SHRI KALPESH VINODBHAI PATEL,RAJKOT vs. THE PR. CIT 1, RAJKOT, RAJKOT

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ITA 417/RJT/2025Status: DisposedITAT Rajkot24 August 2026AY 2018-195 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal set aside the assessment order and restored the matter to the Assessing Officer for fresh adjudication, directing them to examine all issues including the validity of reassessment proceedings. The revisionary order under Section 263 was also set aside as the underlying assessment order was nullified.

What were the facts?

The assessee's income was reassessed under Section 147, with additions made for alleged bogus sales due to cancelled GST registrations of purchasers and lack of invoices. The assessee's appeal to the CIT(A) was dismissed for non-compliance.

What were the issues?

The primary issues were the validity of the reassessment proceedings, the genuineness of sales transactions, and the propriety of the revisionary order under Section 263.

Which sections of the Income-tax Act were involved?

Section 147,Section 144B,Section 148A,Section 148,Section 142(1),Section 68,Section 263

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, Rajkot Bench, Rajkot

Before: Dr. Arjun Lal Saini & Shri Sonjoy Sarma

For Appellant: Shri Bandish Soparkar, Ld. AR
For Respondent: Shri Ravinder Sindhu, Ld. Sr. CIT (DR)
Hearing: 13/08/2026Pronounced: 24/08/2026

आयकर अपीलीय अिधकरण, राजकोट �यायपीठ, राजकोट। In The Income Tax Appellate Tribunal, Rajkot Bench, Rajkot Before Dr. Arjun Lal Saini, Accountant Member And Shri Sonjoy Sarma, Judicial Member आयकर अपील सं./ITA No. 417 & 484/RJT/2025 [ �नधा�रण वष�/Assessment Year: 2018-19 ] Kalpesh Vinodbhai Patel, PCIT, Rajkot-1 Prop of A K Patel Satya Nivas, Ayakar Bhawan, Race Course Vs. Ranchhod Nagar, Opp. Navodit Ring Road, Rajkot, School, Pedak Road, Rajkot Gujarat-360 001 Gujarat-360003 �थायीलेखासं./जीआइआरसं./PAN/GIR No.: ANSPP1420C (अपीलाथ�/Appellant) (��यथ�/Respondent) Appellant by : Shri Bandish Soparkar, Ld. AR Respondent by : Shri Ravinder Sindhu, Ld. Sr. CIT (DR) Date of Hearing : 13/08/2026 Date of Pronouncement : 24/08/2026 :: ORDER :: Per, Shri Sonjoy Sarma, JM: These two appeals have been preferred by the same assessee. ITA No. 417/Rjt/2025 arises out of the order passed by the Ld. Principal Commissioner of Income Tax, Rajkot [hereinafter referred to as “Ld.PCIT"], dated 27.03.2025, which, in turn, arises from the assessment order passed under section 147 read with section 144B of the Income-tax Act, 1961 [hereinafter referred to as "the Act"], dated 29.03.2023. ITA No. 484/Rjt/2025 arises out of the order passed by the National Faceless Appeal Centre [hereinafter referred to as 'NFAC'], dated 03.07.2025, which, in turn, arises from the assessment order dated 29.03.2023 passed under section 147 read with section 144B of the Act. Since both the appeals pertain to the same assessee and involve common facts and issues, they were heard together and are being disposed of by this consolidated order.

ITA No. 417 & 484/RJT/2025 [ AY 2018-19 ] Shri Kalpesh Vinodbhai Patel 02. At the outset, the Ld. AR submitted that there was a delay of 18 days in filing ITA No. 417/Rjt/2025 and prayed for condonation of the same. An application for condonation of delay was also filed. Considering the reasons stated therein, we find that the assessee had shown reasonable cause for the delay. Accordingly, the delay of 18 days is hereby condoned and the appeal is admitted for adjudication on merits.

3.

First, we take up ITA No. 484/Rjt/2025 as the lead case.

4.

Brief facts of the case are that the assessee filed his return of income for Assessment Year (AY) 2018-19 on 29.09.2018, declaring total income of Rs.28,69,980/-. Subsequently, based on information available with the Department regarding certain allegedly bogus financial transactions, proceedings under section 147 of the Income-tax Act, 1961 were initiated. A notice under section 148A(b) was issued to the assessee requiring him to show cause as to why notice under section 148 should not be issued. Since no compliance was made by the assessee, an order under section 148A(d) was passed and notice under section 148 was issued on 28.03.2022. During the reassessment proceedings, the case was taken up for scrutiny in respect of alleged unexplained credit entries arising from transactions with M/s. Shree Ram Corporation (ACQFS6875H) and M/s. Krish Tradelink (AAOFK5589J), and M/s. Shiva Enterprise of Rs.2,00,00,004/-. The Assessing Officer noted that, as per the information available with the Department, substantial amounts had been received by the assessee from the aforesaid parties against purported sales. The assessment records refer to unexplained credit entries of Rs.13.44 crore, whereas subsequently the Assessing Officer proposed to treat sales aggregating to Rs.15,44,00,004/- as bogus and unexplained. The Assessing Officer further observed, on verification of the GST portal, that the GST registrations of the aforesaid purchasers had been cancelled suo motu by the GST authorities. According to the Assessing Officer, such cancellation raised doubts regarding the legal existence and genuineness of the purchasing entities and the transactions entered Page 2 of 5

