NANDITBHAI RAJENDRABHAI RAJPURA,AHMEDABAD vs. ITO WARD 1(8) BHAVNAGAR, BHAVNAGAR

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ITA 354/AHD/2026Status: DisposedITAT Ahmedabad22 April 2026AY 2014-156 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that the CIT(A) was not justified in dismissing the appeal for non-prosecution without deciding on merits. It also noted the assessee's contention regarding the invalidity of the assessment due to the absence of a mandatory notice under Section 143(2).

What were the facts?

The assessee's case was reopened for AY 2014-15 due to an alleged unexplained investment of Rs. 12,00,000/- in a car. The Assessing Officer made an addition under Section 69, and the CIT(A) dismissed the assessee's appeal for non-prosecution without adjudicating on merits.

What were the issues?

Whether the assessment order is void due to non-issuance of notice under Section 143(2), and whether the CIT(A) erred in dismissing the appeal for non-prosecution without deciding on merits.

Which sections of the Income-tax Act were involved?

Section 147,Section 143(3),Section 143(2),Section 69

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “SMC” BENCH, AHMEDABAD

Before: SMT. ANNAPURNA GUPTA & SHRI SIDDHARTHA NAUTIYAL

For Appellant: Shri Vihar Soni, AR
For Respondent: Shri Girish Parihar, Sr. DR
Hearing: 25.03.2026Pronounced: 22.04.2026

IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH, AHMEDABAD BEFORE SMT. ANNAPURNA GUPTA, ACCOUNTANT MEMBER & SHRI SIDDHARTHA NAUTIYAL, JUDICIAL MEMBER I.T.A. No.354/Ahd/2026 (Assessment Year: 2014-15) Nanditbhai Rajendrabhai Rajpura, Vs. Income Tax Officer, B-1, Chirag Apartment, Ward-1(8), Opp. VAsna Muni. School, Bhavnagar Kesariyaji Bus Stop, Vasna, Ahmedabad-380007 [PAN No.AIUPR0304E] (Appellant) .. (Respondent) Appellant by : Shri Vihar Soni, AR Respondent by: Shri Girish Parihar, Sr. DR Date of Hearing 25.03.2026 Date of Pronouncement 22.04.2026 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 26.07.2024 passed for A.Y. 2014-15.

2.

The assessee has raised the following grounds of appeal:

“1. Ld. AO had erred in law as well as on facts in passing order u/s. 147 r.w.s. 143(3) of the I.T. Act without issuing mandatory notice u/s. 143(2) of the Act. 2. The Assessment Order passed u/s 147 r.w.s. 143(3) of the Act dated 04-02- 2022 is void and bad in law. 3. Ld. CIT(A) erred in law and on facts in confirming the addition of Rs. 12,00,000/-, made as unexplained investment u/s 69 of the I.T. Act. 4. Ld. CIT(A) erred in law and on facts in confirming the addition of Rs. 12,00,000/- made u/s 69 of the I.T. Act without considering and commenting upon the documentary evidences that had been submitted while e-filing the appeal vide Form 35 as well as the replies and documents that were available through the assessment records.

ITA No. 354/Ahd/2026 Nanditbhai Rajendrabhai Rajpura vs. ITO Asst.Year –2014-15 - 2–

5.

The Appellant reserves the right to add, alter, amend and withdraw any of the above grounds of appeal.” Condonation of delay 3. At the outset, it is observed that the assessee has filed an application supported by affidavit seeking condonation of delay of 500 days in filing the present appeal. From the affidavit and the material placed on record, it is evident that the assessee was under a bona fide belief that his earlier consultant had duly filed the appeal before the Tribunal and was pursuing the same. It is only upon initiation of recovery proceedings, including attachment of bank accounts, that the assessee came to know about the non-filing of the appeal, whereafter immediate steps were taken to file the present appeal.

4.

The explanation so furnished is duly supported by affidavit and there is nothing on record to suggest that the delay was deliberate or with mala fide intent. It is a settled position of law that while considering condonation of delay, a liberal approach is to be adopted to advance substantial justice. The Hon’ble Supreme Court in Collector, Land Acquisition vs. Mst. Katiji (167 ITR 471) has held that substantial justice should prevail over technicalities and that a litigant should not be denied an opportunity of hearing on merits merely on account of delay. Similarly, in N. Balakrishnan vs. M. Krishnamurthy (1998) 7 SCC 123, it has been held that if the explanation for delay is reasonable and bona fide, delay deserves to be condoned irrespective of its length.

5.

In the present case, the delay is attributable to lapse on the part of the consultant and not due to any deliberate inaction of the assessee.

ITA No. 354/Ahd/2026 Nanditbhai Rajendrabhai Rajpura vs. ITO Asst.Year –2014-15 - 3– Accordingly, in the interest of justice, the delay of 500 days is hereby condoned and the appeal is admitted.

