HANIF OSMAN RAVDA,SITLACHAWK OPP. REHEMANI MASJID ,MEMANWAD MEMANWAD V. INCOME TAX OFFICER, WARD 2(3) , PORBANDAR, GUJARAT

ITA 447/RJT/2025

AI Insights

The case revolves around an appeal by Hanif Osman Ravda against the order of the National Faceless Appeal Centre (NFAC), which confirmed the addition of Rs. 13,71,365 as unexplained money under section 69A of the Income Tax Act, 1961. The addition was initially made by the Assessing Officer following the discovery of a cash deposit of Rs. 13,71,365 in the assessee's bank account, which was not accompanied by a timely filed income tax return. The Tribunal noted that the assessee had provided a detailed explanation and relevant documents during the assessment proceedings, including particulars of his trading activities and customer details. The Tribunal also observed that the assessee had declared a gross business receipt of Rs. 16,50,675 in his return under section 148, which included the disputed amount, and had paid taxes on it. The Tribunal criticized the Assessing Officer and the CIT(A) for ignoring these facts and for not conducting an independent verification of the provided details.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 779254 (ITAT-RAJKOT)
• Duration Of Justice: 3 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-10-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2012-2013
• Appeal Filed On: 02-07-2025
• Other Referred Cases: CIT Vs. Simon Carves Ltd. (1976) 105 ITR 212 (SC)
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ABHIMANYU SINGH YADAV; LD.
• Assessee Lawyers: SAGAR SHAH; LD
• Keywords: Condonation of delay; Business income; Presumptive income
• Section: 147; 148; 143(3); 44AD

