NAVIN SHIVJI PATEL,TIRUNELVELI V. DCIT, CIRCLE-1, TIRUNELVELI

ITA 4120/CHNY/2025

AI Insights

The case involves Shri Navin Shivji Patel, the appellant, who contested an order from the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi. The dispute centered on an addition of Rs. 70,00,000 as unexplained investment in the assessment year 2016-17, made under section 144 of the Income Tax Act, 1961. The AO had completed the assessment on a best judgment basis due to non-compliance from the assessee, who was under judicial custody at the time of the notices. The Tribunal noted the absence of the assessee's response during the initial proceedings and decided to remand the case back to the AO for a fair hearing.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 838092 (ITAT-CHENNAI)
• Duration Of Justice: 1 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-02-2026
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2016-2017
• Appeal Filed On: 31-12-2025
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V. ASWATHY
• Assessee Lawyers: SELVAM MUTHU KUMAR
• Keywords: Unexplained investment; Principle of natural justice

Judgement Text

"आयकर अपीलȣय अͬधकरण, ‘डी’ Ûयायपीठ, चेÛनई IN THE INCOME TAX APPELLATE TRIBUNAL ‘D’ BENCH, CHENNAI Įी जॉज[ जॉज[ क े, उपाÚय¢ एवं Įी इंटूरȣ रामा राव, लेखा सदèय क े सम¢ BEFORE SHRI GEORGE GEORGE K, VICE PRESIDENT AND SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER आयकर अपील सं./ITA No.: 4120/CHNY/2025 िनधाᭅरण वषᭅ/Assessment Year: 2016-17 Shri Navin Shivji Patel, No.49-E, Tenkasi Road, Ilanji Subramaniapuram, Ilanji S.O, Tirunelveli – 627 805. PAN: ADJPP 6779M Vs. The Deputy Commissioner of Income Tax, Circle – 1, Tirunelveli (अपीलाथᱮ/Appellant) (ᮧ᭜यथᱮ/Respondent) अपीलाथᱮ कᳱ ओर से/Appellant by : Shri Selvam Muthu Kumar, CA ᮧ᭜यथᱮ कᳱ ओर से/Respondent by : Ms. V. Aswathy, JCIT सुनवाई कᳱ तारीख/Date of Hearing : 18.02.2026 घोषणा कᳱ तारीख/Date of Pronouncement : 18.02.2026 आदेश/ O R D E R PER GEORGE GEORGE K, VICE PRESIDENT: This appeal filed by the assessee is directed against the order of Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi, dated 01.10.2025 passed under section 250 of the Income Tax Act, 1961 (hereinafter called ‘the Act’). The relevant Assessment Year is 2016-17. Printed from counselvise.com ITA No.4120/Chny/2025 :- 2 -: 2. At the very outset, we notice that the First Appellate Authority’s (FAA) order is ex-parte, since there was no compliance from the assessee to the five notices issued from the office of the First Appellate Authority. Further, we also note that the assessment has been completed on best judgment basis u/s.144 of the Act. 3. The Ld.AR submitted that the AO has completed the assessment on best judgment basis u/s.144 of the Act by making addition of Rs.70,00,000/- as unexplained investment, since the assessee has failed to respond to the notices issued from the office of the AO. The Ld.AR submitted that during the course of assessment proceedings, the assessee was under the judicial custody (remand) and hence could not respond to the notices issued by the AO. The Ld.AR further submitted that the FAA had confirmed the addition made by the AO since the assessee has not furnished any supporting document in support of source of purchase of immovable property. The Ld.AR submitted that the entire purchase consideration for the purchase of immovable property was paid through banking channels and was sourced from drawings made by the assessee from the current account of partnership firm M/s. Poonam Trading Company. Therefore, it Printed from counselvise.com ITA No.4120/Chny/2025 :- 3 -: was prayed in the interest of justice and equity, the issue may be restored to the files of the AO as a last opportunity for proper representation of the case by submitting the necessary documents/evidences to explain the source of investment. 4. The Ld.DR submitted that adequate opportunities were provided from the offices of the AO and the FAA and there is no violation of principles of natural justice. Therefore, it was prayed the appeal of the assessee may be dismissed. 5. We have heard rival submissions and perused the materials on record. Before the Tribunal, the assessee has filed a paper- book consisting of documents/evidences to substantiate the source of investment for purchase of immovable property, which has not been produced before the AO and the FAA. The proceedings before the AO as well as the FAA was ex-parte, since the assessee did not respond to various notices issued. We note that the assessee was under the judicial custody (remand) during the course of assessment proceedings and hence, resulted in non-appearance during the assessment / appellate proceedings. Therefore, in the interest of justice and fair play, we are of the view that the matter ought to be restored to the files of the AO. Printed from counselvise.com ITA No.4120/Chny/2025 :- 4 -: Accordingly, the matter is remitted to the files of the AO for fresh adjudication. The AO shall afford reasonable opportunity of hearing to the assessee. The assessee is directed to co-operate with the Revenue and shall not seek unnecessary adjournment. It is ordered accordingly. 6. In the result, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced in the open court on 18th February, 2026 at Chennai. Sd/- Sd/- (इंटूरȣ रामा राव) (INTURI RAMA RAO) लेखा सदèय/ACCOUNTANT MEMBER (जॉज[ जॉज[ क े) (GEORGE GEORGE K) उपाÚय¢ /VICE PRESIDENT चे᳖ई/Chennai, ᳰदनांक/Dated, the 18th February, 2026 RSR आदेश कȧ ĤǓतͧलͪप अĒेͪषत/Copy to: 1. अपीलाथȸ/Appellant 2. Ĥ×यथȸ/Respondent 3. आयकर आयुÈत /CIT, Madurai 4. ͪवभागीय ĤǓतǓनͬध/DR 5. गाड[ फाईल/GF. Printed from counselvise.com "