BHARAT CHIMANLAL BAROT,AHMEDABAD V. THE ITO, WARD-1(2)(1), AHMEDABAD

ITA 1719/AHD/2025

AI Insights

The case involves Bharat Chimanlal Barot, who appealed against the order of the CIT(A) confirming the additions made by the Assessing Officer under section 144 of the Income-tax Act, 1961, for the Assessment Year 2016. The Assessing Officer had made these additions based on information from brokers and stock exchanges, as the assessee failed to comply with notices and provide necessary explanations. The CIT(A) dismissed the appeal for non-prosecution due to the assessee's continuous non-compliance. The Tribunal, considering the genuine hardships faced by the assessee and the need for substantial justice, decided to restore the matter to the Assessing Officer with directions to allow the assessee to present his case afresh, subject to the payment of costs.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 790407 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-11-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: misc
• Appeal Filed On: 09-09-2025
• Other Referred Cases: Collector, Land Acquisition v. Katiji, Estate of Late Tukojirao Holkar v. CWT, CIT v. B. Bhattacharjee, New Diwan Oil Mills v. CIT
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Matter Remanded
• Court: TRIBUNAL
• Department Lawyers: NITIN VISHNU KULKARNI
• Assessee Lawyers: TEJ SHAH
• Keywords: Condonation of delay; Set aside; Reasonable cause; Income from undisclosed sources; Transactions in derivatives
• Section: 144; 142(1)

