MAHESHKUMAR RAJKARANBHAI SHAH,DEESA V. THE ITO, WARD-1, PALANPUR

ITA 1167/AHD/2025

AI Insights

The case involves Maheshkumar Rajkaranbhai Shah, who appealed against the order of the National Faceless Appeal Centre (NFAC) concerning the Assessment Year 2014-15. The appeal was primarily against the ex-parte decision of the NFAC, which confirmed the reopening of the assessment under Section 147 of the Income Tax Act, 1961, and the addition of Rs.14,33,400 as unexplained on-money payment for a property purchase. The assessee argued that he was not given a reasonable opportunity of hearing and that the materials used for the addition were uncorroborated and not provided to him for cross-examination. The Tribunal found that the notices were not served as per the assessee's preference, leading to the decision to set aside the matter for a fresh hearing.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 705884 (ITAT-AHMEDABAD)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-07-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Assessment Year: 2014-2015
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MAMTA SINGH
• Assessee Lawyers: M. K. PATEL
• Keywords: Set aside; Corroborative evidences; Documents seized; Reopening of assessment
• Section: 147; 69; 80C

Judgement Text

"IN 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.1167/Ahd/2025 Assessment Year: 2014-15 Maheshkumar Rajkaranbhai Shah, Chandan Society, Deesa, Deesa – 385 535. (Gujarat) [PAN – AIJPS 0755 P] Vs. The Income Tax Officer, Ward – 1, Income Tax Office, Palanpur, Distt. Banaskantha –385 001 (Gujarat). (Appellant) (Respondent) Assessee by Shri M.K. Patel, AR Revenue by Smt. Mamta Singh, Sr. DR Date of Hearing 25.06.2025 Date of Pronouncement 04.07.2025 O R D E R PER NARENDRA PRASAD SINHA, ACCOUNTANT MEMBER: This appeal is filed by the assessee against the order of National Faceless Appeal Centre (NFAC) [hereinafter referred as ‘CIT(A)’] dated 05.03.2025 for the Assessment Year (A.Y.) 2014-15 in the proceeding u/s 147 read with section 144B of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’). 2. The brief facts of the case are that the assessee had filed his return of income for the A.Y. 2014-15 on 30.10.2014 declaring total income of Rs.3,62,575/-. The case of the assessee was reopened under Section 147 of the Act on the basis of an information that the assessee had purchased a flat for which certain on-money payment was made. The ITA No.1167/Ahd/2025 (Assessment Year: 2014-15) Maheshkumar Rajkaranbhai Shah vs ITO Page 2 of 5 documents seized in the course of search in the case of one Shri Madanlal Fatehlal Jain revealed that the assessee had purchased a flat on 11.10.2013 for a sale consideration of Rs.31,15,500/- and the on-money paid in respect of the said flat was Rs.59,82,300/-. In the course of assessment, no explanation was given by the assessee in respect of the on-money payment for the purchase of this flat. As the assessee was a co-owner of the said flat, a sum of Rs.14,33,400/- in respect of on-money payment was treated as income of the assessee under Section 69 of the Act. Further, deduction of Rs.1,05,725/- claimed under Chapter-VIA of the Act was also disallowed in the absence of any supporting evidence. The assessment was completed under Section 147 of the Act read with Section 144B of the Act on 31.03.2022 at total income of Rs.18,76,630/-. 3. 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. CIT(A) vide the impugned order and the appeal of the assessee was dismissed. 4. Now, the assessee is in second appeal before us. The following grounds have been taken in this appeal: - 1. That on facts, and in law, the learned NFAC has grievously erred in not granting reasonable opportunity of hearing to the appellant, and in deciding the appeal vide ex-parte order. 2. That on facts, and in law, the learned NFAC has grievously erred in confirming the re-opening of assessment u/s.147 of the Act. 3. That on facts, and in law, the learned NFAC has grievously erred in confirming the addition on the basis of uncorroborated material found from third party, which is not supplied to the appellant, and in not granting opportunity of cross-examination of the persons whose statements are referred in the order under appeal. ITA No.1167/Ahd/2025 (Assessment Year: 2014-15) Maheshkumar Rajkaranbhai Shah vs ITO Page 3 of 5 4. That on facts, and in law, the learned NFAC has grievously erred in confirming the addition of Rs.14,33,400/- made u/s 69 of the Act towards alleged unexplained on-money paid for purchase of property, and in confirming the levy of tax u/s 115BBE of the Act, ignoring the fact, that the appellant not made any such cash payment. 