HEMRAJ PRABHUDAS CHANDEL,AHMEDABAD V. THE ITO, WARD-3(3)(5) PREVIOUSLY ITO, WARD-3(3)(7), AHMEDABAD

ITA 1413/AHD/2025

AI Insights

This case involves an appeal by Hemraj Prabhudas Chandel against the order of the Additional/Joint Commissioner of Income Tax (A)-1, Coimbatore, which confirmed the addition of Rs. 11,73,620 under Section 69C of the Income Tax Act, 1961, pertaining to unexplained cash payments against credit card purchases. The assessee argued that the additions were made without proper consideration of the submissions and evidence provided during the assessment proceedings. The Tribunal noted the assessee's failure to comply with notices during both the assessment and appellate proceedings but allowed the appeal for statistical purposes, providing an opportunity for the assessee to explain the cash payments if he complies with the procedural requirements.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 788522 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-11-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: misc
• Appeal Filed On: 09-07-2025
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANANYA KULSHRESTH
• Assessee Lawyers: DIVYA RATHOR
• Keywords: Set aside; Additional evidence; Principle of natural justice
• Section: 144

Judgement Text

"THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD “SMC” BENCH, AHMEDABAD BEFORE SHRI T.R. SENTHIL KUMAR, JUDICIAL MEMBER AND SHRI NARENDRA PRASAD SINHA, ACCOUNTANT MEMBER ITA No.1413/Ahd/2025 Assessment Year: 2017-18 Hemraj Prabhudas Chandel, D-156, Anantnath Krupa Society, Nr. Panchdev Mandir, Arbudanagar, Odhav, Ahmedabad – 382 415. (Gujarat) [PAN – AGQPC 7396 F] Vs. Income Tax Officer, Ward – 3(3)(5), Previously ITO, Ward – 3(3)(7), Income Tax Office, Vejalpur, Ahmedabad – 380 051. (Gujarat). (Appellant) (Respondent) Assessee by Shri Divya Rathor, AR Revenue by Smt. Ananya Kulshresth, Sr. DR Date of Hearing 18.11.2025 Date of Pronouncement 27.11.2025 O R D E R PER SHRI NARENDRA PRASAD SINHA, AM: This appeal is filed by the assessee against the order of the Additional/Joint Commissioner of Income Tax (A)-1, Coimbatore (in short “the Addl. CIT(A)”) dated 28.02.2024 for the Assessment Year (A.Y.) 2017-18 in the proceeding under Section 144 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’). 2. There was a delay of 435 days in filing of this appeal. The assessee had filed an affidavit explaining the reason for delay. It is submitted that the assessee was working as a Director of M/s. Flymore Travel Private Limited, which was engaged in travel business and the assessee had to Printed from counselvise.com ITA No.1413/Ahd/2025 (Assessment Year: 2017-18) Hemraj Prabhudas Chandel vs ITO Page 2 of 5 make frequent travels as tour manager to facilitate the group tours. In the process, he could not check his e-mail account regularly and had to depend upon the previous counsel for compliance in all tax related matters. Due to the frequent travel of the assessee as well as the default on the part of the consultant, there was a delay in filing the present appeal. It was submitted that the delay was not intentional but only due to unawareness of the assessee about the order of the Ld. Addl. CIT(A). Considering the explanation of the assessee, the delay in filing the appeal is condoned. 3. The brief facts of the case are that the assessee had filed his return of income for the A.Y. 2017-18 on 16.11.2017, showing income of Rs.3,11,410/-. The case was selected for limited scrutiny to verify the credit card payments and cash deposits made during the demonetisation period. In the course of assessment proceedings, no compliance was made by the assessee and the assessment was completed ex-parte under Section 144 of the Act. The Assessing Officer had made addition of Rs.11,73,620/- on account of cash payment against credit card purchases and also addition of Rs.3,12,500/- in respect of unexplained cash deposit in the bank account during the demonetisation period. 4. Aggrieved with the order of the Assessing Officer, the assessee had filed an appeal before the First Appellate Authority, which was decided by the Ld. Addl. CIT(A) vide the impugned order, who had deleted the addition of cash deposit while confirming the addition on account of cash expenditure towards credit card purchase. Printed from counselvise.com ITA No.1413/Ahd/2025 (Assessment Year: 2017-18) Hemraj Prabhudas Chandel vs ITO Page 3 of 5 5. The assessee is now in second appeal before us. The following grounds have been taken in this appeal: - “1. The order passed u/s.250 on 28.02.2024 by ADDL/JCIT(A)-1 Coimbatore confirming addition of Rs.11,73,620/- u/s.69C is wholly illegal, unlawful and against the principles of natural justice. 2. The Ld. ADDL/JCIT (A)-1 Coimbatore has grievously erred in law and or on facts by not considering the submissions made with evidences during assessment proceedings in right perception. 