AHAD RAJAKBHAI LAKHANI,BHAVNAGAR vs. THE ITO, WARD-1(2), BHAVNAGAR

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ITA 385/AHD/2026Status: DisposedITAT Chandigarh12 June 2026AY 2021-226 pages
AI SummaryRemanded

What did the Tribunal hold?

The ITAT found that the CIT(A) erred in ignoring the assessee's submission made on 27.12.2025, even though it was filed after the allowed timeline but was available to the CIT(A) when passing the order. The matter was set aside to the CIT(A) for re-adjudication on merits.

What were the facts?

The Assessing Officer (AO) added Rs. 6,10,54,737/- to the assessee's income for unexplained purchases. The CIT(A) dismissed the assessee's appeal without considering submissions made after the deadline. The assessee appealed to the ITAT.

What were the issues?

Whether the CIT(A) erred by dismissing the appeal without considering the assessee's submissions and violating principles of natural justice.

Which sections of the Income-tax Act were involved?

Section 69C,Section 115BBE,Section 143(3),Section 144B,Section 133(6),Section 271AAC(1)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “D” BENCH, AHMEDABAD

Before: SHRI TR SENTHIL KUMAR & SHRI NARENDRA PRASAD SINHA

For Appellant: Shri Varish Isani, Advocate
For Respondent: Shri Ashesh R Rewar, CIT-DR
Hearing: 09.06.2026Pronounced: 12.06.2026

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 06.02.2026 for the Assessment Year (A.Y.) 2021-22 in the proceeding u/s 143(3) r.w.s. 144B of the Income Tax Act [hereinafter referred as “The Act”].

2.

The brief facts of the case are that the assessee had filed his return of income for A.Y. 2021-22 on 11.03.2022 declaring total income of Rs.4,85,230/-. The case was selected for scrutiny under CASS to verify the purchases from suppliers who were non-filers or had filed non-

ITA No.385/Ahd/2026 Ahad Rajakbhai Lakhani Vs ITO, AY- 2021-22 2

business returns. In the course of assessment the AO had examined the purchases made by the assessee and also made inquiries by issue of notice u/s. 133(6) of the Income Tax Act. The AO was not satisfied about the genuineness of the purchases totalling Rs.6,10,54,737/- from six parties, which were held as unexplained transactions and added to income. The assessment was completed u/s. 143(3) r.w.s. 144B of the Act on 17.12.2022 at total income of Rs.6,15,41,250/-.

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.

The Lrd. Commissioner of Income Tax (E-Appeals) (for short "Appellate Authority") has erred in law in passing the appeal order dated 06/02/2026 whereby he has confirmed order passed by the Income Tax Officer, NFAC (Assessment)-Delhi and dismissed the appeal. The appellate authority has dismissed the appeal without giving proper opportunity of being heard to the appellant. The Lrd. Appellate Authority has not verified documents and evidences submitted along with written submission on 27/12/2025 Hence the order passed is against the principle of natural justice and law required to be quashed Hence, order passed by the appellant authority deserves to be quashed and set aside. 2. The Lrd. Appellant Authority has erred in law in dismissing the appeal of the appellant and confirmed the order of the assessing authority with regard to additions of Rs. 6,10,54,737/- towards unexplained expenditure u/s. 69C of the Income Tax Act as a result of bogus transactions with various suppliers. The action of the appellant authority and the AO for passing the appeal order and ex-parte best judgment assessment order is highly unjustifiable and unlawful. The Lrd. AO has made addition u/s. 69C and applied provision of section 115BBE of the Income Tax Act. The addition made is highly unjustifiable and unlawful. The transactions of sales and purchases are legal valid documents.

ITA No.385/Ahd/2026 Ahad Rajakbhai Lakhani Vs ITO, AY- 2021-22 3

3.

The Lrd. Appellate Authority erred on facts in law, in sustaining addition of Rs. 6,10,54,737/- u/s. 69C of the Income Tax Act solely on the reports of third party without verifying documents and evidences submitted by the appellant. 4. The Lrd. CIT (A) ignored that purchases were supported by proper legal and valid documents. The Lrd. AO and CIT (A) has accepted the corresponding sales and books result. 5. The opportunity to submit details in the case was not properly given and without giving a chance of personal hearing and to submit more details in support of the case, the order passed is in gross violation of principal of natural justice. 6. The Lrd. AO has erred in pertaining the genuine purchases of Rs. 6,10,54,737/- made by the appellant from various suppliers as not genuine and make additions towards unexplained expenditure. Hence, the order is not accordance of provisions of the law 7. The Lrd. AO ought to have verifying the written submission and dismissing of the appeal by not considering various factual and legal grounds raised by the appellant. Hence, the order passed is highly unjustifiable and unlawful. 8. The Lrd. Appellant Authority has grievously erred in law in not considering reply submitted by the appellant in right perspective and passed the order confirming with Lrd. AO by making huge addition of Rs. 6,10,54,737/- on accounts of unexplained expenditure 9. The CIT (A) erred in law and confirming the addition of Rs.6,10,54,737/-Le genuine purchases from various suppliers as bogus entity on the basis of third party investigation report, without any confrontation and cross examination of such material to the appellant as required to the law. 10. The Lrd. Appellate Authority erred in failing to appreciate that, no adverse material was ever supplied to appellant. The entire action by the Lrd. Appellate Authority is violation of principle of natural justice. 11. The Lrd. Assessing Authority has erred in charging interest on consequential demand raised in assessment order 12 The Lrd. Assessing Authority has grievously erred in law in initiating penalty proceedings u/s. 271AAC(1) of the Income Tax Act in absence of any violation of the said provision 13. The appellant craves leave to add, alter, modify, withdraw or amend any of the grounds of appeal either before or at the time of hearing of the appeal.

