MAULIK ASHOKKUMAR SHAH,GODHRA V. THE ITO, WARD-1, GODHRA

ITA 811/AHD/2025

AI Insights

The case involves Maulik Ashokkumar Shah, who appealed against the order of the Commissioner of Income Tax (Appeals), which confirmed the addition of Rs. 26,50,000 as unexplained credit under section 68 of the Income-tax Act, 1961, for the Assessment Year 2017-18. The addition was based on cash deposits made during the demonetization period, which the assessee failed to satisfactorily explain. The CIT(A) upheld the Assessing Officer's decision through an ex-parte order due to the assessee's non-response to multiple notices. The Tribunal noted the assessee's claim of negligence by a former consultant and decided to restore the matter for a fresh assessment, allowing the assessee another opportunity to present his case.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 708471 (ITAT-AHMEDABAD)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-07-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Assessment Year: 2017-2018
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KAMAL DEEP SINGH
• Assessee Lawyers: MOHIT BALANI
• Keywords: Corroborative evidences; Unexplained cash credit; Tax effect; Principle of natural justice
• Section: 147; 68

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH, AHMEDABAD BEFORE DR. B.R.R. KUMAR, VICE-PRESIDENT Ms. SUCHITRA KAMBLE, JUDICIAL MEMBER I.T.A. No. 811/Ahd/2025 (Assessment Year: 2017-18) Maulik Ashokkumar Shah, Padmshree Electric & Electronics, Pajarapol Road Godhra, Godhra-389001 [PAN : BOMPS 2787 D] Vs. Income Tax Officer, Ward (1), Godhara (Appellant) .. (Respondent) Appellant by : Shri Mohit Balani, AR Respondent by: Shri Kamal Deep Singh, Sr DR Date of Hearing 08.07.2025 Date of Pronouncement 15.07.2025 O R D E R PER DR. B.R.R. KUMAR, VICE-PRESIDENT:- The captioned appeal has been filed by the assessee against the order dated 15.03.2025 passed by the Ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi (hereinafter referred to as \"CIT(A)\" for short), passed u/s 250 of the Income-tax Act, 1961, (hereinafter referred to as \"the Act\" for short) for the Assessment Year (AY) 2017-18. 2. The assessee has raised the following grounds of appeals: “1. Learned CIT(A) has erred in law and on facts of the case in passing the impugned order ex-parte. 2. Learned CIT(A) has erred in law and on facts of the case in not adjudicating anything on the validity of reopening and thus confirming the action of AO in assuming the jurisdiction u/s 147 of the Act. ITA No. 811/Ahd/2025 Maulik Ashokkumar Shah Vs. ITO Asst. Year : 2017-18 - 2– 3. The Learned CIT(A) erred in law by failing to consider that the Ld. AO passed the order without duly considering the relevant facts and in violation of the principles of natural justice. Consequently, the impugned order is liable to be quashed. 4. The Learned CIT(A) erred in law and on facts of the case in not appreciating that AO did not adhere to the prescribed procedure for faceless assessment as mandated under Section 144B of the Act. 5. The Ld. CIT(Appeal) ought to consider the Facts, records available on the face of record before passing the order but the Ld. CIT(Appeal) Fails to consider the same and passed the order. 7. The Ld. CIT(Appeal) ought to consider the Circular Instruction No. 03/2017 dated 21-02-2017 but fails to consider it and passed the order. 8. The learned CIT(Appeal) has erred in law by addition of Rs. 26,50,000/- as an unexplained credit u/s 68 of the Act and assessed the income 115BBE of the act-Tax Effect 26,50,000/-. 