PARAG ABHAYBHAI SHAH,AHMEDABAD vs. THE ITO, WARD-7(2)(4), AHMEDABAD

The grounds raised by the assessee in his appeal read as under:-

The assessee filed return of income for Assessment Year 2011-12 showing Rs.1,53,720/- as total income which is majorly from salary income. The Assessing Officer observed that the assessee had made financial transactions during FY 2010-11 and the assessee had entered into transactions of shares exceeding Rs.10,00,000/-, which further reflected that the said transactions were that of Rs.18,74,05,170/- till 31.03.2012 during FY 2010-11. The case of the assessee was reopened u/s 147 of the Act after prior approval of Pr. CIT-7, Ahmedabad. Thereafter, a notice u/s 148 of the Act was issued on 28.03.2018 through RPAD. Several opportunities were granted, but the assessee has not submitted any reply or responded to any notices. Therefore, the Assessing Officer passed assessment order u/s 144 r.w.s. 147 of the Act on 19.12.2018, thereby making addition of Rs.9,37,025/- towards unexplained money u/s 69A of the Act as profit from share transactions.

Being aggrieved by the assessment order, the assessee filed appeal before the CIT(A). The CIT(A) dismissed the appeal of the assessee.

The Ld. AR submitted that the Assessing Officer as well as CIT(A) has not given ample opportunity to the assessee, and without verifying the service of notice, made the addition. The ld. AR further submitted that the notice u/s 148 of the Act is invalid as the same was issued without any reason and without any proper service of notice. On merit, the ld. AR submitted that the addition of Rs.9,37,025/- made u/s 69A of the Act by estimating ½% of turnover of share transactions of Rs.18,74,05,170/- is not justifiable. The ld. AR further submitted that the assessee had also made an application for admission of new evidence under Rule 46A of the Income-tax Rules, 1962 before the CIT(A) which was not accepted.

The ld. DR relied upon the assessment order and the order of the CIT(A).

Heard both the parties and perused all the relevant material available on record. It is pertinent to note that the assessee claimed that the notices were not received by the assessee and the service of the notice u/s 148 of the Act was not Parag Abhybhai Shah Vs. ITO Assessment Years: 2011-12 Page 3 of 4 properly done. From the perusal of the records, it appears that the assessee has not informed the change in his address to the Assessing Officer and, therefore, the plea taken by the assessee that the notice u/s 148 and other statutory notices are invalid appears to be incorrect, and therefore, Ground Nos. 2 & 3 of the appeal are dismissed.

As regards the addition on merit, the assessee has not appeared before the CIT(A); therefore, in the interest of natural justice, it will be appropriate to remand back the matter to the file of the CIT(A) for proper adjudication of the issue on merit after taking cognizance of the evidence filed under Rule 46 of the Income-tax Rules, 1962 by the assessee. The CIT(A) is directed to take appropriate decision as per the due process of law. Needless to say, the assessee be given opportunity of hearing by following principles of natural justice. The assessee is also directed to fully cooperate with the proceedings before the CIT(A) and, if the assessee is non-cooperative, the CIT(A) is at liberty to take appropriate action and decide the case as per law.

In result, appeal of the assessee is partly allowed for statistical purposes.