VIPULBHAI SHENDHABHAI PATEL,PATAN, GUJARAT V. INCOME TAX OFFICER, WARD 2, PATAN, GUJARAT, PATAN, GUJARAT

ITA 1952/AHD/2024

AI Insights

The case involves Vipulbhai Shendhabhai Patel, the appellant, contesting the decision of the Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre, which dismissed his appeal ex-parte. The primary contention was that the notices for the hearing were not properly served to the appellant, leading to a violation of natural justice. The appellant argued that the cash deposits in question were from legitimate business receipts and agricultural income, particularly during the demonetization period. The Income Tax Officer had made certain disallowances and applied a higher rate of tax, which the appellant contested. The tribunal, after considering the circumstances and the failure of the lower authorities to provide a fair hearing, decided to remand the case for a fresh assessment.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 25839 (ITAT-AHMEDABAD)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-03-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2017-2018
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PRATIK SHARMA
• Assessee Lawyers: S. V AGRAWAL
• Keywords: Business income; Principle of natural justice
• Section: 143(2); 44AD; 139

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH, AHMEDABAD BEFORE DR.BRR KUMAR, VICE PRESIDENT & Ms. SUCHITRA KAMBLE, JUDICIAL MEMBER I.T.A. No.1952/Ahd/2024 (Assessment Year:2017-18) Vipulbhai Shendhabhai Patel, 20, Gruh Kamal Society, Chanasma Highway Road, Patan-384002. Vs. The Income Tax Officer, Ward-2, Patan. [PAN No. AEZPP8698G] Appellant by : Shri S. V Agrawal, AR Respondent by: Shri Pratik Sharma, Sr. DR Date of Hearing 12.03.2025 Date of Pronouncement 13.03.2025 O R D E R PER: DR. BRR KUMAR, VICE PRESIDENT: Delay Condoned The captioned appeal has been filed by the Assessee against the order passed by the Ld. Commissioner of Income Tax (Appeal)/National Faceless Appeal Centre (NFAC), Delhi Ahmedabad, vide order dated 15.07.2024 for Assessment Year 2017-18. 2. The Assessee has taken the following grounds of appeal:- 1. Hon’ble CIT(A) has erred in dismissing appeal of the assessec Ex- Parte in as much as Hearing Notices issued were not served to the (अपीलाथᱮ /Appellant ( ᮧ᭜यथᱮ /Respondent) ITA No.1952/Ahd/2024 Asst.Year –2017-18 - 2– assessee. The Notices were sent on A.R who did not inform the assessee. Appeal was filed on 06/02/2021 whereas only 3 Notices of hearing were issued in one month time of 2024. The dismissal of appeal Ex-Parle is against natural justice. 2. Learned Hon. CIT(A) has erred in dismissing the appeal of the assessee and not passing the appellant order on merits of the case. In grounds of appeal, it is specifically mentioned that assessee is doing construction business and cash was deposited in bank accounts out of business receipts. Same fact is also disclosed in ITR and form No. 26AS of the assessee. The appeal was dismissed without considering these facts. At the most Hon. CIT(A) could have considered Section 44AD on these facts. 3. Hon. CIT(A) has erred in confirming that, mandatory notice was issued by A.O, However mandatory Notice u/s 143(2) was not served / received by assessee. 4. Hon. CIT(A) has erred in not deciding 1st ground of appeal that Ex- Parte assessment done by A.O. is not valid. In as much as, assesses has filed the return u/s 139 and shown business income therein. 5. Hon. CIT(A) has erred in confirming disallowance made by A.O. of Rs.24,26,132 being cash deposited in bank accounts. In as much as, assessee is doing construction business and out of business income and withdrawals from bank accounts and agricultural income, cash was deposited during demonetization period. These facts are disclosed in Return u/s 139 and Form No. 26AS of the assessee. 6. Hon. CIT(A) has erred in confirming the higher rate of tax and surcharge by A.O. u/s 115HI.1E. In as much as, cash deposited in bank account is out of business receipts. Section 115BBE do not apply to business income. 3. On going through the record, we find that Ld. CIT(A) has awarded three opportunities of hearing to the assessee to furnish the supportive evidence with regard to the sources of cash deposit. In pursuance to the same, the assessee failed to submit any substantial documents/replies. Hence, the Ld.CIT(A) dismissed the appeal of the assessee. We also find ITA No.1952/Ahd/2024 Asst.Year –2017-18 - 3– that assessee has not complied even before the Assessing Officer. Before us the Ld. Counsel for the assessee prayed that, given an opportunity, all the details/clarification/explanation would be provided to the revenue authorities. Having gone through the fact, we hold that no prejudice will be caused to the revenue if the Assessing Officer is allowed to examine the details/explanation submitted by the assessee. Hence, the matter is remanded to the Assessing Officer for conducting assessment de-novo. The assessee shall comply with the notices issued by the authorities without seeking any unnecessary adjournments. 4. In the result, the appeal of the assessee is allowed for statistical purposes. This Order pronounced in Open Court on 13.03.2025 Sd/- Sd/- (SUCHITRA KAMBLE) (DR. BRR KUMAR) JUDICIAL MEMBER VICE PRESIDENT (True Copy) Ahmedabad; Dated 13.03.2025 Manish, Sr. PS TRUE COPY ITA No.1952/Ahd/2024 Asst.Year –2017-18 - 4– आदेश कᳱ ᮧितिलिप अᮕेिषत/Copy of the Order forwarded to : 1. अपीलाथᱮ / The Appellant 2. ᮧ᭜यथᱮ / The Respondent. 3. संबंिधत आयकर आयुᲦ / Concerned CIT 4. आयकर आयुᲦ(अपील) / The CIT(A)- 5. िवभागीय ᮧितिनिध, आयकर अपीलीय अिधकरण, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाडᭅ फाईल / Guard file. आदेशानुसार/ BY ORDER, उप/सहायक पंजीकार (Dy./Asstt.Registrar) आयकर अपीलीय अिधकरण, अहमदाबाद / ITAT, Ahmedabad "