ABDUL IBRAHIM PATEL,BHARUCH V. ITO WARD 1(4) BHARUCH (CURRENTLY, ITO WARD 1(1) BHARUCH), BHARUCH

ITA 630/SRT/2025

AI Insights

This case involves an appeal by Abdul Ibrahim Patel against the order of the Ld. Addl./Joint Commissioner of Income-tax(Appeals), Kochi, for the assessment year 2017-18. The primary grievances included an addition of Rs.6,83,000 under section 69A of the Income Tax Act, 1961, and a tax demand of Rs.7,91,418, along with penal interest under sections 234A and 234B totaling Rs.2,63,800. The assessee failed to comply with notices during both the assessment and appellate stages, leading to a best judgment assessment and non-compliance penalties. The Tribunal, emphasizing the principles of natural justice and fair play, decided to set aside the previous order and remand the case for a fresh hearing on merits, despite the procedural lapses by the assessee.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 778244 (ITAT-SURAT)
• Duration Of Justice: 4 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-10-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2017-2018
• Appeal Filed On: 30-05-2025
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: NAMITA PATEL
• Assessee Lawyers: KRUTARTH DESAI
• Keywords: Set aside; Reasonable cause; Principle of natural justice; Competent authority; Procedural lapse
• Section: 144; 234B

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL SURAT BENCH “SMC” SURAT BEFORE SHRI SANDEEP GOSAIN (JUDICIAL MEMBER) AND SHRI OM PRAKASH KANT (ACCOUNTANT MEMBER) ITA No. 630/SRT/2025 Assessment Year: 2017-2018 Abdul Ibrahim Patel, Kadri Travel, Near Water Tank, At and Post Zanor, Bharuch-392210. Vs. ITO Ward 1(4) Bharuch (currently, ITO Ward 1(1), Bharuch), Income Tax Office, Station Road, Bharuch-392001. PAN NO. AFSPP 6042 A Appellant Respondent Assessee by : Krutarth Desai, Advocate Revenue by : Ms. Namita Patel, Sr. DR Date of Hearing : 07/10/2025 Date of pronouncement : 08/10/2025 ORDER PER OM PRAKASH KANT, AM This appeal has been preferred by the assessee against order dated 18.03.2025 passed by the Ld. Addl./Joint Commissioner of Income-tax(Appeals), Kochi [hereinafter shall be referred as ‘the Ld. CIT(A)’] for assessment year 2017-18, raising following grounds: 1. In the facts and circumstances of the case, Id. AO has erred in fact and in law in making an addition of Rs.6,83,000/- u/s 69A of the Act and raised a tax demand of Rs.7,91,418/- which needs to be deleted entirely 2. In the facts and circumstances of the case, Id. AO has erred in fact and in law in levying penal interest u/s 234A Printed from counselvise.com ITA No. 630/SRT/2025 2 Abdul Ibrahim Patel and 234B of the Act totalling to Rs.2,63,800/- which deserves to be deleted in toto. 2. At the very outset, we note from the record that despite issuance of three separate notices as under by the Ld. CIT(A), the assessee failed to cause any appearance or compliance before the said authority : 2.1 The chronology of such notices, as duly recorded, manifests that adequate and reasonable opportunities were afforded to the assessee to present its case; yet, none was availed of. We further observe that the assessment itself was framed under section 144 of the Income-tax Act, 1961, i.e., under the best judgment procedure, owing to similar non-compliance during the assessment stage. Even before us, when queried, the Ld. Counsel for the assessee could not adduce any cogent explanation or reasonable cause for the persistent default in responding to the statutory notices either before the Assessing Officer or before the first appellate authority. Ordinarily, such repeated defaults would Printed from counselvise.com ITA No. 630/SRT/2025 3 Abdul Ibrahim Patel justify the imposition of penalty under the provisions of section 271(1)(b) or other allied provisions for non-compliance of notices. However, that issue not being before us, we refrain from expressing any conclusive opinion thereon. 2.2 Having regard, however, to the larger cause of substantive justice, we are of the considered view that an assessee should not be denied adjudication on merits merely for technical or procedural lapses, particularly when the matter has not been examined by the Ld. CIT(A) at all on factual or legal aspects. The principles of natural justice and fair play require that every litigant be given a meaningful opportunity to present its case before the competent authority. 2.3 In the totality of facts and circumstances, and in the interest of justice, we therefore deem it appropriate to set aside the impugned appellate order and restore the matter to the file of the Ld. CIT(A) with a direction to decide the appeal afresh on merits, in accordance with law, after affording due opportunity of hearing to the assessee. 2.4 However, considering the unexplained lapse on the part of the assessee in earlier proceedings, we direct that this restoration shall be subject to payment of a cost of ₹5,000/-, which shall be deposited by the assessee to the Prime Minister’s Relief Fund within one month from the date of receipt of this order. The Ld. CIT(A) shall ensure that proof of such payment is produced before commencement of the fresh appellate proceedings. Printed from counselvise.com ITA No. 630/SRT/2025 4 Abdul Ibrahim Patel 2.5 With these observations and directions, the grounds raised by the assessee are treated as allowed for statistical purposes. 3. In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open Court on 08/10/2025. Sd/- Sd/- (SANDEEP GOSAIN) (OM PRAKASH KANT) JUDICIAL MEMBER ACCOUNTANT MEMBER Surat; Dated: 08/10/2025 Rahul Sharma, Sr. P.S. (on Tour) Copy of the Order forwarded to : 1. The Appellant 2. The Respondent. 3. CIT 4. DR, ITAT, Surat 5. Guard file. BY ORDER, //True Copy// (Assistant Registrar) ITAT, Surat Printed from counselvise.com "