GOVINDJI BUDHAJI THAKOR,AHMEDABAD V. THE ITO, WARD-3(3)(2), AHMEDABAD

ITA 87/AHD/2025

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The case involves Govindji Budhaji Thakor, who appealed against the order of the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, which confirmed the additions made by the AO under Section 144 of the Income Tax Act, 1961. The AO had made several additions to the assessee's income for the Assessment Year 2017-18, citing unexplained cash deposits, credit entries, and undisclosed sale of immovable property. The CIT(A) dismissed the appeal for non-prosecution as the assessee failed to respond to multiple notices. The ITAT, considering the assessee's circumstances, including ill health and reliance on his son for tax matters, decided to restore the matter to the AO for a fresh assessment, emphasizing the principles of natural justice.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 29699 (ITAT-AHMEDABAD)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-03-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2017-2018
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RIGNESH DAS
• Assessee Lawyers: MANISH J. SHAH; RUSHIN PATEL; ARS
• Keywords: Set aside; Unexplained cash credit
• Section: 144; 142(1); 143(2); 250; 69A

Judgement Text

" आयकर अपीलीय अिधकरण, अहमदाबाद \u0011ायपीठ “सी“, अहमदाबाद । IN THE INCOME TAX APPELLATE TRIBUNAL “C” BENCH, AHMEDABAD \u0016ी िस\u0017ाथ\u0019 नौिटयाल, \u0011ाियक सद\u001d एवं \u0016ी मकरंद वसंत महादेवकर, लेखा सद\u001d क े सम$। ] ] BEFORE SHRI SIDDHARTHA NAUTIYAL, JUDICIAL MEMBER AND SHRI MAKARAND V. MAHADEOKAR, ACCOUNTANT MEMBER आयकर अपील सं /ITA No.87/Ahd/2025 िनधा \u000fरण वष\u000f /Assessment Year : 2017-18 Govindji Budhaji Thakor Shakar Bhuwan Makarbiyo Wad B/h. Karnavati Club S.G. Highway, Mohmedpura Ahmedabad – 380 058 बनाम/ v/s. The ITO Ward-3(3)(2) Ahmedabad – 380 015 \u0013थायी लेखा सं./PAN: APOPC 8837 L (अपीलाथ%/ Appellant) (&' यथ%/ Respondent) Assessee by : Shri Manish J. Shah & Rushin Patel, ARs Revenue by : Shri Rignesh Das, Sr.DR सुनवाई की तारीख/Date of Hearing : 11 /03/2025 घोषणा की तारीख /Date of Pronouncement: 12 /03/2025 आदेश/O R D E R PER MAKARAND V. MAHADEOKAR, AM: This appeal by the assessee is directed against the order dated 22.02.2024, passed by the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as “CIT(A)”], for the Assessment Year (AY) 2017-18, arising out of the ex-parte assessment order dated 19/11/2019 passed under Section 144 of the Income Tax Act, 1961 [hereinafter referred to as “the Act”], by the Income Tax Officer, Ward- 3(3)(2), Ahmedabad [hereinafter referred to as “AO”]. ITA No.87/Ahd/2025 Govindji Budhaji Thakor vs. ITO Asst. Year : 2017-18 2 Facts of the Case: 2. The assessee filed his return of income for A.Y. 2017-18 declaring an income of ₹3,93,060/-. The case was selected for complete scrutiny under CASS. The AO issued a notice under Section 143(2) of the Act dated 24.09.2018 through ITBA, which was duly served on the assessee. Subsequent notices under Section 142(1) of the Act dated 22.05.2019 and 05.10.2019 were issued, calling for specific details, but no compliance was made by the assessee. A final show-cause notice dated 06.11.2019 was issued, requiring the assessee to explain the Cash deposits of ₹21,69,000/- during the demonetization period (08.11.2016 to 31.12.2016) in Central Bank of India & Bank of India accounts, Unexplained credit entries of ₹85,08,876/- in the bank accounts during the year and Sale of immovable property for ₹50,00,000/-, which was not disclosed in the return of income. 3. Since there was no response, the AO completed the assessment ex- parte under Section 144 and made the following additions: - ₹21,69,000/- as unexplained cash deposits under Section 69A of the Act. - ₹85,08,876/- as unexplained credit entries under Section 69A of the Act. - ₹50,00,000/- as unexplained sale consideration from immovable property. 3.1. The total assessed income was determined at ₹1,60,70,936/-, and the AO also initiated penalty proceedings under Section 271AAC & Section 270A of the Act. ITA No.87/Ahd/2025 Govindji Budhaji Thakor vs. ITO Asst. Year : 2017-18 3 4. The assessee filed an appeal before the CIT(A). Several notices were issued under Section 250 of the Act, but the assessee did not respond to any of them. Since the assessee failed to appear or provide any evidence, the CIT(A) dismissed the appeal for non-prosecution and confirmed the AO’s additions. 5. Aggrieved by the order of the CIT(A), the assessee preferred an appeal before us raising following grounds of appeal: 1. The Id. CIT(Appeals) erred in law and on facts in dismissing the appeal of the appellant for non-prosecution and thereby confirming the addition of Rs.1,56,77,876/- made by the Assessing Officer without appreciating facts and law of the case properly. 2. The Id. CIT(Appeals) erred in law and on facts in confirming the addition of Rs.21,69,000/-being alleged unexplained cash deposit u/s.69A r.w.s. 115BBE without appreciating facts and law of the case properly. 3. The Id. CIT(Appeals) erred in law and on facts in confirming the addition of Rs.85,08,876/-being alleged unexplained credit entries in the bank account u/s.69A r.w.s. 115BBE without appreciating facts and law of the case properly. 