DIPAK CHANDRAKANTBHAI UGHADPAGA,SURAT V. ITO, WARD 1(3)(6), SURAT

ITA 644/SRT/2025

AI Insights

This case involves an appeal by Dipak Chandrakantbhai Ughadpaga against the order of the Commissioner of Income-tax (Appeals)-4, Chennai, for the assessment year 2017-18. The primary contention was regarding the incorrect application of the tax rate under section 115BBE of the Income Tax Act, which the assessee argued was applied retrospectively at 77.25% instead of the old rate of 35.54%. Additionally, the assessee challenged the ex-parte order passed by the CIT(A) and the confirmation of the addition of Rs. 9,07,400 as unexplained income under section 69A. The ITAT noted the assessee's repeated non-compliance with statutory notices but decided to give one final opportunity for compliance, emphasizing the importance of adjudicating matters on merits over technicalities.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 780457 (ITAT-SURAT)
• Duration Of Justice: 4 month(s) 2 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: 05-06-2025
• Other Referred Cases: Collector, Land Acquisition v. Mst. Katiji [(1987) 167 ITR 471 (SC)]
• Laws Referred To: Income Tax Act
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: J.K. CHANDNANI
• Assessee Lawyers: RASESH SHAH
• Keywords: Set aside; Business income; Opportunity of being heard

