OM SHANTI MOTORS,BHOPAL vs. ACIT CENTRAL-1, BHOPAL, AAYAKAR BHAWAN, HOSHANGABAD ROAD, ARERA HILLS, BHOPAL - (FRONT OF MAILDA MILL)

2. Since these appeals relates to same assessee; the parties have been represented by same counsels and the underlying facts/issues/ controversies are similar/related, we heard these appeals analogously at the request of parties and proceed to decide them by this consolidated order for the sake of clarity, brevity and convenience.

Om Shanti Motors IT(SS)A No. 73 to 79/Ind/2024 & 608 to 625/Ind/2024 AYs: 2009-10 to 2015-16 Quantum Appeals - IT(SS)A No. 73 to 79/Ind/2024:

This is 2nd round of quantum-appeals by assessee before ITAT. The 4. background facts leading to these appeals are such that the assessee is a partnership firm engaged in trading business of automobiles and automobile related works. A search u/s 132 of the Income-tax Act, 1961 was conducted upon a “Regal Homes Group of Bhopal” including assessee on 12.08.2014 pursuant to which the assessments of assessee for seven AYs 2009-10 to 2015-16 were framed u/s 153A/143(3) vide two assessment-orders dated 06.12.2016 and 09.08.2017 after making certain additions. Aggrieved, the assessee carried all seven matters in first-appeals before CIT(A) whereupon the CIT(A) dismissed assessee’s appeals vide orders dated 13.03.2018 ex-parte to assessee due to non-prosecution, while upholding the AO’s orders. The assessee thereafter carried matters before ITAT, Indore Bench in IT(SS)A Nos. 97 to 103/Ind/2018 whereupon the ITAT also decided assessee’s appeals ex-parte to assessee because of non- presence but after hearing the Departmental Representative. The ITAT passed a consolidated order dated 24.10.2019 remanding all seven matters to CIT(A) for a fresh adjudication; the concluding para of ITAT’s order is re- produced below:

“3.हमनेिव�ानिवभागीय�ितिनिधकोसुनाहैतथािन��ािधका�रयोंकेआदेशोंका अवलोकनिकयाहै।हमनेपायािकवत�मानअपीलोंम�, िनधा�रतीकोउिचतएवं�भावी अवसरनहींिदयागयाथा।इसकेअित�र�, िव�ानआयकरआयु�(अपील) नेआदेश

Om Shanti Motors IT(SS)A No. 73 to 79/Ind/2024 & 608 to 625/Ind/2024 AYs: 2009-10 to 2015-16

गुणागुणपरपा�रतनहींिकयेथेजोिक�ायसंगतनहींह�।अतः, �ायकेिहतम�, हम िव�ानआयकरआयु�(अपील) केआदेशोंकोअपा�करनाउपयु�समझतेह�।ये अपील�िनधा�रतीकोसुनवाईकाउिचतअवसरदेनेकेप�ातिविधकेअनुसारगुणागुणपर िनण�ियतकरनेकेिनदेशकेसाथिव�ानआयकरआयु�(अपील) कीफाईलम��ित�ेिषत कीजातीह�तथािनधा�रतीकोभीइससंबंधम�िव�ानआयकरआयु�(अपील) केसम� उप��तहोने/ सहयोगकरनेकािनदेशिदयाजाताहै।” This way, the first round of proceeding ended.

5. Pursuant to above order of ITAT, the CIT(A) resumed the proceeding of fresh adjudication. The CIT(A) issued various notices of hearings to assessee but finding no response from assessee ultimately passed ex-parte orders dated 10.06.2024 again upholding the AO’s orders. The CIT(A) has made following observation while passing ex-parte orders:

Page 2 of CIT(A)’s order of AY 2009-10: “1.1. The appeals were fixed for hearing on 27.04.2021, 20.07.2021, 14.09.2021, 08.11.2021. The appellant on 08.11.2021 filed a letter through ITBA requesting for adjournment of the case on or after 01.12.2021. The request of the appellant was considered and the case was fixed for hearing on 06.12.2021. The appellant did not respond the notice. The case was again fixed for hearing on 01.02.2022. The appellant again requested for adjournment. The same was again considered and the case was further fixed for hearing on 12.04.2022, 27.02.2024 and 04.06.2024. However, the appellant did not respond any notices. It is quite evident from the chronology of event that despite several opportunities being granted from time to time, there has been absolutely no compliance on part of the appellant to give detailed explanation regarding ground of appeal s taken for the years under consideration. This clearly shows that despite clear directions of Hon'ble ITAT, the appellant is not keen to pursue the above mentioned appeals and cooperate in finalization of appeal and has nothing to say further.”