3. That on facts, and in law, the learned NFAC has grievously erred in confirming the disallowance of deduction claimed under Chapter VI A i.e. Section 80C of Rs.1,00,000/- and Section 80D of Rs.5,725/- 6. The appellant craves leave to add, alter, amend any ground of appeal. 5. Shri M.K. Patel, the Ld. AR of the assessee submitted, at the outset, that the order of the Ld. CIT(A) was passed ex-parte, as no compliance could be made by the assessee before him in the course of appeal proceedings. He explained that all the notices of Ld. CIT(A) were received on the registered e-mail which were not accessed by the assessee. He explained that in Form No.35 the assessee had mentioned e-mail address “[e-mail]” and an option was also given that notice/communication should not be sent on this e-mail. However, the Ld. CIT(A) had sent all the notices on the e-mail only and no physical notice was received by the assessee. As a result, no compliance could be made before the Ld. CIT(A). The Ld. AR requested that the assessee may be allowed another opportunity to represent the matter before the Ld. CIT(A) by setting aside the matter to him. 6. Per contra, Smt. Mamta Singh, the Ld. Sr DR had no objection if the matter was set aside to the file of the Ld. CIT(A). 7. We have considered the submissions of the assessee. It is found that in Form no.35 the assessee in the column “Whether notices/communication may be sent on email?” had given an option as “No”. It is also found from the order of CIT(A) that all the notices were served on registered e-mail id. of the assessee and no physical notice was sent to the assessee. It is true that in the faceless regime, the notices ITA No.1167/Ahd/2025 (Assessment Year: 2014-15) Maheshkumar Rajkaranbhai Shah vs ITO Page 4 of 5 are sent through digital mode. Nevertheless, if there in provision for option in Form-35, wherein an option is given by the assessee that no notices/communication should be sent on the e-mail, the Department is required to send physical notice in such cases. The Department can’t seek an option from the assessee and thereafter not act as per the choice of the assessee. In the case where the assessee has opted for not to receive the notices on e-mail id, the matter can’t be decided by issuing only digital notices on the email as provided. Considering this fact, we deem it proper to set aside the matter to the file of the Ld. CIT(A) with a direction to allow another opportunity to the assessee by issuing notice in physical mode along with the digital mode, to represent his case and make his submissions. At the same time, the assessee is also directed to keep on checking his e-mail account as well as the IT Portal and respond to the notices received from the Ld. CIT(A) in digital mode on the e-mail address as mentioned in Form no.35 or as registered e-mail of the assessee or the notices as uploaded on IT Portal. 8. In the result, appeal of the assessee is allowed for statistical purpose. Order pronounced in the open Court on this 4th July, 2025. Sd/- Sd/- (T.R. SENTHIL KUMAR) (NARENDRA PRASAD SINHA) Judicial Member Accountant Member Ahmedabad, the 4th July, 2025 PBN/* ITA No.1167/Ahd/2025 (Assessment Year: 2014-15) Maheshkumar Rajkaranbhai Shah vs ITO Page 5 of 5 Copies to: (1) The appellant (2) The respondent (3) CIT (4) CIT(A) (5) Departmental Representative (6) Guard File By order TRUE COPYE C Assistant Registrar Income Tax Appellate Tribunal Ahmedabad benches, Ahmedabad 1. Date of taking dictation 25.06.2025 2. Date on which the typed draft is placed before the Dictating Member 30.06.2025 3. Date on which the approved draft comes to the Sr. P.S./P.S. 01.07.2025 4. Date on which the approved draft is placed before other Member 02.07.2025 5. Date on which the fair order is placed before the Dictating Member for pronouncement 04.07.2025 6. Date on which the file goes to the Bench Clerk 04.07.2025 7. Date on which the file goes to the Head Clerk 8. Date on which the file goes to the Assistant Registrar for signature on the order 9. Date of despatch of the Order "