KIRITKUMAR GANPATSINH PARMAR,PANCHMAHALS vs. INCOME TAX OFFICER, WARD-1, GODHRA

PDF · subscribers
ITA 2667/AHD/2025Status: DisposedITAT Ahmedabad22 April 2026AY 2020-217 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal noted the assessee's consistent non-compliance but, considering the magnitude of the addition and the need for proper verification, decided to grant one more opportunity. The matter was restored to the Assessing Officer for de-novo adjudication.

What were the facts?

The Assessing Officer made an addition of Rs. 1,64,02,358/- on account of unexplained bank credits as the assessee failed to file a return or provide explanations. The CIT(A) confirmed the addition and dismissed the appeal. The assessee appealed to the ITAT.

What were the issues?

Whether the addition of unexplained bank credits was justified without providing the assessee a full opportunity to explain the transactions, and whether the penalty proceedings were validly initiated.

Which sections of the Income-tax Act were involved?

Section 69A,Section 147,Section 144,Section 144B,Section 115BBE,Section 271AAC(1),Section 272A(1)(d),Section 133(6)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “D” BENCH, AHMEDABAD

Before: SMT. ANNAPURNA GUPTA & SHRI SIDDHARTHA NAUTIYAL

For Appellant: Shri Palak Pavagadhi, CA
For Respondent: Shri Rameshwar P Meena, Sr. DR
Hearing: 08.04.2026

IN THE INCOME TAX APPELLATE TRIBUNAL “D” BENCH, AHMEDABAD BEFORE SMT. ANNAPURNA GUPTA, ACCOUNTANT MEMBER & SHRI SIDDHARTHA NAUTIYAL, JUDICIAL MEMBER I.T.A. No.2667/Ahd/2025 (Assessment Year: 2020-21) Kiritkumar Ganpatsinh Parmar, Vs. Income Tax Officer, At: Bhojpura, TA: Ghoghamba, Ward-1, Panchmahals, Pin Code-389365 Godhra [PAN No.BOUPP7219H] (Appellant) .. (Respondent) Appellant by : Shri Palak Pavagadhi, CA Respondent by: Shri Rameshwar P Meena, Sr. DR Date of Hearing 08.04.2026 22.04.2026 Date of Pronouncement O R D E R PER SIDDHARTHA NAUTIYAL - JUDICIAL MEMBER: This appeal has been filed by the Assessee against the order passed by the Ld. Commissioner of Income Tax (Appeals), (in short “Ld. CIT(A)”), National Faceless Appeal Centre (in short “NFAC”), Delhi vide order dated 27.10.2025 passed for A.Y. 2020-21.

2.

The assessee has raised the following grounds of appeal:

“1. Addition of Rs. 1,64,02,358/-on account of considering the credits of the bank statement as unexplained money u/s 69A. On facts and in the circumstances of the case and in law, The Ld. CIT(A) by confirming the order passed by the Ld. AO has grossly erred in upholding the addition of Rs. 1,64,02,358/-on account of considering the credits of the bank statement as unexplained money. 2. The Ld. AO has grossly erred in making addition u/s 69A of the Income Tax Act, 1961. On facts and in the circumstances of the case and in law, The Ld. CIT(A) by confirming the order passed by the Ld. AO has grossly erred in making addition of the total credit side of the bank statement and the Ld. CIT(A) has not provided effective opportunity of being heard to the appellant to make detailed submission.

