BAKHTAVAR JAMSHED SHROFF,NA vs. ARIVS.ITO, WARD -5, NAVSARI

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ITA 523/SRT/2025Status: DisposedITAT Surat23 July 2026AY 2012-137 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal upheld the CIT(A)'s order to set aside the ex-parte assessment and restore it to the Assessing Officer for a fresh assessment. This was to allow the assessee a proper opportunity to present her case, considering the amended provisions of Section 251(1)(a).

What were the facts?

The assessee, an NRI, received cash gifts totaling Rs. 25,00,000/- and deposited them in her NRO account. As she had not filed a return of income, the assessment was reopened, and an ex-parte order was passed due to non-receipt of notices at the old address.

What were the issues?

Whether the ex-parte reassessment order passed without proper service of notice is valid, and whether the CIT(A) was correct in setting aside the assessment for a fresh hearing.

Which sections of the Income-tax Act were involved?

Section 147,Section 144,Section 251(1)(a),Section 148,Section 271(1)(c)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, SURAT BENCH, SURAT

Before: Shri T.R. Sentil Kumar & Shri Ratnesh Nandan Sahay

IN THE INCOME TAX APPELLATE TRIBUNAL SURAT BENCH, SURAT (PHYSICAL HEARING) Before: Shri T.R. Sentil Kumar, Judicial Member And Shri Ratnesh Nandan Sahay, Accountant Member

ITA No: 523/SRT/2025 Assessment Year: 2012-13

Bakhtavar Jamshed Shroff Income Tax Officer C/o. Percy Kodia, Ward-5, 7/A, Dhun Palace, Vs Navsari Hamazar Society, Opp. Mehul Park, J N Tata Marg, Lunsikui, (Respondent) Navsari, Gujarat-396445 PAN: DCTPS5738F (Appellant) Assessee Represented: Shri Manish J Shah, A.R. Revenue Represented: Ms. Neerja Sharma, Sr. D.R. Date of hearing : 07-05-2026 Date of pronouncement : 23-07-2026 आदेश/ORDER PER : T.R. SENTHIL KUMAR, JUDICIAL MEMBER:-

This appeal is filed by the assessee as against the appellate order dated 12.04.2025 passed by the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, (in short referred to as “CIT(A)”), arising out of the ex-parte reassessment order passed

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under section 147 r.w.s. 144 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) relating to the Assessment Year 2012-13. 2. Brief facts of the case are, the assessee is an individual and Non- Resident Indian (NRI) with no taxable income in India for the financial year 2011-12, therefore, did not file the return of income. However, the assessee received Rs. 25,00,000/- in cash from family members namely Rs. 20,00,000/- as gift from her late father Ms. Pesi Alias Pestanji Kodia, who was an agriculturist shortly before his death on 09.01.2012. The assessee also received another gift of Rs. 5,00,000/- from her late maiden aunty, Sunamay Kodia just before her death on 22.12.2011. Both the gifts were part of their accumulated savings and agriculture income. The assessee deposited the entire gifts in her NRO savings account on 29.12.2011. The NRO account was having balance of Rs. 1,00,000/- and interest of Rs. 6,340/-. Since, the assessee has not filed the return of income and huge cash deposits made in NRO account, the assessment was reopened in the old address of the assessee, namely S-26, Asha Baug, Luncikui, Chikuwadi, Navsari. Since notices were not received by the assessee and not replied which has resulted in passing ex-parte order making addition of Rs. 25,00,000/- and Rs. 1,06,340/-. The AO also initiated penalty proceedings which was also ex-parte then pursuant to the recovery

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action by the department, the assessee came to know about ex-parte order and collected ex-parte order and filed appeal before the Ld. CIT(A). 3. During appellate proceedings, the assessee filed detailed submissions before Ld. CIT(A). Since the assessment being an ex-parte order, Ld. CIT(A) taken into account the newly inserted proviso to section 251(1)(a) of the Act, set aside ex-parte assessment back to the file of the Assessing Officer for making fresh assessment after giving adequate opportunity of hearing to the assessee. Aggrieved against the appellate order, assessee is in appeal 4.

before us arising on the following Grounds of Appeal:-

1.

Learned CIT Appeals did not consider that A.O. completed entire assessment without servicing single notice on the proper address and passed the assessment order u/s.147 r.w.s. 144 of the 1.T. Act. Notice issued on the wrong address is not at all sustainable in the law because servicing of Notice on Wrong Address is as good as not issuing notice to the assessee and hence assessment has no legal validity and Assessment Order must be quashed. 2. Learned CIT Appeals did not consider the facts that the Assessing Officer grossly erred in making addition of Rs.26,06,340/- without mentioned any section in the Assessment Order and without any conclusive evidence. 3. The learned CIT(Appeals) did not appreciate the fact that the A.O. did not give single opportunity to the appellant to explain source of the cash deposited of Rs.25 lacs in NRO sb a/c. Rs.5 lacs received from appellant's aunty (fathers sister) out of her past savings after her death, as she was maiden, agriculturist and living with appellants parents and Rs.20 lacs was received from her father just before his death, who was purely agriculturist by born and having good enough agriculture land and agriculture income.