6. The assessee is now aggrieved by orders dated 10.06.2024 [“impugned orders”] passed by CIT(A) and has come in these appeals. Thus, it is 2nd round before ITAT.

Om Shanti Motors IT(SS)A No. 73 to 79/Ind/2024 & 608 to 625/Ind/2024 AYs: 2009-10 to 2015-16

“With reference to the above captioned matter, on behalf of the appellant, we most humbly beg to submit the following for Your Honor’s kind consideration: - 1. That, the assessment order passed in the assessee’s case for the AY 2009-10 to AY 2015-16 were passed on a very high-pitched level. The additions made were very erroneous and illegal. We are tabulating hereunder the relevant fact of high- pitched assessments made:

Om Shanti Motors IT(SS)A No. 73 to 79/Ind/2024 & 608 to 625/Ind/2024 AYs: 2009-10 to 2015-16

3. That, the Ld. CIT(A) passed the appeal orders dated 10.06.2024 relating to Seven assessment orders and appeals orders passed on dates 15.07.2024 and 23.07.2024 relating to Eighteen Penalty orders without giving any proper opportunity of being heard. The hearing notices issued in the calendar year 2024 were never served on the assessee. From the Income tax portal, it was deciphered that these notices were served on some mail id which never belonged to the assessee. The mail Id Karishmabhargava@Ymail.com and sfvaishali@yahoo.co.in did not belong to assessee firm or any of its partners and were never specified in any of the Form 35 of the impugned appeals.

Om Shanti Motors IT(SS)A No. 73 to 79/Ind/2024 & 608 to 625/Ind/2024 AYs: 2009-10 to 2015-16

10. Also, we would like to bring to your honor’s kind attention that even if the proceedings are before the Ld. CIT(A)-III, Bhopal and not under Faceless mechanism, the process of service of notice of hearing remains the same i.e. through service through Mails. Since the assessee was not served with the last 2 notices issued after a long-time gap before making ex-parte appeal orders, no fault of the assessee can be attributed. Even the appeal orders were issued on wrong mail id’s which proves the genuineness of the assessee case. In view of the above-mentioned facts and circumstances of the case, the assessee humbly submits before the Hon’ble bench that the detailed and voluminous submissions need to be confronted with the Ld. AO as very high pitched and erroneous additions have been made. It would be travesty of justice if the impugned assessment order and consequent appeal order are sustained and would encourage Income tax department to pass such injudicious assessment orders in the future. The assessee has given all the submissions of the case and is merely requesting a fair assessment and has already assured full cooperation and compliance in any future proceedings.” 8. Ld. AR re-iterated the above submission orally also. The crux of Ld. AR’s submission is such that the CIT(A) has passed impugned orders ex- parte to assessee with the reasoning that the assessee did not respond on various dates of hearing fixed by him and therefore the assessee is not keen to pursue appeals and co-operate in finalisation of appeals before him. But this observation was CIT(A) is not correct. Referring to Para 1.1 of CIT(A)’s

Om Shanti Motors IT(SS)A No. 73 to 79/Ind/2024 & 608 to 625/Ind/2024 AYs: 2009-10 to 2015-16 orders (re-produced above), Ld. AR submitted that the CIT(A) fixed intial hearings in the calendar year 2021 / 2022 on 27.04.2021, 20.07.2021, 14.09.2021, 08.11.2021, 06.12.2021, 01.02.2022 and 12.04.2022 but that was Covid-19 period which disturbed life of everyone worldwide. That the assessments made by AO were high-pitched and the assessee needed a lot of preparation and collection of documents during that Covid period, hence the assessee sought adjournments from CIT(A) on some occasions. Ld. AR filed a copy of letter dated 20.07.2021 filed by assessee to CIT(A) seeking adjournment for the reason of preparation of case due to Covid-19; copy of assessee’s letter is scanned and re-produced below for an immediate reference:

Om Shanti Motors IT(SS)A No. 73 to 79/Ind/2024 & 608 to 625/Ind/2024 AYs: 2009-10 to 2015-16

Om Shanti Motors IT(SS)A No. 73 to 79/Ind/2024 & 608 to 625/Ind/2024 AYs: 2009-10 to 2015-16

