MADHUBHAI SHAMBHUBHAI SOJITRA,SURAT vs. ITO, WARD 2(3)(1), SURAT

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ITA 1251/SRT/2025Status: DisposedITAT Surat06 July 2026AY 2017-185 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal, noting that both the assessment and appellate orders were ex-parte, decided to set aside the lower authorities' orders in the interest of natural justice. A cost of Rs. 10,000/- was imposed on the assessee, and the case was remanded to the Assessing Officer for a fresh hearing.

What were the facts?

The assessee, an individual, failed to file an income tax return for AY 2017-18. Information indicated significant cash deposits and withdrawals in his bank account. The assessment was reopened, and an ex-parte order was passed, adding Rs. 3,12,25,564/- as unexplained income.

What were the issues?

The primary issues involved the validity of the reassessment proceedings due to alleged procedural lapses and the ex-parte nature of the assessment and appellate orders, violating principles of natural justice.

Which sections of the Income-tax Act were involved?

Section 147,Section 144,Section 148A,Section 148,Section 142(1),Section 69A,Section 115BBE,Section 139(1),Section 151A,Section 151

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: 1251/SRT/2025 Assessment Year: 2017-18

Madhubhai Shambhubhai Income Tax Officer Sojitra Ward-2(3)(1), 159, Dipmala Society, Vs Surat Matrushakti Road, Punagam, Omkar Society, Surat-394210 (Respondent) PAN: BHGPS5181L (Appellant) Assessee Represented: Shri Akshay M. Modi, CA Revenue Represented: Shri Mukesh Jain, CIT DR Date of hearing : 07-05-2026 Date of pronouncement : 06-07-2026 आदेश/ORDER PER : T.R. SENTHIL KUMAR, JUDICIAL MEMBER:-

This appeal is filed by the Assessee as against the ex-parte appellate order dated 03.09.2025 passed by the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, (in short referred to as “CIT(A)”), arising out of the re-assessment order passed under section 147 r.w.s. 144 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) relating to the Assessment Year 2017-18.

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2.

Brief facts of the case are, the assessee is an individual has not filed return of income u/s 139(1) of the Act for the AY 2017-18. Information received by the Department that the assessee made cash deposit of Rs.3,07,54,760/- in his Bank account maintained with ICICI Bank and also made cash withdrawal of Rs.4,70,804/- and the total financial transaction was Rs.3,12,25,564/-. Since the assessee has not filed return of income, the assessment was reopened by issuing notice u/s. 148A of the Act. The assessee failed to response, which has resulted in passing order u/s 148A(d) of the Act and issued notice u/s 148 of the Act on 28.03.2024. Inspite of various notices issued u/s 142(1) of the Act, the assessee failed to make reply, which has resulted in passing ex-parte assessment order and making addition of Rs.3,12,25,564/- as unexplained income u/s. 69A of the Act and subject to taxation u/s. 115BBE of the Act.

3.

Aggrieved against the re-assessment order, assessee filed appeal before ld. CIT(A), who has given three opportunities of hearing on 05.01.2025, 20.05.2025 and 08.08.2025. The assessee asked for two adjournments, however, not filed any written submission, which has resulted in passing ex-parte appellate order confirming the demand raised by the AO.

4.

Aggrieved against the appellate order, assessee is in appeal before us raising following grounds of appeal:-

1 On the facts and in the circumstances of the case as well in law, CIT(A) has erred in confirming the re-assessment proceedings completed by JAO u/s 143(3) r.w.s 147 of the Act, where the notice u/s 148A(b)/148A(d) and 148 of the Act were issued by the Jurisdictional Assessing Officer (JAO) and not by the Faceless Assessing officer (FAO), as was required by the provisions of Section 151A of the Act, proceedings initiated u/s 148 of the Act is not

