SONALBEN SANJAYSINH VIHOL,AHMEDABAD V. THE INCOME TAX OFFICER, WARD-1, PATAN

ITA 1828/AHD/2024

AI Insights

The case involves appeals by Sonalben Sanjaysinh Vihol against the orders of the Commissioner of Income Tax (Appeals), which upheld the AO's best judgment assessment adding Rs.63,00,500 to the assessee's income for AY 2014-15. The AO had noted substantial cash deposits and withdrawals in the assessee's bank account, for which no income tax return was filed. The assessee contended that these transactions were not hers but involved other individuals for whom she received a commission. The CIT(A) remanded the matter back to the AO after the assessee provided additional evidence, which the AO later rejected. The Tribunal found that the AO did not adequately verify the assessee's claims and directed a thorough re-examination of the matter.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 771918 (ITAT-AHMEDABAD)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-08-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Assessment Year: 2016-2017
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ABHIJIT
• Assessee Lawyers: CHIRAG SHAH
• Keywords: Condonation of delay; Additional evidence; Period of limitation; Source of fund; Time period of passing order
• Section: 133(6)

Judgement Text

" आयकर अपीलीय अिधकरण, अहमदाबाद \u0011ायपीठ “बी“,अहमदाबाद । IN THE INCOME TAX APPELLATE TRIBUNAL “ B ” BENCH, AHMEDABAD \u0015ी संजय गग\u001a, \u0011ाियक सद\u001b एवं \u0015ी मकरंद वसंत महादेवकर, लेखा सद\u001b क े सम!। ] ] Before Shri Sanjay Garg, Judicial Member And Shri Makarand V. Mahadeokar, Accountant Member आयकर अपील सं /ITA Nos.1827/Ahd/2024 & 1828/Ahd/2024 िनधा \u000fरण वष\u000f /Assessment Years : 2014-15 & 2016-17 respectively Sonalben Sanjaysinh Vihol C/31, Ishan Residency R C Technical Road Ghatlodia Ahmedabad – 380 061 (Gujarat) बनाम/ v/s. The Income Tax Officer Ward-1, Patan – 384 265 \u0013थायी लेखा सं./PAN: ALXPV 4350 Q (अपीलाथ$/ Appellant) (%& यथ$/ Respondent) Assessee by : Shri Chirag Shah, AR Revenue by : Shri Abhijit, Sr.DR सुनवाई की तारीख/Date of Hearing : 20/08/2025 घोषणा की तारीख /Date of Pronouncement: 28/08/2025 आदेश/O R D E R Per Sanjay Garg, Judicial Member: Both the captioned appeals have been preferred by the assessee against the separate orders of the Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as ‘CIT(A)’] of even date 30/07/2024 passed u/s.250 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) for the Assessment Years (AYs) 2014-2015 & 2016-17. Printed from counselvise.com ITA Nos.1827 & 1828/Ahd/2024 Sonalben Sanjaysinh Vihol vs. ITO Asst.Year: 2014-15 & 2016-17 2 2. Both the appeals of the assessee are time-barred by 21 days. Separate applications for condonation of delay have been filed. Considering the averments made in the applications and shortness of delay, the delay in filing these appeals is hereby condoned. Assessee’s appeal in ITA No.1827/Ahd/2024 for AY 2014-15 is taken as lead case for the purpose of narration of facts. ITA No.1827/Ahd/2024 3. The brief facts of the case are that the Assessing Officer (AO) noted that there were huge cash deposits and withdrawal transactions routed through the bank account of the assessee. He, further noticed that the assessee had not filed any return of income for the year under consideration. Therefore, during the assessment proceedings, the AO show-caused to the assessee as to why the aforesaid transactions/deposits in the bank account of the assessee be not treated as the income of the assessee from undisclosed sources. Since there was no response received from the assessee, the AO under the circumstances proceeded to frame the ex-parte/best judgement assessment u/s.144 of the Act and made the impugned addition of Rs.63,00,500/-. 4. Being aggrieved of the said order of the AO, the assessee preferred appeal before the Ld.CIT(A). 5. Before the Ld.CIT(A), the assessee submitted that the assessee is a person having meagre resources of income. That, in fact, neither the assessee had any such huge income as noticed by the AO nor the assessee had entered into any financial transactions as noted by the AO. That, in fact, the bank accounts of the assessee were used for the alleged financial transactions by Printed from counselvise.com ITA Nos.1827 & 1828/Ahd/2024 Sonalben Sanjaysinh Vihol vs. ITO Asst.Year: 2014-15 & 2016-17 3 some other persons against which the assessee was given a meagre commission income. The assessee also furnished the names and addresses, PANs, etc. of the persons, who allegedly made the huge financial transactions through the bank account of the assessee. It was therefore, requested to the Ld.CIT(A) that the issue may be examined afresh in the light of the submissions and additional evidences furnished by the assessee. The Ld.CIT(A), after considering the submissions of the assessee remanded the matter to the file of the AO and called for a remand report on the submissions of the assessee. In the remand report, the AO objected to the admission of the additional evidences. However, the AO mentioned that the details of the persons claimed by the assessee were not complete. That the assessee had furnished the details, such as, names with PANs relating to 14 persons only transactions related to which were amounting to Rs.38.93 lakhs, whereas, the assessee, as per the records, had transactions in his book account of approximately Rs.63 lakhs. He, however, did not examine the details furnished by the assessee and rejected the evidences furnished by the assessee stating that the same was an after-thought. The Ld.CIT(A), thereafter, considering the aforesaid remand report held that in this case there were cash deposits in the bank account of the assessee and that relevant provision of section 69A of the Act were fulfilled, therefore, he upheld the assessment order. 