SANDIPBHAI RASIKLAL TANNA,UMBERGAON vs. INCOME TAX OFFICER, WARD-7, VAPI, VAPI

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ITA 1358/SRT/2025Status: DisposedITAT Surat01 September 2026AY 2020-215 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the assessment was void ab initio because the material used for reopening was dated 2023 and thus not relevant for AY 2020-21. The assessee's explanations regarding purchases and sales were also not considered.

What were the facts?

The Assessing Officer (AO) reopened the assessee's assessment for AY 2020-21 based on documents seized during a search action in 2023. The AO made additions for alleged unaccounted purchases and estimated income. The CIT(A) upheld these additions.

What were the issues?

The primary issues were the validity of the reassessment proceedings due to irrelevant material and lack of proper approval, and whether the additions made were substantiated with cogent evidence.

Which sections of the Income-tax Act were involved?

Section 147,Section 144,Section 148,Section 151A,Section 151,Section 69C,Section 115BBE,Section 44AD

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, SURAT BENCH, SURAT

For Appellant: Shri Rushabh Mehta, CA
For Respondent: Shri Ashish Kumar, Sr. DR
Hearing: 18.06.2026Pronounced: 01.09.2026

IN THE INCOME TAX APPELLATE TRIBUNAL SURAT BENCH, SURAT BEFORE MS. SUCHITRA KAMBLE, JUDICIAL MEMBER AND SHRI B.M. BIYANI, ACCOUNTANT MEMBER ITA No.1358/SRT/2025 (Assessment Year: 2020-21) Sandipbhai Rajiklal Tanna, Income Tax Officer, 7th Floor, 8th Floor & 9th, II, Road, Ward - 7, Vs. Vapi Umbergaon Town Main Bazar, Vapi PAN: AOIPS0345E (Appellant) : (Respondent) Assessee by : Shri Rushabh Mehta, CA Respondent by : Shri Ashish Kumar, Sr. DR Date of Hearing : 18.06.2026 Date of Pronouncement : 01.09.2026 O R D E R PER : SUCHITRA KAMBLE, J M: The appeal filed by the assessee is against the order passed by the Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi [in short “CIT(A)”] dated 24.10.2025 for the Assessment Year (in short “AY”) 2020-21.

2.

The assessee has raised the following grounds of appeal: “VALIDITY OF REASSESSMENT: 1. (a) The assessment order passed u/s.147 r.w.s 144 of the Income Tax Act, 1961 ("the Act") by the Ld. Assessing Officer is without jurisdiction, invalid, bad-in-law and is not in accordance with the procedures laid down in the Act. (b) The reopening of the case made by the Ld. Assessing Officer is void-ab-initio and invalid as there is no material whatsoever to incriminate or link it with the assessee so as to come to the conclusion that income of the assessee for the year under consideration has escaped assessment.

ITA No.1358/SRT/2025 Sandipbhai Rajiklal Tanna (c) The reopening of assessment u/s. 148 of the Act by the Jurisdictional Assessing Officer i.e. Ward 7, Vapi is invalid as the notice ought to have been issued by the Faceless Assessing Officer in view of section 151A of the Act and therefore, the entire reassessment proceedings is vitiated and consequently, the assessment order passed u/s. 147 r.w.s. 144 of the Act is void-ab-initio, invalid and bad in law. (d) The sanction granted for reopening the assessment u/s. 151 of the Act by Ld. PCIT Valsad, is mechanical devoid of any material/ evidence against the assessee and without appreciating that there was no live nexus of the information with the allegation of escapement of income. ADDITION OF Rs. 24,79,301/-u/s. 690 r.w.s. 115BBE CONFIRMED BY CIT(A): 2. (a) The Id. CIT (A) erred in facts and law in confirming the addition u/s 69C r.w.s. 115BBE of the Act made by the Ld. Assessing Officer on account of alleged unaccounted purchases of Rs. 24,79,301/ on his own surmises and conjectures and without any clinching evidence brought on record against the assessee. (b) The Ld. CIT(A) failed to appreciate that the Ld. Assessing Officer also failed to provide any material against the assessee and even the relevant extract of statements of third parties reproduced directly in the impugned assessment order has no relevance to the assessee whatsoever. c) The Ld. CIT(A) erred in law in not even providing any opportunity to cross examine the person on whose statement reliance is placed. ADDITION OF ESTIMATED INCOME OF Rs. 1,98,344/- @8% ON ALLEGED PURCHASES: 3. The Ld. CIT(A) erred in facts and law in confirming the addition of estimated income of Rs. 1,98,344/- made by the Ld. Assessing Officer being 8% of alleged unaccounted purchases of Rs.24,79,301/- based on the presumptive regime opted by the assessee in his return of income. 4. All grounds of appeal are without prejudice to one another. 5. Your appellant craves leave to add, amend, alter or drop all or any of the above grounds of appeal.” 3. The assessee filed original return of income for A.Y. 2020-21 on 07.01.2021 declaring total income at Rs.4,28,730/-. The return was processed u/s 143(1) of the Income Tax Act, 1961 (in short “the Act”). The assessee is engaged in the business of trading in the name of Manpasand General Stores. A search action u/s 132 of the Act was carried out in the case of Ambica

