TEJALBEN VIRAMBHAI DESAI,GANDHINAGAR vs. INCOME TAX OFFICER, WARD -1, GANDHINAGAR, GANDHINAGAR

IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH, AHMEDABAD BEFORE DR. B.R.R. KUMAR, VICE-PRESIDENT SHRI RAHUL CHAUDHARY, JUDICIAL MEMBER ITA No.1229/Ahd/2026 (Assessment Year: 2018-19) Tejalben Virambhai Desai, The Income Tax Officer, Vs. Plot No.267/2, Ward-1, Sector 7A, Gandhinagar. Gandhinagar-382007. [PAN :ALVPD1141 M] (Appellant) .. (Respondent) Appellant by : Shri D.K Parikh. AR Respondent by: Shri Veerbadram Vislavath, Sr. DR Date of Hearing 29.06.2026 Date of Pronouncement 07.07.2026

O R D E R PER DR. B.R.R. KUMAR, VICE-PRESIDENT:-

This appeal is filed by the Assessee against the appellate order dated 25.03.2026 passed by the Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre, Delhi, relating to the Assessment Year 2018-19.

Ground No.1 The Ld. CIT(A) has gravely erred in law and has committed a serious illegality in failing to adjudicate the Additional Ground of Appeal filed by the appellant vide application dated 14-05-2024, which specifically challenged (i) the reopening of the assessment u/s 148 of the Act merely on the basis of the information supplied by the State Anti-Corruption Bureau

ITA No. 1229/Ahd/2026 Asst. Year : 2018-19 - 2– (ACB) without the Assessing Officer conducting any independent inquiry as mandated under law, and (ii) the validity of the reassessment proceedings initiated u/s 147/148 of the Act on legal and jurisdictional grounds, including the ground of "borrowed satisfaction" and procedural violation in disposing of objections even before they were raised by the appellant. 1.1 The Ld. CIT(A) was under a statutory obligation u/s 250 of the Act to decide all the grounds of appeal placed before him, including any additional grounds duly filed and admitted. The complete non-adjudication of the Additional Ground of Appeal constitutes a jurisdictional error and a violation of principles of natural justice, rendering the impugned order unsustainable in law. 1.2 This Hon'ble Tribunal is therefore respectfully prayed to adjudicate the Additional Ground of Appeal raising the validity of reopening as set out below in Ground No. 2, or in the alternative, to remand the matter to the Ld. CIT(A) for fresh adjudication of the Additional Ground of Appeal. Ground No.2 The Ld. CIT(A), NFAC, has erred in law and on facts in passing the impugned order dismissing the appellant's appeal in its entirety as the initiation of reassessment was solely based on third-party information received from the State ACB, without any independent inquiry, corroboration or application of mind by the Ld AO, as mandated by law The impugned order is bad in law, contrary to facts and deserves to be quashed. 2.1 The Hon'ble ITAT, Ahmedabad Bench, has, in the case of the appellant's brother involving identical facts and the very same ACB information, held that reopening of assessment based on ACB information without independent inquiry constitutes borrowed satisfaction and quashed the reassessment proceedings. Ground No3 The Ld. CIT(A) has grossly erred in law and on facts in not considering the additional evidence submitted by the appellant under rule 46A of the IT Rules, 1962 vide an application dated 23-07-2025 in connection with the impugned additions made in the assessment order which constitutes a jurisdictional error and a violation of principles of natural justice, rendering the impugned order unsustainable in law Ground No.4 The Ld. CIT(A) has grossly erred in law and on facts in confirming the addition of Rs. 34,02,193/- u/s 69A of the ITA, treating cash deposits and