Judgement Text

"ITA NO. 447/RJT/2025 Hanif Osman Ravda, Page | 1 IN THE INCOME TAX APPELLATE TRIBUNAL, RAJKOT BENCH, RAJKOT BEFORE DR. ARJUN LAL SAINI, ACCOUNTANT MEMBER आयकरअपीलसं./ITA No.447/RJT/2025 Ǔनधा[रणवष[ / Assessment Year: (2012-13) (Hybrid Hearing) Hanif Osman Ravda Sitla Chawk, Rehemani Masjid, Memanwad, Porbandar – 360575 (Gujarat) Vs. ITO Ward 2 (3), Porbandar - 360575 èथायीलेखासं./जीआइआरसं./PAN/GIR No.: ACEPR8023N (Assessee) (Respondent) Assessee by : Shri Sagar Shah, Ld. AR Respondent by : Shri Abhimanyu Singh Yadav, Ld. Sr. DR Date of Hearing :01/09/2025 Date of Pronouncement : 15 /10/2025 आदेश / O R D E R Per, Dr. Arjun Lal Saini, AM Captioned appeal filed by the assessee, pertaining to Assessment Year 2012-13, is directed against the order passed under section 250 of the Income Tax Act, 1961 (hereinafter referred to as “the Act”) by National Faceless Appeal Centre (NFAC), Delhi/Commissioner of Income-tax (Appeals), dated 20/02/2025, which in turn arises out of an order passed by the Assessing Officer dated 09/12/2019 u/s 143(3) r.w.s147of the Income Tax Act, 1961. Printed from counselvise.com ITA NO. 447/RJT/2025 Hanif Osman Ravda, Page | 2 2. Although, this appeal filed by the Assessee, for Assessment Year 2011-12, contains multiple ground of appeals. However, at the time of hearing, I have carefully perused all the grounds raised by the Assessee. I find that most of the grounds raised by the Assessee, are either academic in nature or contentious in nature. However, to meet the end of justice, I confine myself to the core of the controversy and main grievances of the Assessee. Therefore, the solitary grievance of the assessee in this appeal is that on the basis of the facts and circumstances of the case, the learned Commissioner of Income Tax (Appeals) and Income Tax Officer has erred in passing the order by making an addition of Rs. 13,71,365/- under section 69A without bringing any contrary evidence or conducting independent verification of the names, addresses and contact details of customers already furnished by the assessee. 3. The appeal filed by the assessee for the Assessment Year 2012-13, is barred by limitation by 68 days. The assessee has moved a petition requesting the Bench to condone the delay. I have heard both the parties on this preliminary issue. Learned DR for the revenue, opposed the prayer of the assessee for contention of delay. However, the learned Counsel adverted my attention to the reasons for condonation of delay, and urged for a benign view and sought condonation of delay of 68 days in filing the appeal before the Tribunal. A perusal of the reasons and sufficient cause explained by the ld. Counsel for the assessee, gives me an impression of existence of mitigating circumstances to enable me to exercise my discretion in favour of the assessee. Accordingly, the delay is condoned in filing the appeal. 4. The facts of the case which can be stated quite shortly are as follows: The sole issue involved in the present appeal, relates to addition of Rs. 13,71,365/- made by the assessing officer as unexplained money u/s 69A of the I.T. Act. Briefly stated the facts of the present case is that the assessing officer was in Printed from counselvise.com ITA NO. 447/RJT/2025 Hanif Osman Ravda, Page | 3 possession of information that during the relevant previous year the assessee has deposited cash of Rs. 13,71,365/- in the bank account no.314002010108823 maintained with Union Bank of India, Porbandar however, assessee has not filed his return of income within the time frame as provided under the provision of section 139(1) of the I.T. Act. Therefore, assessing officer initiated assessment proceedings u/s 147 of the I.T. Act and issued notice u/s 148 of the I.T. Act on 27.03.2019, which was served on the assessee. However, assessee did not file return of income within the time provided in the notice u/s 148 of the I.T. Act. Subsequently assessing officer vide letter dated 12.07.2019 reminded the assessee to file return in response to notice issued u/s 148 of the I.T. Act. However, assessee submitted reply before the assessing officer, however, the assessing officer did not accept the reply of the assessee. The assessing officer therefore resorted to completion of assessment u/s 143(3) r.w.s. 147 of the I.T. Act vide impugned order dated 09.12.2019, bringing to tax cash deposit of Rs. 13,71,365/- as unexplained money u/s 69A of the I.T. Act. 5. Aggrieved by the above action of the assessing officer, the assessee carried the matter in appeal before the learned CIT(A), who has confirmed the action of the assessing officer, therefore, the assessee is in appeal before this Tribunal. 6. I have heard both the parties and carefully gone through the submission put forth on behalf of the assessee along with the documents furnished and the case laws relied upon, and perused the fact of the case including the findings of the ld CIT(A) and other materials brought on record. Learned Counsel for the assessee submitted that during the assessment proceedings, the assessee had submitted a detailed explanation of the cash deposits, including particulars of his trading activity in cutlery, details of customers including address and phone number of the parties, and the method of business at the time of assessment proceeding. The ld. Counsel further argued that assessee is a simple person Printed from counselvise.com ITA NO. 447/RJT/2025 Hanif Osman Ravda, Page | 4 doing small cutlery business and is not familiar with income tax rules and procedures. The assessee genuinely believed that he was not required to file a return of income, as his income was below the maximum amount which is not chargeable to tax. The assessing officer passed the order by making addition under section 69A of the Act, without bringing any contrary evidence or conducting independent verification of the names, addresses and contact details of customers already furnished by the assessee, during the assessment proceedings. The learned Counsel also stated that the assessee had already shown gross business receipts of Rs. 16,50,675/- in the return filed under section 148, as per section 44AD of the Act and paid the taxes thereon. Therefore, the assessing officer erred in passing the order without giving credit for the income amounting to Rs. 2,72,140/- which was already declared by the assessee in the return filed under section 148 of the Act. The income was offered under the presumptive taxation scheme as per section 44AD of the Act, therefore, further addition should not be made in the hands of the assessee. On the other hand, the Ld. DR for the Revenue has primarily reiterated the stand taken by the Assessing Officer, which we have already noted in our earlier para and is not being repeated for the sake of brevity. 7. I have considered the submissions of both the parties, I note that on account of cash deposited in the bank account, the assessee has shown turnover of Rs. Rs. 16,50,675/- and paid the taxes of Rs. 2,72,140/-, (including other income), under section 44AD of the Act. I note that despite the return being filed under section 44AD of the Act, where books of accounts are not required, to be maintained and business involving normal cash transactions, both authorities, that is, assessing officer as well as ld CIT(A) ignored these facts. I also find that assessing officer, has erred in passing the order by making the addition solely on the basis of cash deposits in the bank account, without considering the corresponding cash withdrawals made from the same account for the purpose of Printed from counselvise.com ITA NO. 447/RJT/2025 Hanif Osman Ravda, Page | 5 retail business of the assessee. I also find that assessing officer has not given credit to the extent of the income already taxed in the return of income filed by the assessee under section 44AD of the Act. At this juncture, I would like to quote golden words of Hon'ble justice H. R. Khanna from the decision of CIT Vs. Simon Carves Ltd. (1976) 105 ITR 212 (SC)where applying the legal maxim of ex majorie cautela (out of abundant precaution) he said that. \"the taxing authorities exercise quasi-judicial powers and in doing so they must act in a fair and not in a partisan manner. Although, it is a part of the duty to ensure that no tax which is legitimately due from an assessee should remain unrecovered, they must also at the same time act in a manner that might indicate scales are weighed against the assessee. We are wholly unable to subscribe to the view that unless those authorities exercise the power in a manner most beneficial to the revenue and subsequently most adverse to the assessee they should be deemed not have exercised it in a proper and judicial manner.” 8. Considering these facts, I find that assessee has paid the legitimate taxes on the cash deposit in the bank account by showing the turnover at Rs. 16,50,675/- and paid the taxes of Rs. 2,72,140/-, (including other income), under section 44AD of the Act. Therefore, assessee under consideration does not have any further liability to pay the tax. Hence, I am not inclined to accept the contention of the Assessing Officer in any manner and hence the addition so made is deleted. Hence this ground of the assessee is allowed. 9. In the result, appeal filed by the assessee, is allowed. Order pronounced in the open court on 15/ 10/ 2025. Sd/- (Dr. A. L. SAINI) ACCOUNTANT MEMBER Rajkot Ǒदनांक/ Date: 15/10/2025 Copy of the Order forwarded to 1. The Assessee Printed from counselvise.com ITA NO. 447/RJT/2025 Hanif Osman Ravda, Page | 6 2. The Respondent 3. The CIT(A) 4. Pr. CIT 5. DR/AR, ITAT, Rajkot 6. Guard File By Order Assistant Registrar/Sr. PS/PS ITAT, Rajkot Printed from counselvise.com "