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Income Tax Appellate Tribunal, INDORE BENCH, INDORE
Before: SHRI VIJAY PAL RAO & SHRI B.M. BIYANI
This appeal by the Assessee is directed against the order dated 16.03.2023 of Commissioner of Income Tax(Appeal), national Faceless Appeal Centre, Delhi for Assessment Year 2012-13. The assessee has raised following grounds of appeal:
“1. That the Ld. AO was not justified in passing the assessment order, which is bad-in-law, void ab initio, barred by limitation, illegal, contrary to the facts and circumstances of the case, liable to be annulled.
ITANo.159/Ind/2023 Sunita Gupta 2. That the Ld. CIT(A) was not justified in confirming the assessment order, which is bad-in-law, void ab initio, barred by limitation, illegal, contrary to the facts and circumstances of the case, liable to be annulled.
The Ld. CIT(A) was not justified in providing sufficient opportunity to the appellant to furnish documents or reply in support of the claim and confirming the addition; and Ld. CIT(A) did not decide the appeal on merits.
4. The Ld. CIT(A) was not justified in confirming the addition of Rs. 52,77,199/-in respect of addition u / s 68..”
At the time of hearing ld.AR of the assessee has stated that the assessment order was passed ex-parte u/s 147 r.w section 144 of the Act and the AO has made an addition of Rs.52,77,199/- u/s 68 of the Act which was declared by the assessee as long term capital gain on sale of shares of Blueprint Securities Ltd. and Konark Commerce & Industries Ltd. Ld.AR has submitted that the AO has treated the transactions of purchase and sale of shares of these two script as bogus accommodation entries without any material in support of the said decision. He has further submitted that the AO has made addition as the assessee did not appear in the assessment proceedings as well as not filed supporting evidences of capital gain. He has further submitted that even the CIT(A) has passed impugned order ex-parte and confirmed the addition made by the AO for want of any submission and supporting evidences filed by the assesse. Thus, Ld.AR has submitted that due to the change of address the assesse could not receive notices issued by the AO as well as CIT(A) and therefore, there was no appearance in the proceedings before the AO as well as CIT(A). Thus, he has pleaded that in the facts and circumstances and in the interest of ITANo.159/Ind/2023 Sunita Gupta justice the assesse may be granted one more opportunity to present her case and produced the supporting evidence before the AO for verification and examination. 3. On the other hand, Ld. DR has not seriously objected to the prayer of the assessee for remanding the matter to the record of the AO for fresh adjudication after verification of supporting evidences to be filed by the assesse.
We have considered the rival submissions and careful perused impugned orders of the authorities below. The AO has issued notice u/s 148 because the assesse has not filed any return of income u/s 139 of the Act. In para 4 of the assessment order the AO has recorded the details of the shares sold by the assessee as under: “4. In this case information was available with this office that the assessee had earned income from LTCG from Blueprint Securities Ltd & Konark Commerce & Industries Ltd. The assessee has sold 15600 shares of Blueprint Securities Ltd in 12 counts and sold 5000 shares of Konark Commerce & Industries Ltd in 02 counts and has gained capital gain of Rs 47,89,200/-and Rs. 4,87,999.99 respectively and no taxes have been paid. The detail of sale is as follow: Trade date Qty. Rate(Rs.) Trade Stock traded value(Rs.) 26.04.2011 1414 307 434098 Blueprint 26.04.2011 307 Blueprint 1586 486902 26.04.2011 1348 307 413836 Blueprint 26.04.2011 1652 307 507164 Blueprint 26.04.2011 307 Blueprint 1260 386820 26.04.2011 307 Blueprint 1740 534180 26.04.2011 1244 307 381908 Blueprint 26.04.2011 1756 307 539092 Blueprint 26.04.2011 307 Blueprint 1244 381908
ITANo.159/Ind/2023 Sunita Gupta 26.04.2011 307 Blueprint 1756 539092 26.04.2011 400 307 122800 Blueprint 26.04.2011 200 307 61400 Blueprint 26.04.2011 2500 97.6 244000 Konark 26.04.2011 2500 97.6 244000 Konark Total 52,77,199.99