3. On the facts and circumstances of the case the Ld. ADDL/JCIT (A)-1, Coimbatore erred in not considering the Grounds of Appeal, statement of facts along with Additional evidences while making addition of amount u/s.69C of Rs.11,73,620/-. 4. Both the Id. AO and ld. ADDL/JCIT (A)-1 Coimbatore did not verify the details furnished in proper perspective and service of notice as most of the notice not served properly to appellant thus violated the principles of natural justice. 5. Ld. AO erred in law or on facts by mentioning service of notices through speed post in Table 1 of assessment order which creates contradiction with table 1 of draft assessment order (SCN). 6. Ld. ADDL/JCIT (A)-1 Coimbatore erred in law or on facts by not appreciating the service of the notices during the appeal proceedings and erred in to consider detailed submissions made before AO while making additions u/s.69C. 7. The appellant craves liberty to add, amend, alter or modify all or any grounds of appeal before final appeal.” 6. Shri Divya Rathore, Ld. AR of the assessee submitted that no compliance could be made before the Ld. Addl. CIT(A) as the assessee was consistently travelling and also due to default on the part of the counsel. He contended that the ground taken in the appeal in respect of cash payment towards credit card expenses was not adjudicated on merits by the Ld. Addl. CIT(A). She explained that cash payments were made out of the cash withdrawals made by the assessee from the bank Printed from counselvise.com ITA No.1413/Ahd/2025 (Assessment Year: 2017-18) Hemraj Prabhudas Chandel vs ITO Page 4 of 5 account. Further that the assessee being engaged in travel business, some of the expenses made through credit card were on behalf of the clients. She, therefore, requested that the assessee may be allowed another opportunity to explain the cash payment towards credit card expenses by setting aside the matter to the file of the Assessing Officer. 7. Per contra, Smt. Ananya Kulshresth, Ld. Sr. DR, supported the orders of the lower authorities. She submitted that no compliance was made by the assessee before the Assessing Officer as well as before the Ld. Addl. CIT(A). She further submitted that no evidence was ever brought on record to explain the source of cash payments towards credit card expenses or to establish that certain expenses pertaining to the clients were incurred by the assessee. She, therefore, supported the order of the Ld. Addl. CIT(A). 8. We have considered the rival submissions. It is found that the Assessing Officer had allowed as many as eight opportunities to the assessee but no compliance was made and the source of cash payments against credit card expenses were not explained. Before the Ld. Addl. CIT(A) also, no compliance was made by the assessee. The explanation of the assessee that he was consistently travelling and, therefore, could not comply to the notices, is not found convincing. Once the assessee had filed the appeal, it was his responsibility to track the progress of the appeal and comply to the notices of the Ld. Addl. CIT(A). The assessee can’t escape by merely placing all the blame on the counsel. We, therefore, deem it proper to impose a cost of Rs.5,000/- on the assessee which should be deposited to the Prime Minister’s National Relief Fund within a period of 15 days from the date of receipt of this order. Printed from counselvise.com ITA No.1413/Ahd/2025 (Assessment Year: 2017-18) Hemraj Prabhudas Chandel vs ITO Page 5 of 5 Subject to the payment of cost, we deem it proper to set aside the matter to the file of the Jurisdictional Assessing Officer with a direction to allow another opportunity to explain the source of cash payments against credit card expenses. The assessee has filed a copy of the credit card expenses before us in the paper-book. The assessee will be free to file the additional evidences as brought on record before us or any other evidence as deemed fit, before the Assessing Officer, in support of the explanation for the cash payment towards credit card expenses. The assessee will also comply to the directions of the Assessing Officer and produce the details and documents as required by him. In case the assessee does not comply in the course of set aside proceeding, the Assessing Officer will be at liberty to decide the matter on the basis of materials available on record. 9. In the result, the appeal of the assessee is allowed for statistical purpose. Order pronounced in the open Court on this 27th November, 2025. Sd/- Sd/- (T.R. SENTHIL KUMAR) (NARENDRA PRASAD SINHA) Judicial Member Accountant Member Ahmedabad, the 27th November, 2025 PBN/* Copies to: (1) The appellant (2) The respondent (3) The PCIT (4) The CIT(A) (5) Departmental Representative (6) Guard File By order TRUE COPYE COPY Assistant Registrar Income Tax Appellate Tribunal Ahmedabad benches, Ahmedabad Printed from counselvise.com "