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4.

The learned A.O. as well as CIT (Appeals) did not consider the amount credited in NRO a/c. of Rs.1 lakh was amount transferred by appellant from outside India and made addition in the total income of the appellant. 5. CIT Appeals and A.O. did not take pain to consider the amount credited of Rs.6,340/- was NRO SB a/c. interest and bank fd interest which was made after depositing the cash in the bank account and made addition. 6. CIT Appeals did not consider the facts that the A.O. during the entire assessment proceedings did not supply copy recorded reasons for reopening the case, which was completely wrong on the part of the Α.Ο. 7. Original Assessment Order u/s.147 r.w.s.144 of the I.T. Act. was passed by the ITO Ward 5, Navsari on 29/09/2017 and just within 6 months Penalty Order u/s.271(1)(c) of the Act. had been passed by ITO Ward 1, Navsari on 19/03/2018. So, Jurisdiction of the AO itself is a question. Under which AO appellant is assessed, either the AO who passed the Original Assessment Order had a jurisdiction over appellant or the AO who passed the Penalty Order had a jurisdiction over appellant and either of the order must be passed by non jurisdictional AO is completely wrong. 8. The appellant craves leave to add, alter, amend, modify, substitute, delete and / or rescind all or any of the grounds of appeal on or before the final hearing, if necessity so arises.

5.

Heard rival submissions and perused the materials available on record. It is undisputed fact that the reassessment order is an ex-parte order, therefore, Ld. CIT(A) invoking the amended provisions of section 251(1)(a) of the Act, set aside ex-parte order back to the file of the AO for passing order on merit by giving proper opportunity to the assessee. Learned counsel relied upon Jurisdictional High Court judgment in the case of Ishwarbhai Thakorbhai Patel vs. ITO, in Special Civil Application No. 22498/2019 dated 01.01.2024, wherein Hon’ble High Court quashed the reassessment order on the ground that reopening of notice under section 148 of the Act was not served on the

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assessee. Thus, Learned counsel pleaded even in this case also notice under section 148 of the Act was not served on the assessee, therefore, entire reassessment proceedings is liable to be quashed. 6. Per contra, Ld. Senior DR appearing for the Revenue supported the orders passed by the lower authorities. 7. We have given thoughtful consideration and perused the materials available on record. The case law (cited supra) relied by the assessee is a case wherein, the assessee being an agriculturist does not even having PAN and not served with the reopening notice under section 148 of the Act, therefore, the Hon’ble High Court quashed the reassessment proceedings on account of non service of 148 notice. Whereas in the present case, the assessee was having PAN with the address namely S-26, Asha Baug, Luncikui, Chikuwadi, Navsari. The assessee claims that this address of her paternal family which vacated the premises in 1991 itself, however the assessee has not updated with the change of address in the PAN data. Thus, there is no fault on the part of the Revenue in serving the notice under section 148 of the Act and other notices to the last known address given by the assessee. When the assessee came to know through recovery proceedings of the department, collected the ex-parte order and filed the appeal before Commissioner (Appeals). Ld. CIT(A) considering the ex-parte

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reassessment order, set aside the matter back to the file of Jurisdictional Assessing Officer to pass fresh order on merit by giving proper opportunity of hearing to the assessee. We do not find any infirmity in the order passed by Ld. CIT(A), which is well within amended provisions of the Act w.e.f. 01.10.2024. Further, the case law relied by the assessee is also clearly distinguishable in the facts of the present case. Thus, grounds raised by the assessee are devoid of merits and liable to be dismissed. Since, Ld. CIT(A) set aside the matter back to the file of Jurisdictional Assessing Officer, the appeal filed by the assessee is also allowed for statistical purposes with a direction to the JAO to pass order on merits by giving proper opportunity of hearing to the assessee. Needless to say, the assessee is directed to furnish all required details before JAO to pass order on merits. 8. In the result, the appeal filed by the assessee is allowed for statistical purposes. Order is pronounced under the provisions of Rule 34(4) of IT(AT) Rules, 1963 on 23/07/2026.

Sd/- Sd/- (RATNESH NANDAN SAHAY) (T.R. SENTHIL KUMAR) ACCOUNTANT MEMBER JUDICIAL MEMBER Surat: Dated 23/07/2026

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*Santosh आदेश क� �ितिलिप अ�ेिषत / Copy of Order Forwarded to:- 1. Assessee 2. Revenue 3. Concerned CIT 4. CIT (A) 5. DR, ITAT, Surat 6. Guard file. By order/आदेश से,

उप/सहायक पंजीकार आयकर अपीलीय अिधकरण, सूरत

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