The AO preceded to frame assessment u/s 144 as the assesse did not response to the notices issued by the AO. The AO has treated these transactions of sale of shares as bogus accommodation entries of long term capital and thereby made the addition of the entire amount of Rs.52,77,199/- u/s 68 of the Act the AO has given reasoning that the instances have been discovered regarding the accommodation entries of long term capital gain provided by the promoter of penny stock companies and on the basis of the said prevailing practice. The AO has also treated these transactions carried out by the assesse as accommodation entries of long term capital gain. Prima facie, it appears that these are not transactions in the penny stock as the sale price of the shares of Blueprint Securities Ltd. is Rs.307 and in case of Konark Commerce & Industries Ltd. is Rs.97.60 paisa. In fact the AO unilaterally concluded that these transactions are accommodation entries without having benefit of the explanation and stand of the assesse as well as supporting evidences. On appeal the CIT(A) has decided the appeal ex-parte by giving the reasons in para 5 to 5.4 as under:
ITANo.159/Ind/2023 Sunita Gupta “5.NON-ATTENDANCE:- In this case, it is seen that the appeal was filed on 31.01.2018 and the first notice of hearing u/s 250 of the Act, was issued on 22.12.2020, fixing the date of hearing on or before 20.01.2021, but on the appointed date, no submission was furnished. Also, several opportunities of hearing were given to the appellant as narrated below:- Sr. No. Date of notice issued Date of hearing Particulars 1 27.01.2021 17.02.2021 No submission furnished 2 16.03.2021 26.03.2021 No submission furnished No submission 3 01.10.2021 12.10.2021 furnished 4 23.12.2021 05.01.2022 No submission furnished 5 05.08.2022 25.08.2022 No submission furnished 6 01.09.2022 16.09.2022 No submission furnished 7 18.10.2022 01.11.2022 No submission furnished 8 23.12.2022 06.01.2023 No submission furnished 9 08.03.2023 14.03.2023 No submission furnished
As can be seen from the above table the appellant was given ample opportunities by way of notices issued as narrated above. However, the appellant/AR has refrained from attending the appellate proceedings and has not furnished any submission. 5.1. There is a well known dictum of law "VIGILANTIBUS, NO DORMENTIBUS, JURA SUBVENIUNT" which means law will help only those who are vigilant Law will not assist those who are careless of his/her right. In order to claim one's right, s/he must be watchful of his/her right. Only those persons, who are ITANo.159/Ind/2023 Sunita Gupta watchful and careful of using his/her rights, are entitled to the benefits of law Law confers rights on persons who are vigilant of their rights 5.2. Hon'ble Madhya Pradesh High Court in the case of Estate of Late TukojiraoHolkar vs. CWT (223 ITR 480) has held as under: "if the party, at whose instance the reference is made, fails to appear at the hearing, or fails in taking steps for preparation of the paper books so as to enable hearing of the reference, the court is not bound to answer the reference." 5.3. Similarly, Hon'ble Punjab & Haryana High Court in the case of New Diwan Oil Mills vs. CIT (2008) 296 ITR 495) returned the reference unanswered, since the appellant remained absent and there was no assistance from the appellant Hon'ble Supreme Court in the case of CIT vs. B. Bhattachargee & Another (118 ITR 461 at page 477-478) held that the appeal does not mean, mere filing of the memo of appeal but effectively pursuing the same. 5.4. In the given circumstances the appeal is decided on merit on the basis of documents that have been submitted by the appellant as part of the appeal memo. i.e. grounds of appeal, statement of facts, assessment order etc.”
6. Thus the order of the AO has been confirmed by the CIT(A) due to non-submissions of any explanation or supporting evidence by the assesse. The CIT(A) has not discussed anything on merits but after reproducing order of the AO has given the finding in para 6.4 as under: “6.4 in view of the above the action of the AO for making this addition is upheld and grounds of assessee are dismissed.”
7. Therefore, the CIT(A) has dismissed the appeal of the assessee due to non-participation of the assessee despite various notices. The Ld.AR of the assessee has explained that due to change of the address of the assesse notices issued by the authorities below did Page 6 of 8
ITANo.159/Ind/2023 Sunita Gupta not come to the knowledge of the assessee and therefore, there was no response to those notices. Accordingly in the facts and circumstances of the case when the CIT(A) has not discussed the issue on merits but simply confirmed the order of the AO as well as reasons explained by the assesse for non-participation in the proceedings before the AO as well as CIT(A) and in the interest of justice we set aside the impugned order of the CIT(A) and matter is remanded to the record of the AO for fresh adjudication after giving an opportunity to the assessee to produce the details, supporting evidences as well as explanation..
In the result, appeal of the assessee is allowed for statistical purposes.
Order pronounced in the open court on 21.12.2023.