ITA No. 2667Ahd/2025 Kiritkumar Ganpatsinh Parmar vs. ITO Asst.Year –2020-21 - 2– 3. Initiating penalty proceeding u/s 271AAC(1) of the Act. On facts and in the circumstances of the case and in law, the Ld. AO has grossly erred in initiating the proceedings for levy of penalty u/s. 271AAC of the Act when no such penalty is leviable. The proceedings initiated by the Ld. AO should be dropped as it is wrongly initiated. 4. Initiating penalty proceeding u/s 272A(1)(d) of the Act. On facts and in the circumstances of the case and in law, the Ld. AO has grossly erred in initiating the proceedings for levy of penalty u/s. 272A(1)(d) of the Act when no such penalty is leviable. The proceedings initiated by the Ld. AO should be dropped as it is wrongly initiated. The appellant craves leave to add, amend, alter, edit, delete, modify or change all or any grounds of appeal at the time of or before the hearing of the appeal.” 3. The brief facts of the case are that the assessee is an individual who did not file his return of income for A.Y. 2020–21. Based on information available with the Income Tax Department under the Risk Management Strategy, the Assessing Officer observed that the assessee had undertaken substantial financial transactions during the relevant financial year viz. cash deposits aggregating to ₹1,03,06,350/- in bank accounts as reported via SFT data, along with other banking transactions. Since the assessee did not file return of income, these transactions remained unexplained and unverified, leading the Assessing Officer to form a belief that income chargeable to tax had escaped assessment within the meaning of section 147 of the Income- tax Act (“the Act”). During the course of reassessment proceedings, the Assessing Officer issued various notices to the assessee asking for various details regarding the nature and source of cash deposits and bank credits. However, the Assessing Officer observed that the assessee failed to comply with any of the notices and remained completely non- compliant throughout the proceedings. Therefore, in order to obtain information, the Assessing Officer issued notice under section 133(6) of the Act and obtained bank statements from various banks including

ITA No. 2667Ahd/2025 Kiritkumar Ganpatsinh Parmar vs. ITO Asst.Year –2020-21 - 3– Panchmahals District Co-operative Bank, State Bank of India, and others. On analysis of these bank accounts, the Assessing Officer observed that the assessee had multiple accounts and total credits including cash deposits aggregated to ₹1,64,02,358/- during the relevant financial year.

4.

In absence of any explanation regarding the nature and source of these credits, and considering the complete non-compliance by the assessee, the Assessing Officer proceeded to complete the assessment under section 147 read with section 144 and section 144B of the Act (best judgment assessment). The Assessing Officer treated the entire amount of ₹1,64,02,358/- as unexplained money under section 69A of the Act and subject the same to tax under section 115BBE of the Act at the prescribed rate. The total income of the assessee was accordingly assessed at ₹1,64,02,358/-. Further, penalty proceedings under sections 271AAC(1) and 272A(1)(d) were also initiated for taxation under section 115BBE and for non-compliance with statutory notices respectively.

5.

Aggrieved by the assessment order, the assessee preferred an appeal before the Commissioner of Income Tax (Appeals). Though the appeal was filed with a delay of 116 days, the assessee sought condonation on the ground that he was a layman, not well versed with tax procedures and faceless assessment mechanism, and became aware of the proceedings only later upon consulting professionals. The CIT(Appeals), taking a liberal view, condoned the delay and admitted the appeal.

ITA No. 2667Ahd/2025 Kiritkumar Ganpatsinh Parmar vs. ITO Asst.Year –2020-21 - 4– 6. On merits, the assessee challenged the addition made under section 69A of the Act contending that the addition was unjustified and excessive. Along with Form 35, the assessee submitted certain documents such as bank statements, audit report in Form 3CD, and financial statements, and also disputed the findings of the Assessing Officer. However, during the course of appellate proceedings, the CIT(Appeals) issued multiple notices seeking detailed submissions and supporting evidence. Despite these opportunities, the assessee failed to furnish any written submissions or documentary evidence during the appellate stage and did not effectively pursue the appeal.

7.

The CIT(Appeals), therefore, proceeded to decide the appeal ex- parte on the basis of material available on record. The CIT(Appeals) held that the burden of proof lies on the assessee to explain the nature and source of cash credits, especially when additions are made under section 69A of the Act. The CIT(Appeals) observed that the Assessing Officer had gathered cogent material in the form of bank statements obtained under section 133(6) of the Act, demonstrating substantial credits in the accounts of the assessee. In contrast, the assessee failed not only during assessment proceedings but also during appellate proceedings to provide any explanation or evidence to rebut these findings.

8.

The CIT(Appeals) further relied on judicial principles that mere filing of an appeal is not sufficient, and the assessee is required to effectively pursue the same. The CIT(Appeals) observed that the assessee did not discharge the onus cast upon him under the Act to explain the source of funds and did not produce any evidence to

ITA No. 2667Ahd/2025 Kiritkumar Ganpatsinh Parmar vs. ITO Asst.Year –2020-21 - 5– contradict the conclusions drawn by the Assessing Officer. The CIT(Appeals) also invoked the principle that appellate authorities are not required to keep matters pending indefinitely in absence of cooperation from the appellant and can decide the matter based on available records.

