JAYESHBHAI GORDHANBHAI PATEL,ANAND V. THE ITO, WARD-1(3)(1), PETLAD

ITA 71/AHD/2025

AI Insights

The case involves Jayeshbhai Gordhanbhai Patel, an individual engaged in agricultural activities, who appealed against the order of the CIT(A) which upheld the addition of Rs. 23,30,500 as unexplained investments for the Assessment Year 2011-12. The assessee did not initially file his return on time and was later found to have made substantial cash deposits in his bank account, which he could not satisfactorily explain. The Assessing Officer treated these deposits as unexplained income under section 69A of the Income Tax Act, 1961. The CIT(A) dismissed the appeal due to the assessee's failure to provide evidence or substantiate his claims during the appellate proceedings. The Tribunal, after considering the circumstances of the delay in filing the appeal and the lack of a detailed examination of the facts by the CIT(A), decided to set aside the CIT(A)'s order and remand the case for a fresh examination.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 783776 (ITAT-AHMEDABAD)
• Duration Of Justice: 9 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-11-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Appeal Filed On: 09-01-2025
• Other Referred Cases: Collector, Land Acquisition v. Mst. Katiji & Others [1987] 167 ITR 471 (SC), N. Balakrishnan v. M. Krishnamurthy [1998] 7 SCC 123 / [1999] 1 SCR 963
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: C. DHARANI NATH
• Assessee Lawyers: DARSHAN BELANI
• Keywords: Condonation of delay; Set aside; Opportunity of being heard; Reassessment proceedings; Unexplained investment; Period of limitation; Time period of passing order
• Section: 148; 139; 2(14)

