NAVNITBHAI DHANJIBHAI PATEL (HUF),AHMEDABAD V. NFAC, ASSESSMENT UNIT PRESENT JURIDICTION THE ITO, WARD-7(2)(1), AHMEDABAD

ITA 780/AHD/2023

AI Insights

This case involves an appeal by Navnitbhai Dhanjibhai Patel (HUF) against the order of the National Faceless Appeal Centre, Delhi, for the Assessment Year 2018-19. The primary issue arose from the assessee's failure to file a return of income, coupled with substantial cash deposits and withdrawals noted in the assessee's bank account. The Assessing Officer (AO) initiated proceedings under section 147 of the Income Tax Act, 1961, after receiving information about these transactions. The AO treated the unexplained cash deposits and credit entries as unexplained cash credits under section 68 of the Act, leading to a significant tax assessment. The CIT(A) upheld the AO's decision, prompting the assessee to appeal to the Tribunal. The Tribunal found that the assessee had not adequately complied at earlier stages but allowed a further opportunity to explain the transactions, emphasizing the need for a fair hearing.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 315662 (ITAT-AHMEDABAD)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-05-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2018-2019
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KAMLESH MAKW ANA
• Assessee Lawyers: PRITESH SHAH
• Keywords: Set aside; Opportunity of being heard; Additional evidence; Unexplained cash credit
• Section: 147; 148; 68

