SUNILBHAI NAGINBHAI MEHTA,SURENDRANAGAR vs. THE ITO WARD-1, SURENDRANAGAR, SURENDRANAGAR

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ITA 262/RJT/2026Status: DisposedITAT Rajkot12 August 2026AY 2022-234 pages
AI SummaryRemanded

What did the Tribunal hold?

The ITAT restored the issues to the file of the Assessing Officer for fresh adjudication, allowing the assessee to produce supporting documents. A cost of Rs. 5,000 was imposed on the assessee for non-compliance.

What were the facts?

The assessee filed a return of income, but the Assessing Officer disallowed certain expenses and added unexplained cash credits. The assessee's appeal to the CIT(A) was dismissed due to non-compliance. The assessee then appealed to the ITAT.

What were the issues?

Whether the disallowance of expenses and addition of unexplained cash credits were justified, and whether the assessee should be given another opportunity to present evidence.

Which sections of the Income-tax Act were involved?

Section 68,Section 143(3),Section 144B,Section 250

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, Rajkot Bench, Rajkot

Before: Dr. Arjun Lal Saini & Shri Sonjoy Sarma

For Appellant: Ms. Rachna Khandhar, Ld. AR
For Respondent: Shri Ravinder Sindhu, Ld. CIT(DR)
Hearing: 10/08/2026Pronounced: 12/08/2026

आयकर अपीलीय अिधकरण, राजकोट �यायपीठ, राजकोट। In The Income Tax Appellate Tribunal, Rajkot Bench, Rajkot Before Dr. Arjun Lal Saini, Accountant Member And Shri Sonjoy Sarma, Judicial Member

आयकर अपील सं./ITA No. 262/RJT/2026 [ �नधा�रण वष�/Assessment Year: 2022-23 ] Sunilbhai Naginbhai Мента ITO, Ward-1, Surendranagar 01, Hariprakashnagar Society, Nr. Income Tax Office, Irish Building, Vs. Garbi Chowk, Opp. Mela Maidan, Surendranagar-363001, Gujarat Surendranagar-383001, Gujarat �थायीलेखासं./जीआइआरसं./PAN/GIR No.: ΑΤΑΡΜ4281E (अपीलाथ�/Appellant) (��यथ�/Respondent) Appellant by : Ms. Rachna Khandhar, Ld. AR Respondent by : Shri Ravinder Sindhu, Ld. CIT(DR) Date of Hearing : 10/08/2026 Date of Pronouncement : 12/08/2026

:: ORDER :: Per, Shri Sonjoy Sarma, JM: Captioned appeal filed by the assessee, pertaining to Assessment Year (AY) 2022-23, is directed against the order under section 250 of the Income-tax Act, 1961 [hereinafter referred to as ‘the Act’] passed by the National Faceless Appeal Centre [hereinafter referred to as ‘NFAC’], dated 01.01.2026, which in turn arises out of an order passed by assessing officer u/s. 143(3) of the Act, dated 28.02.2024.

2.

Brief facts of the case are that the assessee filed its return of income declaring total income of Rs.3,96,600/- and the case was selected for scrutiny. The assessment was completed under section 143(3) read with section 144B of the Income-tax Act,

ITA No. 262/RJT/2026 Sunilbhai Naginbhai Mehta 1961, following the procedure prescribed under the Faceless Assessment Scheme. During the course of assessment proceedings, statutory notices were issued electronically from time to time calling upon the assessee to furnish details, explanations and documentary evidence in support of the various claims made in the return of income. On examination of the details available on record and the information gathered during the course of assessment proceedings, the Assessing Officer noticed certain deficiencies in the claims made by the assessee. The Assessing Officer observed that expenditure of Rs.1,21,30,037/- claimed by the assessee was not supported by proper documentary evidence and was not proved to have been incurred wholly and exclusively for the purposes of business. Accordingly, the said expenditure was disallowed. Further, the Assessing Officer noticed unexplained cash credits of Rs.2,45,63,751/- appearing in the books of the assessee. Since the assessee failed to establish the identity and creditworthiness of the creditors and the genuineness of the transactions as required under section 68 of the Act, the Assessing Officer treated the said amount as unexplained cash credits under section 68 and added the same to the total income of the assessee. The Assessing Officer also noticed that the assessee had claimed deduction under Chapter VI-A amounting to Rs.41,073/- without fulfilling the requisite statutory conditions and without furnishing supporting evidence. Accordingly, the said deduction was disallowed. Thus, the assessment was completed under section 143(3) read with section 144B of the Act by making the aforesaid additions/disallowances.

3.

Aggrieved by the assessment order, the assessee preferred an appeal before the Ld. CIT(A). However, owing to non-compliance on various dates of hearing, the Ld. CIT(A) dismissed the appeal.

4.

Still aggrieved by the order of the Ld. CIT(A), the assessee is in appeal before the Tribunasl.

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ITA No. 262/RJT/2026 Sunilbhai Naginbhai Mehta 05. At the time of hearing, the Ld. AR fairly submitted that, due to certain circumstances, the assessee could not properly represent its case before the lower authorities. She submitted that certain material and supporting documents could not be produced before the Assessing Officer and the Ld. CIT(A). It was, therefore, requested that the matter may be restored to the file of the Assessing Officer with a direction to examine the relevant documents and adjudicate the issues afresh after providing an opportunity of being heard to the assessee.

6.

The Ld. DR supported the orders of the authorities below.

7.

We have heard the rival submissions and carefully perused the material available on record. From the record, we note that the assessee failed to comply with the notices issued by the Assessing Officer as well as the opportunities provided by the Ld. CIT(A). The conduct of the assessee, therefore, reflects considerable non- compliance with the proceedings before the lower authorities.

8.

We, after considering the overall facts and circumstances of the case and in the interest of substantial justice, we deem it appropriate to restore the issues to the file of the Assessing Officer for fresh adjudication. The Assessing Officer shall examine the relevant documents and evidences furnished by the assessee and decide the issues afresh in accordance with law, after affording reasonable opportunity of being heard to the assessee. However, we cannot ignore the repeated non- compliance on the part of the assessee before the lower authorities. The assessee has consumed considerable time in the proceedings without complying with the statutory notices. Therefore, we deem it appropriate to impose a cost of Rs.5,000/- on the assessee. The said amount shall be deposited with the Prime Minister’s National Relief Fund, and the assessee shall produce the receipt evidencing such payment before the Assessing Officer. The assessee is further directed to extend full

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ITA No. 262/RJT/2026 Sunilbhai Naginbhai Mehta cooperation in the proceedings before the Assessing Officer and to furnish all relevant documents and explanations within the time allowed. No unnecessary adjournment shall be sought. Needless to say, the Assessing Officer shall decide the matter afresh on merits in accordance with law, without being influenced by the observations made herein, after affording adequate opportunity of being heard to the assessee. Accordingly, the matter is restored to the file of the Assessing Officer for fresh adjudication in terms of the above directions.

9.

In the result, the appeal of the assessee is allowed for statistical purposes, subject to payment of the aforesaid cost of Rs.5,000/-.

Order pronounced in the open court on this 12th day of August, 2026.

Sd/- Sd/- [ Dr. Arjun Lal Saini ] [ Shri Sonjoy Sarma ] लेखा सद�य/Accountant Member �याियक सद�य/Judicial Member राजकोट/Rajkot िदनांक/ Date: 12/08/2026 Copy of the order forwarded to : 1. The assessee 2. The Respondent 3. CIT 4. The CIT(A) 5. DR, ITAT, Rajkot 6. Guard File By order //True Copy// Sr. Private Secretary ITAT, Rajkot

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