HEMENDRA LILACHAND SHAH,AHMEDABAD V. THE ITO, WARD-5(3)(1), AHMEDABAD

ITA 1616/AHD/2025

AI Insights

This case involves an appeal by Shri Hemendra Lilachand Shah against the order of the National Faceless Appeal Centre (NFAC), Delhi, concerning the assessment year 2017-18. The primary contention was the ex-parte order passed by the CIT(A), which dismissed the appeal without a reasonable opportunity for the appellant to be heard, thus violating principles of natural justice. Additionally, the appellant challenged the reopening of the assessment under section 148 of the Income Tax Act, 1961, and the subsequent assessment order which significantly increased his declared income. The Tribunal noted that the CIT(A) did not adequately address the merits of the case or the procedural lapses in the ex-parte order, leading to the decision to remand the case for a comprehensive re-evaluation.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 787149 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-11-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Assessment Year: 2017-2018
• Appeal Filed On: 25-08-2025
• Laws Referred To: Income Tax Act
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: UDAY KISHANRAO KAKNE
• Assessee Lawyers: ASEEM L. THAKKAR
• Keywords: Opportunity of being heard; Revised return; Principle of natural justice
• Section: 147; 148; 144; 142(1)

Judgement Text

"THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD “C” BENCH Before Dr. BRR Kumar, Vice President And Ms. Suchitra Kamble, Judicial Member Shri Hemendra Lilachand Shah, 2, Krishna Apartment, Bhuderpura Road, Ambawadi, Ahmedabad PAN: AELPS5265E (Appellant) Vs The ITO, Ward-5(3)(1) Ahmedabad (Respondent) Assessee by: Shri Aseem L. Thakkar, A.R. Revenue by: Shri Uday Kishanrao Kakne, Sr. D.R. Date of hearing : 06-10-2025 Date of pronouncement : 17-11-2025 आदेश/ORDER Per Suchitra Kamble, Judicial Member: This is an appeal filed against the order dated 27-06- 2025 passed by National Faceless Appeal Centre(NFAC), Delhi for assessment year 2017-18. 2. The grounds of appeal are as under:- “1. The Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi has erred in passing an Ex Parte Order dismissing the appeal without providing reasonable opportunity of being heard to the appellant. Hence the same being against the principles of natural justice and equity requires to be quashed. 2. The Commissioner Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi has erred in confirming the action of the assessing officer in issuing notice u/s 148 of the Act dated ITA No. 1616/Ahd/2025 Assessment Year 2017-18 Printed from counselvise.com I.T.A No. 1616/Ahd/2025 Shri Hemendra Lilachand Shah, A.Y. 2017-18 2 31.03.2021 seeking to reopen assessment which is illegal and bad in law. 3. The Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi has erred in confirming the action of the Assessing Officer in passing an order u/s. 147 r.ws 144 r.w.s. 144B of the Act dated 31.03.2022 which is illegal and bad in law and hence assessment so framed deserves to be quashed. 4. The Learned Commissioner of Income Tax (Appeals). National Faceless Appeal Centre (NFAC), Delhi has erred in confirming the action of the Assessing Officer in reopening the assessment by issuing notice u/s. 148 of the Act wherein the reasons itself reveal of cash having been seized by Police Authorities which was not properly explained being the subject matter of escapement of income. Therefore, the proceedings should have been initiated u/s 153A/153C of the Act and not u/s 147 of the Act as has been done since requisition u/s 132A of the Act has been undertaken. 5. The Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi has erred in confirming the action of the Assessing Officer in passing the assessment order u/s. 147 r.w.s. 144 r.w.s. 144B of the 1.T. Act 1961 dated 31.03.2022 determining the total income at Rs. 1,43,17,550/- as against the returned income of Rs.3,23,550/-. 6. The Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi has erred in confirming the addition of Rs.1,39,94,000/- made by the Assessing officer as alleged unexplained money u/s, 69A of the Act. 7. The Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi has erred in confirming the action of the Assessing Officer in not appreciating the evidences and other material placed in record in support of the explanation of the cash seized of Rs. 1,39,94,000/-. 8. The appellant craves leave to add, alter, amend or modify any of the grounds of appeal on or before the date of hearing of appeal.” 