Judgement Text

"THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD “C” BENCH Before Shri Sanjay Garg, Judicial Member And Shri Makarand V. Mahadeokar, Accountant Member Bharat Chimanlal Barot, A-1, Vaibhav Appartment, Opp. Meghdoot Petrol Pump, Shahibaug, Ahmedabad PAN: AEMPB4077L (Appellant) Vs The ITO, Ward-1(2)(1) Ahmedabad (Respondent) Assessee by: Shri Tej Shah, A.R. Revenue by: Shri Nitin Vishnu Kulkarni, Sr. D.R. Date of hearing : 10-11-2025 Date of pronouncement : 25-11-2025 आदेश/ORDER Per Makarand V. Mahadeokar, Accountant Member: This appeal by the assessee is directed against the order of the learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, New Delhi [hereinafter referred to as “CIT(A)”], dated 18.06.2025, arising from the ex-parte assessment order passed by the Assessing Officer under section 144 of the Income-tax Act, 1961 [hereinafter referred to as “the Act”] dated 17.12.2018 for the Assessment Year 2016–17. Condonation of Delay ITA No. 1719/Ahd/2025 Assessment Year 2016-17 Printed from counselvise.com I.T.A No. 1719/Ahd/2025 Bharat Chimanlal Barot, A.Y. 2016-17 2 2. The Registry has noted a delay of 9 days in filing the present appeal. In this regard, the assessee has filed two duly notarised affidavits explaining the reasons for the delay. 3. In the first affidavit dated 5th September 2025, the assessee affirmed that the order of the CIT(A) was to be handed over to the Chartered Accountant; however, due to family and health problems, the assessee could not forward the papers to his Authorised Representative/Chartered Accountant in time, resulting in a delay. He affirmed that the delay was unintentional and caused due to bona fide circumstances. In the second affidavit dated 8th November 2025, the assessee further explained that during the assessment proceedings, his accountant, Mr. Mohan Koshti, failed to file the necessary documents before the Assessing Officer, resulting in an ex-parte assessment. Subsequently, the said accountant left service abruptly, and the assessee had to engage another Chartered Accountant. Being a senior citizen and not conversant with technical tax matters, he also faced difficulty in obtaining trading details from his stockbroker. Consequently, by the time the records were compiled, the CIT(A) had already passed the ex-parte appellate order. The delay in forwarding papers to the consultant was, therefore, unintentional and due to genuine difficulties. 4. The learned Departmental Representative did not raise any objection to the assessee’s prayer for condonation of delay and restoration of the matter to the file of the Assessing Officer. However, he emphasised the persistent non-compliant conduct of the assessee before both the Assessing Officer and the CIT(A). Printed from counselvise.com I.T.A No. 1719/Ahd/2025 Bharat Chimanlal Barot, A.Y. 2016-17 3 5. We have carefully considered the submissions and examined the affidavits. The delay is minimal, and the reasons furnished constitute a reasonable cause within the meaning of section 253(5) of the Act. Considering various judicial precedents, we are of the opinion that when substantial justice and technical considerations are pitted against each other, the former deserves precedence. Accordingly, the delay of 9 days in filing the appeal is condoned, and the appeal is admitted for adjudication. Facts of the Case 6. The assessee filed return of income on 21.08.2016 declaring total income of Rs. 3,20,000/-. The case was selected for limited scrutiny for verification of large value share/derivative transactions. 6.1 Notices under sections 143(2) and 142(1) were issued, but no compliance was made by the assessee. Despite repeated opportunities and even penalty notices under section 271(1)(b), the assessee failed to appear or submit details. The Assessing Officer, therefore, proceeded ex-parte and completed the assessment under section 144 of the Act. 6.2 On the basis of information received from brokers, namely Manshvi Securities Ltd. and Angel Broking Ltd., and from stock exchanges, the Assessing Officer noted that the assessee had traded in both cash and derivative segments. As no reconciliation or explanation was filed, the Assessing Officer treated Rs. 15,56,783/- as undisclosed income from share trading. Further, the Assessing Officer observed that the source of payment of Rs. 53,47,307/- towards F&O losses and share Printed from counselvise.com I.T.A No. 1719/Ahd/2025 Bharat Chimanlal Barot, A.Y. 2016-17 4 investments was unexplained. The said amount was accordingly treated as income from undisclosed sources. 6.3 The Assessing Officer also noted non-maintenance of books of account and non-audit in contravention of sections 44AA and 44AB, and initiated penalties under sections 271A, 271B, and 271(1)(c). The total assessed income was computed at Rs. 72,24,090/- as against the returned income of Rs. 3,20,000/-. 6.4 The assessee preferred an appeal before the CIT(A). In appeal, the learned CIT(A), noted that the appeal was filed belatedly by 13 days, which was condoned following the liberal interpretation of “sufficient cause” laid down in Collector, Land Acquisition v. Katiji (supra). 6.5 However, despite repeated notices issued between 2020 and 2025, the assessee failed to make any effective compliance. The CIT(A) recorded that the assessee neither appeared personally nor filed written submissions or evidences. Observing the continuous non-cooperative conduct, the learned CIT(A) dismissed the appeal for non-prosecution, relying upon judicial precedents such as Estate of Late Tukojirao Holkar v. CWT (223 ITR 480, MP), CIT v. B. Bhattacharjee (118 ITR 461, SC), and New Diwan Oil Mills v. CIT (296 ITR 495, P&H). 6.6 The CIT(A) held that in the absence of any material or explanation from the assessee, there was no ground to interfere with the additions made by the Assessing Officer and accordingly confirmed both additions aggregating to Rs. 69,04,090/- and dismissed the appeal. Printed from counselvise.com I.T.A No. 1719/Ahd/2025 Bharat Chimanlal Barot, A.Y. 2016-17 5 7. Aggrieved by the order of CIT(A), the assessee is in appeal before us raising following grounds of appeal: 1. That the learned CIT(A) erred in law and on facts in confirming the addition of Rs. 15,56,783/- made by the Assessing Officer being share trading profit. 2. That the learned CIT(A) erred in law and on facts in confirming the addition of Rs. 53,47,407/- made by the Assessing Officer being the source of amount paid towards F&O loss and investment in shares. 8. The learned Authorised Representative reiterated the contents of the affidavits and submitted that the entire proceedings before both the lower authorities were ex-parte due to unavoidable and bona fide circumstances. He submitted that the assessee is a senior citizen, not conversant with tax procedures, and had genuine difficulty in retrieving and reconciling broker statements and transaction data. He prayed that the matter be restored to the file of the Assessing Officer to enable the assessee to furnish full details and evidence. 9. The learned Departmental Representative did not oppose the prayer for condonation or restoration but highlighted the persistent non-compliance by the assessee before both authorities. 10. We have considered the rival submissions and perused the orders of the authorities below. It is evident that both the assessment and the first appellate proceedings were completed ex-parte due to the assessee’s non-appearance. The additions were made purely on the basis of material gathered from brokers and stock exchanges, without any reconciliation from the assessee. It is equally clear that before the CIT(A), despite Printed from counselvise.com I.T.A No. 1719/Ahd/2025 Bharat Chimanlal Barot, A.Y. 2016-17 6 multiple notices over five years, the assessee did not file any submission or explanation. Nevertheless, the assessee has now come forward with affidavits explaining genuine hardships faced during the proceedings. In the interest of justice, a fair opportunity must be given to place the relevant material on record, as taxation proceedings should be based on real income and factual appreciation rather than technical defaults. 10.1 However, we also take cognisance of the repeated non- compliance and the lack of diligence on the part of the assessee. In order to balance equity and responsibility, we consider it appropriate to restore the matter to the file of the Assessing Officer subject to payment of cost. 10.2 Accordingly, the order of CIT(A) and the assessment is set aside, and the matter is restored to the file of the Assessing Officer with a direction to decide the issue afresh on merits, after affording due opportunity to the assessee to furnish necessary evidences and explanations. 10.3 As a measure of deterrence, the assessee is directed to pay a cost of Rs. 20,000/- (Rupees Twenty Thousand only) to the Prime Minister’s Relief Fund within 30 days from the date of receipt of this order and produce proof of payment before the Assessing Officer. 11. In the result, the appeal is allowed for statistical purposes. Order pronounced in the open court on 25-11-2025 Sd/- Sd/- (Sanjay Garg) (Makarnd V. Mahadeokar) Judicial Member Accountant Member Ahmedabad : Dated 25/11/2025 True Copy Printed from counselvise.com I.T.A No. 1719/Ahd/2025 Bharat Chimanlal Barot, A.Y. 2016-17 7 आदेश कȧ Ĥितिलǒप अĒेǒषत / Copy of Order Forwarded to:- 1. Assessee 2. Revenue 3. Concerned CIT 4. CIT (A) 5. DR, ITAT, Ahmedabad 6. Guard file. By order/आदेश से, उप/सहायक पंजीकार आयकर अपीलीय अिधकरण, अहमदाबाद Printed from counselvise.com "