9. Carrying further, Ld. AR submitted that post-Covid, the CIT(A) has stated to have fixed hearings in the calendar year 2024 on 27.02.2024 and 04.06.2024, after a gap of about 2 years, but the notices of those hearings were served on e-mail ids: karishmabhargava@ymail.com/ sfvaishali@yahoo.co.in which did not belong to assessee-firm or any of its partners and was never specified in any of the Form No. 35 (Appeal Memo) filed by assessee to CIT(A). Ld. AR filed copies of the notices dated 19.02.2024 & 27.05.2024 claiming that the hearings on 27.02.2024 & 04.06.2024 were fixed by CIT(A) through these notices. One notice is scanned and re-produced below for an immediate reference:

Om Shanti Motors IT(SS)A No. 73 to 79/Ind/2024 & 608 to 625/Ind/2024 AYs: 2009-10 to 2015-16

Om Shanti Motors IT(SS)A No. 73 to 79/Ind/2024 & 608 to 625/Ind/2024 AYs: 2009-10 to 2015-16

Om Shanti Motors IT(SS)A No. 73 to 79/Ind/2024 & 608 to 625/Ind/2024 AYs: 2009-10 to 2015-16

Om Shanti Motors IT(SS)A No. 73 to 79/Ind/2024 & 608 to 625/Ind/2024 AYs: 2009-10 to 2015-16

Om Shanti Motors IT(SS)A No. 73 to 79/Ind/2024 & 608 to 625/Ind/2024 AYs: 2009-10 to 2015-16

Om Shanti Motors IT(SS)A No. 73 to 79/Ind/2024 & 608 to 625/Ind/2024 AYs: 2009-10 to 2015-16

The assessee has filed voluminous papers of more than 5,000 Pages in the form of multiple Paper-Books before ITAT to show the level of preparation made by assessee. Ld. AR submitted that since there is a need of in-depth verification of these voluminous papers, it would be most appropriate to restore these matters at the level of AO. This would enable the AO to make a proper assessment and recover legitimate tax from assessee.

Om Shanti Motors IT(SS)A No. 73 to 79/Ind/2024 & 608 to 625/Ind/2024 AYs: 2009-10 to 2015-16

“ISSUE UNDER APPEAL: The present appeals have been preferred by the assessee against the order passed by the Learned Commissioner of Income Tax (Appeals) [CIT(A)] in respect of the quantum additions as well as penalty proceedings under Sections 271(1)(c), 271AAB, 271D, and 271E of the Income Tax Act, 1961 ("the Act"). At the very outset, it is submitted that the assessee has remained perennially non-compliant at every stage of the proceedings - before the Assessing Officer (AO), before the CIT(A), and even before this Hon'ble Tribunal when the matter was previously remanded back to the CIT(A). The conduct of the assessee exhibits utter disregard for the process of law. It is further submitted that this is a search case involving substantial tax implications, where entire proceedings have been conducted physically, not under the faceless regime. Thus, any argument that the assessee was unaware of the ongoing proceedings is wholly untenable and misleading. In a high quantum tax case, where the assessee is well aware of its right to appeal, it is only reasonable to expect that the assessee would also comply with statutory requirements. Instead, the assessee has consistently ignored the legal process, causing unnecessary delays and obstructing tax administration. BRIEF FACTS OF THE CASE 1.01 The assessee is a partnership firm engaged in the business of automobile dealership, operating a service center, and selling spare parts. 1.02 A search and seizure operation under Section 132(1) was conducted on the residential and business premises of the assessee on 12-08-2014. Pursuant to the search, the following assessments were completed: Assessment Year Mode of Assessment 2009-10 Assessed under Section 147 2010-11 to A.Υ. 2014-15 Assessed under Section 153A read with Section 143(3) 2015-16 Assessed under Section 143(3) Chronology of Proceedings Event Date Date of Original Assessment 09-08-2017 Date of CIT(A) Order 13-03-2018 Date of ITAT Second Appeal Order 24-10-2019 1.03 The instant appeals pertain to quantum additions as well as penalty proceedings under Sections 271(1)(c), 271AAB, 271D, and 271E. 2.00 REPEATED NON-COMPLIANCE BY THE ASSESSEE: 2.01 Non-Compliance at Every Stage of Proceedings It is an undisputed fact that the assessee has been consistently non-compliant, right from the assessment stage up to the present appeal before this Hon'ble Tribunal:

Om Shanti Motors IT(SS)A No. 73 to 79/Ind/2024 & 608 to 625/Ind/2024 AYs: 2009-10 to 2015-16