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. 644/SRT/2025 Assessment Year: 2017-2018 Dipak Chandrakantbhai Ughadpaga, 23, Premji Nagar, Adajan Road, Opp. Shital Studio, Nr. Gujarat Gas Circle, Surat-395009. Vs. ITO Ward 1(3)(6), Room No. 303, 3rd floor, Income Tax Office, Anavil Business Centre, Adajan, Surat-395007. PAN NO. AAYPU 8592 K Appellant Respondent Assessee by : Mr. Rasesh Shah, CA Revenue by : Mr. J.K. Chandnani, Sr. DR Date of Hearing : 07/10/2025 Date of pronouncement : 08/10/2025 ORDER PER OM PRAKASH KANT, AM This appeal by the assessee is directed against order dated 27.02.2024 passed by the Ld. Addl./Joint Commissioner of Income-tax (Appeals)-4, Chennai [hereinafter shall be referred as ‘the Ld. CIT(A)’] for assessment year 2017-18, raising following grounds: 1. On the facts AMD circumstances of the case as well as law on the subject, the assessing officer has erred in taxing the income u/s 115BBE @ 77.25% in a retrospective manner by applying the duly substituted S.115BBE inserted Printed from counselvise.com ITA No. 644/SRT/2025 2 Dipak Chandrakantbhai Ughadpaga retrospectively instead of taxing it at 35.54% as per the old provisions of S.115BBE. 2. It is therefore prayed that the additions made by assessing officer may please be deleted. 3. Appellant craves leave to add, alter OR DLEETE any ground(s) either before OR in the course of hearing of the appeal. 4. On the facts AMD circumstances of the case as well as law on the subject, the ld. CIT(A) has erred in passing ex-parte order without giving reasonable AMD sufficient opportunity of being heard 5. On the facts AMD circumstances of the case as well as law on the subject, the Ld. CIT(A) has erred in dismissing the appeal without passing speaking order. 6. On the facts AMD circumstances of the case as well as law on the subject, the ld. CIT(A) has erred in confirming the action of the assessing officer by sustaining the addition of Rs. 9,07,400/-on account of credit card payments as unexplained income u/s. 69A of the act. 7. On the facts AMD circumstances of the case as well as law on the subject, the learned assessing officer has erred in taxing the addition by taking the rate @77.25% by attracting S. 115BBE instead of normal tax rate. The addition if any that maybe confirmed should be taxed as business income. 2. At the threshold, we note that the Registry has pointed out a delay of 125 days in the filing of the present appeal. The Ld. Counsel for the assessee, at the outset, submitted that the delay was neither deliberate nor mala fide but occurred for bona fide and explainable reasons. He drew our attention to the affidavit filed by the assessee explaining the cause of delay, wherein it has been stated that though the appellate order passed by the Ld. CIT(A) was served through the designated e-mail, the assessee was not in the regular habit of checking the said e-mail account. It was only when the consultant, upon routine verification of the IT Portal, Printed from counselvise.com ITA No. 644/SRT/2025 3 Dipak Chandrakantbhai Ughadpaga noticed the disposal of the appeal that the assessee became aware of the order passed by the Ld. CIT(A). The assessee has further averred that the physical copy of the appellate order was never served upon him, and therefore, the appeal could not be filed in time. 3. We have carefully considered the rival submissions, perused the affidavit filed by the assessee, and examined the material placed on record explaining the cause of delay. The explanation offered, indicates a degree of negligence and casualness in pursuing appellate remedies. However, as held by the Hon’ble Supreme Court in Collector, Land Acquisition v. Mst. Katiji [(1987) 167 ITR 471 (SC)], the expression “sufficient cause” in section 5 of the Limitation Act, 1963, should receive a liberal and justice- oriented interpretation so as to advance the cause of substantial justice, and not to defeat it merely on technical considerations. 3.1 It is true that the conduct of the assessee does not inspire confidence, as repeated non-compliance is seen at various stages. Nevertheless, we are conscious of the settled proposition that technicalities should not come in the way of adjudicating matters on merits, particularly when the assessee asserts having a strong prima facie case. Before us, the Ld. Counsel also submitted that the assessee possesses adequate evidence to substantiate the genuineness of the payments made through the credit card, and therefore, the matter deserves consideration on merits. Printed from counselvise.com ITA No. 644/SRT/2025 4 Dipak Chandrakantbhai Ughadpaga 3.2 On the other hand, the Ld. Departmental Representative (DR) strongly opposed the condonation of delay, contending that the assessee has shown a repeated pattern of non-cooperation, not only before the Tribunal but also before the lower authorities. It was submitted that both the Assessing Officer and the Ld. CIT(A) had issued multiple notices which remained unattended, thereby consuming substantial departmental resources. Accordingly, the Ld. DR urged that the delay be not condoned, and if at all condoned, it should be subject to a substantial cost, not less than ₹10,000/-. 3.3 Having considered the totality of circumstances, we are of the considered view that while the conduct of the assessee has been casual and negligent, it would not be in the interest of justice to shut the doors of adjudication merely on account of delay, particularly when the delay is not shown to be willful or contumacious. The cause for delay, though not satisfactory in the strict sense, appears bona fide, and the assessee has shown willingness to make amends by agreeing to bear the cost. 3.4 Accordingly, in the interest of substantial justice, we condone the delay of 125 days, but subject to the condition that the assessee shall deposit a cost of ₹10,000/- (Rupees Ten Thousand only) to the Prime Minister’s Relief Fund within one month from the date of receipt of this order. The assessee shall produce proof of such deposit before the Ld. CIT(A) at the time of fresh appellate proceedings. Printed from counselvise.com ITA No. 644/SRT/2025 5 Dipak Chandrakantbhai Ughadpaga 4. Coming to the merits, we find from the record that the Ld. CIT(A) had issued three notices, to which the assessee failed to respond. Similarly, the Assessing Officer had issued four notices, all of which went unanswered. The cause for non-compliance, as explained before us, is the same as that pleaded for condonation of delay—namely, non-monitoring of electronic communications. Although such indifference to statutory notices cannot be condoned lightly, yet, considering that the assessee has now undertaken to fully cooperate and that a cost has already been imposed for past default, we deem it just and proper to afford one final opportunity. 4.1 Accordingly, we set aside the impugned order of the Ld. CIT(A) and restore the matter to his file for deciding the appeal afresh on merits, in accordance with law, after affording due opportunity to the assessee. The assessee is directed to ensure strict compliance with all notices and to file necessary submissions and evidences within 15 days of receipt of the first notice from the Ld. CIT(A). In case of failure, the Ld. CIT(A) shall be at liberty to dispose of the appeal ex-parte on merits in accordance with law. 4.2 In view of the above directions, Ground No. 5 raised by the assessee stands allowed for statistical purposes, and the remaining grounds are rendered academic, as the entire appeal has been restored to the file of the Ld. CIT(A) for fresh adjudication. Printed from counselvise.com ITA No. 644/SRT/2025 6 Dipak Chandrakantbhai Ughadpaga 5. In the result, the appeal of the assessee is allowed for statistical purposes, subject to the payment of cost as directed hereinabove. 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 "