GAURAV VINODBHAI MITRA,AHMEDABAD V. THE ITO ,WARD 1(2)(1), AHMEDABAD

ITA 1802/AHD/2025

AI Insights

The case involves Gaurav Vinodbhai Mitra, who appealed against the order of the Commissioner of Income Tax (Appeals) concerning an assessment made by the Income Tax Officer under section 144 of the Income Tax Act, 1961. The assessment included substantial additions for unexplained investments and concealed income, which were initially made ex parte due to the assessee's non-compliance in responding to notices. The CIT(A) dismissed the appeal in limine for non-prosecution, which was later set aside by the Tribunal, leading to a second round of appellate proceedings. Despite multiple notices, the assessee again failed to respond, leading the CIT(A) to confirm the additions. The Tribunal, considering the assessee's medical condition and the substantial nature of the additions, decided to remand the matter back to the CIT(A) for a decision on merits, imposing a cost for the repeated non-compliance.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 786827 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-11-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2013-2014
• Appeal Filed On: 25-09-2025
• Other Referred Cases: CIT v. B. N. Bhattacharjee (118 ITR 461), P. N. Balasubramaniam (112 ITR 512)
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: UMESH KUMAR AGRAWAL
• Assessee Lawyers: HEM CHHAJED
• Keywords: Set aside; Opportunity of being heard; Unexplained expenditure; Unexplained investment; Capital Gains; Principle of natural justice
• Section: 144; 142(1); 69; 69C