9.

Accordingly, the CIT(Appeals) held that in absence of any rebuttal or supporting evidence from the assessee, the addition made by the Assessing Officer under section 69A of the Act was justified. Therefore, CIT(Appeals) confirmed the entire addition of ₹1,64,02,358/-. With regard to the grounds relating to penalty proceedings, the CIT(Appeals) held that initiation of penalty is a separate proceeding and does not require adjudication at this stage. Consequently, the appeal of the assessee was dismissed.

10.

The assessee is in appeal before us against the order passed by CIT(Appeals) dismissing the appeal of the assessee.

11.

We have heard the rival contentions and perused the material on record. On careful consideration of the facts and circumstances of the case, we find that the assessment has been completed under section 147 read with section 144 of the Act primarily on account of complete non- compliance by the assessee, wherein the Assessing Officer has treated the entire bank credits amounting to ₹1,64,02,358/- as unexplained money under section 69A of the Act. We note that the addition has been made on the basis of information collected from third parties, namely banks, without the benefit of any explanation from the assessee, and the

ITA No. 2667Ahd/2025 Kiritkumar Ganpatsinh Parmar vs. ITO Asst.Year –2020-21 - 6– same has been sustained by the learned CIT(Appeals) also on account of non-prosecution of appeal by the assessee.

12.

At the same time, it is equally evident that the assessee has not cooperated with the proceedings either at the assessment stage or at the appellate stage and has failed to discharge the primary onus cast upon him under the provisions of the Act. However, considering the magnitude of the addition, which represents the entire bank credits, and the fact that such additions may include business receipts, circulation of funds or explained transactions which require proper verification, we are of the considered view that the matter cannot be conclusively decided without granting one more opportunity to the assessee to substantiate the nature and source of such credits.

13.

It is a settled position under the Income-tax law that while the burden of proof lies on the assessee to explain the source of cash credits or deposits, at the same time, principles of natural justice require that a reasonable opportunity be granted to the assessee to present his case. In the present case, though multiple opportunities were granted, the assessee has now come forward before us seeking an opportunity to explain the transactions.

14.

In the interest of substantial justice, and to ensure that correct income is brought to tax in accordance with law, we deem it appropriate to restore the matter to the file of the Assessing Officer for de-novo adjudication. The Assessing Officer shall examine afresh the nature and source of the bank credits after considering the evidences and explanations to be furnished by the assessee and shall pass a speaking

ITA No. 2667Ahd/2025 Kiritkumar Ganpatsinh Parmar vs. ITO Asst.Year –2020-21 - 7– order in accordance with law after providing adequate opportunity of being heard.

15.

At the same time, considering the consistent non-compliance on the part of the assessee at earlier stages, we deem it fit to impose a cost of ₹5,000/- on the assessee, which shall be deposited with the Prime Minister’s Relief Fund as a condition precedent for availing this opportunity. The assessee is directed to furnish proof of such payment before the Assessing Officer.

16.

The assessee is also directed to fully cooperate in the set-aside proceedings and furnish all relevant details and documentary evidences without seeking unnecessary adjournments, failing which the Assessing Officer shall be at liberty to proceed in accordance with law.

17.

In the result, the appeal of the assessee is allowed for statistical purposes. This Order pronounced in Open Court on 22/04/2026

Sd/- Sd/- (ANNAPURNA GUPTA) (SIDDHARTHA NAUTIYAL) ACCOUNTANT MEMBER JUDICIAL MEMBER Ahmedabad; Dated 22/04/2026 TANMAY, Sr. PS TRUE COPY आदेश की �ितिलिप अ�ेिषत/Copy of the Order forwarded to : 1. अपीलाथ� / The Appellant 2. ��थ� / The Respondent. 3. संबंिधत आयकर आयु� / Concerned CIT 4. आयकर आयु�(अपील) / The CIT(A)- 5. िवभागीय �ितिनिध, आयकर अपीलीय अिधकरण, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाड� फाईल / Guard file. आदेशानुसार/ BY ORDER,

उप/सहायक पंजीकार (Dy./Asstt.Registrar) आयकर अपीलीय अिधकरण, अहमदाबाद / ITAT, Ahmedabad

More judgments on Section 69A

All 15,297 judgments and leading authorities on Section 69A →

Recent GST High Court judgments

Search GST case law →