D K MEHTA (HUF),UMBERGAON vs. THE INCOME TAX OFFICER, WARD 2, VAPI

Appellant represented by Shri Sakar Sharma, CA Respondent represented by Shri Vinod Kumar, Sr. DR Date of hearing 03/01/2023 Date of pronouncement 03/01/2023 Order under Section 254(1) of Income Tax Act PER: PAWAN SINGH, JUDICIAL MEMBER: 1. These two appeals by two different assessees are directed against the separate orders of National Faceless Appeal Centre, Delhi (in short, the NFAC)/learned Commissioner of Income Tax (Appeals) (in short, the ld. CIT(A) dated 29/06/2022 and 12/09/2022 for the Assessment years (AY) 2015-16 and 2016-17 respectively. In both these appeals, the assessee(s) has raised one common grounds of appeal which relates to passing ex- prty order by ld CIT(A)/NFAC, therefore, both these appeals were clubbed, & 310/Srt/2022 Kaushikbhai Jitendrabhai Patel Vs ITO & 1 Anr heard together and are being decided by this consolidated order. For appreciation of facts, the appeal in A.Y. 2016-17 is treated as a “lead case”. In this appeal, the assessee has raised following grounds of appeal: “1. The ld. CIT(A)-NFAC erred on facts and in law in deciding appeal ex parte without adjudicating the appeal on the grounds raised in For, No. 35 in terms of Section 250(6) of the Income Tax Act, 1961.

2. The ld. CIT(A)-NFAC erred on facts and in law in confirming addition of Rs. 28,00,000/- by treating the unsecured loans received during the year by invoking provisions of Section 68 from whom loans had also been obtained in earlier years genuineness of which has not been disputed and ignoring the statement of facts wherein appellant stated that all necessary evidences in support of receipt of loans had been furnished in the course of assessment proceedings.

3. The ld. CIT(A)-NFAC erred on facts and in law in confirming the addition of Rs. 21,70,000/- by treating cash deposits in Axis Bank accounts to be unexplained income of the appellant without appreciating the explanation of appellant that cash deposits were made out of the cash withdrawals made from the bank accounts held by the appellant as stated in statement of facts.”

2. At the outset of hearing, Ld. Authorized Representative (Ld.AR) for the assessee submits that Ld. CIT(A) passed the impugned ex parte order without giving fair and reasonable opportunities of hearing to the assessee. The Ld. CIT(A) in para-4 of impugned order has recorded that despite giving final opportunity no compliance was made on the part of assessee. The Ld. CIT(A) finally dismissed the appeal of assessee without adjudicating the various grounds of appeal as per mandate of Section 250(6) of the Act. The ld AR for the assessee submits that no notice was served on the assessee through email provided in Form-35 (Appeal form before ld CIT-A). The Ld. AR for the assessee further submits that even the Assessing Officer made addition under section 68 of Rs. 28.00 lakhs 2 & 310/Srt/2022 Kaushikbhai Jitendrabhai Patel Vs ITO & 1 Anr and unexplained investment of Rs. 21.70 lakhs by taking view that the assessee filed to provide complete details. Both the lower authorities have not given fair and reasonable opportunities of hearing to the assessee. The Ld. AR for the assessee further submits that matter may be restored back to the file of Ld. CIT(A) for adjudicating the issue afresh in accordance with law.

3. On the other hand, the ld. Sr. DR for the revenue supported the order of ld. CIT(A) and would submits that the assessing officer as well as ld CIT(A) granted sufficient opportunity to the assessee. The assessee failed to availed such opportunity and now taking plea that sufficient opportunity was not given to him. The assessee has no regards to the public authorities. In absence of written submission of any evidence the ld CIT(A) has no option except to decide the appeal on the basis of material available on record.

4. I have heard the submissions of learned Authorised Representative (ld. AR) of the assessee and the learned Senior Departmental Representative (ld. Sr. DR) for the revenue and have gone through the orders of lower authorities carefully. I find that the Assessing Officer while passing the assessment order under section 143(3) on 17.12.2018 made addition under section 68 of Rs. 28.00 lakhs and unexplained investment of Rs. 21.70 lakhs by taking view that the assessee filed to provide complete details. The ld CIT(A)/ NFAC dismissed the appeal of assessee by holding