GOMTIDAS GOVINDRAM SADHU,RAMJI MANDIR SHERTHA, GANDHINAGAR V. INCOME TAX OFFICER, WARD 2 GANDHINAGAR, UDYOG BHAWAN, GANDHINAGAR

ITA 344/AHD/2025

AI Insights

The case involves Gomtidas Govindram Sadhu, a priest at Ramji Mandir, who appealed against the order of the CIT(A) confirming the addition of Rs. 12,81,763 to his income for A.Y. 2017-18 under section 69A of the Income Tax Act, 1961. The addition was based on unexplained cash deposits and other credits in his bank accounts during the demonetization period. The AO had initially made the addition ex parte due to non-compliance by the assessee with multiple notices. The CIT(A) dismissed the appeal for non-prosecution and on merits, noting the absence of any substantiating material from the assessee. The Tribunal, considering the assessee's background and the procedural lapses, decided to set aside the CIT(A)'s order and remand the case for a fresh assessment.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 47096 (ITAT-AHMEDABAD)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-04-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2017-2018
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Matter Remanded
• Court: TRIBUNAL
• Department Lawyers: MAMTA SINGH
• Assessee Lawyers: PALAK PAVAGADHI
• Keywords: Condonation of delay; Set aside; Opportunity of being heard; Income from undisclosed sources; Procedural lapse
• Section: 144; 143(3); 142(1); 250; 69A