ITA No. 417 & 484/RJT/2025 [ AY 2018-19 ] Shri Kalpesh Vinodbhai Patel into with them. During the course of reassessment proceedings, the assessee furnished the ledger accounts of the concerned purchasers and his bank account statement. However, according to the Assessing Officer, the assessee did not furnish copies of the invoices allegedly issued against the sales. Even in response to a subsequent notice under section 142(1) dated 08.02.2023, the assessee was again asked to furnish copies of invoices, ledger accounts of the purchasers and bank statements. The assessee furnished certain documents but, as noted by the Assessing Officer, did not produce the invoices relating to the impugned sales On the basis of the above, the Assessing Officer took the view that the assessee had failed to satisfactorily establish the identity and genuineness of the purchasers and the genuineness of the alleged sales transactions. The cancellation of the GST registrations of the purchasers and the alleged failure to furnish invoices were treated as circumstances casting doubt on the transactions. Accordingly, the Assessing Officer treated the alleged sales aggregating to Rs.15,44,00,004/- as bogus sales and proposed to bring the entire amount to tax under section 68 of the Income-tax Act, 1961. Thus, an addition of Rs.15,44,00,004/- was made to the income of the assessee.

5.

Aggrieved by the order of assessing officer, assessee went in appeal before Ld.CIT(A), which came to be dismissed on account of non-compliance on the part of assessee, thereby sustaining the order of Assessing Officer.

6.

Still, aggrieved by the order of Ld.CIT(A), assessee is in appeal before this tribunal. During the course of hearing, the Ld. AR submitted that while framing the assessment, the Assessing Officer had failed to provide adequate reasons and had not properly examined the issues arising from the return of income and the material available on record. It was, accordingly, contended that the assessment order itself was bad in law. The Ld. AR also advanced elaborate arguments challenging the validity of the reassessment proceedings under section 147 of the Act. Page 3 of 5

ITA No. 417 & 484/RJT/2025 [ AY 2018-19 ] Shri Kalpesh Vinodbhai Patel 07. On the other hand, the Ld. DR strongly submitted that the order of the Ld. CIT(A) was an ex parte order and, therefore, instead of adjudicating the issues on merits, the matter may be restored to the file of the Ld. CIT(A) for fresh adjudication after providing adequate opportunity to the assessee.

8.

On such objection made by Ld. DR, the Ld. AR alternatively, submitted that, if the Tribunal was inclined to restore the matter, the same may be restored to the file of the Assessing Officer, so that the assessee may substantiate his claims and the Assessing Officer may examine the issues afresh in accordance with law.

9.

We have heard, the rival submissions and perused the material available on record. Considering the facts and circumstances of the case, we deem it appropriate, in the interest of justice, to restore the matter to the file of the Assessing Officer for fresh adjudication. Accordingly, the assessment order is set aside and the matter is restored to the file of the Assessing Officer with a direction to examine all the issues raised by the assessee afresh, including the contentions relating to the validity of the reassessment proceedings under section 147 of the Act, in accordance with law. Needless to say, the Assessing Officer shall provide adequate and reasonable opportunity of being heard to the assessee and thereafter pass a speaking order in accordance with law.

10.

Accordingly, ITA No. 484/Rjt/2025 is allowed for statistical purposes.

11.

We now take up ITA No. 417/Rjt/2025, which is directed against the revisionary order passed by the Ld. PCIT under section 263 of the Act dated 27.03.2025. The Ld. PCIT had exercised jurisdiction under section 263 in respect of the assessment order dated 29.03.2023 and directed the Assessing Officer to reframe the assessment by re-examining the issues considered by the PCIT to be prejudicial to the interests of the Revenue. However, as noted above, the very same assessment order dated 29.03.2023 has been challenged by the assessee before this Tribunal in Page 4 of 5

ITA No. 417 & 484/RJT/2025 [ AY 2018-19 ] Shri Kalpesh Vinodbhai Patel ITA No. 484/Rjt/2025 and while adjudicating the said appeal, we have already set aside the assessment order and restored the matter to the file of the Assessing Officer for fresh examination of the issues after providing reasonable opportunity of being heard to the assessee. Once the assessment order itself has been set aside by the Tribunal and the matter has been restored to the file of the Assessing Officer for fresh adjudication, the revisionary proceedings initiated by the Ld. PCIT under section 263 of the Act in respect of the very same assessment order cannot survive independently. In view of the above, the order passed by the Ld. PCIT under section 263 of the Act dated 27.03.2025 has no legs to stand and is liable to be set aside. The Ld. DR also did not raise any serious objection to the same.

12.

Accordingly, after considering the rival submissions and the material available on record, we set aside the order passed by the Ld. PCIT under section 263 of the Act dated 27.03.2025 and allow the appeal of the assessee. Thus, ITA No. 417/Rjt/2025 is allowed.

13.

In the result ITA No. 484/Rjt/2025 is allowed for statistical purposes, whereas ITA No. 417/Rjt/2025 is allowed.

Order pronounced in the open court on this 24th day of August, 2026.

Sd/- Sd/- [ Dr. Arjun Lal Saini ] [ Shri Sonjoy Sarma ] लेखा सद�य/Accountant Member �याियक सद�य/Judicial Member राजकोट/Rajkot िदनांक/ Date: 24/08/2026 Copy of the order forwarded to : 1. The assessee 2. The Respondent 3. CIT 4. The CIT(A) 5. DR, ITAT, Rajkot 6. Guard File By order //True Copy// Sr. Private Secretary ITAT, Rajkot Page 5 of 5

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