ITA No. 1229/Ahd/2026 Asst. Year : 2018-19 - 3– credit entries in the appellant's Axis Bank account as "unexplained money", The Ld. CIT(A) failed to appreciate that the cash deposits in the bank account arose from legitimate and explained sources, as a result the consequential tax levied u/s 115BBE deserves to be set aside. Ground No.5 The Ld. CIT(A) has failed to appreciate that the initiation of penalty proceedings without proper basis and despite the existence of a reasonable explanation furnished by the appellant is contrary to law and against the principles of natural justice, as a result the initiation of penalty proceedings u/s 271AAC(1) of ITA deserves to be quashed. Ground No.6 The Ld. CIT(A) has erred in law and on facts in dismissing the appellant's prayer for stay of demand of Rs. 56,92,461/- arising from the impugned assessment order, without properly considering the appellant's submissions regarding the unjustified nature of the demand and the financial hardship that would be caused. Ground No.7 The Ld. CIT(A) has erred in law and on facts in confirming the levy of interest u/s 234A, 234B and 234C of the Act, which is consequential to the additions made by the Ld AO, as the addition made by Ld AO are not sustainable in law, the consequential levy of interest u/s 234A, 234B and 234C requires to be deleted. Ground No.8 The appellant craves leave to add, alter, amend or withdraw any of the above grounds of appeal before or at the time of hearing of the appeal.

ITA No. 1229/Ahd/2026 Asst. Year : 2018-19 - 4– transactions amounting to Rs.20,00,244/- in a bank account maintained with Axis Bank during the relevant previous year. Based on such information, proceedings under section 148A were initiated, and a show cause notice under section 148A(b) was issued after obtaining the requisite approval under section 151 of the Act. As no response was received from the appellant, an order under section 148A(d) was passed and notice under section 148 dated 02.04.2023 was issued. In response thereto, the appellant filed the return of income declaring a total income of Rs.3,73,340/-. During the reassessment proceedings, notices under sections 142(1) and 143(2) of the Act were issued from time to time, to which the appellant made partial compliance. On examination of the bank account, the Assessing Officer observed total credits, including cash deposits, amounting to Rs.45,41,835/-. The appellant furnished confirmations, PAN, Aadhaar details and copies of income-tax returns in respect of certain transfer entries aggregating to Rs.11,35,000/-, which were accepted by the Assessing Officer. Further, interest and dividend income of Rs.4,438/- was also considered, and accordingly relief aggregating to Rs.11,39,642/- was granted. However, according to the Assessing Officer, the appellant failed to substantiate the source of the remaining cash deposits amounting to Rs.34,02,193/- despite being afforded several opportunities. Although it was stated that supporting details from certain persons would be furnished, the same were not produced before completion of the assessment proceedings. Even in response to the show cause notice, no documentary evidence was furnished in support of the explanation offered. The Assessing Officer, therefore, held that the appellant had failed to discharge the burden of proving the nature and source of the

ITA No. 1229/Ahd/2026 Asst. Year : 2018-19 - 5– said cash deposits. Placing reliance on the settled legal principles relating to the burden of proof in cases of unexplained money, the Assessing Officer treated the cash deposits of Rs.34,02,193/- as unexplained money under section 69A of the Income-tax Act, 1961 and added the same to the returned income. Consequently, the total income of the appellant was assessed at Rs.37,75,533/-. The Assessing Officer further levied tax under section 115BBE, initiated penalty proceedings under section 271AAC(1), and charged interest under the applicable provisions of the Act.

ITA No. 1229/Ahd/2026 Asst. Year : 2018-19 - 6– adjudication. The Ld.CIT(A) shall consider legal grounds as well as on merits and shall considered the issue in toto. The assessee shall submit all relevant bank statements and supporting documents before the Ld. CIT(A) and shall comply with the notices issued by the Revenue authorities without seeking unnecessary adjournments.

The order is pronounced in the open Court on 07.07.2026. S /- Sd/- Sd/- (RAHUL CHAUDHARY) (DR. B.R.R. KUMAR) JUDICIAL MEMBER VICE-PRESIDENT (True Copy) Ahmedabad; Dated 07.07.2026 MV आदेश की �ितिलिप अ�ेिषत/Copy of the Order forwarded to : 1. अपीलाथ� / The Appellant 2. ��थ� / The Respondent. 3. संबंिधत आयकर आयु� / Concerned CIT 4. आयकर आयु�(अपील) / The CIT(A)- 5. िवभागीय �ितिनिध, आयकर अपीलीय अिधकरण, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाड� फाईल / Guard file. आदेशानुसार/ BY ORDER, True Copy

सहायक पंजीकार (Dy./Asstt. Registrar) आयकर अपीलीय अिधकरण, अहमदाबाद / ITAT, Ahmedabad