SHRI RAJESHKUMAR POPATBHAI GABANI,,SURAT vs. THE ITO, WARD-3(2)(3) , SURAT

Assessee by Shri Bipin Jariwala, AR Revenue by Shri Sita Ram Meena – Sr.DR Date of hearing 25.02.2022 Date of pronouncement 01.03.2022 Order under section 254(1) of Income Tax Act PER PAWAN SINGH, JUDICIAL MEMBER: 1. This appeal by assessee is directed against the orders of ld. Commissioner of Income tax (Appeals)1, Surat dated 05.06.2018 for the assessment year (AY) 2008-09, which in turn the assessment order under section 143(3) r.w.s. 147 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) dated 11.03.2016. The assessee raised the following grounds of appeal:

1. That the CIT(A) erred in passing ex parte order without giving an opportunity of being heard.

2. That CIT(A) erred in not considering on merits, the case of assessee who has opted from the presumptive income u/s 44AD which is considered in passing assessment order u/s 143(3) r.w.s. 147 of the Act.

(A.Y 08-09) Shri Rajeshkumar P Gabani 3. That the CIT(A) erred in not considering the reopening of the case as bad in law. 4.The appellant craves leave to add, amend, alter, delete/change or modify any or all the grounds of appeal at the time of hearing.”

2. Brief facts of the case are that assessee is individual, filed his return of income for the year under consideration that is assessment year (AY) 2008-09 declaring income of Rs.2,08,000/- on 25.10.2008. Subsequently, case of assessee was re-opened under section 147. Notice under section 148 was served upon the assessee on 20.03.2015. The case of assessee was re-opened on the basis of information that assessee made cash deposits of Rs.11 lakhs in his bank account with ICICI bank during financial year 2007-08.The said bank account was not disclosed in the balance-sheet of assessee for AY 2008-09.Thus, it could not be verified that the transaction in the said account was duly audited in the books of account of assessee. On such, belief the Assessing Officer has reasoned to believe that income of assessee to that extent have escaped assessment. The Assessing Officer noted that show cause notice dated 22.10.2016 was served upon assessee through speed post. In the show cause notice, the assessee was asked to explain as to why the cash deposit should not be added to the income of assessee. The assessee filed his reply dated (A.Y 08-09) Shri Rajeshkumar P Gabani 11.03.2016. In the reply the assessee stated that he made the transaction sale and purchase of shares during the year. The assessee made purchase of Rs.13,12,635 and sold at Rs.13,30,867/-, for which no books of accounts were maintained. The assessee earned profit of Rs.18,232/- but the assessee has shown profit @ 5% of turnover and accordingly offered profit of Rs.66,540/- in return of income filed in response to notice under section 148. These are the only transaction not disclosed in the books of account. The assessee opted this scheme under section 44AF accepting higher profit. The explanation furnished by assessee was not accepted by Assessing Officer. The Assessing Officer made addition of Rs.11 lakh to the total income of assessee by taking view that the assessee himself stated the share transaction were made during the year and no books of accounts were maintained.

3. Aggrieved by the addition, the assessee filed appeal before Ld. CIT(A). The Ld. CIT(A) passed ex parte order vide order dated 05.06.2018 by taking view that assessee was not interested in prosecuting Further, aggrieved, assessee has filed present appeal before this Tribunal.

4. We have heard the submissions of the learned authorised representative (AR) for the assessee and the learned Senior (A.Y 08-09) Shri Rajeshkumar P Gabani departmental representative (DR) for the revenue. The Ld. AR of the assessee submits that the accountant of the assessee was suffering from kidney disease and he was not in a position to attend the hearing fixed on 06.05.2018. The ld CIT(A) passed impugned order on the same day ex parte i.e. on 05.06.2018. The Ld. AR of the assessee submits that no fair and proper opportunity was given to assessee. The assessee has good case on merit and is likely to succeed if his case is considered on merit. The ld AR for the assessee that he undertake on behalf of the assessee to be more vigilant in future and the assessee will not make any default in making timely compliance of the notice issued from the office of ld CIT(A). The ld AR for the assessee submits that he has already file copy of medical prescription of Mahavir Hospital of accountant namely Prafull, who was appointed by the assessee to represent him before ld CIT(A).