DIPAK RAHEJA, RAIPUR,RAIPUR vs. ACIT, CIRCLE-1(1), RAIPUR, RAIPUR

The brief facts emanating from the assessment order are as follows:

When the matter came up before the first appellate authority, the Ld. CIT(Appeals)/NFAC after considering the material available on record and assessment order had held and observed as follows: “5.1 It is pertinent that in order to decide this appeal in a timely manner a number of notices/communications through ITBA portal were sent to the appellant, viz. Communications dated 21.02.2025, 28.02.2025 and 05.03.2025. However, there evidently has been no response from the appellant till date. There is no gain saying that once the appeal is filed by the appellant, it is obligatory on its part to purposefully and co-operatively pursue the same in a worthwhile manner, which the appellant has evidently failed to do. It clearly appears that the appellant's compliance or rather lack of it, the appellant has not even bothered to pursue this appeal in any productive manner. Hence, in view of the aforesaid total non-compliance/non prosecution of the instant appeal on the part of the appellant, the instant appeal is adjudicated and disposed off, as under, ex-parte, primarily on the basis documentation available on record. 5.5 The Appellant had filed his Return of Income for A.Y. 2017-18 on 23.03.2018 declaring total income of Rs. 82,87,080/-. The AO issued notice u/s.148 of the act on 14.07.2022. In response to the notice issued, the appellant filed return of income on 08.05.2023 declaring total income of Rs.82,87,080/-. The same was treated as invalid in view of the ordinary delay in filing of return u/s. 148 of the act. The AO completed the assessment proceedings u/s. 144 of the act and made addition of Rs.1,20,16,408/- and treated the same as unexplained credits u/s. 68 of the act. 5.6 It is pertinent to note that even during the instant appellate proceedings, neither appellant nor his representative filed any submissions in response to the notices issued from time-to-time and had in fact chosen to remain silent and failed to substantiate or cooperate by filing the details called for, which shows the appellant is not interested in pursuing his appeal. However, it was noted that despite several opportunities were given to the appellant, he has not responded for the reasons best known to him. Needless to mention that in order to prove their point, the appellant should substantiate and back his point by providing relevant details, which he has failed to do so.”

At the time of hearing, the Ld. Counsel for the assessee submitted that the reason for non-compliance by the assessee before the Ld. CIT(Appeals)/NFAC was that the hearing notices have been sent in the wrong email id by the department. In this regard, the email id that has been provided to the department for communication purpose is “ketanparmar628@gmail.com”. However, the communications as per ITBA portal regarding hearing notices for all the three dates i.e.21.02.2025, 28.02.2025 and 05.03.2025 were sent to some other email id which does not belong to the assessee. The said email id as per screen shot of the ITBA portal regarding hearing notices from the department to the assessee was communicated at “cnmurty2006@gmail.com” which was not the communication address given by the assessee to the department. That since all notices of hearing were sent to wrong email id, therefore, it was not possible for the assessee to know regarding the hearing notices, thus, there was no compliance from the assessee.

We are of the considered view after perusing all the documents on records which suggests that indeed the department had sent hearing notices to wrong email id, therefore, it was not possible for the assessee to respond to the same which resulted in an ex-parte order.

In the overall spectrum of an ex-parte order being passed due to non-compliance by the assessee before the Ld.CIT(Appeals)/NFAC, we refer

Respectfully following the aforesaid order on the same parity of reasoning, we are providing final opportunity to the assessee to represent his case before the first appellate authority. Accordingly, we set-aside the order of the Ld. CIT(Appeals)/NFAC and remand the matter back to its file for denovo adjudication as per law while complying with the principles of natural justice. The Ld. CIT(Appeals)/NFAC is also directed to be particular with regard to the sending of the hearing notices and they should be alert while sending such hearing notices for compliance by the assessee so that it is sent on the correct email id provided by the assessee.

Before parting, we may herein observe that this is not simply an ex- parte order. In fact, this is a case where the assessee has received accommodation entries in guise of unsecured loan from Kolkata based shell companies during the period under consideration. The search operation in the cases of RKTC Group and Shri Suresh Agrawal shows that various beneficiaries including the assessee had routed their unaccounted

In the present case of the assessee, it is already on record that the assessee had received accommodation entries in the guise of unsecured loan from the Kolkata based shell companies and it is therefore now onus on the part of the Ld. CIT(Appeals)/NFAC to verify and examine in detailed manner whether any fraud has been committed by the assessee towards the department. That though on the ground of natural justice, one final opportunity has been given to the assessee but the genesis of the entire facts and circumstances needs proper verification by the department so to find out whether any lawful taxes remain unpaid to the department due to sham transactions adopted which will be within purview of tax evasion amounting to fraud to the revenue and in such case, fraud vitiates everything including natural justice.

The application of principle of fraud was even considered by the Hon'ble Supreme Court in the case of Badami (deceased) by her LRs v. Bhali in Civil Appeal No.1723/2008, dated 22/05/2012 wherein the Hon'ble Supreme Court has held as follows:-

In another decision of the Hon’ble Supreme Court in the case of Smt. Shrist Dhawan v. M/s. Shaw Brothers AIR 1992 SC 1555, it has been held that fraud and collusion vitiates even the most solemn proceedings in any civilized system of jurisprudence including natural justice. Further, the Hon’ble Supreme Court in the case of Mc Dowell & Company Ltd. Vs. CTO [1985] 154 ITR 148 (SC) has held that "Tax planning may be legitimate provided it is within the framework of law, Colourable devices cannot be part of tax planning....".

Therefore, in our considered view, in the present matter it is the responsibility of the revenue authorities to investigate if there is any tax evasion as per the transactions entered into by the assessee and in such circumstances additions are to be sustained in the hands of the assessee.

As per the aforesaid terms, the grounds of appeal raised by the assessee stands allowed for statistical purposes.

In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open court on 25th day of June, 2025.