Judgement Text

"आयकर अपीलीय अिधकरण आयकर अपीलीय अिधकरण आयकर अपीलीय अिधकरण आयकर अपीलीय अिधकरण,अहमदाबाद \bयायपीठ अहमदाबाद \bयायपीठ अहमदाबाद \bयायपीठ अहमदाबाद \bयायपीठ ‘C’ अहमदाबाद। अहमदाबाद। अहमदाबाद। अहमदाबाद। IN THE INCOME TAX APPELLATE TRIBUNAL “C” BENCH, AHMEDABAD ]BEFORE MS. SUCHITRA R. KAMBLE, JUDICIAL MEMBER AND MAKARAND V.MAHADEOKAR, ACCOUNTANT MEMBER ITA No.1802/Ahd/2025 Asstt.Year : 2013-14 Gaurav Vinodbhai Mitra Flat No.25, 9th Floor, Manhatan Apts., Opp: Medisurge, Ellisbridge, Ahmedabad 380 006. PAN : AHSPM 3874 F Vs. ITO, Ward-1(2)(1) Ahmedabad. (Applicant) (Responent) Assessee by : Shri Hem Chhajed, AR Revenue by : Shri Umesh Kumar Agrawal, Sr.DR सुनवाई क तारीख/Date of Hearing : 18/11/2025 घोषणा क तारीख /Date of Pronouncement: 19/11/2025 आदेश आदेश आदेश आदेश/O R D E R PER MAKARAND V.MAHADEOKAR, AM: This appeal by the assessee is directed against the order dated 30.01.2019 passed by the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as “CIT(A)”] , in respect of the assessment framed by Income Tax Officer, Ward 5(2)(2), Ahmedabad [hereinafter referred to as “Assessing Officer or AO”] under section 144 of the Income Tax Act, 1961 [hereinafter referred to as “the Act ”] for the assessment year 2013–14 vide order dated 26.02.2016. 2. Facts of the Case: 2.1 The assessee filed his return of income on 14.10.2013 declaring total income of Rs.2,20,730/-. Subsequently the case was selected for scrutiny under CASS for the reason “Large investment in property compared to total income and capital gains consideration in ITR is less than sale of property Printed from counselvise.com ITA No.1802/Ahd/2025 2 reported in AIR”. Notices under section 143(2) and 142(1) were issued. However, the assessee did not respond. The assessment was, therefore, completed ex parte under section 144 of the Act. The Assessing Officer made the following additions: (i) Unexplained investment under section 69 - Purchase of immovable property - Rs. 1,10,00,000/- (ii) Concealed income based on sold property - Rs. 37,00,000/- (iii) Unexplained expenditure under section 69C - Credit card payment - Rs. 2,15,000/- 2.2 The total addition made by the Assessing Officer amounted to Rs.1,49,15,000/- and the income was assessed at Rs.1,51,35,730/- 2.3 The assessee filed an appeal on 06.03.2018 before the CIT(A)–5, Ahmedabad, accompanied by a request for condonation of delay. The CIT(A) dismissed the condonation request holding that no evidence had been filed along with the appeal or during the appellate proceedings to support the explanation. The CIT(A) rejected the appeal in limine. The assessee preferred an appeal before the Tribunal, which vide order dated 06.12.2021 set aside order of CIT(A) and restored the issue back to the file of CIT(A). 2.4 In the second round of appeal before the CIT(A), despite issuance of notices, the assessee did not file any submissions. Notices had been issued on 07.10.2024, 08.05.2025 and 14.06.2025, all served by e-mail and marked as delivered, but no compliance was made. The CIT(A) relied on decisions including CIT v. B. N. Bhattacharjee (118 ITR 461) and P. N. Balasubramaniam (112 ITR 512) to hold that an appeal must be diligently pursued and that non-prosecution results in dismissal. 3. Aggrieved by the order of CIT(A), the assessee is in appeal before us raising following grounds: 1. The order passed by the Ld. CIT(A) is against law, equity and justice. Printed from counselvise.com ITA No.1802/Ahd/2025 3 2. The Ld. CIT(A) has erred in law and on facts in upholding the addition made under section 69 of the Act by the Ld. Assessing Officer of Rs.1,10,00,000/- for purchase of immovable property. 3. The Ld. CIT(A) has erred in law and on facts in upholding the addition made under section 69C of the Act by the Ld. Assessing Officer of Rs.2,15,000/- as unexplained expense. 4. The Ld. CIT(A) has erred in law and on facts in upholding the addition made by the Ld. Assessing Officer of Rs. 37,00,000/- as concealed income. 5. The appellant craves liberty to add, amend, alter or modify all or any grounds of appeal before final appeal. 4. During the hearing, the learned Authorised Representative (AR) submitted that both the assessment order and the appellate order were passed ex parte. It was submitted that the assessee had provided all relevant documents to his tax consultant for submission before the CIT(A). However, the consultant failed to file replies to the notices issued. 4.1 It was further explained that the assessee suffered a cardiac arrest on 19.05.2025 and had to be hospitalised, which prevented him from following up with the consultant or monitoring the appeal proceedings. The learned Authorised Representative submitted that the non-compliance before the CIT(A) was neither deliberate nor intentional. The assessee requested that the matter be restored to the file of the CIT(A) for adjudication on merits after providing adequate opportunity. 4.2 Considering the medical reason explained by the AR, the learned Departmental Representative raised no objection to the request of the assessee for remand of the matter to the file of the CIT(A) for adjudication on merits. 5. We have considered the orders passed by the lower authorities, the material available on record and the submissions of the learned AR and the learned DR. 5.1 It is not in dispute that the assessment was framed ex parte under section 144 as the assessee did not respond to the statutory notices issued Printed from counselvise.com ITA No.1802/Ahd/2025 4 under sections 143(2) and 142(1). The Assessing Officer, on the basis of non-compliance, treated the purchase of immovable property of Rs. 1,10,00,000/- as unexplained investment under section 69, treated Rs.37,00,000/- as concealed income on account of sale of immovable property and further treated credit card expenditure of Rs.2,15,000/- as unexplained expenditure under section 69C. Thus, the total addition of Rs.1,49,15,000/- was made and the total income was assessed at Rs.1,51,35,730/-. 