Rajkumar Anandchand Jain Vs DCIT (ITAT Mumbai)
In a significant ruling that underscores the importance of adherence to procedural fairness in tax appeals, the Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) has delivered a noteworthy judgment in the case of Rajkumar Anandchand Jain Vs Deputy Commissioner of Income Tax (DCIT). The crux of the matter revolves around the Commissioner of Income Tax Appeals (CIT(A)) upholding the Assessing Officer’s (AO) decision without duly considering the merits of the case, which has been identified as a violation of Section 250(6) of the Income Tax Act, 1961. This case highlights the procedural safeguards designed to ensure fair adjudication in tax disputes.
The appellant, Mr. Rajkumar Anandchand Jain, contested the appellate order passed by the National Faceless Appeal Centre, Delhi, for the assessment year 2018-19. The CIT(A) had dismissed the appeal against the assessment order under sections 143(3) read with 144B, where an addition of Rs. 14,098,500 was made to the appellant’s income under section 56(2)(x)(b) of the Act. The primary contention was the failure to consider the merits of the case, constituting non-compliance with Section 250(6) of the Act.
The facts of the case reveal that the dispute centered around the purchase of immovable property, where the purchase value was significantly less than the stamp duty value determined by the authority. The AO had added the difference amount to the appellant’s income as per the provisions of section 56(2)(x)(b), which the CIT(A) upheld without considering the appellant’s arguments regarding the date of acquisition and the stamp duty value applicable.
Upon appeal, the ITAT scrutinized the procedural aspects and the merits of the appellant’s arguments. The Tribunal observed that the CIT(A) had failed to address the specific grounds of appeal raised by the appellant, particularly concerning the addition under section 56(2)(x)(b) and the determination of the property’s acquisition date. This oversight was deemed a lapse in following the mandate of Section 250(6), which necessitates a detailed order addressing the appellant’s grounds.
The Mumbai ITAT’s decision to remand the case back to the CIT(A) for a comprehensive review on merits emphasizes the critical role of procedural fairness and the need for adjudicatory bodies to thoroughly consider the contentions of the appellants. This ruling serves as a reminder of the judiciary’s role in ensuring that tax disputes are adjudicated not only on the basis of strict legal principles but also with due regard to the principles of natural justice. The Tribunal’s directive for the CIT(A) to provide a reasoned order in line with Section 250(6) reinforces the importance of detailed and merit-based adjudication in the tax appeal process. By allowing the appeal for statistical purposes, the ITAT has highlighted the necessity of adherence to procedural laws to safeguard taxpayers’ rights and ensure equitable justice in the realm of tax litigation.
FULL TEXT OF THE ORDER OF ITAT MUMBAI
01. This appeal is filed by Mr. Rajkumar Anandchand Jain (the assessee/appellant) against the appellate order passed by National Faceless Appeal Centre, Delhi (the learned CIT – A) for assessment year 2018 – 19 on 10/8/2023 wherein the appeal filed by the assessee against the assessment order passed under section 143 (3) read with section 144B of The Income Tax Act, 1961 (The Act) dated 20/4/2021 by the National e-Assessment Centre, Delhi (the learned AO) was dismissed relying on the decision of the honourable Supreme Court in case of B N Bhattacharjee 118 ITR 461 upholding the action of the learned assessing officer in assessing the income of Rs. 19,923,680 where the assessee failed to substantiate against the addition made by the learned assessing officer of Rs. 14,098,500.
02. The assessee is aggrieved with that appellate order and has preferred appeal before us raising following grounds of appeal:-
The learned Commissioner of income tax appeal erred in making an addition of Rs 14,098,500 under section 56 (2) (x) (b) details of which are as under:-