ITA No.385/Ahd/2026 Ahad Rajakbhai Lakhani Vs ITO, AY- 2021-22 4 5. Shri Varish Isani, the Ld. AR of the assessee submitted the Ld. CIT(A) had dismissed the appeal of the assessee without adjudicating the grounds taken by the assessee on merits. He explained that the Ld. CIT(A) had allowed three opportunities to which no compliance could be made by the assessee and, therefore, he had dismissed the appeal of the assessee. According to the Ld. AR apart from the three opportunities allowed by the Ld. CIT(A) as mentioned in his order viz. on 03.11.2025, 02.12.2025 and 08.12.2025, another opportunity was allowed vide notice dated 11.12.2025 in response to which the assessee had filed a detailed submission on 27.12.2025. This submission made by the assessee was, however, was not considered by the Ld. CIT(A) and he had passed the order on 06.02.2026 by giving a finding that no compliance was made by the assessee at all. The Ld. AR requested that the matter may be set aside to the file of Ld. CIT(A) with a direction to consider the submissions made by the assessee on 27.12.2025 and thereafter re-adjudicate the appeal of the assessee on merits.

6.

Per Contra Shri Ashesh R Rewar, Ld. CIT-DR had no objection if the matter was set aside to the file of Ld. CIT(A) with a direction to consider the submissions of the assessee made on 27.12.2025.

7.

We have considered the request of the assessee. It is found that in para 5.3 of the order, the Ld. CIT(A) has referred to only 3 opportunities allowed to the assessee on 03.11.2025, 02.12.2025 and 08.12.2025; to which no compliance was made. However, the assessee has brought on record a copy of notice dated 11.12.2025 issued by the NFAC, as per which time was allowed to the assessee till 18.12.2025 to furnish his submissions. The assessee has also brought on record a copy of its online submissions and acknowledgment thereof made on 27.12.2025. Even

ITA No.385/Ahd/2026 Ahad Rajakbhai Lakhani Vs ITO, AY- 2021-22 5 though this submission was made by the assessee after the time as allowed by the Ld. CIT(A), the same was available with him on the date of passing of this order. Further, this submission of the assessee was also viewed by the Ld. CIT(A) on 06.12.2026 but was not considered in his order passed on the same day. Merely because the submission was filed by the assessee after the timeline as allowed, the same should not have been ignored, particularly when the same was viewed by the Ld. CIT(A) while passing his order. The action of the Ld. CIT(A) in ignoring the submission of the assessee already available on record, cannot be appreciated. We, therefore, set aside the matter to the file of Ld. CIT(A) with a direction to consider the submissions made by the assessee on 27.12.2025 and thereafter re-adjudicate the grounds taken by the assessee on merits. The Ld. CIT(A) will have liberty to call for any further explanation/details from the assessee as deemed fit. The assessee is also directed to make compliance before the Ld. CIT(A) in the course of set aside appeal proceedings and furnish the documents and clarifications as required by him.

8.

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

Order pronounced in the Court on 12/06/2026 at Ahmedabad.

Sd/- Sd/- (TR SENTHIL KUMAR) (NARENDRA PRASAD SINHA) Judicial Member Accountant Member Dated – 12th June, 2026 Neelesh, Sr. PS (True Copy) आदेश आदेश क� आदेश आदेश क� क� �ितिलिप क� �ितिलिप �ितिलिप अ�ेिषत �ितिलिप अ�ेिषत अ�ेिषत/Copy of the Order forwarded to : अ�ेिषत 1. अपीलाथ� / The Appellant आदेशानुसार/BY ORDER, आदेशानुसार आदेशानुसार आदेशानुसार

ITA No.385/Ahd/2026 Ahad Rajakbhai Lakhani Vs ITO, AY- 2021-22 6 2. ��यथ� / The Respondent. उप उप/सहायक उप उप सहायक सहायक पंजीकार सहायक पंजीकार पंजीकार पंजीकार 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. (Dy./Asstt.Registrar) आयकर आयकर अपीलीय आयकर आयकर अपीलीय अपीलीय अिधकरण अपीलीय अिधकरण अिधकरण, अहमदाबाद अिधकरण अहमदाबाद अहमदाबाद / ITAT, Ahmedabad अहमदाबाद

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