THE ITO, WARD-5(3)(1), AHMEDABAD V. KALPANABEN NAYANKUMAR SHAH, AHMEDABAD

MA 99/AHD/2025

AI Insights

The case involves the Income Tax Officer, Ward-5(3)(1), Ahmedabad, as the appellant, and Kalpanaben Nayankumar Shah, the respondent, concerning the assessment years 2016-17 and 2017-18. The Revenue filed Miscellaneous Applications seeking rectification of the ITAT's consolidated order, which had found the assessments invalid due to procedural lapses in issuing notices under section 143(2) of the Income Tax Act. The Tribunal's decision was based on the facts that the original return filed by the assessee could not be e-verified due to a system error, and subsequent returns were not properly acknowledged by the Centralized Processing Center (CPC). The Tribunal dismissed the Revenue's applications, affirming that the assessments were without valid jurisdiction.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 839557 (ITAT-AHMEDABAD)
• Duration Of Justice: 5 month(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 23-02-2026
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2016-2017
• Appeal Filed On: 22-09-2025
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: URVASHI SODHAN
• Assessee Lawyers: RAMESHWAR P MEENA
• Section: 144

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH, AHMEDABAD BEFORE SMT. ANNAPURNA GUPTA, ACCOUNTANT MEMBER MISCELLANEOUS APPLICATION Nos. 99/Ahd/2025 & 100/Ahd/2025 IN I.T (SS).A. Nos. 1877 & 1878/Ahd/2024 (िनधाŊरण वषŊ / Assessment Years : 2016-17 & 2017-18) The Income Tax Officer Ward-5(3)(1), Ahmedabad बनाम/ Vs. Kalpanaben Nayankumar Shah B-13, Taksheel Apt., B/h. Jetabhia Park Bus Stop, N N Road, Paldi, Ahmedabad ̾थायी लेखा सं./जीआइआर सं./PAN/GIR No. : AHZPS1132K (Appellant) .. (Respondent) अपीलाथŎ ओर से /Appellant by : Ms. Urvashi Sodhan, Advocate ŮȑथŎ की ओर से/Respondent by : Shri Rameshwar P Meena, Sr. DR Date of Hearing 16/01/2026 Date of Pronouncement 23/02/2026 (आदेश)/ORDER The present Miscellaneous Applications have been filed by the Revenue seeking rectification in the common, consolidated order passed by the ITAT in assessee’s appeals i.e. ITA Nos. 1877 & 1878/Ahd/2024 for A.Y 2016-17 & 2017-18. 2. On going through the contents of the Miscellaneous Application and after hearing the arguments of the Ld. DR before us, the mistake in the orders of the ITAT is vis-à-vis its finding of fact that; Printed from counselvise.com MA Nos. 99 & 100/Ahd/2025 [ITO vs. Kalpanaben Naryankumar Shah] A.Ys. 2016-17 & 2017-18 - 2 – (i) the assessee had filed return of income, which was e-verified on 28.02.2022, & (ii) the original return of income filed was not e-verified due to system failure and not the fault of the assessee. 3. As per the Revenue, noting above facts, the ITAT had proceeded to hold that the failure to issue notice u/s.143(2) of the Income Tax Act, 1961 (in short ‘the Act’) in the above circumstances had led to jurisdictional error in framing of assessment so as to render assessment framed invalid. 4. The mistake as per the Revenue with respect to both the above facts is: i. The return filed by the assessee was not e-verified on 28.02.2022, but, in fact, the CPC noted the return to be invalid. ii. The AO had never admitted to the fact that the failure to e- verify the original return was due to system failure, but, the said fact noted in the assessment order was only a part of the show cause notice issued to the assessee. 3. On considering the application of the Revenue as above and on going through the order of the ITAT, we do not find any merit in the application filed before us. Undoubtedly, the legal ground of the assessee was allowed noting two facts relating to filing of return of income by the assessee: Printed from counselvise.com MA Nos. 99 & 100/Ahd/2025 [ITO vs. Kalpanaben Naryankumar Shah] A.Ys. 2016-17 & 2017-18 - 3 – i. That the original return filed in response to notice u/s.148 of the Act could not be e-verified due to system error of the Department. ii. That subsequently the assessee had filed return of income and which was e-verified also. 4. Noting the facts as above, the ITAT held that the assessee had on two occasions filed return of income and on the first occasion, the return could not be e-verified for no fault of the assessee. On the second occasion, the ITAT had noted e- verification of the return filed by the assessee and finding that no notice in response to the said return was issued u/s.143(2) of the Act,the ITAT held the assessment framed to be without valid jurisdiction and, hence, invalid. 