MUKESH ROSHANLAL SHAH,AHMEDABAD vs. DCIT, CIRCLE 1(1)(1), AHMEDABAD, AHMEDABAD

The assessment in this case was made u/s 147 r.w.s. 144 and Section 144B of the Income Tax Act, 1961(“the Act”). The A.O. has stated that the assessee was provided several opportunities of hearing by issue of notices u/s. 148 Section 142(1) and show cause notices, but no response was received from the assessee. The A.O. accordingly made an addition of Rs.2,14,57,800/- being the amount of money deposited in cash in the assessee’s bank account as unexplained cash u/s 69A of the Act and taxed the same u/s. 115BBE of the Act.

Due to the apparent non-compliance by the assessee, the A.O. also recorded satisfaction that proceedings for levy of penalty u/s. 271AAC(1) and penalty u/s. 272A(1)(d) ought to be initiated. Subsequently, vide order u/s. 271AAC(1), penalty of Rs.16,57,615/- was levied and vide order u/s. 272A(1)(d), penalty of Rs.20,000/- was levied.

In the impugned order, the Ld. CIT(A), NFAC confirmed the additions in the assessment order and also confirmed the penalties levied u/s. 271AAC(1) and section 272A(1)(d).

Before us ld. Counsel for the assessee submitted an acknowledgement of various written submissions and supporting evidences filed online on the portal. Ld. Counsel submitted that these details having not been properly examined and considered by the Ld. CIT(A) in the impugned order and requested that the assessee be given an opportunity to submit all the relevant details before the assessing officer. Under the circumstances of the case, we feel it is fair that the assessee should not suffer 2 gross addition by the entire amount appearing in its bank account as unexplained cash deposit and one opportunity should be given to the assessee to appear before the assessing officer and explain its position with reference to the evidences.

The Ld. Sr. D.R. fairly raised no objection to the file being set-aside to the assessing officer. We therefore set-aside this assessment order to the Jurisdictional Assessing Officer to provide an opportunity of hearing to the assessee and decide the issue afresh having regard to the evidence and explanation furnished by the assessee and in accordance with law. The assessee is directed to comply with the directions of the Assessing Officer and submit all submissions and evidences diligently.

In the result, the appeal of the assessee in ITA No. 2240/Ahd/2026 is allowed for statistical purposes.

The penalty u/s 271AAC(1) is consequential to the assessment and therefore the original assessment having been set-aside at this stage, this penalty cannot survive and is deleted.

In the result, the appeal of the assessee in ITA No. 2241/Ahd/2026 is allowed.

Section 272A(1)(d) provides that if any person fails to comply with a notice under sub-section (1) of Section 142 or sub-section (2) of Section 143 or fails to comply with a direction issued under sub-section (2)(a) of Section 142, he shall pay by 3 way of penalty, a sum of Rs.10,000/- for each such default or failure. This penalty is not directly connected to the consequence of an assessment and the determination of income and tax payable thereon. This provision is introduced in the Act as a deterrent against deliberate and unreasonable non-compliance by an assessee to the notices issued by the assessing officer.

In the present case, the assessee has challenged the levy of penalty only on the ground that the penalty was levied in haste while an appeal against the assessment was pending, but the assessee has not offered any reasonable cause for the failure in compliance for which the penalty was levied. We therefore find no reason to interfere with the decision of the lower authorities in this regard and confirm the levy of penalty u/s. 272A(1)(d) of the Act. 12. In the result, the appeal of the assessee in ITA No. 2242/Ahd/2026 is dismissed.

DR, ITAT, Ahmedabad 6. Guard file. By order/आदेश से, उप/सहायक पंजीकार आयकर अपील�य अ�धकरण, अहमदाबाद