4. The Id. CIT(Appeals) erred in law and on facts in confirming the addition of Rs.50,00,000/-being alleged undisclosed sale consideration received on sale of immovable property without appreciating facts and law of the case properly. 5. The appellant craves leave to add, amend or alter the grounds of appeal at the time of hearing, if need arise. 5.1. The appeal was filed before the Tribunal with a delay of 258 days. The assessee submitted an affidavit explaining the reasons for the delay, stating that: • The order of CIT(A) dated 22.02.2024 was received through e- proceedings and email intimation on the same date. • The assessee, being uneducated in tax matters, relied entirely on his son, Mukeshji Govindji Thakor, to handle the tax proceedings. ITA No.87/Ahd/2025 Govindji Budhaji Thakor vs. ITO Asst. Year : 2017-18 4 • Due to the assessee’s ill health, the son sought advice from multiple consultants, which resulted in conflicting advice and inaction on the part of the assessee. • In December 2024, personal and financial disputes arose between the assessee and his son, leading to the assessee taking back control of his income tax matters. • Upon consulting another tax consultant, it was discovered that no appeal had been filed before the Tribunal within the prescribed 60-day period. • The assessee immediately engaged a legal representative, and the appeal was eventually filed on 13.01.2025, resulting in a delay of 258 days. 6. On the background of the facts and circumstances, the Departmental Representative (DR) raised no objection to the condonation of delay. 7. Considering the genuine hardship faced by the assessee, we find that the reasons for the delay are bona fide and do not reflect any mala fide intent. Accordingly, the delay of 258 days is condoned, and the appeal is admitted for adjudication. 8. The learned Authorized Representative (AR) submitted that due to the ill health of the assessee, he was completely dependent on his son for assessment and appellate proceedings and therefore the assessee could not properly represent his case before the lower authorities, resulting in an ex- parte assessment under Section 144 of the Act. The AR sought an opportunity for the assessee to present his case on merits and, therefore, requested that the matter be restored to the file of the AO for fresh adjudication. ITA No.87/Ahd/2025 Govindji Budhaji Thakor vs. ITO Asst. Year : 2017-18 5 9. The DR did not object to the restoration of the matter to the AO but submitted that the assessee’s non-cooperation before the lower authorities caused unnecessary litigation, and hence, a nominal cost should be imposed as a deterrent. 10. We have considered the rival submissions and perused the material on record. It is undisputed that the assessment was completed ex-parte under Section 144 of the Act due to the assessee’s non-compliance with the notices issued under Sections 143(2) and 142(1) of the Act. The CIT(A) also dismissed the appeal ex-parte due to the assessee’s failure to participate in appellate proceedings. At the same time, we also note that the assessee’s inability to pursue the matter was due to factors beyond his control, including ill health, reliance on his son, and conflicting legal advice. The principle of natural justice demands that the assessee be given a fair opportunity to present his case. 10.1. We have noted the reliance placed by the CIT(A) on the judicial precedents where it was held that an appeal means an effective appeal, and merely filing an appeal without actively prosecuting it is equivalent to not filing an appeal at all and that the courts have the inherent power to dismiss appeals for non-prosecution. However, given the specific circumstances of the case, we are of the opinion that one more opportunity should be granted to the assessee to present his case before the AO. At the same time, we find merit in the DR’s contention that the assessee’s failure to comply with tax proceedings has led to unnecessary litigation, and a cost should be imposed to ensure future compliance. ITA No.87/Ahd/2025 Govindji Budhaji Thakor vs. ITO Asst. Year : 2017-18 6 10.2. In the interest of justice, we set aside the order of the CIT(A) and restore the matter back to the file of the AO for de novo adjudication, with the direction that the assessee shall fully cooperate and submit necessary documents in support of his claims. Further, we impose a cost of ₹5,000/- on the assessee, payable to the Income Tax Department within 30 days from the date of receipt of this order. 11. In the result, the appeal of the Assessee is allowed for statistical purposes. Order pronounced in the Open Court on 12th March, 2025 at Ahmedabad. Sd/- Sd/- (SIDDHARTHA NAUTIYAL) JUDICIAL MEMBER (MAKARAND V. MAHADEOKAR) ACCOUNTANT MEMBER अहमदाबाद/Ahmedabad, िदनांक/Dated 12/03/2025 टी.सी.नायर, व.िन.स./T.C. NAIR, Sr. PS आदेश की \"ितिलिप अ#ेिषत/Copy of the Order forwarded to : 1. अपीलाथ$ / The Appellant 2. \"%थ$ / The Respondent. 3. संबंिधत आयकर आयु& / Concerned CIT 4. आयकर आयु& ) अपील ( / The CIT(A)-(NFAC), Delhi. 5. िवभागीय \"ितिनिध , अिधकरण अपीलीय आयकर , राजोकट/DR,ITAT, Ahmedabad, 6. गाड\u000f फाईल / Guard file. आदेशानुसार/ BY ORDER, स%ािपत \"ित //True Copy// सहायक पंजीकार (Asstt. Registrar) आयकर अपीलीय अिधकरण, ITAT, Ahmedabad "