On Merits: 6. The brief facts of the case are that the assessee is an individual who filed his return of income for A.Y. 2014–15 declaring total income of ₹2,83,360/-. Subsequently, based on information that the assessee had made cash investment of ₹12,00,000/- towards purchase of a Toyota Fortuner car, the case was reopened under section 147 of the Act. During the reassessment proceedings, the Assessing Officer issued notices under sections 142(1) and 148 of the Act calling upon the assessee to explain the source of such investment. However, there was substantial non-compliance initially, and therefore the Assessing Officer proceeded to complete the assessment under section 144 read with section 147 of the Act.

7.

The Assessing Officer observed that the income declared by the assessee in earlier years was not commensurate with the investment made. Although the assessee later submitted that the funds were arranged from relatives and friends and furnished certain ledger confirmations and PAN details, the Assessing Officer found such evidences to be inadequate especially in the absence of complete details and proper corroboration on part of the assessee. Accordingly, the Assessing Officer treated the amount of ₹12,00,000/- as unexplained investment under section 69 of the Act and added to the total income.

8.

Aggrieved, the assessee preferred an appeal before the CIT(Appeals). Before the CIT(Appeals), the assessee submitted that the

ITA No. 354/Ahd/2026 Nanditbhai Rajendrabhai Rajpura vs. ITO Asst.Year –2014-15 - 4– addition was made without considering the evidences such as confirmations, PAN and Aadhaar of lenders, and that the source of investment was duly explained. However, the CIT(Appeals) dismissed the appeal primarily on account of non-prosecution, observing that the assessee did not respond to notices of hearing and relying on judicial precedents relating to dismissal for non-prosecution. The CIT(Appeals) thus did not adjudicate the issues on merits nor examine the evidences filed by the assessee.

9.

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

10.

We have heard the rival contentions and perused the material on record. The assessee has specifically raised a legal ground that the assessment has been framed under section 147 read with section 143(3) of the Act without issuance of mandatory notice under section 143(2) of the Act. It has been contended that in absence of such notice, the assessment order is void ab initio. The assessee has also placed reliance on judicial precedents including CIT vs. Sukhini P. Modi (2014) 52 taxmann.com 50 (Gujarat) and other Tribunal decisions to support the proposition that issuance of notice under section 143(2) is mandatory for framing an assessment under section 143(3) even in reassessment proceedings.

11.

Further, on merits, the assessee has submitted that the addition of ₹12,00,000/- under section 69 of the Act was made despite furnishing confirmations, PAN and Aadhaar details of the lenders, and that such evidences were also filed before the CIT(Appeals) along with Form 35

ITA No. 354/Ahd/2026 Nanditbhai Rajendrabhai Rajpura vs. ITO Asst.Year –2014-15 - 5– but were not considered at all. The Counsel for the assessee has brought to our notice that the CIT(Appeals) passed the order ex parte without adjudicating the issues on merits.

12.

The Counsel for the assessee has also submitted that the notices of hearing issued by the CIT(Appeals) were sent to an incorrect email ID, i.e., “nanditraipura26111981@gmail.com”, whereas the correct email ID mentioned in Form 35 was “nandit.rajpura@gmail.com”. Due to this mismatch, the assessee did not receive the notices and was deprived of an opportunity of being heard.

13.

In our considered view, the CIT(Appeals) was not justified in dismissing the appeal for non-prosecution without adjudicating the grounds on merits. It is a settled principle that the first appellate authority is duty bound to decide the appeal on merits.

14.

Considering the legal ground raised regarding non-issuance of notice under section 143(2) of the Act, which goes to the root of the validity of assessment, and further considering that the assessee was deprived of effective opportunity before the CIT(Appeals) due to incorrect service of notice, we are of the view that the entire matter requires fresh examination.

15.

Accordingly, in the interest of justice, we set aside the impugned order of the CIT(Appeals) and restore the matter to his file for de-novo adjudication. The CIT(Appeals) shall first adjudicate the legal ground relating to validity of assessment in light of judicial precedents and thereafter decide the issue on merits after considering all evidences filed

ITA No. 354/Ahd/2026 Nanditbhai Rajendrabhai Rajpura vs. ITO Asst.Year –2014-15 - 6–

by the assessee. Adequate opportunity of hearing shall be provided to the assessee by issuing notices at the correct email address.

16.

The assessee is also directed to cooperate fully and furnish all necessary details to substantiate his case.

17.

Accordingly, 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 1. Date of dictation 20.04.2026 (Dictated over dragon software) 2. Date on which the typed draft is placed before the Dictating Member 20.04.2026 3. Other Member………………… 4. Date on which the approved draft comes to the Sr.P.S./P.S 7.04.2026 5. Date on which the fair order is placed before the Dictating Member for pronouncement 22.04.2026 6. Date on which the fair order comes back to the Sr.P.S./P.S 22.04.2026 7. Date on which the file goes to the Bench Clerk 22.04.2026 8. Date on which the file goes to the Head Clerk…………………………………... 9. The date on which the file goes to the Assistant Registrar for signature on the order…………………….. 10. Date of Dispatch of the Order……………………………………

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