HEMA VIRAL JOSHI,GANDHINAGAR vs. THE INCOME TAX OFFICER, WARD-2, GANDHINAGAR

Details of the assessments are tabulated as follows:

The assessee was subjected to ex-parte assessments under section 144 of the Act by the Assessing Officer (AO) for the respective assessment years, details of which are tabulated above. These assessments were framed due to the failure of the assessee to file the returns of income within the time prescribed under section 139 of the Act. All the assessment orders were passed on December 28, 2017, where the AO made an addition under section 69A of the Act on account of unexplained deposits in her bank account. The ITA Nos.609 to 612/Ahd/2023 Hema Viral Joshi/Viral Vinodchandra Joshi vs. ITO Asst. Years : 2010-11, 2011-12 & 2012-13

In all three AY(s), both the assessee filed appeals before the CIT(A). In the grounds of appeal(s), the assessee took grounds that the financial records and transactions related to the relevant assessment years were maintained in Tally accounting software, but the data was lost due to a virus attack on her system. As a result, she was unable to produce the details of the transactions in her bank account during the assessment proceedings. She submitted that she had been unwell during the relevant period, and due to her illness, her doctor had advised her to take bed rest. This was cited as a reason for her inability to provide the necessary details and attend to the proceedings on time. The assessee mentioned that many of the transactions were handled by her father-in-law, Major Vinodchandra Joshi, who passed away on June 18, 2012. As a result, she claimed that the details regarding the transactions were not readily available, and this contributed to the difficulty in responding to the Assessing Officer’s queries during the assessment. She asserted that she had made efforts to obtain the necessary details from the bank and other authorities but was unable to receive the required documentation on time. This further compounded her inability to furnish the details required for the assessment. The assessee also argued that the cash deposits made into her bank account were not income but represented redeposits of cash withdrawn earlier. She stated that the cash transactions in her bank account were incorrectly treated as unexplained income under section 69A of the Income

The assessee did not file his return of income for the assessment year 2011-12 within the prescribed time under section 139(1) of the Act. The assessment was reopened by the Assessing Officer (AO) under section 147 based on information received from the Income Tax Investigation Wing. The information indicated that the assessee had conducted significant financial transactions, specifically related to shares of Gandhinagar Hotels Ltd.. The AO noted that these transactions were not disclosed in any income tax return. The AO focused the large deposits in assessee’s bank account, particularly related to the sale of shares of Gandhinagar Hotels Ltd. The assessee’s bank account showed cash deposits totalling to Rs.47,82,000/- and deposits by cheques totalling to Rs.50,74,671/, which the AO treated as unexplained cash credits under section 68 of the Income Tax Act. The AO also linked these transactions to certain off-market deals in the shares of Gandhinagar Hotels Ltd., which were transferred to various parties, including the assessee. The ITA Nos.609 to 612/Ahd/2023 Hema Viral Joshi/Viral Vinodchandra Joshi vs. ITO Asst. Years : 2010-11, 2011-12 & 2012-13

The assessee filed an appeal before CIT(A), who confirmed the assessment order, stating that the appellant had not co-operated during the assessment or appellate proceedings and that the addition was justified based on the information available on record.

Aggrieved by the orders of CIT(A), both the assessees are in appeals before us with following grounds of appeal:

Alternatively, and without prejudice both the lower authorities have failed to appreciate the fact that the cash that is withdrawn is itself deposited in the bank account.

Both the lower authorities have passed the orders without properly appreciating the facts and they further erred in grossly ignoring various submissions, explanations and information submitted by the appellant which ought to have been considered before passing the impugned order. This action of the lower authorities is in clear breach of law and Principles of Natural Justice and therefore deserves to be quashed.

The Ld. CIT(A) has erred in law and on facts of the case in confirming action of the Ld. AO in charging interest u/s. 234A/B/C/D of the Act.

The Ld. CIT(A) has erred in law and on facts of the case in confirming action of Ld. AO in levying penalty u/s. 271(1)(c) of the Act.

The Ld. CIT(A) has erred in law and on facts of the case in confirming action of Ld. AO in levying penalty u/s. 271F of the Act.

The Ld. CIT(A) has erred in not considering various facts and in not appreciating the facts and law in their proper perspective.

The Appellant craves leave to add, amend, alter, edit, delete, modify or change all or any of the grounds of appeal at the time of or before the hearing of the appeal. Grounds of appeal in the case of Viral Vinodchandra Joshi in ITA No. 612/Ahd/2023:

During the course of hearing before us, the Authorised Representative (AR) of the assessee stated that the CIT(A) has not decided the issues on merit and not taken into account facts of both the cases. The AR submitted the common paper book containing various correspondence with AO and CIT(A).

