ASHOKBHAI MAGANBHAI BHAKTA,SURAT vs. THE INCOME TAX OFFICER, WARD-2(2)(1), SURAT

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ITA 178/RJT/2025Status: DisposedITAT Surat23 July 2026AY 2015-165 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal condoned the delay in filing the first appeal, noting the AO's initial calculation of zero tax liability led to the assessee's belief that no appeal was necessary. The Tribunal also found the assessment order flawed due to the incorrect residential status of the assessee and the need to examine additional evidence.

What were the facts?

The assessee, a non-resident, did not file a return. The AO initiated reassessment proceedings based on information about a property purchase and made an addition for unexplained investment. The CIT(A) dismissed the appeal as time-barred.

What were the issues?

Whether the delay in filing the first appeal should be condoned, and whether the assessment order is sustainable given the incorrect residential status and the need to examine additional evidence.

Which sections of the Income-tax Act were involved?

Section 147,Section 144B,Section 69,Section 139,Section 148,Section 143(2),Section 142(1),Section 156,Section 154

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, SURAT BENCH, SURAT

For Appellant: Shri Arjav Vidani, CA
For Respondent: Shri Om Prakash Jha, Sr. DR
Hearing: 21.07.2026Pronounced: 23.07.2026

आयकर अपीलीय अिधकरण, सूरत �ायपीठ, सूरत IN THE INCOME TAX APPELLATE TRIBUNAL SURAT BENCH, SURAT BEFORE SHRI B.M. BIYANI, ACCOUNTANT MEMBER AND SHRI PARESH M. JOSHI, JUDICIAL MEMBER ITA No.178/RJT/2025 (Assessment Year: 2015-16)

Ashokbhai Maganbhai Income Tax Office, Bhakta, Amruta Estate, Patel Faliyu, बनाम/ Rajkot, Kamrej S.O., Nansad, Vs. Kamrej, Surat (Appellant / Assessee) (Respondent / Revenue) PAN: AMFPB1661D Assessee by Shri Arjav Vidani, CA Revenue by Shri Om Prakash Jha, Sr. DR Date of Hearing 21.07.2026 Date of Pronouncement 23.07.2026

O R D E R Per B.M. Biyani, A.M.:

Feeling aggrieved by the order of first-appeal dated 11.02.2025 passed by learned Commissioner of Income-Tax (Appeals)-NFAC, Delhi [“Ld. CIT(A)”], which in turn arises out of the assessment-order dated 23.02.2024 passed by learned Assessment Unit of Income-tax Department [“Ld. AO”] u/s 147 r.w.s. 144B of Income-tax Act, 1961 [“the Act”] for Assessment-Year [“AY”]

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ITA No.178/RJT/2025 Ashokbhai Maganbhai Bhakta 2015-16, the assessee has filed this appeal on the grounds mentioned in Appeal Memo (Form No. 36).

2.

The background facts leading to present appeal as culled out from the orders of lower-authorities and as narrated by Ld. AR for assessee during the hearing, are such that the assessee-individual was a non-resident for the AY 2015-16 under consideration and the assessee did not file any return u/s 139 for that year. The AO, on the basis of information available in Insight Portal of Income-tax Department revealing that the assessee had purchased an immovable property for Rs. 1,10,76,750/- during the relevant year, formed a belief that the income chargeable to tax had escaped assessment. Accordingly, the AO issued notice u/s 148 dated 04.04.2022 [after complying with the procedure prescribed u/s 148A(b)] to make assessment u/s 147. Subsequently, the AO also issued notices u/s 143(2)/142(1)/final Show-Cause notice. Basically, the AO asked assessee to explain the source of investment in impugned transaction of purchase of property. The assessee filed replies to some of the notices explaining the source of investment. However, ultimately while completing assessment, the AO accepted part source to the extent of Rs. 13,00,000/- and made addition for remaining amount of Rs. 97,76,750/- treating the same as unexplained investment u/s 69. Aggrieved, the assessee carried matter in first-appeal whereupon the Ld. CIT(A) dismissed assessee’s appeal as time-barred taking into account that the assessee had not filed the same within statutory period of 30 days. Now, the assessee has come in next appeal before us.

