RAJESH KUMAR BHEMJIBHAI GOTHI,SURAJPURA V. INCOME TAX OFFICERWARD 1, PALANPUR, PALANPUR

ITA 877/AHD/2025

AI Insights

The case involves Rajesh Kumar Bhemjibhai Gothi, the appellant, who contested the assessment order passed by the Income Tax Officer, Ward-1, Palanpur, which treated a cash deposit of Rs. 22,00,000 in his bank account during the demonetization period as unexplained income under Section 69A of the Income Tax Act, 1961. The Assessing Officer completed the assessment ex-parte under Section 144 due to non-compliance by the assessee in filing a return or responding to notices. The First Appellate Authority dismissed the appeal for non-prosecution. The Tribunal found that the Assessing Officer and the CIT(A) had not adequately considered the assessee's submissions and evidence, leading to the decision to remand the case for a thorough re-examination.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 708827 (ITAT-AHMEDABAD)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-07-2025
• 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: MEHUL THAKKAR
• Keywords: Set aside; Additional evidence; Unexplained cash credit; Principle of natural justice
• Section: 144; 142(1)

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD “SMC” BENCH, AHMEDABAD BEFORE SHRI T.R. SENTHIL KUMAR, JUDICIAL MEMBER AND SHRI NARENDRA PRASAD SINHA, ACCOUNTANT MEMBER ITA No.877/Ahd/2025 Assessment Year: 2017-18 Rajesh Kumar Bhemjibhai Gothi Surajpura Post Sangra, TA Palanpur Dist-Banaskantha Palanpur 385001. (Gujarat) [PAN – BFVPG5155D] Vs. Income Tax Officer, Ward – 1, Palanpur, Banaskantha, (Gujarat). (Appellant) (Respondent) Assessee by Shri Mehul Thakkar, AR Revenue by Shri Kamal Deep Singh, Sr. DR Date of Hearing 10.07.2025 Date of Pronouncement 16.07.2025 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, Delhi (in short ‘the CIT(A)’) dated 18.03.2025 for the Assessment Year (A.Y.) 2017-18 in the proceedings under Section 144 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’). 2. The brief facts of the case are that no return of income was filed by the assessee for the A.Y. 2017-18. The Assessing Officer has received an information that there was cash deposit of Rs.22,00,000/- in the bank account of the assessee with Bank of Baroda during demonetization period i.e. from 09/11/2016 to 31/12/2016. A notice u/s 142(1) of the Act ITA No.877/Ahd/2025 (Assessment Year: 2017-18) Rajesh Kumar Bhemjibhai Gothi vs ITO Page 2 of 5 was issued on 14.06.2019 requiring the assessee to file his return. But no return was filed and no compliance was made by the assessee in the course of assessment proceeding. Therefore, the assessment was completed ex-parte under Section 144 of the Act on 17.12.2019 at a total income of Rs.22,00,000/-. 3. Aggrieved with the order of the Assessing Officer, the assessee had filed an appeal before the First Appellate Authority which was dismissed by the Ld. CIT(A) vide the impugned order. Now, the assessee is in second appeal before us. The following grounds have been taken in this appeal: - “1. The CIT(A) has erred in law in confirming the Assessment Order passed by the Assessing Officer assessing the total income at Rs. 22,00,000/- 2. That CT(A) erred in confirming the order of the Assessing Officer for the want of corroborative evidence and submission of the appellant. 3. The appellant could not participate in the appellate proceedings due to the reasons beyond the control of the appellant. The appellant was not in knowledge of the notices sent to the mail id as he had entrusted the work to the Authorized Representative. 4. The appellant had no bonafide intention to evade the notices, the appellant had already raised reasonable grounds before the CIT(A) during the filing of Form 35 in the e- filing portal of the appellant. 5. Both the lower authorities have passed the orders without properly appreciating the facts and they further erred in passing the impugned order without providing sufficient opportunity to explain. This action of the lower authorities is in dear breach of law and Principles of Natural Justice and therefore deserves to be quashed. 6. Both the lower authorities have erred in law and on facts in taxing the assessed income u/s 115BBE of the Act. 7. The learned CIT (A) has erred in law and on facts of the case in confirming the action of the learned AO in initiating penalty u/s 272A(l)(d), 271AAC 8. The learned CIT (A) has erred in law and on facts of the case in confirming action of the Id. AO in charging interest u/s. 234A, 234B, 234C of the Act. 9. The appellant craves leave to add, amend, alter, edit, delete, modify or change all or any of the grounds of appeal at the time of or before the hearing of the appeal.” ITA No.877/Ahd/2025 (Assessment Year: 2017-18) Rajesh Kumar Bhemjibhai Gothi vs ITO Page 3 of 5 4. Shri Mehul Thakkar, Ld. AR of the assessee submitted that the assessee had made compliance before the Assessing Officer in the course of assessment, which was not considered by him. He explained that the compliance was made online in the e-Proceeding, which was probably overlooked by the AO. It was submitted that before the Ld. CIT(A), no compliance could be made due to fault of the counsel, as a result the appeal was dismissed on the ground of non-prosecution. The Ld. AR submitted that the Assessing Officer was not correct in treating the cash deposits in the bank account as income of the assessee without taking into account the submissions of the assessee. He, therefore, requested that the assessee may be allowed another opportunity to explain the cash deposits by setting aside the matter to the file of the Assessing Officer. 5. Per contra, Sh. Kamal Deep Singh, Ld. Sr. DR had no objection if the matter was set aside to the file of the Assessing Officer. 6. We have considered the submissions of the assessee. It is found that the Assessing Officer had treated the entire cash deposits of Rs.22,00,000/- in the bank account of the assessee as unexplained credit under Section 69A of the Act. However, the Assessing Officer had neither called the copy of the bank statement nor examined the entries appearing in the bank statement. The assessee has brought on record a copy of the e-Proceeding Response Acknowledgement dated 16.11.2019, as per which a reply was given in response to the AO’s notice dated 10.10.2019. It was explained that the cash deposit of Rs.22 lakhs represented compensation received from Railway Department due to acquisition of agricultural land and that this compensation was exempt from tax. It appears that this explanation of the assessee was not considered by the ITA No.877/Ahd/2025 (Assessment Year: 2017-18) Rajesh Kumar Bhemjibhai Gothi vs ITO Page 4 of 5 AO and the submissions of the assessee were also not examined on merits. The Ld. CIT(A) had dismissed the appeal of the assessee for the reason that no compliance could be made before him. In the interest of justice, we deem it proper to set aside the matter to the file of the Jurisdictional Assessing Officer with a direction to allow another opportunity to the assessee to explain the source of cash deposits in the bank account. The assessee is also directed to comply before the Assessing Officer and respond to the notices and directions of the Assessing Officer. The assessee will be free to produce the additional evidences, if any, in order to explain the cash deposits and the AO will also be at liberty to examine the evidences as brought on record and thereafter decide the matter on merits. 7. In the result, the appeal of the assessee is allowed for statistical purpose. Order pronounced in the open Court on this 16th July, 2025. Sd/- Sd/- (T.R. SENTHIL KUMAR) (NARENDRA PRASAD SINHA) Judicial Member Accountant Member Ahmedabad, the 16th July, 2025 PBN/*Tanmay Copies to: (1) The appellant (2) The respondent (3) CIT (4) CIT(A) (5) Departmental Representative (6) Guard File By order E C Assistant Registrar Income Tax Appellate Tribunal Ahmedabad benches, Ahmedabad "