RANNA SHASHANK SHAH,AHMEDABAD V. THE ITO, WARD-5(2)(3), AHMEDABAD

ITA 1400/AHD/2025

AI Insights

This case involves an appeal by Ranna Shashank Shah against the order of the National Faceless Appeal Centre (NFAC), Delhi, concerning the assessment year 2017-18. The primary issue was the addition of Rs.47,81,000 as unexplained money under Section 69A of the Income Tax Act, 1961, due to cash deposits made during the demonetisation period. The assessee argued that these deposits were proceeds from his boutique business. The CIT(A) had dismissed the initial appeal due to non-compliance with procedural notices, which the assessee attributed to multiple litigations affecting his mental state. The Tribunal found the assessee negligent in ensuring compliance with the CIT(A)'s requirements but allowed the appeal for statistical purposes, setting aside the case for further examination.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 790728 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-12-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2017-2018
• Appeal Filed On: 04-07-2025
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAMESHWAR P. MEENA
• Assessee Lawyers: ALPESH SHAH
• Keywords: Set aside; Recovery proceedings
• Section: 143(3); 44AD

Judgement Text

"THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD “D” BENCH, AHMEDABAD BEFORE MS. SUCHITRA KAMBLE, JUDICIAL MEMBER AND SHRI NARENDRA PRASAD SINHA, ACCOUNTANT MEMBER ITA No.1400/Ahd/2025 Assessment Year: 2017-18 Ranna Shashank Shah, 59, Aditya Bungalow, Gyan Sagar Society, Dr. V.S. Road, Atira, Ahmedabad – 380 015. (Gujarat). [PAN – AQAPS 0481 R] Vs. Income Tax Officer, Ward – 5(2)(3), Room No.517, Aayakar Bhavan (Vejalpur), Near Sachin Tower, 100 Ft. Road, Anandnagar-Prahladnagar Road, Ahmedabad – 380 015. (Gujarat). (Appellant) (Respondent) Assessee by Shri Alpesh Shah, AR Revenue by Shri Rameshwar P. Meena, Sr. DR Date of Hearing 24.11.2025 Date of Pronouncement 02.12.2025 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 (NFAC), Delhi (in short “the CIT(A)”) dated 31.10.2023 for the Assessment Year (A.Y.) 2017-18 in the proceeding under Section 143(3) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’). 2. There was a delay of 551 days in filing of this appeal. The assessee has filed an affidavit explaining the reason for the delay. It is submitted that the assessee was facing several litigations pursuant to the Printed from counselvise.com ITA No.1400/Ahd/2025 (Assessment Year: 2017-18) Ranna Shashank Shah vs. ITO Page 2 of 5 proceedings initiated by the Debt Recovery Tribunal against the concerns owned by him and his family members. Due to the multiple litigations, the assessee was mentally disturbed and pre-occupied with the recovery proceedings pending before the Debt Recovery Tribunal. As a result, the present appeal could not be filed in time. The assessee has brought on record the details of various proceedings before the Debt Recovery Tribunal, Sessions Court, CMM Court and Bombay High Court initiated by different Banks and it is found that altogether 14 such matters were pending. Considering the explanation of the assessee, the delay in filing the present appeal by the assessee is condoned. 3. The brief facts of the case are that the assessee had filed his return of income for the A.Y. 2017-18 on 17.12.2017 declaring total income of Rs.8,95,680/-. The case was selected for scrutiny to examine the cash deposits in the bank account during demonetisation period. It transpired that the assessee had made total cash deposit of Rs.47,81,000/- in four bank accounts during the demonetisation period. The Assessing Officer was not convinced with the explanation of the assessee regarding the source of cash deposits. Accordingly, the entire cash deposit of Rs.47,81,000/- was treated as unexplained money and added to the income of the assessee under Section 69A of the Act. The assessment was completed under Section 143(3) of the Act on 26.12.2019 at a total income of Rs.56,76,680/- 4. Aggrieved with the order of the Assessing Officer, 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. Printed from counselvise.com ITA No.1400/Ahd/2025 (Assessment Year: 2017-18) Ranna Shashank Shah vs. ITO Page 3 of 5 5. 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 and on facts in confirming the addition made by the AO in the order passed. 2. The CIT (A) has erred in law and on facts in not considering the provisions of section 44AD of the Act in true spirit and confirming the addition made by the AO 3. The CIT(A) has erred in law and on facts in confirming the addition u/s. 69A made by the AO which is unwarranted of facts. The appellant claims leave to alter, adduce and/or submit any/further ground/ss of appeal before or during the appellate proceedings.” 6. Shri Alpesh Shah, Ld. AR of the assessee, submitted that no compliance could be made before the Ld. CIT(A) who had dismissed the appeal without examining the merits of the addition. The Ld. AR explained that all the notices were sent on the e-mail address. However, the assessee had given an option in Form no.35 that no communication may be sent on his e-mail id. Since the assessee could not comply to the notices, the matter was decided ex-parte by the Ld. CIT(A). The Ld. AR submitted that the assessee was running business of Boutique selling handloom garments and the cash deposits in the bank account represented the sale proceeds. The Ld. AR requested that the assessee may be allowed another opportunity to explain the cash deposits by setting aside the matter to the file of Ld. CIT(A). 7. Per contra, Shri Rameshwar P. Meena, Ld. Sr. DR had no objection if the matter was set aside to the file of the Ld. CIT(A) for allowing another opportunity to the assessee. Printed from counselvise.com ITA No.1400/Ahd/2025 (Assessment Year: 2017-18) Ranna Shashank Shah vs. ITO Page 4 of 5 8. We have considered the request of the assessee. We are not convinced with the explanation of the assessee regarding non-compliance before the Ld. CIT(A). In the faceless scheme, all the notices are mandatorily sent on the e-mail address only. It is not the case of the assessee that the e-mail communications were not received. The Ld. CIT(A) had allowed all together six opportunities but no compliance was made on any of the occasion. When the assessee had filed first appeal before the Ld. CIT(A), the assessee should have been careful enough to ensure that proper compliance was made before the appellate authority. It was the duty of the assessee to watch his affairs before the Ld. CIT(A). The assessee was certainly negligent and his act was lethargic. We, therefore, deem it proper to impose a cost of Rs.10,000/- on the assessee which should be deposited to the Prime Minister’s National Relief Fund within a period of 15 days from the date of receipt of this order. Subject to the payment of tax, the Ld. CIT(A) is directed to allow one more opportunity to the assessee to explain the source of cash deposit in the bank account during the demonetisation period. The assessee too is directed to make compliance before the Ld. CIT(A) in the course of set side proceeding and bring on record the evidences in support of cash deposits and also comply to the requirements of Ld. CIT(A). In case the assessee does not make compliance in the set aside proceeding, the Ld. CIT(A) will be at liberty to pass the order on the basis of materials available on record. Printed from counselvise.com ITA No.1400/Ahd/2025 (Assessment Year: 2017-18) Ranna Shashank Shah vs. ITO Page 5 of 5 9. In the result, appeal of the assessee is allowed for statistical purpose. Order pronounced in the open Court on this 2nd December, 2025. Sd/- Sd/- (SUCHITRA KAMBLE) (NARENDRA PRASAD SINHA) Judicial Member Accountant Member Ahmedabad, the 2nd December, 2025 PBN/* Copies to: (1) The appellant (2) The respondent (3) The PCIT (4) The CIT(A) (5) Departmental Representative (6) Guard File By order TRUE COPYE COPY Assistant Registrar Income Tax Appellate Tribunal Ahmedabad benches, Ahmedabad Printed from counselvise.com "