JIVANBHAI LALJIBHAI BARVADIA,SURAT vs. ASSISTANT COMMISSIONER OF INCOME TAX, CIR - 2(2), SURAT

आदेश / O R D E R Per B.M. Biyani, A.M.: Feeling aggrieved by the order of first-appeal dated 22.12.2023 passed by learned Commissioner of Income-Tax (Appeals)-NFAC, Delhi [“Ld. CIT(A)”], which in turn arises out of the assessment-order dated 19.09.2019 passed by learned ACIT, 2(2), Surat [“Ld. AO”] u/s 144 of Income-tax Act, 1961 [“the Act”] for Assessment-Year [“AY”] 2017-18, the assessee has filed this appeal on the grounds mentioned in Appeal Memo (Form No. 36).

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Jivanbhai Laljibhai Barvadia ITA No. 175/SRT/2024 - AY 2017-18 2. The background facts leading to present appeal are such that the assessee-individual did not file any return of income of AY 2017-18. The Ld. AO, taking account the information available on 360 degree of ITBA System revealing the transactions of cash deposits of Rs. 2,05,500/- in Bank of Baroda and Rs. 9,90,000/- in Axis Bank made by assessee during the period of demonetization, issued notice dated 09.03.2018 u/s 142(1) calling the assessee to file return of income but, however, the assessee did not respond. The Ld. AO also issued subsequent notices which also remained uncompiled with by assessee. The AO made direct enquires from respective banks u/s 133(6) and obtained bank statements. Then, the AO served show- cause notice dated 11.04.2019 through speed-post which was returned by post authorities with the remark “on enquiry the office found closed” [Para 3 of assessment-order]. Thereafter, the AO served notice physically through notice server but the same was also not complied with by assessee. Ultimately, the AO sought direction from Addl. CIT u/s 144A and issued another show-cause notice to assessee for completion of assessment u/s 144 which also remained uncompiled by assessee. Finally, the AO considered the material in his possession and completed assessment u/s 144 treating the total cash deposits/credit entries in bank a/cs during the entire previous year 2016-17 aggregating to Rs. 6,78,83,015/- as unexplained income u/s 69A. Aggrieved, the assessee carried matter in first- appeal. The Ld. CIT(A) granted hearings to assessee but the assessee sought adjournments and could not make effective representation. The Ld. CIT(A),

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Jivanbhai Laljibhai Barvadia ITA No. 175/SRT/2024 - AY 2017-18 therefore, dismissed assessee’s appeal without granting any relief. Now, the assessee has come before us by way of next appeal.

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Jivanbhai Laljibhai Barvadia ITA No. 175/SRT/2024 - AY 2017-18 5. We have considered the rival submissions of both sides and carefully perused the material available on record including the orders of the lower authorities. Upon a thoughtful consideration of the entire conspectus of facts, we find that the assessment-order passed by the Ld. AO is an ex-parte order wherein the entire amount of cash deposits/credits in the bank accounts during the previous year, aggregating to Rs. 6,78,83,015/-, has been treated as unexplained income of the assessee. It is further borne out from the record that during the first-appellate proceedings, the assessee had sought adjournments, though no effective representation could ultimately be made. The assessee claims to be engaged in real estate business and has now expressed readiness to place all relevant details and evidences before the tax authorities. In these circumstances, where neither the assessee could effectively present its case before the Ld. AO nor the Ld. CIT(A) has adjudicated the issues involved on merits, sustaining the impugned orders, more particularly the high addition of Rs. 6,78,83,015/-, would result in serious prejudice to the assessee and may amount to denial of an effective adjudication. At the same time, no prejudice would be caused to the Revenue if the matter is restored to the file of the Ld. AO since the Revenue's case on merits would remain fully open. Therefore, in the larger interest of substantial justice, we deem it appropriate to set aside the orders of both the lower authorities and restore the matter to the file of the Ld. AO for adjudication de novo, at the risk and responsibility of the assessee. The Ld. AO shall afford the assessee a reasonable and adequate opportunity of being heard, consider all submissions and evidences that may be placed on

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Jivanbhai Laljibhai Barvadia ITA No. 175/SRT/2024 - AY 2017-18 record, and thereafter pass a speaking and reasoned order in accordance with law. The assessee has assured us of full and effective co-operation in the remand proceedings and such assurance is placed on record. Needless to say, in the event of any failure on the part of the assessee to co-operate or in the event of seeking unwarranted adjournments, the Ld. AO shall be at liberty to proceed in accordance with law including passing an ex-parte order, if so warranted. Ordered accordingly.

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Jivanbhai Laljibhai Barvadia ITA No. 175/SRT/2024 - AY 2017-18 7. This appeal is accordingly allowed for statistical purpose, subject to payment of cost by assessee as mentioned above.

Order pronounced in open court on 24/06/2026

Sd/- Sd/- (SUCHITRA KAMBLE) (B.M. BIYANI) JUDICIAL MEMBER ACCOUNTANT MEMBER Surat दिन ांक /Dated : 24/06/2026 True Copy Rajesh/Sr. PS Copies to: (1) The appellant (2) The respondent (3) CIT (4) CIT(A) (5) Departmental Representative (6) Guard File By order UE COPYAssistant Registrar Income Tax Appellate Tribunal Surat Bench, Surat

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