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Facts
The assessee, Sama Jewellery Private Limited, appealed against an ex-parte assessment order passed by the CIT(A) for AY 2017-18. The additions were made for unexplained expenditure and unexplained cash deposits.
Held
The Tribunal held that the assessee was not granted adequate opportunity to present their case before the CIT(A), and the CIT(A) merely reiterated the AO's findings without independent analysis. Therefore, the matter was set aside.
Key Issues
Whether the CIT(A) erred in passing an ex-parte order without providing a reasonable opportunity to the assessee and if the CIT(A) failed to provide independent findings.
Sections Cited
143(3), 69C, 68, 234B, 234C, 271AAC, 250
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, ‘G’ BENCH
आदेश / O R D E R PER VIKRAM SINGH YADAV (A.M): The present appeal has been preferred against the impugned order dated 29.02.2024 passed in Appeal no. CIT(A), 14, Mumbai/10181/2019-20 by the Ld. Commissioner of Income–tax(Appeals)/ National Faceless Appeal Centre (NFAC) [hereinafter referred to as the “CIT(A)”] u/s. 250 of the Income-Tax Act, 1961 [hereinafter referred to as "Act"] for the Sama Jewellery Private Ltd. Assessment year [A.Y.] 2017-18, wherein the assessee has taken the following grounds of appeal: “
1. 1. On the facts and circumstances of the case and in law, the learned CIT(A) erred in passing ex-parte assessment order without providing fair opportunity of being heard to the appellant.
2. On the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in confirming the action of Ld AO in disallowing the purchases from M/s Sangham Diamonds Pvt Ltd by treating the genuine purchase as bogus.
3. On the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in confirming the action of Ld AO in treating the genuine purchases from M/s Sangham Diamonds Pvt Ltd as suspicious solely based on third-party statement of Shri Ramesh Soni given before Investigation Wing, Mumbai without providing copy of the said statement and opportunity for cross examination.
4. On the facts and circumstances of the case and in law, the Ld.CIT(A) has erred in confirming the action of Ld AO in making an addition of Rs. 54,45,875/- (being 18% of disputed purchases of Rs. 3,02,54,863/-) on account of suspicious purchases from M/s Sangham Diamonds Pvt Ltd under section 69C of the Income Tax Act, 1961.
5. On the facts and circumstances of the case and in law, the Ld CIT(A) has erred in confirming the action of Ld AO assessing cash deposits in of Rs. 50,86,380/- as unexplained cash credits u/s 68 of the Income Tax Act, 1961.
6. On the facts and circumstances of the case and law, the Ld. CIT(A) erred in confirming the action of Ld AO in levying interest under section 234B and 234C of the Income Tax Act, 1961.
7. On the facts and circumstances of the case and law, the Ld. CIT(A) erred in confirming the action of Ld AO in initiating the penalty proceedings u/s 271AAC of Income Tax Act, 1961.
8. Appellant craves leave to add further grounds or to amend or alter the existing grounds of appeal on or before the date of hearing.”
At the outset, it is noted that there is a delay in filing the appeal by the assessee by 98 days as pointed out by the registry. After hearing both the parties and considering the material available on records including the affidavit placed by the assessee, the contents of which has not been rebated by the Revenue, we find that there is a reasonable cause for the delay in filing the present appeal. The delay is hereby condoned and the appeal of the assessee is admitted for adjudication.
Sama Jewellery Private Ltd. 3. Briefly the facts of the case are that assessment in this case was completed u/s. 143(3) of the Act wherein the assessed income was determined at Rs. 1,22,47,090/- as against the returned income of Rs. 17,14,830/- by making addition in respect of unexplained expenditure u/s. 69C of the Act amounting to Rs. 54,45,875/- and u/s. 68 of the Act in respect of unexplained cash deposit amounting to Rs. 50,86,380/-.
The assessee thereafter carried the matter in appeal before the Ld. CIT(A) and notices were issued on 08.02.2024, 16.02.2024 and 28.02.2024 and thereafter the impugned order has passed on 29.02.2024 confirming the addition so made by the AO. Against the said order, the assessee is in appeal before us.
During the course of hearing, the Ld. AR submitted that though the notices were issued, the assessee had sought time initially and in response to notice dated 28.02.2024, the assessee was in the process of preparing the necessary submissions and in the process of responding to the notice, however before the submissions could be filed, the impugned order was passed on 29.02.2024. It was submitted that the assessee has not been granted adequate opportunity by the Ld. CIT(A). It was further submitted that the Ld. CIT(A) has not recorded any independent findings as can be seen from the impugned order and the findings of the AO have only been reiterated by the Ld. CIT(A).
The Ld. DR was heard who has also fairly submitted that there is no independent finding which has been recorded by the Ld. CIT(A) and therefore the matter deserve to be set aside.
After hearing both the parties and considering the material available on record, given that the assessee has not been granted adequate opportunity to respond to the notices and the fact that the Ld. CIT(A) has merely relied on the findings of the AO without recording his own independent findings and the reasoning as to why the addition so made be sustained, we find ourselves constrained in absence of findings by the ld CIT(A) to adjudicate on the grounds of appeal so taken by the assessee wherein the order of the ld CIT(A) has been challenged and deem it appropriate to set aside the matter to the file of the Ld. CIT(A) to decide the same afresh as per law by way of passing a speaking order after providing reasonable opportunity to the assessee.
In the result, the appeal of the assessee is allowed for statistical purposes.
Order pronounced in open court on 28.03.2025.