5. Being aggrieved by the order of the Ld.CIT(A), the assessee has come in appeal before the Tribunal. 6. We have heard the rival submissions of the parties and gone through the record. Though, there was a failure on the part of the assessee, in this Printed from counselvise.com ITA Nos.1827 & 1828/Ahd/2024 Sonalben Sanjaysinh Vihol vs. ITO Asst.Year: 2014-15 & 2016-17 4 case, to come with clean hands before the AO and furnish the requisite details. Further, he did not participate in the assessment proceedings and under such circumstances, the AO was left with no alternative option other than to pass the best judgement assessment order u/s.143(3) of the Act on the basis of material available on record. However, during the appellate proceedings, the assessee had explained that the transactions in question did not belong to him. That, in fact, his account was used by certain other persons for financial transactions for which he was paid commission income. The assessee also furnished the names, addresses, including PANs, etc. of the persons, who had done financial transactions through his account. The Ld.CIT(A) considering the additional evidences furnished by the assessee, remanded the matter to the file of AO. Under these circumstances, the AO, in our view, was supposed to examine the contentions of the assessee on merits. However, the AO completely failed to verify the contentions made by the assessee. The assessee having furnished the names of 14 persons and furnished details PANs, etc., the AO was supposed to verity the said details, calling for information from the said persons and further to gather the details of transactions and nature of transactions, etc. from the concerned banks also. Though, in this case, there was a failure on the part of the assessee to fully and truly disclose the correct facts during the assessment proceedings, however, it has been held, time and again, by the various courts of law that the Income Tax Department should collect only legitimate taxes from the tax- papers. The Income Tax Department, is not supposed to punish the assessees for their mistakes and charge undue taxes rather, it is to charge tax on the real income of an assessee. Merely because there was a default on the part of the assessee to present true picture during the assessment proceedings, the assessee in our view, should not be burdened with heavy taxes if, in fact, the Printed from counselvise.com ITA Nos.1827 & 1828/Ahd/2024 Sonalben Sanjaysinh Vihol vs. ITO Asst.Year: 2014-15 & 2016-17 5 alleged transactions did not belong to him but to some other persons. The assessee, in this case, has not made a vague or general submissions that the amount/transactions belonged to other persons, rather he has furnished names, PANs of the concerned persons. So, under the circumstances, the bonafide on the part of the assessee stood established. As noted above, since the assessee has pleaded that he was a man of meagre resources and did not have any much income, therefore, as commonly observed, the assessee avoided income-tax proceeding being not aware of the consequences of the action that can be taken against him for offering his bank account to some other persons for financial transactions. The assessee may have committed violation of law, however, for the purpose of taxation of his income, only his real income is required to be taxed. Under these circumstances, we are of the view that the entire case is required to be re-examined at the hands of the AO. We, therefore, restore the issue to the file of the AO for de novo assessment. It is directed that the AO will verify the details furnished by the assessee and will also call for information from the bank authorities and also call for the details from the concerned persons, who allegedly made transactions through the bank account of the assessee. If it is found that the said transaction belonged to other persons, then the AO will pass the assessment order accordingly. It is also directed, in exercise of powers u/s.254 read with section 133(6) of the Act, that if the AO found that the transactions belonged to some other persons, whose income has escaped assessment, the AO will be at liberty to re-open the assessment of those persons or to pass the information to the concerned AO for re-opening the assessment of those concerned persons and the limitation period in those cases will be applicable as per the provisions u/s.153(6) of the Act. Printed from counselvise.com ITA Nos.1827 & 1828/Ahd/2024 Sonalben Sanjaysinh Vihol vs. ITO Asst.Year: 2014-15 & 2016-17 6 7. With the above observations, the appeal of the assessee in ITA No.1827/Ahd/2024 for AY 2014-15 is treated as allowed for statistical purposes. ITA No.1828/Ahd/2024 for AY 2016-17 8. Since the facts and issue involved in this appeal is identical to that has been discussed as above in assessee’s appeal for AY 2014-15 in ITA No.1827/Ahd/2024, our findings given above on the identical issue will mutatis mutandis apply herein, and this appeal of the assessee is, accordingly, allowed for statistical purposes. 9. In the result, both the appeals of the assessee are treated as allowed for statistical purposes. Order pronounced in the Open Court on 28/08/2025. Sd/- Sd/- (Makarand V. Mahadeokar) Accountant Member ( Sanjay Garg ) Judicial Member अहमदाबाद/Ahmedabad, िदनांक/Dated 28/08/2025 टी.सी.नायर, व.िन.स./T.C. NAIR, Sr. PS आदेश की #ितिलिप अ$ेिषत/Copy of the Order forwarded to : 1. अपीलाथ% / The Appellant 2. #&थ% / The Respondent. 3. संबंिधत आयकर आयु' / Concerned CIT 4. आयकर आयु' ) अपील ( / The CIT(A)- 5. िवभागीय #ितिनिध , अिधकरण अपीलीय आयकर , अहमदाबाद /DR,ITAT, Ahmedabad. 6. गाड\u000f फाईल / Guard file. आदेशानुसार/ BY ORDER, स&ािपत #ित //True Copy// सहायक पंजीकार (Asstt. Registrar) आयकर अपीलीय अिधकरण, ITAT, Ahmedabad Printed from counselvise.com "