SUNNY FULCHANDJI SHAH ,AHMEDABAD V. THE ACIT,CIR-2(1)(1), AHMEDABAD

ITA 1927/AHD/2025

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The case involves Sunny Fulchandji Shah, the appellant, who contested the disallowance of a Rs. 5,00,000 donation claimed under Section 80GGC of the Income-tax Act, 1961, to a political party, which was deemed bogus by the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi. The primary legal contention was the validity of the notice issued under Section 148 for reopening the assessment, which the appellant argued was not justified. The Tribunal's decision hinged on the interpretation of Section 149(b) concerning the time limit for issuing notices for reopening assessments, particularly focusing on whether the amount of income that had escaped assessment met the threshold of Rs. 50,00,000 as required for a valid reopening beyond three years from the end of the relevant assessment year.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 829471 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-01-2026
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Ahmedabad
• Assessment Year: misc
• Appeal Filed On: 13-10-2025
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Reopening of assessment; Principle of natural justice; Opportunity of cross examination; Bogus
• Section: 147; 148; 153A

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH, AHMEDABAD BEFORE DR. B.R.R. KUMAR, VICE-PRESIDENT MS. SUCHITRA R. KAMBLE, JUDICIAL MEMBER ITA No.1927/Ahd/2025 (Assessment Year: 2019-20) Sunny Fulchandji Shah, 6, Arbudgiri Apartment, Rambag Road, Sabarmati, Ahmedabad-380005 [PAN :AYCPS 7838 N] Vs. DCIT, Circle 2(1)(1), Ahmedabad (Appellant) .. (Respondent) Appellant represented by : Shri S.N. Divatia, AR & Shri Samir Vora, AR Respondent represented by: Shri Virbhadra Vishalavat, Sr. DR Date of Hearing 13.01.2026 Date of Pronouncement 13.01.2026 O R D E R PER DR. B.R.R. KUMAR, VICE-PRESIDENT:- This appeal has been filed by the Assessee against the order dated 31.09.2025 passed by the Ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi (‘Ld. CIT (A)’ in short), under Section 250 of the Income-tax Act, 1961 (‘the Act’ in short) for Assessment Year 2019-20. 2. The assessee has raised following grounds of appeal :- “.1.1 The order passed by U/s.250 passed on 31-07-2025 for A.Y. 2019 20 by NFAC [CIT(A)], Delhi for short CIT(A) upholding the disallowance of Rs.5,00,000/ u/s 80GGC treating the impugned donation as bogus is wholly illegal, unlawful and against the principles of natural justice. 2.1 The Id. CIT(A), has grievously erred in law and or on facts in not appreciating that the impugned donation to the said political party was believed to be genuine by the appellant in view of the documentary evidence furnished to him and as such the disallowance of Rs. 5,00,000/- was not justified. 3.1 The Id.CIT(A) has grievously erred in law and or on facts in upholding the reopening of assessment which was illegal and unlawful because the condition precedent for valid reopening were not satisfied. 3.2 That the in the facts and circumstances of the Id. CITIA), ought not to have upheld the impugned donation as bogus and thereby upholding disallowance of Rs.5,00,000/- u/s 80GGG Printed from counselvise.com ITA No. 1927/Ahd/2025 Sunny Fulchandji Shah Vs. DCIT Asst.Year :2019-20 - 2– 3.3 The Id. CIT(A) ought not to have upheld the impugned donation as bogus without providing the material/evidence relied upon him as well as allowing the opportunity of cross examination of the concerned parties. 4.0 The Id. CIT(A) has failed to appreciate that the re-opening u/s 147 was illegal and unlawful since the condition precedent were not satisfied.” 3. The undisputed facts of the case are that a notice u/s 148 of the Act has been issued on 20.04.2023 for escapement of income on account of donation paid to a non- genuine political party of Rs.5,00,000/-. The assessment year before us is AY 2019-20 and the assessee filed return u/s 139(1) of the Act on 27.08.2019, declaring total income of Rs.25,59,370/-. The applicable provisions of the Income-tax Act as on 20.04.2023 reads as under:- “149. Time limit for notice (1) No notice under section 148 shall be issued for the relevant assessment year,一 (a) if three years have elapsed from the end of the relevant assessment year, unless the case falls under clause (b); (b) if three years, but not more than ten years, have elapsed from the end of the relevant assessment year unless the Assessing Officer has in his possession books of account or other documents or evidence which reveal that the income chargeable to tax, represented in the form of- (1) an asset; (ii) expenditure in respect of a transaction or in relation to an event or occasion; or (ii) an entry or entries in the books of account, which has escaped assessment amounts to or is likely to amount to fifty lakh rupees or more: Provided that no notice under section 148 shall be issued at any time in a case for the relevant assessment year beginning on or before Ist day of April, 2021, if a notice under section 148 or section 153A or section 153C could not have been issued at that time on account of being beyond the time limit specified under the provisions of clause (b) of sub-section (1) of this section or section 153A or section 153C, as the case may be, as they stood immediately before the commencement of the Finance Act, 2021.” Printed from counselvise.com ITA No. 1927/Ahd/2025 Sunny Fulchandji Shah Vs. DCIT Asst.Year :2019-20 - 3– 4. Considering the provisions of Section 149(b), the escapement of income prima facie is not likely to amount to Rs.50,00,000/- as the reasons given for escapement was Rs.5,00,000/-. Keeping in view the clear provisions of the Act, the notice issued by the Assessing Officer is treated as invalid and hence the proceedings are treated as void ab initio. 5. In the result, the appeal of the assessee is allowed. Heard, dictated, pronounced and order issued in open court today on 13.01.2026 Sd/- Sd/- (SUCHITRA R. KAMBLE) (DR. B.R.R. KUMAR) JUDICIAL MEMBER VICE-PRESIDENT Ahmedabad; Dated 13.01.2026 **btk आदेशकी\u0007ितिलिपअ ेिषत/Copy of the Order forwarded to : 1. अपीलाथ\u0007/ The Appellant 2. \b थ\u0007/ The Respondent. 3. संबंिधतआयकरआयु\u0015/ Concerned CIT 4. आयकरआयु\u0015(अपील) /The CIT(A)- 5. िवभागीय\bितिनिध, आयकरअपीलीयअिधकरण, अहमदाबाद/ DR, ITAT, Ahmedabad 6. गाड फाईल /Guard file. आदेशानुसार/ BY ORDER, True Copy सहायकपंजीकार (Dy./Asstt.Registrar) आयकरअपीलीयअिधकरण, अहमदाबाद / ITAT, Ahmedabad 1. Date of dictation … ……………..13.01.2026 2. Date on which the typed draft is placed before the Dictating Member ….12.01.2026 3. Other Member…12.01.2026 4. Date on which the approved draft comes to the Sr.P.S./P.S…..12.01.2026 5. Date on which the fair order is placed before the Dictating Member for pronouncement…..13.01.2026 6. Date on which the fair order comes back to the Sr.P.S./P.S….13.01.2026 7. Date on which the file goes to the Bench Clerk …13.01.2026 8. Date on which the file goes to the Head Clerk…………………………………... 9. The date on which the file goes to the Assistant Registrar for signature on the order 10. Date of Dispatch of the Order…………………………………… Printed from counselvise.com "