From the details available in the paper book, we observe that there is a Letter from Viral Vinodchandra Joshi to the Income Tax Officer (dated 14-12-2018) responded to a notice under section 142 of the Act for A.Y. 2011-12. In this letter, he raised concerns about the delayed reopening of his assessment, requested copies of materials and documents used in the investigation, and stated that he was not involved in the transactions related to Gandhinagar Hotels Ltd. He explained that his brother, Shri Pritesh Joshi, had misused his bank account, and he denied knowing individuals mentioned in the notice. We also note that the assessee submitted copy of Bank book (in the case of Hema Viral Joshi) and the copy of assessment order of M/s Pragna Auto Services for A.Y. 2011-12 (in which the brother of Viral Joshi – Shri Pritesh Joshi was a partner). In the assessment order of the said firm M/s Pragna Auto Services, there is reference to money received against sale of shares of Gandhinagar Hotels Ltd. which apparently not considered by the lower authorities.

We also noted that in her letter dated 15-02-2019, Ms.Hema Viral Joshi submitted that she did not participate in the banking transactions in the joint savings account in question. The transactions were primarily executed by her husband, Viral Joshi. In the same letter, Ms.Hema Joshi claimed that she had no connection or relationship with Shri Hitesh B. Raval, an advocate involved in the share transactions that led to the tax demands. She asserted that she had never interacted with him, which was crucial since the demand was based on share transactions attributed to him. She also stated that the ITO, Ward 3, Gandhinagar, had passed an order adding Rs.28 lakhs as business income and Rs.1.86 crore as short-term capital gains in the case of Shri Hitesh Raval. She also stated that the addition in her case was based on transactions in the joint account at Gandhinagar Nagarik Co-operative Bank Ltd. (A/c No. 118321116009578), which was jointly held with her husband and her husband, Viral Joshi, was also assessed for transactions related to this account, and the Assessing Officer had made an addition of Rs.98,60,537/- for A.Y. 2011-12 in his case. The letter also highlighted that the joint account transactions were managed by her husband, Viral Joshi. She insisted that both the additions in her case and her husband’s case were related to the same bank account and transactions, and any liabilities should be adjusted accordingly.

Upon careful consideration of the submissions made by the Authorized Representative (AR) of the assessees and the materials placed on record, it is evident that both Hema Viral Joshi and Viral Vinodchandra Joshi were subjected to ex-parte assessment orders framed under sections 144 and 147 of the Act. In the case of Hema Viral Joshi, her appeals were further

It is further observed that both assessees had provided reasonable explanations for their inability to comply with the assessment proceedings and had placed relevant facts before the lower authorities, which were not properly considered. In particular, Hema Viral Joshi claimed that the cash deposits were redeposits of previously withdrawn amounts, and Viral Vinodchandra Joshi asserted that the transactions related to his bank account were not properly attributed to him but were linked to off-market share dealings, allegedly executed by other family members. These factual submissions, along with supporting documents such as bank books and correspondence with the authorities along with affidavits of both the assessees, have material bearing on the assessments but were overlooked by the CIT(A).

In light of the above, we find that the orders of the CIT(A) in all four cases are unsustainable as they do not address the merits of the case and have failed to consider the explanations and evidence provided by the assessees. Therefore, in the interest of justice, we hereby set aside the impugned orders passed by the CIT(A) in the cases of both assessees for their respective assessment years and restore the matters to the file of the CIT(A) for fresh adjudication. The CIT(A) is directed to provide a reasonable opportunity to the assessees to present their cases and to decide the issues on merit, after

In the combined result, the appeals of the assessee (in the case of Hema Viral Joshi) in ITA Nos.609, 610 & 611/Ahd/2023 for AYs 2010-11, 2011-12 & 2012-13 respectively and the appeal of the assessee (in the case of Viral Vinodchandra Joshi) in ITA No.612/Ahd/2023 for AY 2011-12 all are treated as allowed for statistical purposes. Order pronounced in the Open Court on 8th October, 2024 at Ahmedabad. (SUCHITRA KAMBLE) ACCOUNTANT MEMBER अहमदाबाद/Ahmedabad, िदनांक/Dated 08/10/2024 टी.सी.नायर, व.िन.स./T.C. NAIR, Sr. PS आदेश की "ितिलिप अ#ेिषत/Copy of the Order forwarded to : अपीलाथ$ / The Appellant

( ) / The CIT(A)/(NFAC), Delhi िवभागीय "ितिनिध आयकर अपीलीय अिधकरण राजोकट/DR,ITAT, Ahmedabad, 5. , , गाड" फाईल /

Guard file.