Judgement Text

" आयकर अपीलीय अिधकरण, अहमदाबाद Ɋायपीठ “SMC“, अहमदाबाद । IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH, AHMEDABAD सुŵी सुिचũा काɾले, Ɋाियक सद˟ एवं ŵी मकरंद वसंत महादेवकर, लेखा सद˟ क े समƗ। ] ] BEFORE MS. SUCHITRA KAMBLE, JUDICIAL MEMBER AND SHRI MAKARAND V. MAHADEOKAR, ACCOUNTANT MEMBER आयकर अपील सं /ITA No. 344/Ahd/2025 िनधाŊरण वषŊ /Assessment Year : 2017-18 Gomtidas Govindram Sadhu 212, Shertha, Gandhinagar, Ramji Mandir Shertha, Shertha B.O., 382423, Gujarat बनाम/ v/s. Income Tax Officer Ward-2, Gandhinagar ̾थायी लेखा सं./PAN: DKDPS2722D अपीलाथŎ/ (Appellant) Ů̝ यथŎ/ (Respondent) Assessee by : Shri Palak Pavagadhi, AR Revenue by : Smt. Mamta Singh, Sr.DR सुनवाई की तारीख/Date of Hearing : 08/04/2025 घोषणा की तारीख /Date of Pronouncement: 09/04/2025 आदेश/O R D E R PER MAKARAND V. MAHADEOKAR, AM: This appeal filed by the assessee is directed against the order dated 19.12.2023 passed by the Learned Commissioner of Income-tax (Appeals), National Faceless Appeal Centre [NFAC], Delhi [hereinafter referred to as “CIT(A)”] under section 250 of the Income-tax Act, 1961 [hereinafter referred to as “the Act”] for the Assessment Year 2017-18 arising out of the order dated 01.10.2019 of the Income Tax Officer, Ward 2, Gandhinagar [hereinafter referred to as “AO”] passed under section 144 of the Act. ITA No.344/Ahd/2025 Gomtidas Govindram Sadhu vs. ITO A.Y. 2017-18 2 Condonation of Delay 2. The appeal is delayed by 362 days. In support of the petition for condonation of delay, the assessee filed a duly notarized affidavit. It is stated therein that the assessee is a Sadhu (priest) of Ramji Mandir, Shertha, Gandhinagar, with limited education and no knowledge of tax procedures. It is submitted that the assessee was initially represented by an incompetent authorised representative, who was unaware of the procedure and timeline for filing appeals before the Hon’ble Tribunal. It is further stated that due to technical difficulties, the assessee was unable to download the order passed by the CIT(A) and a grievance was lodged for the same. On learning of the procedural default, the assessee appointed a new authorised representative and promptly filed the present appeal. 3. The Departmental Representative (DR) raised no objection in condoning the delay and left the decision to the wisdom of the bench. 4. Considering the explanations offered in the affidavit and having regard to the peculiar facts and background of the assessee, we are of the view that the delay was not deliberate or contumacious, but due to genuine hardship. It is a settled position in law that where substantial justice and technical considerations are pitted against each other, the cause of substantial justice deserves to be preferred. Accordingly, in the interest of justice, and to ensure that a party is not denied an opportunity to contest on merits owing to procedural lapses beyond his control, the delay of 362 days is hereby condoned. ITA No.344/Ahd/2025 Gomtidas Govindram Sadhu vs. ITO A.Y. 2017-18 3 Facts of the Case 5. The assessee is an individual engaged in performing religious duties as a priest of Ramji Mandir, Shertha. The assessee did not file a return of income for A.Y. 2017-18. Based on information received, the AO noticed that the assessee had made cash deposits of Rs. 5,00,000/- each in two bank accounts with Dena Bank and Rs. 2,00,000/- in another account with Ahmedabad District Central Co-operative Bank during the demonetization period (08.11.2016 to 30.12.2016), aggregating to Rs. 12,00,000/-. In addition, there were credits other than cash deposits amounting to Rs. 81,763/-, resulting in a total credit of Rs. 12,81,763/-. Notices under section 142(1) were issued on multiple occasions—dated 08.03.2018, 11.06.2019, 02.08.2019, and 21.08.2019—and a final show cause notice dated 21.09.2019 was also issued with the prior approval of the JCIT under section 144A. Despite these, there was no substantive compliance from the assessee. Subsequently, the assessment was completed ex parte under section 144 r.w.s. 143(3) by making an addition of Rs. 12,81,763/- under section 69A of the Act. The AO also directed to charge tax at 60% under section 115BBE, along with interest under sections 234A/B/C and initiated penalty proceedings under sections 271AAC(1), 270A, and 272A(1)(d). 