KANTIBHAI AMBALAL PATEL,SANDHANA vs. INCOME TAX OFFICER, WARD 1, NADIAD

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ITA 633/AHD/2026Status: DisposedITAT Ahmedabad03 September 2026AY 2017-184 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal condoned the delay in filing the appeal and, in the interest of substantial justice, remanded the case back to the CIT(A). The assessee was granted a final opportunity to substantiate the source of the cash deposits with supporting evidence.

What were the facts?

The assessee, an agriculturist, made cash deposits of Rs. 11,50,500/- during demonetization but did not file a return of income. The Assessing Officer treated these deposits as unexplained money, and the CIT(A) upheld this order due to the assessee's non-compliance.

What were the issues?

Whether the cash deposits in the bank account were unexplained money and whether penalty proceedings were correctly initiated. The primary issue was providing the assessee an opportunity to prove the source of the deposits.

Which sections of the Income-tax Act were involved?

Section 69A,Section 115BBE,Section 271AAC,Section 272A(1)(d),Section 271F,Section 144,Section 142(1),Section 250

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, AHMEDABAD “SMC” BENCH

Before: Shri Rahul Chaudhary & Shri R. Govindarajan

For Appellant: Ms. Vidhi V. Pandya, C.A
For Respondent: Smt. Ananya Kulshresth, Sr. D.R

आदेश/ORDER PER R. GOVINDARAJAN, ACCOUNTANT MEMBER:

The assessee has filed the appeal against the order dated 13-06- 2024 passed by Commissioner of Income Tax (Appeals), National Faceless Appeal Centre NFAC (in short, referred to as the CIT(A)) u/s. 250 of the Income Tax Act, 1961 (herein referred to as “the Act”) relating to Assessment Year 2017-18.

Condonation of Delay 2. Assessee filed Form 36 on 27-2-2026. There was delay of 565 days in filing of appeal before ITAT. Assessee, agriculturist, aged 75 years, submitted that he was not well versed with the IT e-proceedings and was not aware of the order passed by CIT(A).

I.T.A No. 633/Ahd/2026 Kantibhai Ambalal Patel, A.Y. 2017-18 Hence, there was delay in filing of appeal before ITAT. The reasons attributed to inordinate delay are not acceptable. However, in the interest of justice, delay is condoned.

3.

The assessee raised the following grounds of appeal:- “1. Addition of Rs. 11,50,500/- on account of cash deposits in bank account as unexplained money u/s 69A of the Act. On facts and in the circumstances of the case and in law, The Ld. CIT(A) by confirming the order passed by the Ld. AO has grossly erred in making addition of Rs. 11,50,500/- to the income of the appellant on account of considering the cash deposits in bank account as unexplained money. 2. The Ld. AO passed order calculating tax @ 60% as per section 115BBE of the Income Tax Act:

On facts and in the circumstances of the case and in law, the Ld. AO has grossly erred in calculating tax @ 60% as per section 115BBE of the Income Tax Act for AY 2017-18. The tax rate for the AY 2017-18 was 30% as per section 115BBE of the Income tax act.

3.

Initiating penalty proceeding u/s 271AAC of the Act. On facts and in the circumstances of the case and in law, the Ld. AO has grossly erred in initiating the proceedings for levy of penalty u/s. 271AAC of the Act when no such penalty is leviable. The proceedings initiated by the Ld. AO should be dropped as it is wrongly initiated. 4. Initiating penalty proceeding u/s 272A(1)(d) of the Act. On facts and in the circumstances of the case and in law, the Ld. AO has grossly erred in initiating the proceedings for levy of penalty u/s. 272A(1)(d) of the Act when no such penalty is leviable. The proceedings initiated by the Ld. AO should be dropped as it is wrongly initiated. 5. Initiating penalty proceeding u/s 271F of the Act. On facts and in the circumstances of the case and in law, the Ld. AO has grossly erred in initiating the proceedings for levy of penalty u/s 271Fof the Act when no such penalty is leviable. The proceedings initiated by the Ld. AO should be dropped as it is wrongly initiated. The appellant craves leave to add, amend, alter, edit, delete, modify or change all or any grounds of appeal at the time of or before the hearing of the appeal.”

4.

The brief facts of the case are that assesee, an individual, did not file return of income for A.Y. 2017-18. Consequent to the

I.T.A No. 633/Ahd/2026 Kantibhai Ambalal Patel, A.Y. 2017-18 information in possession of the department that assessee had made cash deposits of Rs. 11,50,500/- in Bank of Baroda during the period of demonetization (09-11-2016 to 31-12-2016), AO issued notice u/s. 142(1) of the Act. There was non-compliance on the part of the assessee. Hence, AO after giving several opportunities passed the best judgment assessment order u/s. 144 of the Act assessing the entire cash deposits of Rs. 11,50,500/- as unexplained money u/s. 69A of the Act.

5.

Being aggrieved by the order of the AO, the assessee filed appeal before Ld. CIT(A). During appellate proceedings, assessee did not make any submissions in spite of several opportunities provided. Considering the non-compliance of assesse, ld. CIT(A) held that assessee was not interested in pursuing his appeal. Further, in the absence of any documentary evidence in support of assessee’s claim of sale of agricultural produce as the source for cash deposits in bank, CIT(A) upheld the order of A.O.

6.

Aggrieved by the order of the CIT(A), the assessee is in appeal before us.

7.

The ld. counsel appearing for the assessee submitted that cash deposits represented sale proceeds of agricultural produce realized in cash. He submitted that assessee could not effectively present his case either before AO or before CIT(A) due to assessee’s unawareness regarding the proceedings.

8.

The ld. D.R., on the other hand, relied on the orders of ld. CIT(A) and AO and contended that adequate opportunities were provided which the assessee failed to avail.

I.T.A No. 633/Ahd/2026 Kantibhai Ambalal Patel, A.Y. 2017-18 9. We have considered the rival submissions and perused the records. It is evident that the addition has been made without any explanation from the assessee owing to his non-compliance. Assesse in his submission before CIT(A) maintained that cash deposits in bank account were sourced from sale of agricultural produce. In the interest of substantial justice, we are of the view that the assessee deserves one final opportunity to substantiate his case. Accordingly, we remand the case back to CIT(A) for adjudication of the case. The assessee is directed to furnish necessary evidence to demonstrate the source of cash deposits with supporting evidence before CIT(A). The assessee is also directed to extend full co-operation and not to seek unwarranted adjournments.

10.

In the result, the appeal is allowed for statistical purpose.

Order pronounced in the open court on 03-09-2026

Sd/- Sd/- (RAHUL CHAUDHARY) (R. GOVINDARAJAN) JUDICIAL MEMBER ACCOUNTANT MEMBER Ahmedabad : Dated 03/09/2026 a.k. आदेश क� ��त�ल�प अ�े�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�य अ�धकरण, अहमदाबाद

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