5. The DR has pointed out to us that the second return filed by the assessee was actually noted by the CPC to be not e-verified. The first return filed by the assessee, he stated, was never admitted by the AO to have been not e-verified due to system failure. His contention is that these were submissions of the assessee, which were part of the show cause notice issued by the AO. 6. Even if we agree with the fact that there was a mistake vis-à- vis the e-verification of the second return filed by the assessee, however, we are unable to agree with the Ld. DR vis-à-vis there Printed from counselvise.com MA Nos. 99 & 100/Ahd/2025 [ITO vs. Kalpanaben Naryankumar Shah] A.Ys. 2016-17 & 2017-18 - 4 – being any mistake in the first return filed by the assessee noted to be not e-verified due to system failure. The ITAT had noted in its order the fact of the AO admitting to the same at Page 2 of his order. The Ld. DR, however, has contended that the AO never agreed to the same, but, in fact, reproduced the assessee’s submission in this regard in his show cause notice. 7. The contents of the show cause notice are reproduced at page 2 of the order of the AO and we find that there is no mention of the fact of the assessee’s return not being verified due to system failure. On the contrary, this fact finds mention in the earlier portion of the order wherein the AO has noted that “on the submission of the assessee that failure to e-verify the ITR was attributable to system failure and not to her,the AO mentioned that the submission is considered and the assessment in this case is made u/s. 144 of the Act merely because the system did not allow to issue notice u/s.143(2) of the Act as no valid return was in the system database. 8. It is clear from the above that the contention of the Ld. DR that the AO had merely reproduced assesses contention of return not being e verified due to system failure in the show cause notice is incorrect but in fact the AO acknowledged the said fact, as rightly noted in the order passed by the ITAT. 9. In view of the above, the fact remains that the assessee did file the return of income originally which the ITAT held to be Printed from counselvise.com MA Nos. 99 & 100/Ahd/2025 [ITO vs. Kalpanaben Naryankumar Shah] A.Ys. 2016-17 & 2017-18 - 5 – deemed to be e-verified and since, admittedly, no notice u/s.143(2) of the Act was issued, there is no change in the decision of the ITAT that the assessment framed was invalid. 10. In view of the above, we do not find any merit in the Miscellaneous Applications filed by the Revenue and dismiss the same. 11. In the result, both Miscellaneous Applications filed by the Revenue are dismissed. This Order pronounced on 23/02/2026 Sd/- (ANNAPURNA GUPTA) ACCOUNTANT MEMBER Ahmedabad; Dated 23/02/2026 S. K. SINHA TRUE COPY आदेश की Ůितिलिप अŤेिषत/Copy of the Order forwarded to : 1. अपीलाथŎ / The Appellant 2. ŮȑथŎ / The Respondent. 3. संबंिधत आयकर आयुƅ / Concerned CIT 4. आयकर आयुƅ(अपील) / The CIT(A)- 5. िवभागीय Ůितिनिध, आयकर अपीलीय अिधकरण, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाडŊ फाईल / Guard file. आदेशानुसार/ BY ORDER, उप/सहायक पंजीकार (Dy./Asstt. Registrar) आयकर अपीलीय अिधकरण, अहमदाबाद / ITAT, Ahmedabad 1.Date of dictation on 11.02.2026 2.Date on which the typed draft is placed before the Dictating Member 11.02.2026 3.Date on which the approved draft comes to the Sr.P.S./P.S. 4.Date on which the fair order is placed before the Dictating Member for Pronouncement 5.Date on which the fair order comes back to the Sr.P.S./P.S 23.02.2026 6.Date on which the file goes to the Bench Clerk 23.02.2026 7.Date on which the file goes to the Head Clerk…………. 8.The date on which the file goes to the Asstt. Registrar for signature on the order…………………… 9.Date of Dispatch of the Order………Dat Printed from counselvise.com "