Loading judgment…
Facts
The assessee, a proprietor of M/s. Laxmi Cattle Traders, declared an income of Rs.3,72,342 for AY 2013-14. The assessment was reopened under Section 147 based on information that the assessee received credits of Rs.1,13,30,000 from M/s. Riya Traders, which was considered an accommodation entry.
Held
The Tribunal noted that the CIT(A) issued a notice of hearing but the assessee could not furnish details and sought adjournments. The CIT(A) passed an ex-parte order. The Tribunal remanded the matter back to the CIT(A) for proper adjudication with an opportunity of hearing, while imposing a cost of Rs.1,000 on the assessee.
Key Issues
Whether the CIT(A) erred in passing an ex-parte order without giving proper opportunity of hearing to the assessee, and if the reopening of assessment was valid.
Sections Cited
147, 68, 115BBE, 69C, 143(3)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, AHMEDABAD “B” BENCH, AHMEDABAD
Before: DR. BRR KUMAR & Ms. SUCHITRA KAMBLE
PER SUCHITRA KAMBLE, JUDICIAL MEMBER:
This appeal is filed by the Assessee against order dated 17.10.2024, passed by the CIT(A), National Faceless Appeal Centre (NFAC), Delhi for the Assessment Year (A.Y.) 2013-14.
The Assessee has raised the following grounds of appeal:
“1. The Learned CIT(A) – NFAC has erred in confirming the re- open assessment though it was bad in law, since Larned AO has re-opened the assessment without conducting inquiry and Assessment Year: 2013-14 Harshadkumar Bhogilal Raval vs. ITO Page 2 of 4 re-opened under the directions of higher authorities and did not apply his mind, 2. The Learned CIT(A) – NFAC has erred in deciding the appeal ex-parte and confirming the assessment of Learned A.O. who made the addition of Rs.1,13,30,000/- under Section 68 read with section 115BBE. Learned CIT(A) – NFAC further erred in not deciding the appeal on merits.
3. Learned CIT(A) – NFAC has erred in confirming addition under Section 68 read with section 115BBE in as much as, assessee was doing commission agency business in APMC Unjha market and as per market Rules he had earned commission.”
The assessee is proprietor of M/s. Laxmi Cattle Traders and filed return of income for the year under consideration on 16.08.2013 declaring income of Rs.3,72,342/-. The assessment proceedings under Section 147 of the Income Tax Act, 1961 were initiated based on information received from DDIT Investigation, Mehsana that the assessee received credits worth Rs.1,13,30,000/- in his Bank account from M/s. Riya Traders. M/s. Riya Traders along with M/s. Nayan Trading Company who were engaged in the activities of providing accommodation entries to persons including the assessee but the transactions made by the assessee with M/s. Riya Traders of that of Rs.1,13,30,000/- was held as accommodation entry and the Assessing Officer made addition of Rs.1,13,30,000/- under Section 68 of the Act as unexplained cash credit being accommodation entry. The Assessing Officer has made addition on account of unexplained expenditure being commission paid for accommodation entry under Section 69C of the Act.
Being aggrieved by the Assessment Order, the assessee filed appeal before the CIT(A). The CIT(A) partly allowed the appeal of the assessee.
Assessment Year: 2013-14 Harshadkumar Bhogilal Raval vs. ITO Page 3 of 4 5. The Ld. AR submitted that the CIT(A) has passed ex-parte order on merit without giving opportunity to the assessee of hearing and contesting the mater before the CIT(A). Therefore, the Ld. AR summited that the matter may be remanded back to the file of the CIT(A) for proper adjudication of the issues after giving opportunity of hearing to the assessee.
The Ld. DR relied upon the Assessment Order and the order of the CIT(A).
We have heard both the parties and perused all the relevant material available on record. It is pertinent to note that the CIT(A) issued the notice of hearing to the assessee but the assessee could not furnish the details and without the details confirmed the addition made by the Assessing Officer. The assessee was not given opportunity of hearing but at the same time the assessee has sought adjournment on 8 occasions. Therefore, we are of the view that the assessee will pay a cost of Rs.1,000/- to the Treasury of Income Tax Department within two weeks from the date of order. The matter is remanded back to the file of the CIT(A) for proper adjudication of the issues, after giving opportunity of hearing to the assessee by following the principles of natural justice and adjudicate the issues on merit as per Income Tax Act. Thus, appeal of the assessee is partly allowed for statistical purpose.
Order pronounced in the open Court on this 1st May, 2025.