6. The assessee preferred appeal before the CIT(A). However, as noted in the appellate order, no compliance was made to multiple hearing notices issued on 29.12.2020, 16.03.2023, and 03.11.2023. Consequently, the appeal was dismissed both for non-prosecution and on merits. The CIT(A) confirmed the addition made by the AO, observing that the assessee had failed to substantiate the claim of the amount being accumulated past savings or offerings (Dakshina). The appellate authority held that no explanation or ITA No.344/Ahd/2025 Gomtidas Govindram Sadhu vs. ITO A.Y. 2017-18 4 supporting material was placed on record and sustained the addition of Rs. 12,81,763/- under section 69A. 7. Aggrieved by the order of CIT(A), the assessee is in appeal before us raising following grounds of appeal: 1. “Addition of Rs. 12,00,000/- on the basis of cash deposits in the bank account u/s 69A of the Income Tax Act. On facts and in the circumstances of the case and in law, Ld. CIT(A) by confirming the order passed by the Ld. AO has grossly erred in making addition of Rs.12,00,000/- on account of cash deposits u/s 69A of the Income Tax Act. 2. Addition of Rs. 81,763/- on the basis of credit deposits in the bank account u/s 69A of the Income Tax Act On facts and in the circumstances of the case and in law, Ld. CIT(A) by confirming the order passed by the Ld. AO has grossly erred in making addition of Rs. 81,763/- on account of credit deposits u/s 69A of the Income Tax Act. 3. The Ld. AO passed order calculating tax @60% as per section 115BBE of the Income Tax Act: On facts and in the circumstances of the case and in law, the Ld. AO has grossly erred in calculating tax @60% as per section 115BBE of the Income Tax Act for AY 2017-18. The tax rate for the AY 2017-18 was 30% as per section 115BBE ofthe Income tax act. 4. Initiating penalty proceeding u/s 271AAC(1) of the Act: On facts and in the circumstances of the case and in law, the Ld. AO has grossly erred in initiating the proceedings for levy of penalty u/s. 271AAC(1) of the Act when no such penalty is leviable. The proceedings initiated by the Ld. AO should be dropped as it is wrongly initiated. 5. Initiating penalty proceeding u/s 272A(1)(d) of the Act: On facts and in the circumstances of the case and in law, the Ld. AO has grossly erred in initiating the proceedings for levy of penalty u/s. 272A(1)(d) of the Act when no such penalty is leviable. The proceedings initiated by the Ld. AO should be dropped as it is wrongly initiated. The appellant craves leave to add, amend, alter, edit, delete, modify or change all or any grounds of appeal at the time of or before the hearing of the appeal.” 8. During the course of hearing before us, the learned Authorised Representative (AR) reiterated that the assessee is a religious priest and the amounts deposited in the bank were accumulated religious offerings (Dakshina) saved over several years. It was explained that non-compliance ITA No.344/Ahd/2025 Gomtidas Govindram Sadhu vs. ITO A.Y. 2017-18 5 during assessment and appellate proceedings was due to ignorance, lack of education, and poor advice from an earlier representative. It was further submitted that the assessee is now adequately represented and is willing to produce all necessary evidence to support the claim that the deposits were not unaccounted income. The learned A.R. accordingly requested that the matter be restored to the file of the Assessing Officer for a fresh adjudication after providing reasonable opportunity. 9. The learned DR raised no objection to the prayer for remand. 10. We have considered the facts of the case, the orders of the lower authorities, the affidavit and statement of facts on record, and the submissions made during the hearing. It is evident that the assessment was framed ex-parte, and the appellate order was also passed without hearing the assessee due to non-compliance. Considering the peculiar facts of the case, the social and religious background of the assessee, and in the interest of substantial justice, we are of the considered view that the matter deserves to be reconsidered by the AO. 10.1 Accordingly, the impugned order of the CIT(A) is set aside, and the matter is restored to the file of the AO for denovo adjudication. The assessee shall produce relevant evidence and documents in support of his contentions and cooperate in the proceedings. The AO shall examine the matter afresh on merits and pass a speaking order in accordance with law after providing adequate opportunity of being heard. 10.2 At the same time, considering that the assessee failed to comply with proceedings at multiple stages, we deem it appropriate to impose a cost of ITA No.344/Ahd/2025 Gomtidas Govindram Sadhu vs. ITO A.Y. 2017-18 6 Rs. 5,000/- on the assessee to be paid to the credit of Income Tax Department within 30 days of receipt of this order, as a measure of deterrence and to enforce procedural discipline. 11. In the result, the appeal is allowed for statistical purposes with a direction as above. Order pronounced in the Open Court on 9th April, 2025 at Ahmedabad. Sd/- Sd/- (SUCHITRA KAMBLE) JUDICIAL MEMBER (MAKARAND V. MAHADEOKAR) ACCOUNTANT MEMBER अहमदाबाद/Ahmedabad, िदनांक/Dated 09/04/2025 S. K. Sinha, Sr. PS True Copy आदेश की Ůितिलिप अŤेिषत/Copy of the Order forwarded to : 1. अपीलाथŎ / The Appellant 2. ŮȑथŎ / The Respondent. 3. संबंिधत आयकर आयुƅ / Concerned CIT 4. आयकर आयुƅ ) अपील ( / The CIT(A)/Pr.CIT-1, Vadodara 5. िवभागीय Ůितिनिध , आयकर अपीलीय अिधकरण , राजोकट/DR,ITAT, Ahmedabad, 6. गाडŊ फाईल / Guard file. आदेशानुसार/ BY ORDER, सȑािपत Ůित //True Copy// सहायक पंजीकार (Asstt. Registrar) आयकर अपीलीय अिधकरण, ITAT, Ahmedabad "