3. The assessee is engaged in the business of real estate. The assessee filed return of income for assessment year 2017-18 on 29-03-2018 disclosing total income of Rs. 3,30,380/-. The case of the assessee was reopened by issuing notice u/s. 148 of the Printed from counselvise.com I.T.A No. 1616/Ahd/2025 Shri Hemendra Lilachand Shah, A.Y. 2017-18 3 Income Tax Act. The basis of reopening was the information that cash amounting to Rs. 1,39,94,000/- was issued by the police authorities in old currency but it source was not properly explained by the assessee. In response to the notice, the assessee filed revised return of income on 25-05-2021 declaring total income of Rs. 3,23,556/-. Notice u/s. 143(2) was issued by the Assessing Officer and subsequently notice u/s. 142(1) was also issued but the same was not responded. The show cause notice u/s. 144 was issued. The assessee has not filed any explanation/submission in the response to the said notice. Thereafter, final show cause notice along with draft of assessment order was sent to the assessee and in its response, the assessee submitted them stating that the money seized by the police authorities were old money and were not in use therefore they could not be termed as cash. The Assessing Officer observed that the assessee maintained cash as on 01-04- 2016 with opening cash balance of Rs. 1,37,17,267/- and during the year the assessee sold immoveable property and received sum of Rs. 40,00,000/-. In addition to the said, the assessee had also sold another property for Rs. 1,20,00,000/-. The Assessing Officer has not accepted the submissions of the assessee as the copy of the cash book furnished by the assessee was held fabricated and held that document had no authenticity as the assessee had not furnished the copies of audited finance related to his real estate business. In absence of the bank account statements, the Assessing Officer passed assessment order u/s. 144 r.w.s. 144B of the Act at Rs. 1,43,17,550/- making addition of Rs. 1,39,94,000/- to the original ITR of the assessee. Printed from counselvise.com I.T.A No. 1616/Ahd/2025 Shri Hemendra Lilachand Shah, A.Y. 2017-18 4 4. Being aggrieved by the assessment order, the assessee filed appeal before the CIT(A). The CIT(A) dismissed the appeal of the assessee as ex-parte. 5. The ld. A.R. submitted that the CIT(A) erred in passing ex- parte order without providing reasonable of being heard to the assessee. The ld. A.R. further submitted that the CIT(A) erred in confirming the action of the Assessing Officer in reopening the assessment by issuing notice u/s. 148 where the reasons itself reveal of cash if any seized by police authorities which was not properly explained being the subject matter of escapement of income. Therefore, the proceedings should have been initiated u/s. 153A/153C of the Act and not u/s. 147 of the Act as has been done since requisition u/s. 132A of the Act has been undertaken. The ld. A.R. further submitted that the assessee has filed return of income at Rs. 3,23,350/- but the assessment order determined the total income at Rs. 1,43,17,550/-. The ld. A.R. submitted that the CIT(A) erred in confirming the addition of Rs. 1,39,94,000/- made by the Assessing Officer as alleged unexplained money u/s. 69. The ld. A.R. further submitted that the Assessing Officer has not appreciated the evidences and other materials placed in record in support of the explanation of cash seized by the police department. 6. The ld. D.R. relied upon the assessment order and the order of the CIT(A). 7. We have heard both the parties and perused all the relevant material available on record. It is pertinent to note the annexures of police authorities who have seized the cash and the said information was forwarded to the Assessing Officer, it Printed from counselvise.com I.T.A No. 1616/Ahd/2025 Shri Hemendra Lilachand Shah, A.Y. 2017-18 5 appears that it will amount to a requisition u/s. 132A of the Act. This aspect along with the merits of the case was not at all taken into account and was not at all decided by the CIT(A) as the order passed by the CIT(A) is ex-parte and without giving opportunity of hearing to the assessee. Therefore, it will be appropriate to remand back this matter to the file of the CIT(A) for proper adjudication of the issues and decide the case as per Income Tax Act. Needless to say, the assessee be given opportunity of hearing by following principles of natural justice. 8. In the result, the appeal of the assessee is partly allowed for statistical purpose. Order pronounced in the open court on 17-11-2025 Sd/- Sd/- (Dr. BRR Kumar) (Suchitra Kamble) Vice President Judicial Member Ahmedabad : Dated 17/11/2025 आदेश क\u0006 \u0007\bत ल प अ\u000fे षत / Copy of Order Forwarded to:- 1. Assessee 2. Revenue 3. Concerned CIT 4. CIT (A) 5. DR, ITAT, Ahmedabad 6. Guard file. By order/आदेश से, उप/सहायक पंजीकार आयकर अपील\u0012य अ\u0013धकरण, अहमदाबाद Printed from counselvise.com "