the ld. CIT(A) for de novo adjudication. The assessee is directed to strictly comply with the proceedings without any undue delay on his side and the ld. CIT(A) is also directed to decide the issue on the merits of the case based upon the submission of the assessee and in accordance with law.