Loading judgment…
Facts
The assessee filed an income tax return for AY 2012-13. The AO reopened the assessment under Section 147 and added Rs. 51,30,000/- as unexplained cash credit. The CIT(A) passed an ex-parte order confirming the addition, citing non-submission of documents by the assessee.
Held
The Tribunal noted that the CIT(A) had not examined the issues on merits and had not properly considered the assessee's submissions. The Tribunal decided to give the assessee one more opportunity to present their case.
Key Issues
Whether the CIT(A) erred in passing an ex-parte order without proper appreciation of facts and in upholding the reassessment and additions without considering the assessee's submissions on merits.
Sections Cited
250, 147, 148, 68, 143(3), 132, 149, 151
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “G” BENCH, MUMBAI
Before: JUSTICE (RETD.) C V BHADANG&
(Assessment Year: 2012-13) Shailesh Kantilal Shah, Income Tax Officer, Ward- 503, Dharam Palace, Hughes Road, 19(3)(1), Room No. 606, 6th Floor, Piramal Gamdevi, Mumbai-400007. Vs. Chambers, Lalbaug, PAN: AAFPS5517F Mumbai-400012. Appellant) : Respondent) : Ms. Shruti Kalyanikar, AR Appellant /Assessee by : Shri Swapnil Choudhary, Sr. DR Revenue / Respondent by Date of Hearing : 14.08.2025 Date of Pronouncement : 28.08.2025 O R D E R
Per Padmavathy S, AM:
This appeal by the assessee is against the order of the Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre, Delhi [In short 'CIT(A)'] passed under section 250 of the Income Tax Act, 1961 (the Act) dated 14.05.2025 for Assessment Year (AY) 2012-13. The assessee has raised the following the grounds of appeal:
2 ITA 4192/Mum/2025 Shailesh Kantilal Shah “1. THE ORDER IS BAD IN LAW, ILLEGAL AND WITHOUT JURISDICTION 1.1 tax In the facts and the circumstances of the case, and in law, the appellate order framed by the Additional / Joint Commissioner of Income (Appeals), Faridabad ['Ld. CIT (A)'] is bad in law, illegal and without jurisdiction, as the same is framed in breach of the statutory provisions of the Income tax Act, 1961 ['the Act'] and the scheme and as otherwise also is not in accordance with the law. 1.2 Without prejudice to the generality of the above, the appellate order so passed is bad in law, illegal and void as the same is arbitrary and perverse.
2. VIOLATION OF PRINCIPLES OF NATURAL JUSTICE 2.1 In the facts and the circumstances of the case, and in law, the appellate order so framed in bad in law and illegal, as the same is framed in breach of the principles of Natural Justice. 2.2 Without prejudice to the generality of the above ground, in the facts and the circumstances of the case, the Ld. CIT (A) erred in - (1) not granting proper, sufficient, reasonable and fair opportunity of being heard to the Appellant while passing the appellate order, (ii) not granting an opportunity of personal hearing: 3. EX-PARTE ORDER 3.1 The Ld. CIT (A) erred in passing the order ex parte. 3.2 While doing so, the Ld. CIT (A) failed to appreciate that the non-attendance / non - reply was for the reasons not attributable to the Appellant/beyond the control of the Appellant and not deliberate or intentional. 3.3 It is submitted that in the facts and the circumstances of the case, and in law, no such action was called for. WITHOUT PREJUDICE TO THE ABOVE 4. CHALLENGE TO REASSESSMENT 4.1 The Ld. CIT (A) erred in confirming the action of the Income tax Officer 19(3)(3), Mumbai ('the A.O.') in initiating the reassessment proceeding and 3 ITA 4192/Mum/2025 Shailesh Kantilal Shah framing the assessment of the Appellant by invoking the provisions of section 147 r.w.s 148 of the Act. 4.2 While doing so, the A.O. failed to appreciate that: (i) The case of the Appellant did not fall within the parameters laid down by section 147 r.w.s. 148, 149 & 151 of the Act; (ii) The necessary preconditions for initiating the reassessment proceeding and completion thereof were not satisfied. 4.3 It is submitted that in the facts and the circumstances of the case, and in law, the reassessment framed is bad in law, illegal and without jurisdiction. WITHOUT PREJUDICE TO THE ABOVE 5. ADDITION OF RS. 51,30,000/- AS ALLEGED UNEXPLAINED CASH CREDIT 5.1 The Ld. CIT (A) erred in confirming the action of the A.O. in making addition of the amount of Rs. 51,30,000/-u/s. 68 of the Act, by treating the unsecured loans taken by the Appellant from three parties as alleged unexplained cash credit. 5.2 While doing so, the Ld. CIT (A) erred in (i) Basing his action only on surmises, suspicion and conjecture; (ii) Taking into account irrelevant and extraneous considerations; and (iii) Ignoring relevant material and considerations. 5.3 It is submitted that in the facts and the circumstances of the case, and in law, no such addition was called for. 5.4 Without prejudice to the above, assuming but not admitting that some addition was called for, the Ld. CIT (A) failed to appreciate that the computation of the addition made by the A.O. is not in accordance with the law, is arbitrary, and excessive.”