ITA No.1358/SRT/2025 Sandipbhai Rajiklal Tanna Fireworks Group, Ahmedabad on 16.11.2023 wherein the office premises as well as the residential premises of the said group was searched. During the search proceedings a variety of incriminating documents were seized. The analysis of the digital data and seized documents reveals the tax evasion by the assessee. A survey u/s 133A of the Act is carried out on godown premises of M/s. Ambica Ashish Tradelink LLP. Shri Tejas Modi, employee in the firm gave a statement. From the statement the Assessing Officer (in short “the AO”) observed that the amount received in cash against the discount and sub discount on wholesale and semi wholesale bills is not accounted in the books of the firm. From these documents and the statement the AO observed that the assessee, proprietor of Manpasand General Stores made unaccounted purchase in cash totaling Rs.24,79,301/- from M/s. Ambica Ashish Tradelink LLP for the A.Y. 2020-21. Notice u/s 148 of the Act was issued on 30.03.2024. In response to these statutory notices the assessee submitted reply on 07.12.2024 but has not filed return of income in response to notice u/s 148 of the Act. The AO observed that the assessee has shown total turnover of Rs.17,71,860/- as per the return u/s 44AD of the Act. After going through the details the AO made addition of Rs.24,79,301/- as unexplained expenditure u/s 69C of the Act. The AO also made addition of Rs.1,98,344/- as income from business.

4.

Being aggrieved by the assessment order the assessee filed appeal before the CIT(A). The CIT(A) dismissed the appeal of the assessee.

5.

The Ld. Authorised Representative (in short “Ld. AR”) for the assessee submitted that the AO while reopening the assessment has not taken a proper approval u/s 151 of the Act as there was no correlation related to the said material to the assessee’s addition. The Ld. AR submitted that the said material belong to the date in 2023 as per the seized documents but the A.Y. 2020-21 was reopened by the AO in assessee’s case.

ITA No.1358/SRT/2025 Sandipbhai Rajiklal Tanna 6. The Ld. Departmental Representative (in the short “Ld. DR”) submitted that the assessee has not responded and is not denying that there was a business conducted by the assessee with M/s. Ambica Ashish Tradelink LLP. Thus, the addition is justifiable. The Ld. DR relied upon the assessment order and the order of the CIT(A).

7.

We have heard both the parties and perused all the relevant materials available on record. From the perusal of the assessment order at page No.3 the document mentioned therein clearly mentions the date 11.11.2023 which cannot be taken into account for the A.Y. 2020-21. Besides this, the assessee has field the reply dated 07.12.2024 which categorically explains the transaction between M/s. Ambica Ashish Tradelink LLP as well as the assessee’s purchase and sales in consonance with the queries raised by the AO during the assessment proceedings. The details given by the assessee were not at all considered by the AO as well as by the CIT(A). Thus, the assessment itself becomes void ab-initio as the material upon which the addition is made is not that of the relevant assessment year before us. The Ld. AR’s contention thus appears to be supported by the statute. Hence, the assessment itself becomes invalid. Besides this, on merit as well the addition does not sustain as the assessee has given the details of purchase and sales in consonance and there was no discrepancy pointed out by the AO related to the documents produced before the AO.

8.

In result, the appeal of the assessee is allowed.

Order pronounced in the open court on 01.09.2026

Sd/- Sd/- (B.M. BIYANI) (SUCHITRA KAMBLE) ACCOUNTANT MEMBER JUDICIAL MEMBER Surat; Dated: 01.09.2026 * Kishore, Sr. P.S.

ITA No.1358/SRT/2025 Sandipbhai Rajiklal Tanna Copy of the Order forwarded to: 1. The Appellant 2. The Respondent 3. CIT- concerned 4. DR, ITAT, Surat 5. Guard File By order,

Assistant Registrar/Sr.PS/PS ITAT, Surat Bench

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