MUKESH NARPATLAL SHAH,AHMEDABAD V. THE ITO, WARD-2(1)(2), AHMEDABAD

ITA 597/AHD/2025

AI Insights

This case involves an appeal by Mukesh Narpatlal Shah against the order of the Commissioner of Income-tax (Appeals), National Faceless Appeal Centre, Delhi, concerning the assessment year 2013-14. The primary issues in the appeal included the validity of the notice issued under Section 148 of the Income Tax Act, 1961, the addition of unexplained credits as deemed income, and the lack of proper opportunity for the assessee to present his case. The tribunal noted procedural lapses in the handling of the assessee's case, particularly the failure to provide adequate hearing opportunities and the absence of mandatory sanction prior to the issuance of the notice under Section 148.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 668651 (ITAT-AHMEDABAD)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-06-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2013-2014
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B.P. SRIVASTAVA
• Assessee Lawyers: S UDHIR M EHTA
• Keywords: Opportunity of being heard; Unexplained cash credit; Principle of natural justice; Deemed to accrue or arise in india; Reason to believe
• Section: 148; 142(1); 271(1)(c)

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH, AHMEDABAD BEFORE DR. B.R.R. KUMAR, VICE-PRESIDENT SHRI T.R. SENTHIL KUMAR, JUDICIAL MEMBER I.T.A. No. 597/Ahd/2025 (Assessment Year: 2013-14) Mukesh Narpatlal Shah, C-201, Dev Archan Flats, Opp. Kochrab Ashram, B/h. Bony Travels, Paldi, Ahmedabad-380007 [PAN : AMKPS 9584 P] Vs. Income Tax Officer, Ward 2(1)(2), Ahmedabad (Appellant) .. (Respondent) Assessee by : Shri Sudhir Mehta, AR Revenue by: Shri B.P. Srivastava, Sr DR Date of Hearing 02.06.2025 Date of Pronouncement 23.06.2025 O R D E R PER DR. B.R.R. KUMAR, VICE-PRESIDENT : This appeal has been filed by the assessee against the order passed by the Ld. Commissioner of Income-tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi (hereinafter referred to as \"CIT(A)\" for short) dated 26.02.2024 passed under Section 250 of the Income-tax Act, 1961 [hereinafter referred to as \"the Act\" for short], for Assessment Year (AY) 2013-14. 2. The grounds of appeal raised by the Assessee are as follows:- “1. The CIT(A) erred in law and facts to confirm the order of the assessing officer wherein the notice issued u/s 148 of the Income Tax act is on vague information which were received from a third party cannot be a basis for forming a reasonable belief as to escapement of income. Further there is no legal evidence on the basis of which reason to believe can be justified and there was no income escaped assessment. 2. The CIT(A) erred in law to confirm the addition on account of unexplained credit of Rs. 96,02,771/- u/s 68 of the Act and being added as deemed income u/s ITA No. 597/Ahd/2025 Mukesh Narpatlal Shah Vs. ITO Asst. Year : 2013-14 - 2– 68 r/w 115BBE of the Income Tax Act All the credits were received in bank account of the assessee from banking channels from the parties who themselves are Income Tax assessee. The source of the credit is the bank account of the depositor. All the ledger accounts has placed on record by reply dated 21.03.2022 before assessing officer in view of the Show Cause Notice dated 20.03.2022 which were not considered properly. The additions made are arbitrary and without any adverse material on record 3. No proper opportunity was given to the assessee before framing the assessment as well as before appellate proceedings. The proposed additions were made have no link of the reasons which result into the assessment order framed in haste. Thus the additions made are against the principal of natural justice and are arbitrary and highly excess. 4 The assessing officer has not placed on record the approval u/s. 151 of the act. The approval stated in the notice u/s 143(2) r.w. 147 of the act dated 15.12.2021 which shows that: \"Hence, necessary sanction to issue notice u/s 148 is requested for from Pr. CIT as per the provisions of section 151 of the act.\" Therefore, the sanction were not obtained before issuing the notice u/s 148 of the act. The reasons for passing order is totally wrong as the assessee fully complied with the notice u/s 148 of the IT Act by filing the ITR on 24/03/2021 similarly all the notice u/s 142(1) were properly responded. The assessing officer has failed to appreciate the reply by the assessee in true and correct sense. 5 The CIT (A) has erred in law and facts to confirm the addition of the Long Term Capital Loss of Rs. 16,50,194/- from being carry forward and set off in future. 6 The Learned CIT[A] has eared in law to confirm the assessment order which is bad in law and on facts and against the natural Justice. 7. The Learned ITO has initiated penalty proceedings 271(1)(c) when there is no concealment of Income or furnishing inaccurate particulars of Income. It is submitted that the additions made in the assessment order cannot be held as concealment of Income.” 3. The assessment in the case of the assessee was re-opened under Section 147 of the Act, and a notice under Section 148 was issued. During the appellate proceedings before the learned CIT(A), the assessee raised several grounds, including objections to the validity of the notice on the basis of limitation and improper service. Before us as well, the assessee has contended that the mandatory sanction required prior to the ITA No. 597/Ahd/2025 Mukesh Narpatlal Shah Vs. ITO Asst. Year : 2013-14 - 3– issuance of the notice under Section 148 was not obtained, and further, that no opportunity of being heard was granted by the learned CIT(A). It is also on record that the assessee failed to respond to the notices issued by the learned CIT(A), leading to the appeal being decided ex-parte by the Ld. CIT(A) vide his order dated 26.02.2024. 4. During the hearing before us, the Ld. AR submitted that given an opportunity due compliance would be made before the Ld. CIT(A). The Ld. DR objected to this submission in principle. We, however, find that no prejudice would be caused to the Revenue if an opportunity of being heard is given to the assessee. Hence, in the interest of justice, we remand the matter to the Ld. CIT(A) to adjudicate the issues de novo, after issuing notice of hearing afresh. The assessee shall comply to the notices issued by the Ld. CIT(A) without seeking unnecessary adjournments. 5. In the result, the appeal of the assessee is allowed for statistical purposes. The order is pronounced in the open Court on 23.06.2025 Sd/- Sd/- (T.R. SENTHIL KUMAR) (DR. B.R.R. KUMAR) JUDICIAL MEMBER VICE-PRESIDENT Ahmedabad; Dated 23/06/2025 **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 उप/सहायक पंजीकार (Dy./Asstt. Registrar) आयकर अपीलीय अिधकरण, अहमदाबाद / ITAT, Ahmedabad "