The Ahmedabad Bench of Income Tax Appellate Tribunal ( ITAT ) directed the Commissioner of Income Tax(Appeals)[CIT(A)] to conduct a fresh hearing after dismissing the appeal for non-prosecution and imposed a ₹5,000 cost to be paid to the “Prime Minister’s National Relief Fund” for the delay caused by non-attendance.
Sandip Kiritbhai Patel HUF,appellant-assessee,filed its income tax return for AY 2013-14, declaring Nil income. The case was reopened based on information that it had benefited from bogus LTCG and accommodation entries through VAS Infra Ltd and Naresh Jain. The Assessing Officer(AO) made additions under Section 68 as the entries remained unexplained.
Comprehensive Guide of Law and Procedure for Filing of Income Tax Appeals, Click Here
The assessee being aggrieved, appealed to the CIT(A), who rejected the appeal for non-prosecution and confirmed the AO’s decision.
Dissatisfied by the decision of the CIT(A) the assessee appealed before the tribunal.
The assessee raised several grounds, claiming that the CIT(A) wrongly dismissed the appeal for non-prosecution instead of deciding it on merits. It was argued that the notices under Sections 148 and 148A were time-barred and the reasons for reopening were vague and unconnected to the appellant or Naresh Jain. The assessee, engaged in stock trading, reported all transactions in the profit and loss account, conducted through SEBI-registered brokers and banking channels.
Comprehensive Guide of Law and Procedure for Filing of Income Tax Appeals, Click Here
It was also stated that VAS Infra Ltd was one of many regularly traded scripts, with all transactions properly recorded. The assessee denied any link to Naresh Jain or receipt of ₹47,12,842 as accommodation entries. The return for AY 2013-14, filed on 30.09.2013, declared Nil income and was assessed under Section 143(3) with no additions. The case was reopened based on alleged bogus LTCG through VAS Infra Ltd and Naresh Jain.
The two member bench comprising Dr.BRR Kumar(Vice-President) and Siddhartha Nautiyal(Judicial Member) noted that the assessee failed to appear before the CIT(A) multiple times, leading to an ex-parte order. While acknowledging the assessee’s right to appeal, the tribunal stressed the need to follow the authorities’ notices. It found the assessee’s non-compliance was delaying the justice process.
As a result, the tribunal directed the assessee to pay Rs.5,000 to the “Prime Minister’s National Relief Fund” and seek a fresh hearing from the CIT(A), who was instructed to give the assessee a chance to be heard before concluding the case.
In short,the appeal filed by the assessee was allowed for statistical purposes.
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