The assessee is an individual and filed the return of income for AY 2012-13 on 11.03.2013 declaring a total income of Rs. 8,90,000/-. Subsequently, the AO 4 ITA 4192/Mum/2025 Shailesh Kantilal Shah received information from DDIT (Inv.) that the assessee has obtained accommodation entries from certain parties who are alleged to be entry operators. Accordingly, the AO reopened the assessment by issue of notice under section 148 of the Act. The assessee submitted various details in support of the details called for by the AO. The AO after consideration the submissions of the assessee completed the assessment under section 147 of the Act by making an addition of Rs. 51,30,000/- towards accommodation entries. Aggrieved the assessee filed further appeal before the CIT(A). The CIT(A) passed an ex-parte order for the reason that the assessee has not filed relevant documents and satisfactory evidences. The assessee is in appeal before the Tribunal against the order of the CIT(A).
We heard the parties and perused the material on record. The ld. AR submitted that the assessee had prepared a detailed written submission along with necessary documentary evidences before the CIT(A). The ld AR further submitted that, the CIT(A) has upheld the addition made by the AO without taking into consideration the submissions made and without giving any opportunity to the assessee to furnish any further necessary details. On perusal of the order of the CIT(A) we notice that the CIT(A) has dismissed the appeal by merely stating that the assessee has not made any written submission duly supported by documents. The relevant observations of the CIT(A) in this regard is extracted below – “Decision: I have carefully considered the entire submissions of the appellant along with all exhibits, perused the materials on record and carefully gone through the order of the AO passed u/s 143(3) r.w.s 147 of the I.T Act 1961 dated 25-12-2019. I find from the grounds of appeal
vis-à-vis statement of facts that the appellant has claimed the AO has made erroneous, unjustified addition based on erroneous findings of facts that the appellant being engaged in accommodation entries and the same proceedings being bad in law But the appellant is unable to submit any written
5. ITA 4192/Mum/2025 Shailesh Kantilal Shah submission duly supported by documents in support of its claim, for which the said claim of appellant being treated as unacceptable. It is observed from the assessment order that despite availing ample opportunity in assessment stage neither the appellant nor its authorized representative could have provided any acceptable satisfactory evidence or satisfactory explanation against the findings of the AO, so as to establish that the concerned concerns viz. Parshwnath Gems (P) Ltd., Maniratnam Exim Pvt. Ltd. and Merine Gems Pvt. Ltd. had ever carried out any genuine business activity. In appeal proceedings also the appellant is unable to file any written submission substantiating his claim corroborating with supporting documents. It is observed the appellant is unable to prove either the identity or the creditworthiness of the said parties which are the benami concerns of Shri Gautam Jain to whose premises a search operation was conducted u/s 132 of the Act on 03-10-2013 and who acknowledged shri Gautam Jain group being one of a leading entry providers.
Accordingly, I do not find any infirmity in the order of the AO and find the same is justified in as much as the addition being made in accordance with law. Considering the entire conspectus of the case I hold that the appellant has no proper logical and justifiable explanation regarding above findings of the AO. Accordingly additions made by the AO in assessment order of Rs. 51,30,000/- invoking provision of section 68 of the I.T. Act stand confirmed and the grounds relating to these issues are dismissed.”
From the above it is clear that the CIT(A) has sustained the additional made by the AO on the ground that the assessee has not submitted the supporting evidences with regard to the impugned additions. We further notice that though the CIT(A) has extracted the submissions of the assessee, has not given any finding on the same but has concluded stating that the assessee has not furnished details. Therefore we see merit in the contention that the impugned issue has not been examined on merits by the CIT(A) and that the submissions made before him have not properly considered. In view of these discussions and taking into consideration the facts peculiar to the assessee's case, we are inclined to give one more opportunity to the assessee to represent the case before the appellate authorities. Accordingly, we remit the appeal back to the CIT(A) with a direction to call for the necessary details and adjudicate the impugned issue on merits. The assessee is 6 ITA 4192/Mum/2025 Shailesh Kantilal Shah directed to submit the relevant documents as may be called for without seeking unnecessary adjournments and co-operate with appellate proceedings. It is ordered accordingly.
In result the appeal of the assessee is allowed for statistical purposes.