MANJIT SINGH,MUMBAI vs. ITO 11(1)(1), MUMBAI

Grounds taken by the assessee are reproduced as under:

Legal Issues

1 The Ld. National Faceless Appeal Centre [hereinafter referred to as NFAC] erred in passing the impugned order dated 25.08.2023 in breach of principles of natural justice as the Appellant was not afforded an appropriate opportunity of being heard.

The Ld. NFAC failed to appreciate that the Appellant appeared before the juri ictional CIT(A) and filed petition to admit additional evidence u/r 46A of the IT Rules, 1962 and the Ld. Juri ictional CIT(A) had called for remand report. The order dated 25/08/2023 has been passed without considering the facts and submissions made by the Appellant. Thus, the ex-parte order dated 25/08/2023 is passed in breach of principles of natural justice and the same is bad in law.

The Ld. NFAC erred in confirming the addition of Rs.64,01,819/- made by the AO invoking provisions of section 2(22)(e) of the Act without appreciating the facts and circumstances of the case. The Ld. NFAC as well the AO failed to appreciate that the money was advanced to the Appellant by the company RAM Agrotrade & Construtions Pvt. Ltd. To acquire land on behalf of the company. Hence, the same cannot be treated as advances or loan in the hands of the Appellant. Thus, addition of Rs. 64,01,819/- treating the same as deemed dividend under section 2(22)(e) of the Act is not at all justified and the same may be deleted.

The Ld. NFAC and the AO failed to appreciate that the transaction carried out by the company in the regular course of its business do not attract the provisions of section 2(22)(e) of the Act. Thus, addition of Rs. 64,01,819/- is not at all justified and the same same may be deleted.

Ld. NFAC as well as the A.O. erred in treating cash deposited in bank out of the cash-in-hand available with the Appellant as unexplained cash credit u/s 68 of the Act. The AO failed to appreciate the evidence placed before him. Thus, addition of Rs. 34,99,380/- is not at all justified and the same may be deleted.

The NFAC and the AO failed to appreciate that the Appellant has substantial land holding and has regularly shown agricultural income in earlier assessment years as well as subsequent assessment years. Thus, addition made merely on conjecture and surmises is not justified. The addition of Rs. 34,99,980/- made by invoking provisions of section 68 is highly arbitrary and unreasonable and the same may be deleted.

The Ld. NFAC and the AO erred in denying the Appellant the benefit of section 54F and taxing the long term capital gains of Rs. 14,79,685/- without appreciating the facts and the circumstances of the case.

At the outset, it is noted that there is a delay of 420 days in filing the present appeal before the Tribunal on which petition for condonation of delay along with affidavit is placed on record. Assessee submitted that there was a change in Authorised Representative from the one who represented before the ld. Assessing Officer and who filed the appeal before ld. CIT(A). While this change took place, corresponding change in the email ID did not take place and it continued that of the erstwhile Counsel. In the first appellate proceeding, matter was remanded to ld. Assessing Officer on account of furnishing of additional evidence by the assessee, for which it is claimed that opportunity of hearing was not provided and submission made by the assessee were not considered. Remand Report dated 27.01.2020 was submitted by the ld. Assessing Officer to the office of the ld. CIT(A). Assessee had again made request before the ld. CIT(A) to remit the matter back to ld. Assessing Officer since no opportunity was given to represents his case in the remand proceedings. Assessee made submissions afresh in the remand proceedings before ld. Assessing Officer on 13.12.2022. Under the assumption that the remand proceedings are pending, communication from National Faceless Appeal Centre (NFAC) continued on old email ID of the Counsel, who failed to inform the assessee which resulted into an 4 Manjit Singh., AY 2015-16

We have considered the petition for condonation of the said delay along with an affidavit. Upon perusal of the same and hearing both sides, we deem it fit to condone the delay on the ground that there was sufficient cause for the said delay. Accordingly, we condone the delay to take up the matter for adjudication.

Ld. Counsel for the assessee prayed that since the matter has not been heard on merit at the first appellate stage, it may be remitted back to the file of ld. CIT(A) for denovo meritorious adjudication on the grounds raised before the ld. CIT(A). He also pointed out that assessee had furnished all the details in the assessment proceedings as noted by the ld. Assessing Officer in para – 8 of the impugned order. It is only because of non update of email ID of the erstwhile Counsel on account of change that assessee was prevented from making submissions and attending the hearings at the first appellate stage. Thus, the matter may be remitted back to the file of ld. CIT(A) for fresh adjudication.

We have perused the order of authorities below and taken note of the submissions of the ld. Counsel. Considering the same, in the interest of justice and fair play, we find it proper to remit the matter back to the file of ld. CIT(A) for denovo meritorious adjudication. Needless to say, that assessee be given reasonable opportunity of being heard. Assessee is also directed to be diligent in attending the 5 Manjit Singh., AY 2015-16

In the result, appeal of the assessee is allowed for statistical purposes.