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Facts
The assessee filed return for AY 2017-18 declaring income of Rs.19,24,470/-. The AO reopened the case under Section 147 based on information that the assessee was a beneficiary of Long Term Capital Gain (LTCG) of Rs.59,69,286/- from shares of Kushal Limited. The assessment was completed at Rs.78,93,756/- with an addition of Rs.59,69,286/-.
Held
The tribunal found the assessee's explanation for non-compliance before the CIT(A) unconvincing due to his failure to check his email account regularly. Consequently, the tribunal imposed a cost of Rs.5,000/- on the assessee and set aside the matter to the CIT(A) to allow another opportunity.
Key Issues
Whether the assessee's non-compliance before the CIT(A) was justified, and if the matter should be set aside for a fresh opportunity, considering the imposition of a cost.
Sections Cited
147, 144B, 148
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, AHMEDABAD “C” BENCH, AHMEDABAD
Before: MS. SUCHITRA KAMBLE & SHRI NARENDRA PRASAD SINHA
O R D E R
PER SHRI NARENDRA PRASAD SINHA, AM:
This appeal is filed by the assessee against the order of National Faceless Appeal Centre (NFAC) [hereinafter referred as ‘the CIT(A)’] dated 18.03.2025 for the Assessment Year (A.Y.) 2017-18.
The brief facts of the case are that the assessee had filed the return of income for the A.Y. 2017-18 on 28.03.2018 declaring total income of Rs.19,24,470/-. The Assessing Officer (AO) had received information that the assessee was beneficiary of Long Term Capital Gain of Rs.59,69,286/- received in respect of transaction of shares of Kushal Limited. On the basis of this information, the case of the assessee was reopened under Section 147 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) after recording the reason. The assessment was 2025 Assessment Year: 2017-18 Abbasi Vohra vs. ITO Page 2 of 4 completed under Section 147 read with Section 144B of the Act on 25.05.2023 at a total income of the Rs.78,93,756/-. The AO had made addition of Long Term Capital Gain of Rs.59,69,286/- from sale of stock of Kushal Limited as income from other sources on the ground that this was a manipulated entry to route unaccounted income of the assessee as bogus LTCG.
Aggrieved with the order of the AO, the assessee had filed an appeal before the First Appellate Authority which was decided vide the impugned order and the appeal of the assessee was dismissed.
Now the assessee is in second appeal before us. The following grounds have been taken by the assessee in this appeal: -
1. On the facts and circumstances of the case as well as law on the subject, the learned CIT (Appeals) has erred in confirming initiation of re- assessment proceedings u/s.148 of the Act.
2. On the facts and circumstances of the case as well as law on the subject, the learned CIT(A) has erred in passing order without discussing grounds on merits.
3. On the facts and circumstances of the case as well as law on the subject, the learned Commissioner of Income-Tax (Appeals) has erred in passing order without providing enough opportunities to represent the case of the assessee. 4. On the facts and circumstances of the case as well as law on the subject, the learned Commissioner of Income-Tax (Appeals) has erred in passing order without considering that assessee was unaware about the hearing notices. 5. On the facts and circumstances of the case as well as law on the subject, the learned CIT (Appeals) has erred in confirming the addition of Rs.59,69,286/- on account of LTCG from sale of stock/scrip of Kushal Ltd. 6. On the facts and circumstances of the case as well as law on the subject, the learned Commissioner of Income-Tax (Appeals) has erred in not considering that all the purchase and sale transactions of Kushal Ltd. shares were done through banking channels and Demat account and that assessee had furnished contract notes and bank statements during the assessment proceedings.
2025 Assessment Year: 2017-18 Abbasi Vohra vs. ITO Page 3 of 4 7. It is therefore prayed that the above addition/disallowance made by the assessing officer may please be deleted.
8. Appellant craves leave to add, alter or delete any ground(s) either before or in the course of hearing of the appeal.
Shri Hardik Vora, Ld. AR of the assessee submitted that the Ld. CIT(A) had dismissed the appeal of the assessee for the reason that no compliance was made before him. He explained that in response to notice received from Ld. CIT(A), the assessee had sought adjournment on 07.02.2025. However, no compliance could be made to the subsequent notices as the assessee was not regular in checking the e-mail account. The Ld. AR, therefore, requested that the matter may be set aside to the file of the Ld. CIT(A) with direction to allow another opportunity to the assessee.
Per Contra, Shri S.K. Agal, Ld. Sr. DR supported order of the Ld. CIT(A). He, however, had no objection, if the matter is set aside to the file of Ld. CIT(A).
We have considered the rival submissions. We are not convinced with the explanation of the assessee for non-compliance before the Ld. CIT(A). The e-mail Id. mentioned in Form No.35 was “abbasivohra@live.com” which belonged to the assessee himself. Further, an option was also given to receive the notices/communication on this e-mail. When the assessee had sought adjournment on the first date of hearing on 07.02.2025 he should have been careful enough to access his e-mail account and make compliance before the Ld. CIT(A) on the subsequent dates. Since we are not convinced with the explanation of the assessee for the non-compliance before the Ld. CIT(A), we impose a cost of Rs.5,000/- (Rupees Five Thousand only) on the assessee which should be paid to the Prime Minister’s National Relief Fund 2025 Assessment Year: 2017-18 Abbasi Vohra vs. ITO Page 4 of 4 within a period of 15 days from the date of receipt of this order. At the same time, since the Ld. CIT(A) could not decide the matter on merits in the absence of any compliance on the part of the assessee, we deem it proper to set aside the matter to the file of the Ld. CIT(A) with direction to allow another opportunity to the assessee. The Ld. CIT(A) would proceed in the matter after verifying that the cost is paid by the assessee. Further, the assessee is also directed to make compliance before the Ld. CIT(A) in the course of set-aside appeal proceeding.
In the result, appeal of the assessee is allowed for statistical purpose.
Order pronounced in the open Court on this 13th June, 2025.