PRADEEP SUGANCHAND KAWDIYA,AHMEDABAD V. THE DY.CIT, CIRCLE-3(1)(1), AHMEDABAD

ITA 2135/AHD/2025

AI Insights

The case involves Pradeep Suganchand Kawdiya, who appealed against the order of the National Faceless Appeal Centre (NFAC), which confirmed the addition of Rs. 98,25,112 as deemed dividend under section 2(22)(e) of the Income Tax Act. The assessee's income tax return for the Assessment Year 2013-14 was reopened based on information that he had taken a loan from a company where he was a director and significant shareholder. The Assessing Officer (AO) treated this loan as deemed dividend due to the company's surplus reserves. The assessee's appeal to the CIT(A) was dismissed due to non-compliance, leading to the current appeal before the Tribunal.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 839999 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-02-2026
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2013-2014
• Appeal Filed On: 13-11-2025
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KALPESH RUPAVATIA
• Assessee Lawyers: DIVYANG SHAH
• Keywords: Set aside; Opportunity of being heard; Deemed dividend
• Section: 147; 148; 2(22)(e)

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH, AHMEDABAD BEFORE SHRI TR SENTHIL KUMAR, JUDICIAL MEMBER AND SHRI NARENDRA PRASAD SINHA, ACCOUNTANT MEMBER ITA No. 2135/AHD/2025 Assessment Years: 2013-14 Pradeep Suganchand Kawdiya, C/O. Divyang Shah & Co. Chartered Accountants, 201, 2nd floor, Devashish complex, Nr. Regenta, Central Antarim Hotel, Off CG Road, Ahmedabad, Gujarat - 380009 [PAN – AGGPK6400Q] Vs. Deputy Commissioner of Income Tax (DCIT), 3(1)(1), Ahmedabad – 380015 (Appellant) (Respondent) Assessee by Shri Divyang Shah, AR Revenue by Shri Kalpesh Rupavatia, SR-DR Date of Hearing 19.02.2026 Date of Pronouncement 25.02.2026 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), Delhi [hereinafter referred to as ‘CIT(A)’] dated 31.10.2025 for the Assessment Year (AY) 2013-14 in the proceedings u/s 147 r.w.s 144B of the Income Tax Act. 2. The brief facts of the case are that the assessee had filed his return of income for A.Y. 2013-14 on 31.04.2014 declaring total income of Rs.10,92,580/-. The case of the assessee was reopened on the basis of Printed from counselvise.com ITA No. 2135/Ahd/2025 Pradeep Suganchand Kawdiya Vs. DCIT, AY-2013-14 2 information that he was a Director and holding 45% shares of M/s. Omkara Impex & Merchandise Pvt. Ltd. and had taken loan of Rs.1,26,57,030/- from the company which was outstanding. It further transpired that the said company had surplus of Rs.1,92,05,627/- in the reserve and surplus. Thus, the amount advanced to the Director was liable to be treated as deemed dividend u/s. 2(22)(e) of the Income Tax Act. In the course of assessment, the AO was not satisfied with the explanation of the assessee in this regard. He, therefore, worked out the deemed dividend of Rs.98,25,112/- u/s. 2(22)(e) of the Act and accordingly made the addition. The assessment was completed u/s. 147 r.w.s 144B of the Act on 25.09.2021 at total income of Rs.1,09,17,692/-. 3. Aggrieved with the order of the AO, 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. Whether, on facts and in circumstances of the case and in law, Ld. CIT(A) was erred in confirming the addition of Rs. 98,25,112/- u/s. 2(22)(e) of the Act?. 2. Whether, on facts and in circumstances of the case and in law, Ld. AO erred in issuing notice u/s. 148 of the Act?. Further, appellant craves leave to add, amend, alter or withdraw all or any ground of appeal. Printed from counselvise.com ITA No. 2135/Ahd/2025 Pradeep Suganchand Kawdiya Vs. DCIT, AY-2013-14 3 5. Shri Divyang Shah, the Ld. AR of the assessee submitted that the Ld. CIT(A) had dismissed the appeal of the assessee for the reason that no compliance could be made before him. He, therefore, requested that the assessee may be allowed another opportunity by setting aside the matter to the file of Ld. CIT(A). 6. Per contra, Shri Kalpesh Rupavatia, the Ld. SR-DR, supported the order of Ld. CIT(A). He, however, had no objection if the matter was set aside to the file Ld. CIT(A) for allowing another opportunity to the assessee. 7. We have considered the request of the assessee. It is found that the Ld. CIT(A) had allowed as many as three opportunities to the assessee but no compliance was made on any occasion. Neither the assessee had requested for adjournment on any of the dates. The assessee had not explained the reason for complete non-compliance before the Ld. CIT(A). We, therefore, deem it proper to impose a cost of Rs.10,000/- on the assessee which should be deposited to the Prime Minister National Relief Fund within a period of 15 days from the date of receipt of this order. Subject to the payment of cost, the Ld. CIT(A) is directed to allow one more opportunity of being heard to the assessee and to explain and make submissions in respect of the grounds as taken before him. The assessee is also directed to make compliance before the Ld. CIT(A) and furnish the details and clarifications as required by him. In case the assessee does not make any compliance, the Ld. CIT(A) will have liberty to decide the matter on merits on the basis of materials available on record. Printed from counselvise.com ITA No. 2135/Ahd/2025 Pradeep Suganchand Kawdiya Vs. DCIT, AY-2013-14 4 8. In the result, the appeal of the assessee is allowed for statistical purpose. Order pronounced in the Court on 25/02/2026 at Ahmedabad. Sd/- Sd/- (TR SENTHIL KUMAR) (NARENDRA PRASAD SINHA) Judicial Member Accountant Member Dated – 25th February, 2026 Neelesh True Copy आदेश आदेश आदेश आदेश क\u0002 क\u0002 क\u0002 क\u0002 \u0003ितिलिप \u0003ितिलिप \u0003ितिलिप \u0003ितिलिप अ ेिषत अ ेिषत अ ेिषत अ ेिषत/Copy of the Order forwarded to : 1. अपीलाथ\u0007 / The Appellant 2. \b यथ\u0007 / The Respondent. 3. संबंिधत आयकर आयु / Concerned CIT 4. आयकर आयु (अपील) / The CIT(A) 5. िवभागीय \bितिनिध, आयकर अपीलीय अिधकरण / DR, ITAT, 6. गाड\u0014 फाईल /Guard file. आदेशानुसार आदेशानुसार आदेशानुसार आदेशानुसार/BY ORDER, उप उप उप उप/सहायक सहायक सहायक सहायक पंजीकार पंजीकार पंजीकार पंजीकार (Dy./Asstt.Registrar) आयकर आयकर आयकर आयकर अपीलीय अपीलीय अपीलीय अपीलीय अिधकरण अिधकरण अिधकरण अिधकरण, अहमदाबाद अहमदाबाद अहमदाबाद अहमदाबाद / ITAT, Ahmedabad Printed from counselvise.com "