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ITA No.178/RJT/2025 Ashokbhai Maganbhai Bhakta 3. Ld. AR for assessee at first addressed the issue of delay in filing first- appeal before Ld. CIT(A). Precisely, he carried us to the relevant documents held in case file / paper-book and demonstrated successfully that the Ld. AO passed aforesaid assessment-order dated 23.02.2024 u/s 147 assessing total income at Rs. 1,00,14,700/- (including the impugned addition of Rs. 97,76,750/- u/s 69) but, however, in the Computation-Sheet of Tax and Interest calculation, the AO computed the liability of tax and interest at Rs. “0”. Further, in the notice of demand dated 23.02.2024 issued u/s 156, the AO mentioned “0” amount payable by assessee. Therefore, the assessee got an understanding that nothing was payable by him by way of tax and interest and assessment was closed. Hence, the assessee did not feel any necessity of filing appeal to Ld. CIT(A). Subsequently, the AO issued a notice dated 06.06.2024 for making rectification u/s 154 and at that stage, the assessee realized that the AO had made a mistake of calculating “0” liability of tax and interest. Therefore, after legal consultation, the assessee filed appeal to Ld. CIT(A) on 03.07.2024 and hence there occurred a delay in filing of appeal. Thus, by referring these facts and corroborating the same with the support of documents held at Pages 10-13 and 26 of Paper-Book, the Ld. AR submitted that the delay is not attributable to assessee in any manner. He submitted that the delay must be condoned in this peculiar situation of facts. Ld. DR for revenue did not raise any objection against condonation, perhaps realizing that it is a fit case. Faced with this situation and also taking into account the landmark decision of Hon’ble Apex Court in Collector, Land Acquisition Vs Mst. Katiji and others 1987 AIR 1353,

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ITA No.178/RJT/2025 Ashokbhai Maganbhai Bhakta 1987 2 SCC 387 holding that the “technical considerations” should not prevail over the cause of “substantial justice”, we deem it fit to condone the delay. Accordingly, we condone the delay in filing appeal before Ld. CIT(A).

4.

On merit of the case, we find as under:

(i) Firstly, the Ld. AO has passed assessment-order taking into account the status of assessee as “Resident” whereas the Ld. AR is claiming very strongly in open court that the assessee was a “Non-Resident” for the year under consideration. Therefore, the assessment-order passed by Ld. AO in the wrong status of “Resident” is fundamentally wrong and against the very scheme of the Act. Hence, the assessment-order is not sustainable for this reason alone and deserves to be re-framed.

(ii) Secondly, the assessee has also filed an “Application for Additional Evidences” on Page 37 of Paper-Book. Further, the Ld. AR pointed out that there are additional evidences at Pages 39, 51 to 54, etc. of Paper-Book. The additional evidences filed by assessee are substantial to explain the sources utilized by assessee for making investment in purchase of property and requires a detailed examination and verification by Ld. AO.

5.

Therefore, the best course of action in present case, as suggested by Ld. DR for revenue, would be to restore this matter at the level of Ld. AO for passing assessment-order afresh after duly examining the correct residential status of assessee and considering evidences of assessee (including the

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ITA No.178/RJT/2025 Ashokbhai Maganbhai Bhakta additional evidences now placed on record). We accept the suggestion of Ld. DR and restore this matter to the file of Ld. AO for adjudication afresh. The Ld. AO shall give necessary opportunity of hearing to assessee and pass an appropriate order uninfluenced by his earlier order. The assessee is also directed to remain vigilant and ensure participation in the hearings as may be fixed by Ld. AO without seeking unnecessary adjournments failing which the Ld. AO shall be at liberty to proceed in accordance with law. Ordered accordingly.

6.

In result, this appeal is allowed for statistical purposes.

Order pronounced in open court on 23/07/2026

Sd/- Sd/- (PARESH M. JOSHI) (B.M. BIYANI) JUDICIAL MEMBER ACCOUNTANT MEMBER िदनांक /Dated : 23.07.2026 * Kishore, Sr. P.S. Copy of the Order forwarded to: 1. The Appellant 2. The Respondent 3. CIT- concerned 4. DR, ITAT, Surat 5. Guard File

By Order,

Sr. Private Secretary, I.T.A.T., Surat

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