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Facts
The assessee challenged the CIT(A)'s order upholding additions made by the AO. The AO had re-opened the assessment based on statements regarding large cash credits in bank accounts managed by the assessee. The CIT(A) upheld the additions, stating the assessee failed to substantiate claims with documentary evidence.
Held
The Tribunal held that the CIT(A) had passed an ex-parte order without delving into the merits of the case and that the assessee did not provide sufficient documentary evidence. The Tribunal granted the assessee one more opportunity to present their case before the first appellate authority.
Key Issues
Whether the CIT(A) erred by not providing adequate opportunity of being heard to the assessee and if the additions made by the AO were substantiated.
Sections Cited
250, 133A, 143(1), 143(3), 147, 148
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Income Tax Appellate Tribunal, “E” BENCH, MUMBAI
(Assessment Year: 2011-12) Kamal Kishor T. Rathi DCIT 4(3) 115B, Shalimar Miracle, Plot No. 26, 1st Aayakar Bhavan, Mumbai – 400020. Floors, S. V. Road, Goregaon (West), Vs. Mumbai – 400062. PAN/GIR No. AAGPR1508N (Assessee) : (Respondent) Assessee by : Shri. Vijay Shah Respondent by : Shri. Hemanshu Joshi (Sr. DR) Date of Hearing : 29.01.2025 Date of Pronouncement : 30.01.2025 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), 50, Mumbai (‘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) 2011-12.
The assessee has raised the following grounds of appeal and additional grounds of appeal: “The appellant states that the ld. CIT(A) has not given opportunity of being heard to represent the case. Additional Grounds of Appeal:
(A.Y. 2011-12) Kamal Kishore T. Rathi 1. On the facts and circumstances of the case and in law, the appellant-prays that the learned CIT (A) has not given proper opportunity of being heard to the appellant even though the appellant has made application for adjournment of case not only the time for hearing is given very short so the appellant prays that the appellant should be given proper opportunity of being heard.
2. On the facts on circumstances of case the appellant the learned CIT (A) has erred in confirming the addition The learned CIT (A) grossly erred in treating the accounts opened and operated by Shri Sachin Gaikwad as accounts of M/s Govind Sharda & Co. Whose Proprietor is Mr. Sachin Gaikwad.
3. The learned CIT (A) grossly erred in confirming adding a sum of Rs. 8,65,000/-being unexplained cash deposit in bank account of M/s. Govind Sharda & Co. whose proprietor is Mr. Sachin Gaikwad 4. The Learned CIT (A) ought to have given due consideration to the fact that while conducting search U/s. 133A the learned DCIT (Investigation), unit 1(4), had included both these accounts for the purpose of calculating income and same had been consideration by learned CIT (A) while completing the original assessment U/s. 143 (3).”
Briefly stated the assessee is an individual and had filed his return of income dated 04.08.2011, declaring total income at Rs. 2,57,430/- and the same was processed u/s. 143(1) of the Act. Pursuant to the search action in the case of M/s. Kamal Jajoo Group dated 26.08.2010, a survey action was undertaken on the assessee after which the assessee has offered Rs. 25,00,000/- over and above his regular income for A.Y. 2011- 12 and the ld. AO concluded the assessment u/s. 143(3) dated 20.03.2014. Subsequent to the information from Dy. Director of Income Tax (Investigation), the assessee’s case was reopened vide notice dated 30.03.2017, based on the statement of Mr. Sachin S. Gaikwad, proprietor of M/s. Durga Prasad & Co. and M/s. Govind Sharda & Co. who had admitted to credit of Rs. 98,00,000/- and Rs. 75,82,83,127/- in bank account managed and controlled by the assessee. In response to the notice u/s. 148, the assessee filed the return. The ld. AO then passed the assessment order u/s. 143(3) r.w. 147 of the Act, dated 15.12.2017, determining total income at Rs. 2,60,87,544/- after making an (A.Y. 2011-12) Kamal Kishore T. Rathi addition of Rs. 8,65,000/- as unaccounted cash deposit and Rs. 2,27,22,544/- as unaccounted brokerage and commission.
Aggrieved the assessee was in appeal before the first appellate authority, who vide order dated 25.09.2024, upheld the addition made by the ld. AO on the ground that the assessee has failed to substantiate his claim by documentary evidence.
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. The learned Authorised Representative ('ld. AR' for short) for the assessee contended that the assessee was not given sufficient opportunity to represent his case before the ld. CIT(A) and further short adjournments were granted by the ld. CIT(A), where the assessee was unable to represent effectively before the first appellate authority. The ld. AR further stated that the assessee’s adjournment request was also rejected by the ld. CIT(A). The ld. AR prayed that the assessee may be given one more opportunity to present his case before the ld. CIT(A).
The learned Departmental Representative (‘ld. DR’ for short) on the other hand controverted the said fact and stated that the assessee was given sufficient opportunity which was not availed by the assessee. The ld. DR relied on the order of the lower authorities.
In the above factual matrix of the case, it is observed that the ld. CIT(A) has passed an ex-parte order upholding the addition made by the ld. AO. On perusal of the ld. CIT(A)’s order, it is evident that the ld. CIT(A) has not gone into the merits of the case and also the assessee has failed to furnish the documentary evidences to establish the (A.Y. 2011-12) Kamal Kishore T. Rathi nature and source of the cash deposits found credited in the alleged bank accounts. We therefore deem it fit to provide the assessee with 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 direct the assessee to cooperate with the proceeding without any undue delay on his side and the ld. CIT(A) is to decide the issue on the merits of the case based on the submission of the assessee and in accordance with law.