 Before the AO: No meaningful compliance or explanations were provided during the assessment proceedings.  Before the CIT(A) (First Round): The assessee failed to participate in the appellate proceedings, leading to dismissal of the appeal.  Before the ITAT (First Round): When the matter was remanded back to the CIT(A), the Hon'ble Tribunal exercised judicial leniency by granting another opportunity to the assessee.  Before the CIT(A) (Set-Aside Proceedings): Despite the Hon'ble Tribunal granting a fresh opportunity, the assessee again remained non-compliant, even after being given as many as eight opportunities. 2.02 Physical Proceedings, Not Faceless - No Excuse for Non-Compliance This is a search case where proceedings were conducted physically. Thus, the assessee cannot claim ignorance or lack of communication as an excuse for non-compliance. The assessee was not only aware of the pendency of the proceedings but has willfully chosen not to cooperate. 2.03 Second Round of Proceedings Before ITAT-No Justification for Further Leniency  The search took place in 2014, and almost 11 years have elapsed, yet the assessee continues to adopt dilatory tactics.  This is now the second round of litigation before this Hon'ble Tribunal, and the assessee once again pleads for a remand, citing its own non-compliance.  Such conduct is a clear abuse of the judicial process, and further remand should not be granted in light of the assessee's repeated disregard for legal proceedings. 2.04 Precedential Impact - Detrimental Consequences of a Remand If this Hon'ble Tribunal were to again remand this matter back to the CIT(A) for a second time, it would not set a good precedent whereby a non-compliant assessee could indefinitely delay tax proceedings through repeated defaults. Such a decision would encourage deliberate non-cooperation, weaken the effectiveness of search assessments, and diminish the sanctity of judicial process. In my humble view, it is imperative to send a strong message that an assessee who does not respect the legal framework cannot be rewarded with endless opportunities. 3.00 PRAYER: NO REMAND SHOULD BE GRANTED: 3.01 In view of the discussion made in preceding paras and also considering the assessee's continued disregard for legal proceedings, it is very humbly submitted that no further remand should be granted. Even if there exist high-pitched assessments or mistakes apparent on record, the assessee's consistent failure to comply should weigh heavily against any relief being granted. 3.02 Without Prejudice to the above, if this Hon'ble Tribunal still decides to grant a remand, it is very humbly requested that strict conditions may kindly be imposed upon the assessee to ensure compliance, namely:

Om Shanti Motors IT(SS)A No. 73 to 79/Ind/2024 & 608 to 625/Ind/2024 AYs: 2009-10 to 2015-16 i) Heavy costs may please be imposed upon the assessee as a consequence of its prolonged non-compliance and wastage of judicial resources. ii) The assessee should be directed to deposit a suitable percentage of the outstanding tax demand before being allowed any relief. iii) The assessee should be mandated to comply with all further proceedings in a time- bound manner. Thanking you Respectfully submitted”

Om Shanti Motors IT(SS)A No. 73 to 79/Ind/2024 & 608 to 625/Ind/2024 AYs: 2009-10 to 2015-16 been given reasonable opportunities of hearing as directed in ITAT’s order.

Furthermore, the assessee’s willingness to represent cases before lower- authority is discernible from the fact that more than 5,000 papers have been filed before ITAT to show the preparation made. Thus, considering entire conspectus of case and also to impart substantial justice, it would be fair to give one more opportunity to assessee. Since the learned Representatives of both sides are ad idem that in the event of remand of these matters, it would be more appropriate to restore at the level of AO, we are inclined to remand these matters to AO for adjudication afresh after giving necessary opportunities of hearings to assessee and following the procedure of law. This remand is at the risk and responsibility of assessee.

We specifically direct the assessee to stay diligent in attending hearings as may be fixed by AO and make adequate representation to the queries of AO without seeking unnecessary adjournments failing which the AO shall be at liberty to take any view in accordance with law. Accordingly, these appeals can be said to be allowed for statistical purposes. to 625/Ind/2024:

This is 1st round of ‘penalty-appeals’ before ITAT. However, the status 18. of these appeals is same as of ‘quantum-appeals’ to the extent that the CIT(A) has fixed earlier hearings during Covid-2019 period and served notices of later hearings to wrong email ids not belonging to assessee and not even provided by assessee in Form No. 35. Further, the penalties

Om Shanti Motors IT(SS)A No. 73 to 79/Ind/2024 & 608 to 625/Ind/2024 AYs: 2009-10 to 2015-16 imposed by AO have emanated from various documents/issues of very same search proceedings whose ‘quantum-appeals’ have been remanded to the file of AO for afresh adjudication in earlier part of this order. Therefore, as agreed by learned Representatives of both sides, we remand these ‘penalty-matters’ also to the file of AO in the very same terms as the ‘quantum-appeals’ remanded in earlier part of this order. This way, these appeals are also allowed for statistical purposes.

Order pronounced in open court on 04/04/2025