RITESHSINH DASHRATHSINH ZALA,AHMEDABAD vs. INCOME TAX OFFICER, WARD 4(2)(3), AHMEDABAD, AHMEDABAD

IN THE INCOME TAX APPELLATE TRIBUNAL "A” BENCH, AHMEDABAD DR. B.R.R. KUMAR VICE PRESIDENT SHRI RAHUL CHAUDHARY, JUDICIAL MEMBER ITA No.2420/AHD/2026 (Assessment Year: 2017-2018) Riteshsinh Dashrathsinh Zala 9, Adc Bank Staff Society, Nr Lake Chandlodia, Ahmedabad-380054, Gujarat [PAN:AAFPZ2779Q] …………. Appellant Vs Income Tax Officer, Ward 4(2)(3), Ahmedabad Aaykar Bhavan, Nr. Sachin Tower, Vejalpur Ahmedabad-380054, Gujarat …………. Respondent Appearance For the Appellant/Assessee : Shri Vivek Chavda, For the Respondent/Department : Shri Amit Pratap Singh, Sr. DR Date Conclusion of hearing : 27.07.2026 Pronouncement of order : 30.07.2026

O R D E R Per Rahul Chaudhary, Judicial Member: 1. The present appeal has been preferred by the Assessee against the Order, dated 12/05/2026, passed by the National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as the ‘CIT(A)’] whereby the Learned CIT(A) had dismissed the appeal against the Assessment Order, dated 31/03/2022, passed under Section 147 r.w.s 144 read with section 144B of the Income Tax Act, 1961 [hereinafter referred to as ‘the Act’] for the Assessment Year 2017-2018 as being barred by limitation.

ITA No.2420/AHD/2026 Assessment Year 2017-2018 ab initio for having been passed without affording reasonable and meaningful opportunity of being heard. 1.2 The Ld. CIT(A) has grievously erred in law and/or on facts in not condoning the delay in filing the appeal despite the appellant establishing sufficient and bona fide cause. 1.3 The Ld. CIT(A) has grievously erred in law and/or on facts in not granting sufficient opportunity to explain the cause of delay as well as the facts and law on merits. It is therefore the appellant may please be granted opportunity to present the additional evidence in the interest of natural justice. 2.1 The Ld. CIT(A) has grievously erred in law and/or on facts in upholding the initiation of proceedings u/s 147. 2.2 The Ld. CIT(A) has erred in law and/ or on facts in not considering the legal position that the reopening cannot be initiated for rowing and fishing inquiry. It is a well settled position of law that provisions of Section 147 cannot be used merely to inquire a transaction. 2.3 That in the facts and circumstances of the case, the AO has invoked the provisions of Section 147 merely because he received information from insight portal. The AO has acted mechanically on the information which is wholly against the principle of natural justice which was upheld by Ld. CIT(A). 3.1 The Ld. CIT(A) has grievously erred in law and / or on facts in treating the cash deposits of INR.1,84,00,000/- as unexplained money under section 69A, when the same represented sale proceeds duly recorded in the regular books of account. 3.2 The Assessing Officer ought not to have invoked section 69A, inasmuch as the cash so deposited and the corresponding sales were duly recorded in the audited books of account, cash book and bank books, whereas section 69A applies only to money not recorded in the books of account. 3.3 The Ld. CIT(A) has failed to appreciate that the addition of INR.1,84,00,000/-, being out of cash sales already credited to the profit and loss account and offered to tax, results in double taxation of the very same receipts and is unsustainable. 4.1 The Ld. CIT(A) has grievously erred in law and / or on facts in subjecting the addition to tax at the special rate under section 115BBE, the receipts being explained business income and not deemed unexplained income falling within the ambit of section 115BBE. 4.2 The Ld. CIT(A) has failed to appreciate that the provisions of Section 115BBE can be invoked only after issuing a show cause notice which was not issued before triggering the harsh section of section 115BBE.” 3. The brief facts of the case are that the Assessee is an individual and 2