9. The Ld. CIT (Appeal) has erred in law by passing the order for levied of interest u/s 234A, 234B, 234C ,234D of the Act. 10. The Ld. CIT(Appeal) has erred in law by Intimating to impose the penalty u/s 271AAC of the Income tax Act.” 3. In the present case, the assessee is stated to be engaged in operating a retail business dealing in various types of mobile phones and accessories. The assessee filed its return of income for the year under consideration on 03.11.2017, declaring a total income of Rs.3,77,650/-. During the course of assessment proceedings, the Assessing Officer observed that the assessee had deposited a sum of Rs.26,50,000/- in cash into his bank account maintained with The Godhra City Co-operative Bank Ltd. during the period of demonetization, i.e. from 09.11.2016 to 31.12.2016. Since the assessee failed to satisfactorily explain the source of the said cash deposit with supporting evidence, the Assessing Officer treated the same as unexplained and added it ITA No. 811/Ahd/2025 Maulik Ashokkumar Shah Vs. ITO Asst. Year : 2017-18 - 3– to the assessee’s income under relevant provisions of the Act. This addition was subsequently upheld by the Ld. CIT(A) by way of an ex-parte order dated 15.03.2025. 4. Upon perusal of the record, we find that several notices u/s 250 of the Act were issued to the assessee on 11.07.2024, 02.01.2025, 21.02.2025, and 08.03.2025, directing the assessee to submit necessary documents, submissions, and clarifications in respect of the cash deposits made during the demonetization period. However, the assessee failed to respond to any of these notices, which led to the dismissal of the appeal by the Ld. CIT(A) through an ex-parte order. 5. Subsequently, the assessee filed an affidavit dated 08.07.2025 before the Tribunal stating that due to negligence on the part of the erstwhile consultant, no steps were taken to file submissions or represent the assessee’s case before the appellate authority. It was further submitted that by the time a new consultant was appointed and had the opportunity to examine the records, the notice dated 08.03.2025 had already lapsed, resulting in the ex-parte adjudication of the appeal. The assessee contended that the default in appearance was inadvertent and solely attributable to the inaction of the earlier consultant. A prayer was made before the Tribunal to afford another opportunity, assuring full cooperation and submission of all necessary explanations and documents before the revenue authorities. 6. We also observe from the record that the assessee did not provide a satisfactory explanation before the Assessing Officer either. However, considering the principles of natural justice and in the interest of fair play, we are of the view that the assessee deserves one final opportunity to present its ITA No. 811/Ahd/2025 Maulik Ashokkumar Shah Vs. ITO Asst. Year : 2017-18 - 4– case. Accordingly, the matter is restored to the file of the Assessing Officer for de novo assessment. The assessee shall comply with the notices issued by the authorities from time to time without seeking unnecessary adjournments. 7. In the result, the appeal of the assessee is allowed for statistical purposes. The order is pronounced in the open Court on 15.07.2025 Sd/- Sd/- (SUCHITRA KAMBLE) (DR. B.R.R. KUMAR) JUDICIAL MEMBER VICE-PRESIDENT Ahmedabad; Dated 15.07.2025 btk आदेश की \u0007ितिलिप अ ेिषत/Copy of the Order forwarded to : 1. अपीलाथ\u0007 / The Appellant 2. \b थ\u0007 / The Respondent. 3. संबंिधत आयकर आयु\u0015 / Concerned CIT 4. आयकर आयु\u0015(अपील) / The CIT(A)- 5. िवभागीय \bितिनिध, आयकर अपीलीय अिधकरण, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाड फाईल / Guard file. आदेशानुसार/ BY ORDER, True Copy सहायक पंजीकार (Dy./Asstt. Registrar) आयकर अपीलीय अिधकरण, , , , अहमदाबाद / ITAT, Ahmedabad 1. Date of dictation 14.07.2025 2. Date on which the typed draft is placed before the Dictating Member 14.07.2025 3. Other Member …14.07.2025.. 4. Date on which the approved draft comes to the Sr.P.S./P.S ……. 5. Date on which the fair order is placed before the Dictating Member for pronouncement …15.07.2025… 6. Date on which the fair order comes back to the Sr.P.S./P.S …15.07.2025…. 7. Date on which the file goes to the Bench Clerk …15.07.2025……… 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 Dispatch of the Order…………………………………… "