ASHOK NARIMAN JALNAWALA,MUMBAI vs. ASSISTANT COMMISSIONER OF INCOME TAX/INCOME TAX OFFICER/ NFAC -DELHI, MUMBAI

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ITA 4138/MUM/2023Status: DisposedITAT Mumbai05 September 2024AY 2017-184 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal noted that the learned CIT(A) had issued notices on five different occasions, but the appellant assessee did not comply and made no endeavor to make submissions. However, in the interest of justice and fair play, the Tribunal found it appropriate to afford a last opportunity to the assessee and remit the matter back to the file of the learned CIT(A) for denovo adjudication afresh on merit. The Tribunal directed the assessee to be diligent and cooperative in attending hearings and making submissions for expeditious disposal and to refrain from seeking adjournments except for compelling circumstances. The CIT(A) was directed to ensure observance of principles of natural justice. The Tribunal explicitly stated that no observation was made on the merits of the case. The appeal was allowed, and the impugned order was set aside, restoring the case to the CIT(A) for statistical purposes.

What were the facts?

The assessee, Ashok N. Jalnawala, is in appeal against an order dated 19.09.2023 passed by the CIT(A)/NFAC for Assessment Year 2017-18. The assessee failed to file a return of income or respond to notices under Section 142(1). Information gathered under 'Operation Clean Money' revealed cash deposits of Rs. 12,48,000/- in the assessee's bank accounts during the demonetisation period. The Assessing Officer added this amount under Section 69A. The assessee appealed to the CIT(A), who dismissed the appeal ex-parte. The assessee's appeal to the ITAT is on the grounds that the CIT(A) erred in dismissing the appeal ex-parte without considering written submissions.

What were the issues?

1. Whether the learned CIT(A) erred in dismissing the assessee's appeal ex-parte, thereby violating the principles of natural justice, as per Section 250 of the Income-tax Act, 1961? Assessee's contention: The learned CIT(A) passed the impugned order ex-parte in violation of the principles of natural justice and erred in not appreciating the written submissions of the appellant. The assessee prayed to set aside the impugned order. Revenue's contention: The learned DR submitted that the assessee was provided sufficient opportunity of hearing by the learned CIT(A) but did not comply. The learned DR supported the impugned ex-parte order passed by the first appellate authority.

Which sections of the Income-tax Act were involved?

Section 250,Section 139,Section 142(1),Section 69A

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘SMC’ BENCH

Before: SHRI NARENDRA KUMAR BILLAIYA, ACCOUNTANT & SHRI SUNIL KUMAR SINGH

(Assessment Year : 2017–18) Ashok N. Jalnawala Vs. Additional/Joint/Deputy/ House No. 151, Assistant Commissioner of Belapur Village, Income tax/Income-Tax Sector-20, officer/Commissioner(A) CBD Belapur, Income-Tax Officer, Navi Mumbai, National e-Assessment 400614. Centre, New Delhi. PAN/GIR No. ADVPJ6955F (Appellant) .. (Respondent) Assessee by Shri. Fenil Bhatt Revenue by Shri. R. R. Makwana, Sr. DR Date of Hearing 05/09/2024 Date of Pronouncement 09/09/2024 आदेश / O R D E R PER SUNIL KUMAR SINGH (J.M): 1. This appeal has been preferred against the impugned order dated 19.09.2023 passed in Appeal no. CIT(A) 46, Mumbai/10686/2019-20 by the Ld. Commissioner of Income–tax(Appeals)/ National Faceless Appeal Centre (NFAC) [hereinafter referred to as the “CIT(A)”] u/s. 250 of the Income-tax Act, 1961 [hereinafter referred to as "Act"] for the Assessment year 2017-18, wherein learned CIT(A) has dismissed assessee’s appeal ex-parte.

Ashok Nariman Jalnawala 2. The brief facts under appeal state that the assessee failed to furnish return of income for A.Y. 2017-18 either u/s. 139 or in response to notice u/s. 142(1) of the Act. On the basis of information gathered during the phase of online verification under ‘Operation Clean Money’, data revealed that the assessee deposited Cash of Rs. 12,48,000/- in his bank accounts during the demonetisation period (09.11.2016 to 30.12.2016). The case was selected for scrutiny and notices u/s. 143(2) and 142(1) of the Act were issued and served upon the assessee. The assessee failed to respond to these notices, hence learned assessing officer added Rs. 12,48,000/- u/s. 69A of the Act.

3.

Aggrieved by the assessment order, assessee preferred an appeal before learned CIT(A), who dismissed assessee’s appeal ex-parte.

4.

Assessee has filed this second appeal on the ground that learned CIT(A) has erred in dismissing the appeal for non-prosecution without appreciating the written submission of the appellant.

5.

In response to the notice issued by the tribunal, learned DR appeared and participated in the hearing.

6.

We have perused the records and heard learned representatives for both the parties.

7.

Learned representative for the assessee has, at the very outset informed that impugned order has been passed by learned CIT(A), ex-parte in violation of the principles of natural justice. Prayed to set aside the impugned order.

8.

Learned DR has submitted that assessee was provided sufficient opportunity of hearing by learned CIT(A) but for no avail. Learned DR has supported impugned ex-parte order passed by the first appellate authority.

Ashok Nariman Jalnawala 9. We notice that the learned CIT(A) had issued notices on five different occasions, however appellant assessee did not comply notices and made no endeavor to make submission before the learned CIT(A). However, in the interest of justice and fair play, we find it appropriate to afford last opportunity to the assessee and remit the matter back to the file of learned CIT(A) for denovo adjudication afresh on merit. We further direct the assessee to be diligent and cooperative in attending the hearings and making submissions before the first appellate authority for the expeditious and effective disposal of the appeal. Assessee shall refrain from seeking any adjournment but for compelling and unavoidable circumstances. Needless to say that learned CIT(A) shall ensure the observance of the principles of natural justice. It is made clear that we have not made any observation on the merits of the case. The appeal is liable to be allowed accordingly.

10.

In the result, the appeal is allowed. Impugned order dated 19.09.2023 is set aside. The case is restored back to the file of the learned CIT(A) for statistical purposes. Order pronounced on 09.09.2024.

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