BHANSALI & SONS- HUF,AHMEDABAD V. THE ITO, WARD-1(2)(1), AHMEDABAD

ITA 2073/AHD/2025

AI Insights

The case involves Bhansali & Sons - HUF, who appealed against the order of the National Faceless Appeal Centre (NFAC), Delhi, for the Assessment Year 2012-13. The appeal was against the proceedings under sections 144 and 147 of the Income Tax Act, which were initiated based on information that the assessee had traded in shares of a penny stock company and obtained bogus long-term capital benefits. The AO treated the transactions as non-genuine and added the proceeds and purchase consideration to the income. The Tribunal found procedural lapses in the handling of the assessee's case, particularly the lack of proper notice and opportunity to be heard, leading to the decision to set aside the matter for re-assessment.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 839037 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-02-2026
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2012-2013
• Appeal Filed On: 03-11-2025
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SURESH CHAND MEENA
• Assessee Lawyers: S UDHIR M EHTA
• Keywords: Set aside; Opportunity of being heard; Additional evidence; Unexplained investment; Principle of natural justice; Bogus
• Section: 147; 144; 142(1)

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH, AHMEDABAD BEFORE SHRI TR SENTHIL KUMAR, JUDICIAL MEMBER AND SHRI NARENDRA PRASAD SINHA, ACCOUNTANT MEMBER ITA No. 2073/AHD/2025 Assessment Years: 2012-13 Bhansali & Sons - HUF, 707/1 Sakar Bazar, Kalupur, Ahmedabad Gujarat - 380002 [PAN – AACHB4228B] Vs. Income Tax Officer, Ward -1(2)(1), Ahmedabad (Appellant) (Respondent) Assessee by Shri Sudhir Mehta, Advocate Revenue by Shri Suresh Chand Meena, SR-DR Date of Hearing 18.02.2026 Date of Pronouncement 20.02.2026 O R D E R PER NARENDRA PRASAD SINHA, ACCOUNTANT MEMBER: This appeal is filed by the assessee against the order of National Faceless Appeal Centre(NFAC), Delhi [hereinafter referred to as ‘CIT(A)’], dated 07.05.2024 for the Assessment Year (A.Y.) 2012-13 in the proceeding u/s 144 r.w.s 147 of the Income Tax Act. 2. There was a delay of 460 days in filing of this appeal. The assessee has filed a condonation application explaining the reason of delay. It has been submitted that the assessee was not aware about the order of the Ld. CIT(A), as a result the appeal could not be filed in time. It was explained that there was no communication of the order either by the e- Printed from counselvise.com ITA No. 2073/Ahd/2025 Bhansali & Sons - HUF Vs. ITO, AY-2012-13 2 mail or by physical service. From the order of the Ld. CIT(A), it is noted that there is no reference of any opportunity provided by him. It transpires that the Ld. CIT(A) had decided the appeal by considering the submission of the assessee uploaded on the portal on 05.11.2022. Since no opportunity of being heard was prima facie allowed by the Ld. CIT(A), the explanation of the assessee regarding delay in filing of the appeal is found acceptable. Therefore, the delay in filing of the appeal is condoned. 3. The brief facts of the case are that the assessee had filed its return of income for A.Y. 2012-13 declaring income of Rs. 3,72,740/-. The case of the assessee was reopened u/s. 147 of the Act on the basis of information that it had traded in shares of penny stock company M/s VMS Industries Ltd. and obtained bogus long-term capital benefit. In the course of assessment, no compliance was made before the AO. Therefore, the AO has treated the entire proceed of Rs.1,47,380/- on account of sale of shares of VMS Industries Ltd. as non-genuine and sham transaction and added to the income. Further, the purchase consideration of Rs.13,09,732/- in respect of these shares was also treated as unexplained investment and added to income. The assessment was completed u/s. 144 r.w.s 147 of the Act on 31.10.2019 at total income of Rs.18,49,550/-. 4. Aggrieved with the order of the AO, the assessee had filed an appeal before the First Appellate Authority which was decided by Ld. CIT(A) vide the impugned order and the appeal of the assessee was dismissed. Printed from counselvise.com ITA No. 2073/Ahd/2025 Bhansali & Sons - HUF Vs. ITO, AY-2012-13 3 5. Now the assessee is in second appeal before us. The following grounds have been taken in this appeal. 1. That the Learned CIT[A] as well as Income Tax Officer without giving any opportunity passed the order u/s 147 r.ws 144 of the Income Tax Act, 1961 which is against the principle of natural justice. 2. The Learned CIT(A) has erred in law and facts to confirm the order of the Learned Assessing Officer by passing the order u/s 147 r.w.s 144 of Income Tax Act, 1961 as no notice has been received by the appellant either through e-mail or physical delivery. 