DILIP RAMANLAL DOSHI,MUMBAI vs. ITO-19(1)(4), MUMBAI

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ITA 4418/MUM/2023Status: DisposedITAT Mumbai11 June 2024AY 2014-155 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 CIT(A) had not passed the impugned order on merits but had dismissed the assessee's appeal in default. While acknowledging that the assessee had not appeared before the first appellate authority despite notices, the Tribunal, in the interest of justice and fair play, deemed it appropriate to remit the matter back to the file of the CIT(A) for denovo adjudication on merits. The Tribunal directed the assessee to be diligent and cooperative in attending hearings and making submissions before the CIT(A) for expeditious and effective disposal, advising against seeking adjournments except for compelling reasons. The CIT(A) was also directed to ensure observance of principles of natural justice. The Tribunal explicitly stated that it had not made any observations on the merits of the case. The appeal was allowed, and the impugned order was set aside, restoring the appeal to the file of the CIT(A) for statistical purposes.

What were the facts?

The assessee, Dilip Ramanlal Doshi, an individual engaged in diamond trading, filed his return of income for Assessment Year 2014-15 declaring a total income of Rs. 4,84,690/-. The Assessing Officer (AO) completed the assessment under Section 143(3) of the Income Tax Act, 1961, on December 19, 2016. The AO made an addition of Rs. 2,52,57,479/- as unexplained cash credit under Section 68, relating to sale proceeds from shares of Sunrise Asian Ltd., and an addition of Rs. 10,10,229/- under Section 69C as unexplained expenditure (commission). The assessee appealed to the Commissioner of Income-tax (Appeals) [CIT(A)]. The CIT(A) passed an ex parte order on October 6, 2023, dismissing the assessee's appeal in default. The assessee has now appealed this order to the Income Tax Appellate Tribunal (ITAT).

What were the issues?

1. Whether the Ld. CIT(A) erred in law and facts in passing an order under Section 250 of the Act and dismissing the appeal in default, violating principles of natural justice. 2. Whether the Ld. CIT(A) erred in law and facts in confirming the addition of Rs. 2,52,57,479/- on account of sale proceeds from sale of shares of Sunrise Asian Ltd. and disallowing the exemption claimed in respect of long-term capital gains thereon, as per Section 68 of the Act. 3. Whether the Ld. CIT(A) erred in law and facts in confirming the addition of Rs. 10,10,299/- on account of alleged commission, added under Section 69C of the Act. Assessee's Contention: The assessee argued that the CIT(A) passed an ex-parte order in violation of the principles of natural justice without proper application of judicious mind and prayed for the setting aside of the impugned order. Revenue's Contention: The Revenue contended that the assessee was provided sufficient opportunity of hearing through various e-mail notices and supported the impugned order.

Which sections of the Income-tax Act were involved?

Section 250,Section 68,Section 143(3),Section 69C

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘D‘ BENCH

Before: SHRI GIRISH AGRAWAL, ACCOUNTANT & SHRI SUNIL KUMAR SINGH, JUDICIDAL MEMBER

Pronounced: 11/06/2024

आदेश / O R D E R

PER SUNIL KUMAR SINGH (J.M): 1. This appeal has been preferred against the impugned order dated 06.10.2023 passed in appeal no. CIT(A)30, Mumbai/15031/2016–17, by the Ld. Commissioner of Income–tax(Appeals), National Faceless Appeal Centre (NFAC)

1.

[hereinafter referred to as the “CIT(A)”] u/s. 250 of the Income–tax Act, 1961 [hereinafter referred to as “Act”] for the Dilip Ramanlal Doshi Assessment year [A.Y.] 2014–15, wherein learned CIT(A) has upheld the addition of Rs. 2,52,57,479/– as unexplained cash credit u/s. 68 of the Act and addition of commission of Rs. 10,10,229/– made vide assessment order dated 19.12.2016.

2.

The brief facts state that the assessee is an individual and doing business of trading in diamonds in his partnership firm i.e M/s suken exports and has income from business, capital gain and income from other sources. Assessee filed his return of income on 24.03.2016 declaring total income at Rs. 4,84,690/-. The case of the assessee was selected for scrutiny. Subsequently, the statutory notice u/s. 143(2) dated 19.09.2016 and notice u/s.142(1) was also issued and served. Assessee's representative Shri Rajendra B Shah, CA attended the proceeding before AO and furnished requisite details. AO completed assessment u/s. 143(3) of the Act on 19.12 2016 and made addition of Rs. 2,52,57,479/- as sale proceeds on sale shares u/s. 68 of the Act. Further, Rs. 10,10,299/- was added u/s. 69C of the Act as an unexplained expenditure. Assessee preferred an appeal against the assessment order before learned CIT(A), who

Dilip Ramanlal Doshi passed ex parte impugned order in default of assessee and dismissed the assessee’s appeal.

3.

The appellant assessee has approached this tribunal on the following grounds:

“1. The Ld. CIT(A) has erred in law and in facts in passing the order u/s. 250 of the Act and dismissing the appeal.

2. The Ld. CIT(A) has erred in law and in facts in confirming the addition on account of sale proceeds from sale of shares of Sunrise Asian Ltd. amounting to Rs.2,52,57,479/– and disallowing the exemption claimed in respect of the long term capital gains earned thereon.

3. The Ld. CIT(A) has erred in law and in facts in confirming the addition on account of alleged commission of Rs. 10,10,299/- added u/s. 69C of the Act…….”

4.

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

5.

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

6.

At the very outset, learned representative for the assessee has submitted that learned CIT(A) has passed ex-parte order in violation of the principles of natural justice without any application of judicious mind. Prayed to set aside the impugned order.

7.

Learned DR has submitted that assessee was provided sufficient opportunity of hearing by issuance of various notices through e–mail. Learned DR has supported impugned order.

Dilip Ramanlal Doshi 8. Perusal of the impugned order shows that learned CIT(A) has not passed impugned order on merit, rather dismissed assessee's appeal in default simplicitor.

9.

Learned CIT(A) was expected to state the points for determination, the decision there on and the reasons for the decision as provided u/s. 250(6) of the Act. We are conscious of the fact, that assessee has not turned up before the first appellate authority in response to the notices issued on various occasions. However, in the interest of justice and fair play, we deem it appropriate to remit the matter back to the file of learned CIT(A) for denovo adjudication on merit. We further direct the assessee to be diligent and coorperative in attending the hearings and making submissions before the first appellate authority for the expeditious and effective disposal of the appeal. Assessee should refrain from seeking any adjournment but for compelling and unavoidable reasons. Need less 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 observations on the merit of the case. The appeal is liable to be allowed.

Dilip Ramanlal Doshi 10. In the result, the appeal is allowed. Impugned order dated 06.10.2023 is set aside. The appeal is restored back to the file of the learned CIT(A) for statistical purpose.

Order pronounced on 11.06.2024.

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