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH, AHMEDABAD BEFORE MS. SUCHITRA KAMBLE, JUDICIAL MEMBER & SHRI NARENDRA PRASAD SINHA, ACCOUNTANT MEMBER आयकर अपील सं./I.T.A. No. 780/Ahd/2023 (िनधा\u0005रण वष\u0005 / Assessment Year: 2018-19) Navnitbhai Dhanjibhai Patel (HUF) 41, Applewoodvilas, Near Surabhitvatika, Near Shantipura Cross Roads, Sardar Patel Ring Road, Shela, Ahmedabad, Gujarat – 380058, बनाम/ Vs. ITO, Ward-7(2)(1) Ahmedabad थायी लेखा सं./जीआइआर सं./PAN/GIR No. : AAHHN0090G (Appellant) .. (Respondent) अपीलाथ\u0012 ओर से /Appellant by : Shri Pritesh Shah, AR. \u0014\u0015थ\u0012 की ओर से/Respondent by : Shri Kamlesh Makwana CIT-DR Date of Hearing 01/05/2025 Date of Pronouncement 13/05/2025 O R D E R PER SHRI NARENDRA PRASAD SINHA, AM: This appeal is filed by the assessee against the order of the National Faceless Appeal Centre, Delhi (in short ‘the CIT(A)’), dated 22.09.2023 for the Assessment Year (A.Y.) 2018-19. 2. The brief facts of the case are that the assessee did not file its return of income for the A.Y. 2018-19. The AO had received information that the assessee had made cash deposit of Rs.91,07,500/- and cash withdrawals of ITA No.780/Ahd/2023 [Navnitbhai Dhanjibhai Patel (HUF) vs. ITO] - 2 – Rs.1,62,37,866/- in the bank account maintained with ICICI Bank, during the financial year 2017-18 relevant to A.Y.2018-19. Therefore, the AO had initiated proceeding u/s 147 of the Act after recording proper reason. The assessee had filed return of income in response to notice u/s 148 of the Act showing Nil income. The assessee, however, did not comply in the course of assessment proceeding and the source of cash deposits and other credits in the bank account was not explained. In the course of assessment, the AO made enquiries from the bank and found that total cash deposit of Rs.91,07,500/- and credit entries by cheque/RTGS of Rs.17,77,79,222/- was appearing in the bank account of the assessee. In the absence of any explanation on the part of the assessee, the Assessing Officer treated the entire cash deposits as well as the credit entries in the bank accounts as unexplained cash credit under section 68 of the Act. The assessment was completed under Section 147 rws 144B of the Act on 28.03.2023 at total income of Rs.18,68,86,720/-. 3. Aggrieved with the order of the Assessing Officer, the assessee had filed an appeal before the First Appellate Authority which was decided vide the impugned order and appeal of the assessee was dismissed. 4. The assessee is now in second appeal before us. The following grounds have been taken in this appeal: - 1. The learned CIT(A) erred in law and on facts in not granting the adequate opportunity of being heard to the appellant during the course of appellate proceedings, such opportunity should have been granted in the interest of justice. 2. The learned CIT(A) erred in law and on facts in confirming the reassessment order passed by Assessing Officer, under section 147 read with section 144B of the Income Tax Act, 1961, such order is requested to be quashed. ITA No.780/Ahd/2023 [Navnitbhai Dhanjibhai Patel (HUF) vs. ITO] - 3 – 3. The learned CIT(A) erred in law and on facts in confirming the addition of Rs.91,07,500/- made by the AO in respect of cash deposited in Bank considering the same as unexplained money under section 69A of the Income Tax Act, 1961, such addition is requested to be deleted. 4. The learned CIT(A) erred in law and on facts in confirming the addition of Rs.17,77,79,222/-made by the AO in respect of cash credit in the Bank considering the same as unexplained under section 68 of the Income Tax Act, 1961, such addition is requested to be deleted.” 5. Shri Pritesh Shah, Ld. AR of the assessee submitted that the Ld. CIT(A) had dismissed the appeal of the assessee without examining the merits of the addition. He explained that no compliance could be made by the assessee before the Ld. CIT(A) and for this reason the appeal was dismissed. He, therefore, requested that the assessee may be allowed another opportunity to explain the deposits in the bank account and the matter may be set aside to the file of the Assessing Officer. He further submitted that the AO had wrongly made the addition u/s 68 of the Act. The Ld. AR also requested to admit additional evidences in support of the cash and credit entries appearing in the bank account of the assessee. 6. Per contra, Shri Kamlesh Makwana, Ld. CIT-DR submitted that the assessee neither made compliance before the Assessing Officer nor before the ld. CIT(A). He further submitted that the ld. CIT(A) had allowed as many as four opportunities to the assesses but no compliance was made by the assessee on any of these occasions, other than seeking adjournments. He, however, had no objection if the matter was set aside to the ld. CIT(A) for allowing another opportunity to the assessee. ITA No.780/Ahd/2023 [Navnitbhai Dhanjibhai Patel (HUF) vs. ITO] - 4 – 7. We have considered the rival submissions. The undisputed fact is that the assessee neither complied before the Assessing Officer nor before the Ld. CIT(A) and the source of the cash deposits and credits appearing in the bank account was not explained. We, therefore, deem it proper to impose a cost of Rs.10,000/- on the assessee which should be paid to the Income Tax Department within 15 days of the receipt of this order. We are also of the opinion that the Assessing Officer was not correct in treating the entire cash deposits and credit entries in the bank account as income of the assessee without taking into account the debit transactions. The ld. AR of the assessee has submitted that cash deposits in the bank account were made out of earlier withdrawals from the same account. Further, that most of the credit entries were loan transactions, in support of which copy of ledger account and confirmations have now been filed in the paper-book. These are fresh evidences and were not examined by the lower authorities at any stage. We, therefore, 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 to explain the source of cash deposits and the credit entries appearing in the bank account. The assessee will be free to bring on record the evidences filed before us or any other evidence before the CIT(A), to explain the cash & credit entries as appearing in the bank accounts and the ld. CIT(A) will be free to call for the remand report of the AO thereon, if so required. The assessee is also directed to promptly comply before the ld. CIT(A) and not to seek any adjournment. ITA No.780/Ahd/2023 [Navnitbhai Dhanjibhai Patel (HUF) vs. ITO] - 5 – 8. In the result, the appeal of the assessee is allowed for statistical purpose. This Order pronounced on 13/05/2025 Sd/- Sd/- (SUCHITRA KAMBLE) (NARENDRA PRASAD SINHA) JUDICIAL MEMBER ACCOUNTANT MEMBER Ahmedabad; Dated: 13/05/2025 आदेश की \u0013ितिलिप अ\u0018ेिषत/Copy of the Order forwarded to : 1. अपीलाथ\u0012 / The Appellant 2. \u0014\u0015थ\u0012 / The Respondent. 3. संबंिधत आयकर आयु\u001b / Concerned CIT 4. आयकर आयु\u001b(अपील) / The CIT(A)- 5. िवभागीय \u0014ितिनिध, आयकर अपीलीय अिधकरण, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाड% फाईल / Guard file. आदेशानुसार/ BY ORDER, उप/सहायक पंजीकार (Dy./Asstt. Registrar) आयकर अपीलीय अिधकरण, अहमदाबाद / ITAT, Ahmedabad "