USMANBHAI HAJIBHAI GHANCHI,AHMEDABAD V. THE ITO, WARD-6(1)(1), AHMEDABAD

ITA 915/AHD/2023

AI Insights

The case involves appeals by Usmanbhai Hajibhai Ghanchi against the orders of the National Faceless Appeal Centre (CIT(A)), Delhi, for the assessment years 2011-12 and 2017-18. The primary issue in both appeals was the unexplained cash deposits in the assessee's bank accounts, which were treated as undisclosed income by the Assessing Officer under section 147 and section 68 of the Income Tax Act. The Tribunal noted the lack of compliance and explanation from the assessee in the earlier proceedings but decided to set aside the matters to allow the assessee another opportunity to present his case, emphasizing the need for a fair hearing.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 297935 (ITAT-AHMEDABAD)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-04-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2011-2012
• Laws Referred To: Income Tax Act
• Result in Favour of: Matter Remanded
• Court: TRIBUNAL
• Department Lawyers: TRUPTI PATEL
• Assessee Lawyers: TEJ SHAH
• Keywords: Set aside; Additional evidence; Unexplained cash credit; Capital receipt; Rectification of order
• Section: 147; 144; 154; 133(6)

Judgement Text

"THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD “D” BENCH Before Shri Siddhartha Nautiyal, Judicial Member And Shri Narendra Prasad Sinha, Accountant Member Usmanbhai Hajibhai Ghanchi, C/O H.S. Hotelwala, AMTS Staff Quarters, Behrampura, Ahmedabad PAN: APPPG2114M (Appellant) Vs The ITO, Ward-6(1)(1), Ahmedabad (Respondent) Assessee by: Shri Tej Shah, A.R. Revenue by: Smt. Trupti Patel, Sr. D.R. Date of hearing : 03-04-2025 Date of pronouncement : 24-04-2025 आदेश/ORDER Per Narendra Prasad Sinha, Accountant Member: These two appeals are filed by the assessee against the order of National Faceless Appeal Centre (hereinafter referred as “CIT(A)”), Delhi dated 21-06-2023 and dated 01-12-2023 for the assessment years 2011-12 and 2017-18 respectively. 2. There was delay of 82 days in filing the Appeal No. 915/Ahd/2023 for assessment year 2011-12. The assessee had filed an affidavit explaining the reason for delay. It is submitted that income tax matters and the appeal filing was looked after by his counsel, who neither appeared before the ld. CIT(A), nor informed him about the order of the CIT(A) in time. As a result, ITA Nos. 915/Ahd/2023 & 34/Ahd/2024 Assessment Year 2011-12 & 2017-18 I.T.A Nos. 915/Ahd/2023 & 34/Ahd/2024 Usmanbhai Hajibhai Ghanchi, A.Y. 2011-12 & 2017-18 2 there was delay of 82 days in filing of the appeal. Considering the explanation of the assessee, the delay in filing of the appeal is condoned. 3. As the issue involved in the two appeals were identical, both the matters were heard together and are being disposed of vide this common order. 4. We will first take up ITA No. 915/Ahd/2023 for assessment year 2011-12. ITA No. 915/Ahd/2023 5. The brief facts of the case are that the assessee did not file his return of income for assessment year 2011-12. The Assessing Officer had received an information about deposit of cash in the bank account of the assessee based on which the Assessing Officer recorded his reason and reopened the case u/s. 147 of the Act. There was no compliance by the assessee in the course of assessment proceeding. The Assessing Officer made inquires u/s. 133(6) of the Act from the Banks and found that total cash deposit of Rs. 6,11,17,844/- was made in 10 different bank accounts of the assessee. It was also found that the assessee had disclosed an amount of Rs. 84,12,744/- in respect of deposits/credits in four bank accounts in the Income Declaration Scheme (IDS) 2016. The Assessing Officer, therefore, allowed credit of the amount disclosed under IDS and the balance unexplained credit in the bank accounts of Rs. 5,27,05,100/- was considered as unexplained income of the assessee from undisclosed source. The assessment was I.T.A Nos. 915/Ahd/2023 & 34/Ahd/2024 Usmanbhai Hajibhai Ghanchi, A.Y. 2011-12 & 2017-18 3 completed u/s. 144 r.w.s. 147 of the Act on 19-12-2018 at total income of Rs. 5,27,05,100/-. 6. 