I.T.A No. 1251//SRT/2025 A.Y. 2017-18 Page No 3 Madhubhai Shambhubhai Sojitra vs. ITO

sustainable and the order passed u/s 143(3) r.w.s 147 of the Act is bad-in-law and hence, liable to be quashed. 2 On the facts and in the circumstances of the case as well as in law, both the lower authorities has erred in passing ex parte order passed without considering the details on records filed by the appellant, which is in pure violation of the principles of natural justice, without jurisdiction, bad in law, illegal, invalid, arbitrary, void ab initio and hence liable to be quashed. 3 On the facts and in the circumstances of the case as well in law, the CIT (Appeals), NFAC has erred in confirming the order passed by the ITO, Ward 2(3)(1), Surat (for the sake of brevity The JAO) u/s 147 r.w.s. 144 of the Act by making addition of Rs. 3,12,25,564/- u/s 69A r.w.s. 115BBE of the Act, purely on misleading, misconceptual, arbitrary and perverse observations and hence, being without jurisdiction, bad in law, invalid, illegal, unwarranted of facts, is liable to be quashed or annulled in toto. 4 On the facts and in the circumstances of the case as well in law, both the lower authorities have grievously erred in completing the re-assessment proceedings applying the provisions of 69A of the Act treating cash withdrawals and cash deposits made during the year under assessment for the furtherance of cheque discounting business without appreciating the books of accounts, statement and explanation filed in response to the notices issued and hence, the addition made for the alleged unexplained money u/s 69A of the Act, in the absence of any evidences/materials contrary to the detailed explanations substantiated by cogent, credible and corroborative evidences, being without jurisdiction, bad in law, baseless, imaginary, arbitrary, conjectural, perverse, and purely on guess work and surmises, deserves to be deleted. 5 On the facts and in the circumstances of the case as well in law, the CIT (Appeals) NFAC, erred in overlooking the fact that the AO failed in recording the reasons in statutory form and hence, the entire re-assessment proceedings is bad in law and therefore, deserves to be quashed. 6 On the facts and in the circumstances of the case as well in law, the CIT (Appeals) NFAC, erred in overlooking the fact that the AO failed in obtaining the prior approval of Higher Authority u/s 151 of the Act and hence, the entire re- assessment proceedings is bad in law and therefore, deserves to be quashed. 7 Your appellant further reserves his rights to add, alter, amend or modify any of the aforesaid grounds before or at the time of hearing of an appeal.

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5.

Ld. Counsel appearing for the assessee submitted that, if one more opportunity be given to the assessee so that he can explain the books of accounts and the cheque discounting business carried out by the assessee, thereby, the entire addition made by the AO liable to be modified or cancelled. The assessee also raised technical grounds on reopening of the assessment.

6.

Per contra, Ld. CIT DR appearing for the Revenue, supported the orders passed by the Lower Authorities and strongly opposed the contention of the assessee and requested to impose heavy cost on the assessee, in the event of setting aside the matter back to the file of AO.

7.

We have heard rival submissions and perused the materials available on record. It is undisputed fact that it is an ex-parte assessment before the Ld. AO as well as before the Appellate Authority, as the assessee only sought for adjournment. Now, the assessee undertakes to file all necessary details, materials and records before the Ld. JAO. In the interest of Principle of Natural Justice, we deem it fit to impose a cost of Rs.10,000/- payable by the assessee to the Income Tax Department within two weeks of receipt of the copy of this order and production on receipt for Rs.10,000/- the Lower Authority orders are hereby set aside and direct the Ld. Jurisdictional Assessing Officer to give one more opportunity of hearing to the assessee. Needless to say, the assessee should make use of this final opportunity and produce all relevant materials, evidences and documents for passing assessment order in accordance with provisions of law.

I.T.A No. 1251//SRT/2025 A.Y. 2017-18 Page No 5 Madhubhai Shambhubhai Sojitra vs. ITO

8.

In the result, the appeal filed by the Assessee is treated as allowed for statistical purposes.

Order is pronounced under provision of Rule 34[4] of ITAT Rules, 1963 on 06-07-2026.

Sd/- Sd/- (RATNESH NANDAN SAHAY) (T.R. SENTHIL KUMAR) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated 07/06/2026 Mittali आदेश क� �ितिलिप अ�ेिषत / Copy of Order Forwarded to:- 1. Assessee 2. Revenue 3. Concerned CIT 4. CIT (A) 5. DR, ITAT, Ahmedabad 6. Guard file. By order/आदेश से,

उप/सहायक पंजीकार आयकर अपीलीय अिधकरण, सूरत

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