5.2 The assessee carried the matter in appeal before the CIT(A)-5, Ahmedabad. The CIT(A) vide order dated 30.01.2019 declined to condone the delay in filing the appeal and dismissed the appeal in limine without going into the merits of the additions. The assessee preferred an appeal before this Tribunal, and the Co-ordinate Bench, vide order dated 06.12.2021, set aside the order of the CIT(A) and restored the matter to the file of the CIT(A) with a direction to decide the appeal on merits. Thus, the present matter is in the nature of a second round of appellate proceedings before the CIT(A), as well as the second round of proceedings before this Tribunal. In the second round, the CIT(A) issued several notices to the assessee on 07.10.2024, 08.05.2025 and 14.06.2025, all of which were duly delivered at the registered e-mail address. However, the assessee did not file any reply or written submissions. On account of persistent non-compliance, the CIT(A) proceeded ex parte and confirmed the additions made by the Assessing Officer. The CIT(A) relied on the judicial pronouncements including CIT v. B. N. Bhattacharjee 118 ITR 461 and P. N. Balasubramaniam 112 ITR 512 to hold that an appeal requires diligent prosecution and cannot be kept pending indefinitely. 5.3 During the hearing before us, the learned AR submitted that both the assessment order dated 26.02.2016 and the impugned appellate order dated 30.01.2019 were passed ex parte. It was contended, by way of an affidavit, that the assessee had furnished all relevant papers to his Printed from counselvise.com ITA No.1802/Ahd/2025 5 consultant for filing before the CIT(A). The consultant, however, failed to submit replies. The AR further explained that the assessee suffered a cardiac arrest on 19.05.2025 and was hospitalised, due to which he could not monitor the progress of the appeal or follow up with the consultant. It was submitted that the non-compliance was not deliberate or intentional and that in the interest of justice, one more opportunity may be granted by restoring the matter to the file of the CIT(A) for adjudication on merits. 5.4 The learned DR, considering the medical explanation offered on behalf of the assessee, raised no objection to the request for remand. However, it is a significant and relevant fact that the learned Authorised Representative did not disclose during the hearing that this is the second round of appeal even before this Tribunal. The Departmental Representative also did not point it out. This fact emerges only from the record. The conduct of the assessee across both rounds of proceedings before the CIT(A), namely persistent non-compliance and failure to attend to hearings or respond to notices, shows lack of due diligence in prosecuting the appeal. 5.5 In the ordinary course, such repeated non-compliance across two rounds of appellate proceedings would justify a strict view. However, the additions involved are substantial in quantum and the assessment has been completed entirely ex parte without consideration of any evidence or explanation from the assessee. Section 250(6) of the Act mandates that the first appellate authority must dispose of the appeal by means of a reasoned and speaking order on merits. The principles of natural justice also require that the assessee be afforded a fair opportunity to present his case, particularly when reasons beyond his control, such as hospitalisation, have been stated. 5.6 In these circumstances, we consider it appropriate, in the interest of substantial justice, to restore the matter to the file of the CIT(A) for a fresh decision on merits. At the same time, the consistent non-compliant behaviour of the assessee across both rounds cannot be ignored. Therefore, we direct that the restoration shall be subject to the Printed from counselvise.com ITA No.1802/Ahd/2025 6 payment of cost of Rs.10,000/- by the assessee. The assessee shall deposit the cost with the jurisdictional Assessing Officer within thirty days from the date of receipt of this order to the credit of Income Tax Department and produce the proof of such payment before the CIT(A) at the time of first hearing. In case of failure to deposit the cost within the stipulated period, the CIT(A) shall be at liberty to treat the appeal as dismissed and no further opportunity shall be required to be granted. 5.7 After verification of the payment of cost, the CIT(A) shall afford reasonable opportunity of being heard to the assessee, permit submission of all relevant evidences and explanations and shall dispose of the appeal by a speaking order strictly in accordance with law, without being influenced by any observations contained in this order. The assessee is placed on notice that he must extend full cooperation in the fresh appellate proceedings, failing which the CIT(A) shall be justified in deciding the matter based on material available on record. 5.8 We clarify that we have not adjudicated upon the merits of the additions made under sections 69 and 69C or the addition of Rs.37,00,000/- treated as concealed income. All issues remain open for examination by the CIT(A). 6. In the result, all grounds of appeal are allowed for statistical purposes. Order pronounced in the Court on 19th November, 2025 at Ahmedabad. Sd/- Sd/- (SUCHITRA R. KAMBLE) JUDICIAL MEMBER (MAKARAND V. MAHADEOKAR) ACCOUNTANT MEMBER Ahmedabad, dated 19/11/2025 vk* Printed from counselvise.com "