MANISHKUMAR MANHARBHAI PATEL,SURAT vs. INCOME TAX OFFICER, WARD-3(2)(1), SURAT

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ITA 385/SRT/2026Status: DisposedITAT Surat15 July 2026AY 2019-204 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal directed the CIT(A) to grant another opportunity to the assessee to make compliance, subject to payment of cost, and thereafter re-decide the appeal on merits.

What were the facts?

The assessee's case was reopened based on information of transactions with bogus firms for fake input tax credit. The AO added sales of Rs. 63,20,389/- as bogus and unexplained. The CIT(A) dismissed the assessee's appeal due to non-compliance.

What were the issues?

Whether the assessment was validly reopened and whether the addition of sales as bogus and unexplained was justified. The appeal was also remanded for fresh consideration due to non-compliance before the CIT(A).

Which sections of the Income-tax Act were involved?

Section 147,Section 148,Section 148A,Section 133(6),Section 144B,Section 68,Section 270A

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “DB” BENCH, SURAT

Before: SHRI TR SENTHIL KUMAR & SHRI NARENDRA PRASAD SINHA

For Appellant: Shri P M Jagasheth, CA
For Respondent: Shri Ajay Uke, SR-DR
Hearing: 20.05.2026Pronounced: 15.07.2026

PER NARENDRA PRASAD SINHA, ACCOUNTANT MEMBER:

This appeal is filed by the assessee against the order of National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as “CIT(A)”] dated 20.01.2026 for the Assessment Year (A.Y.) 2019-20 in the proceeding u/s 147 r.w.s. 144B of the Income Tax Act [hereinafter referred as “The Act”].

2.

The brief facts of the case are that the assesse had filed his return of income for A.Y. 2019-20 on 24.10.2019 declaring income of Rs.5,23,920/-. The case was reopened on the basis of information received that the assessee had made transactions with Shri Bharatbhai

ITA No.385/Srt/2026 Manishkumar Manharbhai Patel Vs. ITO, AY- 2019-20 2

Bhagwandas Soni, Ravi Prakash Soni and Vishal Ganeshbhai Adesara and other concerns which were running bogus firms and issuing fake bills of Gold without actual supply of goods for the purpose of availing fake input tax credit. Accordingly, a notice u/s. 148 of the Act was issued on 31.03.2023 after passing an order u/s. 148A(d) of the Act. In the course of assessment, the AO had issued notice u/s. 133(6) of the Act to verify the genuineness and credit worthiness of sales, which was not complied. Therefore, the AO had considered the total sales of Rs. 63,20,389/- as bogus and unexplained and accordingly made the addition. The assessment was completed u/s. 147 r.w.s. 144B of the Act on 23.03.2024 at total income of Rs. 68,44,209/-.

3.

Aggrieved with the order of the AO, the assessee had filed an appeal before the first appellate authority, which was decided by the learned CIT(A) vide the impugned order and the appeal of the assessee was dismissed. Th

4.

Now the assessee is in second appeal before us. The following grounds have been taken in this appeal:

1.

On the facts and in the circumstances of the case as well as the law on the subject. the learned Assessing Officer has erred in re-opening the assessment u/s. 147 of the Act and issuing notice u/s. 148 of the Income Tax Act, 1961. 2. On the facts and in the circumstances of the case as well as the law on the subject, the learned Commissioner of the Income Tax (Appeals) has erred in confirming the action of the Assessing Officer in making addition of Rs. 63,20,389/- is treated as bogus and unexplained under the provisions of Section 68 of the Income-tax Act, 1961. 3. On the facts and in the circumstances of the case as well as the law on the subject, the learned Commissioner of the Income Tax (Appeals) has not offered adequate opportunities to hear the case and passed ex-parte order and hence, the case may please be set aside and restored back to the CIT(A) or AO.

ITA No.385/Srt/2026 Manishkumar Manharbhai Patel Vs. ITO, AY- 2019-20 3 4. On the facts and in the circumstances of the case as well as the law on the subject, the learned Assessing Officer has erred in initiating penalty proceedings u/s 2708 of the of the Income Tax Act, 1961. 5. It is therefore prayed that the above penalty may please be deleted as learned members of the tribunal may deem it proper.

5.

Shri P M Jagasheth, the Ld. AR of the assessee submitted at the outset that no compliance could be made before the Ld. CIT(A) and, therefore, he had dismissed the appeal of the assessee without adjudicating the grounds taken by the assessee on merits. He, therefore, requested that the assessee may be allowed another opportunity of being heard by setting aside the matter to the file of Ld. CIT(A).

6.

Per Contra, Shri Ajay Uke, the Ld. SR-DR, supported the order of the Ld. CIT(A). However, he had no objection if the matter was set aside for allowing another opportunity to the assessee.

7.

We have considered the submissions of the assessee. It is found that the Ld. CIT(A) had allowed three opportunities to the assessee but no compliance was made by the assessee on any occasion. The assessee has not explained the reason for non-compliance before the Ld. CIT(A). When the appeal was filed by the assessee, he should have been careful enough to enquire about the status of the pending appeal before the Ld. CIT(A). It was the duty of the assessee to watch his affairs before the CIT(A). The assessee was aware of the pending appeal, still no care was exercised to enquire about the status of appeal. We, therefore, direct the assessee to pay a cost of Rs.5,000/- which should be deposited to the Prime Minister’s National Relief Fund within a period of 15 days from the date of receipt of this order. Subject to the payment of cost,

ITA No.385/Srt/2026 Manishkumar Manharbhai Patel Vs. ITO, AY- 2019-20 4

the Ld. CIT(A) is directed to allow another opportunity to the assessee to make compliance and thereafter re-decide the grounds taken by the assesse before him on merits. The assessee is also directed to respond to the queries of the CIT(A) and furnish the documents and clarifications as required by him. In case the assessee does not make compliance in the course of set aside appeal proceeding, the Ld. CIT(A) will have liberty to pass the order on merits, on the basis of the materials available on record.

8.

In the result, the appeal of the assessee is allowed for statistical purpose.

Order pronounced in the Court on 15/07/2026 at Ahmedabad.

Sd/- Sd/- (TR SENTHIL KUMAR) (NARENDRA PRASAD SINHA) Judicial Member Accountant Member Dated – 15th July, 2026 Neelesh, Sr. PS (True Copy) आदेश क� आदेश क� �ितिलिप �ितिलिप अ�ेिषत अ�ेिषत/Copy of the Order forwarded to : आदेश आदेश क� क� �ितिलिप �ितिलिप अ�ेिषत अ�ेिषत 1. अपीलाथ� / The Appellant 2. ��यथ� / The Respondent. 3. संबंिधत आयकर आयु� / Concerned CIT 4. आयकर आयु�(अपील) / The CIT(A) 5. िवभागीय �ितिनिध, आयकर अपीलीय अिधकरण / DR, ITAT, 6. गाड� फाईल /Guard file. आदेशानुसार/BY ORDER, आदेशानुसार आदेशानुसार आदेशानुसार पंजीकार (Dy./Asstt.Registrar) उप/सहायक उप सहायक पंजीकार उप उप सहायक सहायक पंजीकार पंजीकार आयकर आयकर अपीलीय आयकर आयकर अपीलीय अपीलीय अिधकरण अपीलीय अिधकरण अिधकरण, अहमदाबाद अिधकरण अहमदाबाद अहमदाबाद / ITAT, Ahmedabad अहमदाबाद

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