Judgement Text

" आयकर अपीलीय अिधकरण, अहमदाबाद \u0011ायपीठ “SMC“,अहमदाबाद । IN THE INCOME TAX APPELLATE TRIBUNAL “ SMC ” BENCH, AHMEDABAD ] ] BEFORE DR. BRR KUMAR, VICE PRESIDENT AND SHRI SIDDHARTHA NAUTIYAL, JUDICIAL MEMBER आयकर अपील सं /ITA No.71/Ahd/2025 िनधा \u000fरण वष\u000f /Assessment Year : 2011-12 Jayeshbhai Gordhanbhai Patel Kishan Cowk Piplav, Anand – 388 460 Gujarat बनाम/ v/s. The ITO Ward-1(3)(1) Petlad – 388 450 \u0013थायी लेखा सं./PAN: BIXPP 2069 Q (अपीलाथ\u0017/ Appellant) (\u0018\u0019 यथ\u0017/ Respondent) Assessee by : Shri Darshan Belani, AR Revenue by : Shri C. Dharani Nath, Sr.DR सुनवाई की तारीख/Date of Hearing : 15/09/2025 घोषणा की तारीख /Date of Pronouncement: 06/11/2025 आदेश/O R D E R PER SIDDHARTHA NAUTIYAL, JM: The present appeal has been preferred by the Assessee against the order of the Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as ‘CIT(A)’] dated 29/09/2022 passed u/s.250 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) for the Assessment Year (AY) 2011-2012. 2. The assessee has raised the following grounds of appeal: “1. The Hon’ble CIT(A) erred in law and facts of the case by upholding the addition amounting to Rs.23.30,500/- made as unexplained investments in case of the appellant for AY 2011-12. 2. The appellant reserves the right to add/alter or amend any of the ground of appeal.” Printed from counselvise.com ITA No.71/Ahd/2025 Jayeshbhai Gordhanbhai Patel vs. ITO Asst. Year : 2011-12 2 Condonation of delay 3. At the outset, we note that there is a delay of 771 days in filing of the present appeal. The assessee has filed an application for condonation of delay along with an Affidavit, wherein it has been submitted the order of the learned CIT(A), Delhi, was passed on 29.09.2022, but the assessee did not receive the physical copy of the said order through post or courier. Further, it has been explained that the assessee is not well-versed with the use of electronic communication such as e-mail and does not access it regularly. Owing to these reasons, he was not aware of the adjudication of his appeal by the CIT(A), and consequently, could not take the required steps for filing the appeal before this Tribunal within the prescribed limitation period. It is further seen from the Affidavit that the assessee came to know about the appellate order only upon receipt of the issue letter dated 14.11.2024 issued by the Income Tax Officer, Ward 1(3)(1), Petlad, for recovery of outstanding demand. Immediately thereafter, the assessee took necessary steps to file the appeal before this Tribunal, resulting in a delay of 771 days in filing the same. The assessee has submitted that the delay is neither deliberate nor intentional but occurred due to the genuine and bona fide circumstances beyond his control. 4. We have carefully considered the submissions made and the reasons explained by the assessee in his affidavit. We are of the considered view that the cause of delay explained by the assessee constitutes a sufficient cause within the meaning of section 253(5) of the Act. The Hon’ble Supreme Court in the case of Collector, Land Acquisition v. Mst. Katiji & Others [1987] 167 ITR 471 (SC) has held that a liberal approach is to be adopted while considering an application for condonation of delay and that substantial justice should prevail over technical considerations. The Hon’ble Court Printed from counselvise.com ITA No.71/Ahd/2025 Jayeshbhai Gordhanbhai Patel vs. ITO Asst. Year : 2011-12 3 further observed that when substantial justice and technical considerations are pitted against each other, the cause of substantial justice deserves to be preferred. Similarly, the Hon’ble Supreme Court in N. Balakrishnan v. M. Krishnamurthy [1998] 7 SCC 123 / [1999] 1 SCR 963 held that the length of the delay is not material; what matters is the acceptability of the explanation offered. If the explanation does not smack of mala fides and is otherwise reasonable, the delay should be condoned in the interest of justice. In the present case, considering the facts and circumstances narrated in the affidavit and the supporting documents placed on record, we are satisfied that the assessee was prevented by reasonable and bona fide cause in not filing the appeal within the prescribed period. The delay in filing the appeal cannot be said to be deliberate or due to negligence. Accordingly, in the interest of justice and equity, and following the ratio laid down by the Hon’ble Supreme Court in Collector, Land Acquisition v. Mst. Katiji (supra) and N. Balakrishnan v. M. Krishnamurthy (supra), we hereby condone the delay of 771 days in filing of the present appeal. 5. The appeal is therefore admitted for adjudication on merits. On Merits 6. The brief facts of the case are that the assessee, Shri Jayeshbhai Gordhanbhai Patel, an individual engaged in agricultural activity, did not file his return of income for Assessment Year 2011-12 within the due date prescribed under section 139 of the Act. Subsequently, the Assessing Officer (“AO”) received information that the assessee had deposited a total amount of Rs. 23,30,500/- in cash in his bank account during the relevant financial year. Based on this information, the case was reopened by issuing notice under section 148 of the Act. In response, the assessee filed his return Printed from counselvise.com ITA No.71/Ahd/2025 Jayeshbhai Gordhanbhai Patel vs. ITO Asst. Year : 2011-12 4 declaring total income of Rs. 1,13,260/- and agricultural income of Rs. 85,000/-. During the reassessment proceedings, the AO issued multiple statutory notices and provided various opportunities to the assessee to furnish supporting documents explaining the source of the cash deposits. However, the assessee failed to produce any documentary evidence to substantiate his claim. The assessee submitted a written statement asserting that he was engaged solely in agriculture, derived income from ancestral and partnership agricultural lands, and that the deposited cash represented long- term household savings of himself and his family, kept at home for social and family needs. The AO, after examining the bank statement, found that large cash deposits, including Rs. 20,00,000/- on a single day, were made without any credible explanation. The AO rejected the explanation as an afterthought and treated the entire sum of Rs. 23,30,500/- as unexplained income under section 69A of the Act, completing the assessment at a total income of Rs. 24,43,760/-. 7. Being aggrieved, the assessee filed an appeal before the Commissioner of Income Tax (Appeals) Delhi (“CIT(A)”), raising various grounds, inter alia, that the assessment order was passed without granting proper opportunity of hearing, that the addition of Rs. 23,30,500/- as unexplained investment was unjustified, and that the amount represented proceeds from sale of agricultural land not chargeable to tax under section 2(14) of the Act. However, the CIT(A) noted that the assessee did not respond to any of the notices of hearing issued under section 250 of the Act, nor filed any written submission or evidence in support of his grounds of appeal. The CIT(A) observed that despite repeated opportunities, the assessee failed to establish the genuineness of the source of cash deposits or furnish evidence relating to agricultural income or sale of agricultural land. The CIT(A) held that merely Printed from counselvise.com ITA No.71/Ahd/2025 Jayeshbhai Gordhanbhai Patel vs. ITO Asst. Year : 2011-12 5 stating that the assessee was engaged in agriculture did not prove the source of the deposits. Accordingly, the CIT(A) upheld the findings of the AO and dismissed the appeal, sustaining the addition of Rs. 23,30,500/- made under section 69A of the Act. 7.1. Thereafter, the assessee filed the present appeal before this Tribunal along with an application for condonation of delay of 771 days, supported by an affidavit explaining that he did not receive the CIT(A) order physically or through e-mail and came to know about the same only upon receipt of a recovery notice dated 14.11.2024 issued by the Income Tax Officer, Ward 1(3)(1), Petlad. Upon discovering this, the assessee immediately took steps to file the present appeal. We have already, in the preceding part of this order, allowed the assessee’s application for condonation of delay after being satisfied with the bona fide reasons furnished by the assessee. 8. Now coming to the merits of the case, we observe that the CIT(A) has dismissed the appeal ex parte without examining the matter in detail on facts and merits. Since the assessee has now explained the reasons for non- compliance and the delay in pursuing the appeal was found to be genuine, we are of the view that in the interest of justice and fair play, the assessee deserves an opportunity to present his case before the first appellate authority. 8.1. Accordingly, we set aside the impugned order of the CIT(A) and restore the matter to his file for de novo adjudication. The CIT(A) is directed to afford adequate opportunity of being heard to the assessee and decide the appeal afresh on merits, in accordance with law. We make it clear that the Printed from counselvise.com ITA No.71/Ahd/2025 Jayeshbhai Gordhanbhai Patel vs. ITO Asst. Year : 2011-12 6 assessee shall cooperate in the appellate proceedings and produce necessary documentary evidence in support of his claim. 9. In the result, the appeal of the assessee is allowed for statistical purposes, in the interest of justice. Order pronounced in the Open Court on 06/11/2025 at Ahmedabad. Sd/- Sd/- (DR. BRR KUMAR) VICE PRESIDENT (SIDDHARTHA NAUTIYAL) JUDICIAL MEMBER अहमदाबाद/Ahmedabad, िदनांक/Dated 0611/2025 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 1. Date of dictation (word processed by H-JM on his computer) : 03.11.2025 2. Date on which the typed draft is placed before the Dictating Member. : 03.11.2025 3. Date on which the approved draft comes to the Sr.P.S./P.S : 4. Date on which the fair order is placed before the Dictating Member for pronouncement. : 5. Date on which fair order placed before Other Member : 6. Date on which the fair order comes back to the Sr.P.S./P.S. : 06.11.25 7. Date on which the file goes to the Bench Clerk. : 06.11.25 8. Date on which the file goes to the Head Clerk. : 9. The date on which the file goes to the Assistant Registrar for signature on the order. : 10. Date of Despatch of the Order : Printed from counselvise.com "