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. The assessee is in second appeal before us. 7. The following grounds have been taken in this appeal: - “1. The CIT(A) erred in law and in the facts of the case in confirming the order of the AO in exercising jurisdiction u/s 147 of the act. 2. The CIT(A) erred in law and in the facts of the case in confirming the order of the AO in making addition of Rs. 5,27,05,100/- u/s 68 of the act.” 8. Shri Tej Shah, ld. A.R. of the assessee fairly conceded that no compliance was made by the assessee either before the Assessing Officer or before the ld. CIT(A). He submitted that the assessee has now filed fresh evidences with explanation of the bank deposits for the year under consideration along with bank statement and bank book, ledger accounts and other details. The ld. A.R. submitted that the cash deposits in the bank accounts represented the cash withdrawals, contra entry from other bank accounts, land development/construction and labour work receipts, capital receipts etc. He submitted that the Revenue was not correct in treating the entire deposits in the bank accounts as income of the assessee. He, therefore, requested that the matter may be set aside to the file of the Assessing Officer with a request to allow another opportunity to the assessee to explain the source of cash deposits. 9. Per contra, Smt. Trupti Patel, ld. Sr. D.R. strongly relied upon the orders of the Assessing Officer and the ld. CIT(A). I.T.A Nos. 915/Ahd/2023 & 34/Ahd/2024 Usmanbhai Hajibhai Ghanchi, A.Y. 2011-12 & 2017-18 4 10. We have considered the rival submissions. It is true that no compliance was made by the assessee before the Assessing Officer as well as before the ld. CIT(A). Further, no explanation has been given for not filing the evidences, that has been brought on record before us, before the lower authorities. At the same time, the Assessing Officer was also not correct in treating the entire credit/cash deposits in the bank accounts as income of the assessee. In the interest of justice, we, therefore, deem it proper to set aside the matter to the file of jurisdictional Assessing Officer with a direction to allow another opportunity to the assessee to explain the credits/cash deposits in the bank accounts. The assessee is free to produce the additional evidences brought on record before us or any other evidence, to the Assessing Officer. We also deem it proper to impose a cost of Rs. 10,000/- on the assessee for non-compliance made before the lower authorities, which should be paid to the Income Tax Department within 15 days of receipt of this order. The Assessing Officer will proceed in the matter after verifying that the cost is paid by the assessee. 11. In the result, the appeal is allowed for statistical purposes. ITA No. 34/Ahd/2024 12. The assessee had filed his return of income for assessment year 2017-18 on 27-03-2018 declaring total income of Rs. 18,62,134/-. The case was selected for complete scrutiny under CASS. In the course of the assessment, no compliance was made by the assessee. The Assessing Officer had made addition of Rs. 32,95,49,422/- in respect of cash deposits and other credits in I.T.A Nos. 915/Ahd/2023 & 34/Ahd/2024 Usmanbhai Hajibhai Ghanchi, A.Y. 2011-12 & 2017-18 5 the bank accounts of the assessee. The assessment was completed u/s. 144 on 09-12-2019 at total income of Rs. 33,14,11,560/-. Thereafter, the assessee had filed a rectification application before the AO on the ground that credit of Rs. 31,28,32,111/- in the bank account of the DCB Ltd. did not pertain to the assessee. The Assessing Officer had passed rectification order u/s. 154 dated 26-04-2022 and the income was revised to Rs. 1,85,79,449/- only. The assessee had filed an appeal before the CIT(A) in respect of original addition, which was dismissed vide the impugned order for the reason that no compliance was made by the assessee before the CIT(A). 13. As the facts for this year are identical to the facts discussed in A.Y. 2011-12, the decision taken in ITA No. 915/Ahd/2023 is applicable to this year as well. For this year also, the assessee has brought on record additional evidences in respect of cash deposits/credits in the bank account. Therefore, the matter is set aside to the file of jurisdictional Assessing Officer with a direction to allow another opportunity to the assessee to explain the source of cash deposits. At the same time, the assessee is also directed to pay a cost of Rs. 10,000/- for this year as well, which should be paid to the Income Tax Department within 15 days of receipt of this order. The appeal of the assessee is allowed for statistical purposes. 14. In the result, both the appeals are allowed for statistical purposes. Order pronounced in the open court on 24-04-2025 Sd/- Sd/- (Siddhartha Nautiyal) (Narendra Prasad Sinha) Judicial Member Accountant Member I.T.A Nos. 915/Ahd/2023 & 34/Ahd/2024 Usmanbhai Hajibhai Ghanchi, A.Y. 2011-12 & 2017-18 6 Ahmedabad : Dated 24/04/2025 आदेश क\u0006 \u0007\bत ल प अ\u000fे षत / Copy of Order Forwarded to:- 1. Assessee 2. Revenue 3. Concerned CIT 4. CIT (A) 5. DR, ITAT, Ahmedabad 6. Guard file. By order/आदेश से, उप/सहायक पंजीकार आयकर अपील\u0012य अ\u0013धकरण, अहमदाबाद "