NIRMALA KUMAR GARASIYA,MUMBAI vs. COMMISSIONER OF INCOME TAX (APPEALS), MUMBAI

From the assessment order, it is observed that the appellant did not appear before the Ld. AO despite several e-notices were sent to a particular e-mail. Since there is no response from appellant, an elaborate order was passed making an addition of Rs. 1.37 crore under section 69A of the I.T. Act. The appellant’s contention is that the e-mail to which these notices were sent was wrongly tagged to somebody by Income Tax Portal. Hence, the Ld. AO made addition under section 144 of the Act. The contention of Ld. AR of the appellant is that the Ld. AO made a huge addition of Rs. 1.37 crore

During the hearing proceedings before the ITAT, Ld. DR relied on the orders of lower authorities. The Ld. AR of the appellant made the following submissions :- a) The reopening of assessment is invalid as the Ld. AO did not obtain permission from concerned authority before reopening the assessment. b) The hearing notices were not sent to the correct e-mail of appellant by the Ld. AO. c) Based on some report of DDIT(Inv) that ACI Infocom Ltd. as a penny stock, the Ld. AO presumed that all stocks held by appellant are penny stocks, including Adani Group of Companies, and the entire sale consideration of all stocks was added erroneously under section 69A of the Act.

Heard both sides. From the assessment order/Ld. CIT(A), it is not known where from the Ld. AO took approval for reopening the assessment and hence it cannot be adjudicated by the Bench. Coming to merits of the case, the Ld. AO made huge addition of Rs. 1.37 crore under section 69A of the Act as there was no response to the show-cause notice issued by Ld. AO. As rebuttal, the Ld. AR of the appellant says the notices were not received in appellant’s mail and hence could not respond. Ld. CIT(A) did not consider the detailed written submissions made and confirmed the addition made by Ld. AO. After perusing the detailed submissions made by Ld. AR of appellant, the Bench decides that principles of natural justice i.e., right to hearing was not given to appellant by Ld. AO. It is very unfortunate that a senior officer like appellate commissioner is not taking into consideration all the submissions while passing an appeal order. From the order of Ld. CIT(A), it is observed that various submissions made by Ld. AR of the appellant that entire sale consideration of all shares, apart from presumed penny stock,