CHANDRAKANT NARSIDAS PATEL,MUMBAI vs. INCOME TAX OFFICER, WARD-4(3)(1), AAYKAR BHAVAN

In various grounds of appeal

Brief facts of the case are that the assessee return of income declaring total income of Rs. 8,67,300/-. Subsequently, his case was reopened u/s 147 and a notice u/s 148 was issued. The AO issued various notices from time to time which were not complied. He also asked the assessee to explain the source of investment in gold of 258 kg amounting to Rs. 84 Crores. He further asked to provide the name, current address, PAN & e-mail ID along with documentary evidence to corroborate the identity, creditworthiness and genuineness of the transactions with M/s Pihu Gold & M/s Satnam Jewels. The AO also their confirmations which remained non complied. Ultimately, the AO passed the impugned assessment u/s 147 r.w.s 144B of the Act making addition of Rs. 84,08,67,300/- u/s 69A of the Act. Further, the A.O. invoked the provisions of Section 115BBE in respect of above addition made in the assessment order.

During the appellate proceedings before the ld.CIT(A), the assessee vehemently argued against the addition made by the AO by furnishing ground wise written submissions with reference to the detail P a g e | 3 A.Y. 2017-18 Chandrakant Narsidas Patel, Mumbai and documents furnished by it during the appellate proceedings which were sent to the AO for submission of remand report.With regard to M/s Pihu Gold and M/s Satnam Jewels, it was submitted that jurisdiction of these cases does not lie with this office therefore undersigned is unable to offer comment on the same. However, on account of incomplete compliance during remand proceedings, the AO showed his inability to furnish report on the details set to him for comments.

Before us, the ld.AR has reiterated the contentions as made in the grounds of appeal. He has not give many reason for non compliance during various proceedings before the authorities. It is further contended strongly that the AO did not apply his mind and mechanically reopened the case of the basis of information passed on to him and he had not sufficient material facts to constitute ‘reason to believe’. The case of the assessee could not be reopened on the only basis that the ED arrested him for alleged money laundering through two entities i.e. Pihu Gold and Satnam Jewels. However, we find that the assessee was completely silent with respect to the money laundering case filed by the ED and its status report. Hence, the additions made by AO was confirmed and appeal of the assessee was dismissed.

We notice that huge additions made by the AO on account of lack of compliance could not be adjudicated properly by the ld.CIT(A) also. Taking into consideration all relevant facts of the case and following the principles of natural justice, we are of the opinion that the scales of justice demand that the matter should be verified and revisited at the level of AO. Both the sides agreed to this proposition of sending back the entire issue to the file of AO for de novo assessment by him while affording sufficient opportunity of being heard to the assessee. Accordingly, the matter is remanded to the AO and the assessee is directed to ensure proper compliance failing which the AO would be at liberty to draw adverse view of the matter.

In the result, the appeal is allowed for statistical purposes. Order pronounced in the open court on 15.09.2025. SANDEEP GOSAIN PRABHASH SHANKAR (न्याययक सदस्य /JUDICIAL MEMBER) (लेखाका रसदस्य/ACCOUNTANT MEMBER)