3. The Learned CIT(A) has erred in law and facts while disallowing a sum of Rs. 1,43,780/- being the amount received by the appellant on sell of shares of M/s VMS Industries Ltd. giving the reasons failed to explain the source of investment and treated the transaction as non-genuine and sham transaction. 4. The Learned CIT(A) has erred in law and facts while disallowing a sum of Rs. 13,09,732/- giving the reason unexplained purchase/investment and added in the declared income of the appellant. 5. The addition made to the returned income is bad in law as well as on the basis of facts of the case as certain assumptions were made by the authorities below without appreciating the actual facts of the appellant’s case. 6. The appellant craves to add, amend or alter any ground before the disposal of appeal to meet the ends of justice. 7. Even otherwise, the impugned orders are illegal, bad in law. 6. Shri Sudhir Mehta, the Ld. AR of the assessee submitted that the AO had issued a notice u/s. 142(1) of the Act on 01.10.2019 calling for general information as well as the details of investment in shares and securities, which could not be complied by the assessee. Thereafter, the AO had issued a show cause notice on 23.10.2019 with hearing date on 30.10.2019. However, the said notice was received by the assessee only on 04.11.2019 and in response thereto the assessee had filed a reply before the AO vide letter dated 05.11.2019. But the said reply was not Printed from counselvise.com ITA No. 2073/Ahd/2025 Bhansali & Sons - HUF Vs. ITO, AY-2012-13 4 considered by the AO on the ground that the assessment order was already passed on 31.10.2019. The Ld. AR submitted that the assessee had furnished all the relevant details as called for by the AO before the Ld. CIT(A) as well, who had, however, refused to admit the additional evidences and dismissed the appeal of the assessee. The Ld. AR submitted that considering the fact that proper opportunity of hearing was not allowed by the AO and the order was passed even before the show cause notice was received by the assessee, the matter may be set aside to the file of the AO with a direction to allow another opportunity to the assessee to explain the investment in shares. 7. Per contra, Shri. Suresh Chand Meena, the Ld. SR-DR had no objection if the matter was set aside to the AO for allowing another opportunity to the assessee. 8. We have considered the submissions of the assessee. A copy of the show cause notice dated 23.10.20019 has been brought on record in the paper-book. From the tracking evidences to the show cause notice brought on record, it is found that this notice was delivered to the assessee only on 04.11.2019, whereas the date of compliance as per the notice was 30.10.2019. Further, the AO had already passed the assessment order on 31st October, 2019 without waiting for the reply of the assessee. Thus, the assessee was not allowed any proper opportunity to respond to the show cause notice and furnish the details as requisitioned by the AO. Under the circumstances, the Ld. CIT(A) was not correct in rejecting the additional evidences filed before him. As the assessee was not allowed a proper opportunity of being heard, we deem it proper to set aside the matter to the file of Jurisdictional AO with a direction to allow another Printed from counselvise.com ITA No. 2073/Ahd/2025 Bhansali & Sons - HUF Vs. ITO, AY-2012-13 5 opportunity to the assessee to explain the share transactions. The assessee is also directed to make compliance before the AO in the course of set aside proceeding and produce the details and documents as required by the AO. 9. In the result, the appeal of the assessee is allowed for statistical purpose. Order pronounced in the Court on 20/02/2026 at Ahmedabad. Sd/- Sd/- (TR SENTHIL KUMAR) (NARENDRA PRASAD SINHA) Judicial Member Accountant Member Dated – 20th February, 2026 Neelesh True Copy आदेश आदेश आदेश आदेश क\u0002 क\u0002 क\u0002 क\u0002 \u0003ितिलिप \u0003ितिलिप \u0003ितिलिप \u0003ितिलिप अ ेिषत अ ेिषत अ ेिषत अ ेिषत/Copy of the Order forwarded to : 1. अपीलाथ\u0007 / The Appellant 2. \b यथ\u0007 / The Respondent. 3. संबंिधत आयकर आयु / Concerned CIT 4. आयकर आयु (अपील) / The CIT(A) 5. िवभागीय \bितिनिध, आयकर अपीलीय अिधकरण / DR, ITAT, 6. गाड\u0014 फाईल /Guard file. आदेशानुसार आदेशानुसार आदेशानुसार आदेशानुसार/BY ORDER, उप उप उप उप/सहायक सहायक सहायक सहायक पंजीकार पंजीकार पंजीकार पंजीकार (Dy./Asstt.Registrar) आयकर आयकर आयकर आयकर अपीलीय अपीलीय अपीलीय अपीलीय अिधकरण अिधकरण अिधकरण अिधकरण, अहमदाबाद अहमदाबाद अहमदाबाद अहमदाबाद / ITAT, Ahmedabad Printed from counselvise.com "