ITA No.2420/AHD/2026 Assessment Year 2017-2018 the sole proprietor of M/s. Quality Films, engaged in the business of retail and wholesale trading of cameras, lenses and allied equipment. The proprietary concern is registered under the Gujarat Value Added Tax Act, 2003 (TIN: 24074204598), its books of account are duly audited, and it reported a turnover of INR.10,02,87,975/- during the Financial Year 2016-17. The Assessee filed his return of income for the Assessment Year 2017-18 on 30/10/2017 declaring a total income of INR.14,94,940/-. Subsequently, the case was reopened under section 147 of the Act, and a notice under section 148 was issued on 31/03/2021 on the basis of information received from the Investigation Wing/Insight Portal regarding cash deposits in the Assessee's bank account. Since the Assessee did not comply with the statutory notices issued during the reassessment proceedings, the assessment was completed ex-parte under Section 147 read with Sections 144 and 144B of the Act vide Assessment Order, dated 31/03/2022. The Assessing Officer treated the cash deposits of INR.1,84,00,000/- as unexplained money under section 69A of the Act and accordingly, assessed the total income at INR.1,98,94,940/-.

ITA No.2420/AHD/2026 Assessment Year 2017-2018 the ground of delay without adjudicating the issues on merits. On perusal of the Assessment Order we find that Assessee had reported turnover of INR.10,02,87,974/- during the relevant previous year. The aggregate cash deposits of INR.2,77,66,392/- were made by the Assessee during the relevant previous year. Out of the aforesaid amount of cash deposits, cash deposits of INR.28,44,600/- were made on 10/11/2016 (i.e., during the demonetization period). We note that in Paragraph 3 of the Assessment Order the Assessing officer has recorded that the Assessee has filed bank statement and cash books and had contended that the sources of cash deposits was business receipts. Since, the Assessee did not file corroborative evidences, the Assessing Officer made addition of INR.1,84,00,000/- in the hands of the Assessee invoking provision of Section 69A of the Act. The Assessee had challenged the aforesaid addition in appeal before the Learned CIT(A). However, the said appeal was dismissed as being barred by limitation. During the course of hearing it was submitted that the Learned Authorised Representative for the Assessee that the delay in filing the appeal before the Learned CIT(A) was on account of delayed of knowledge of the Assessment Order having being passed. We note that Learned CIT(A) rejected the explanation offered by the Assessee recording that since the Assessment Order was passed on 31/03/2022 it should be presumed that the same got served upon the Assessee on the same date. No factual findings have been returned by the Learned CIT(A) as regards the actual service of Assessment Order. We have already noted in herein above that the Assessee was proceeded ex-parte during the Assessment Proceedings. However it is not a case where the Assessee was completely non-compliant. Therefore, considering the facts and circumstances of the case, the substantial addition made under Section 69A of the Act, and in the interest of justice, we deem it appropriate to accept the explanation offered by the Assessee for delay in filing appeal before the Learned CIT(A) as bonafide. Accordingly, condoning the delay, we set-aside the impugned order passed by Learned CIT(A) and restore the issue back to the file of the Assessing Officer for fresh adjudication. The Assessee 4

ITA No.2420/AHD/2026 Assessment Year 2017-2018 is directed to furnish all relevant bank statements, documents and explanations before the Assessing Officer and extend full cooperation during the assessment proceedings without seeking unnecessary adjournments. The Assessing Officer shall thereafter, decide the issue afresh in accordance with law after affording reasonable opportunity of being heard to the Assessee.

Thus, in result, the appeal of the Assessee is partly allowed.

Order pronounced on 30.07.2026

Sd/- Sd/- (Dr. B.R.R. Kumar) (Rahul Chaudhary) Vice President Judicial Member

िदनांकDated : 30.07.2026 अहमदाबाद Ahmedabad; True Copy MV

ITA No.2420/AHD/2026 Assessment Year 2017-2018 आदेशक��ितिलिपअ�ेिषत/Copy of the Order forwarded to : 1. अपीलाथ�/ The Appellant 2. ��यथ�/ The Respondent. 3. संबंिधतआयकरआयु�/ Concerned CIT 4. आयकरआयु�(अपील) / The CIT(A) 5. िवभागीय�ितिनिध, आयकरअपीलीयअिधकरण/ DR, ITAT, 6. गाड�फाईल /Guard file. आदेशानुसार/BY ORDER, उप/सहायकपंजीकार (Dy./Asstt.Registrar) आयकरअपीलीयअिधकरण, अहमदाबाद / ITAT, Ahmedabad