MAHESHKUMAR BHAGWANDAS PATEL,NA vs. ARIVS.INCOME TAX OFFICER, WARD - 3, NAVSARI

ITA 658/SRT/2023Status: DisposedITAT Surat25 September 2026AY 2011-1224 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal noted that the assessee did not press several legal grounds, including those related to the issuance of notice under Section 148 and the validity of the reassessment order for AYs 2010-11 and 2011-12. The Tribunal also observed that the CIT(A) had passed ex-parte orders as the assessee was non-responsive. For AYs 2010-11 and 2011-12, the Tribunal, referencing its decision in similar matters (though not detailed in the provided text), allowed the appeals for statistical purposes, implying a remand for fresh adjudication on the merits of the additions. Similarly, for AY 2017-18, the ground challenging the addition of Rs. 1,76,43,301/- was allowed for statistical purposes, with the adjudication mirroring that for AYs 2010-11 and 2011-12. Consequently, the penalty appeals for AYs 2010-11, 2011-12, and 2012-13 were remanded to the AO for fresh adjudication, as they emanated from the assessment proceedings. The Tribunal stated that the AO shall take a fresh call in these matters in accordance with facts and law. All quantum appeals were partly allowed for statistical purposes, and all penalty appeals were allowed for statistical purposes.

What were the facts?

The assessee, Maheshkumar Bhagwandas Patel, filed appeals against orders of the National Faceless Appeal Centre (NFAC), Delhi, which upheld assessment orders passed by the ACIT/AO. The assessments were made under Section 143(3) read with Section 147 of the Income-tax Act, 1961, for Assessment Years (AYs) 2010-11 and 2011-12. The AO initiated reassessment proceedings after a survey in another person's case revealed a bank account in the assessee's name with substantial cash deposits, which the assessee stated pertained to a Vasudhara Dairy distributorship operated by Shri Kuldip R. Patil. The AO added an estimated net profit of 8% on these deposits. For AY 2017-18, the assessment was made under Section 144, with additions including cash deposits during demonetisation and other periods. Penalty appeals under Section 271B for failure to get accounts audited were also filed for AYs 2010-11, 2011-12, and 2012-13.

What were the issues?

1. Whether the Commissioner of Income-tax (Appeals) erred in dismissing the assessee's grounds regarding the issuance of notice under Section 148 and the non-provision of reasons for issuing such notice for AYs 2010-11 and 2011-12. 2. Whether the Commissioner of Income-tax (Appeals) erred in dismissing the assessee's grounds challenging the merits of the additions made by the Assessing Officer (AO) on account of profit from the milk distributorship business and estimated profit margins for AYs 2010-11 and 2011-12. 3. Whether the Commissioner of Income-tax (Appeals) erred in dismissing the assessee's ground regarding the addition of Rs. 1,76,43,301/- for entry pickup from bank accounts for AY 2017-18. 4. Whether the Commissioner of Income-tax (Appeals) erred in dismissing the assessee's grounds related to the initiation of penalty proceedings under Section 271B for failure to get accounts audited for AYs 2010-11, 2011-12, and 2012-13. Assessee's arguments: The assessee contended that the legal grounds (notice u/s 148, reasons for notice, reassessment order u/s 143(3) r.w.s. 147, and additional ground regarding notice u/s 143(2)) were not pressed. For penalty appeals, the assessee argued that penalties under Section 271B could not be imposed as the assessee denied the transactions in the bank account. Revenue's arguments: The revenue's stand was that the bank account and transactions belonged to the assessee, justifying the AO's actions.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 147,Section 131,Section 148,Section 143(2),Section 234B,Section 234C,Section 271B,Section 271(1)(c),Section 144,Section 234A,Section 271AAC,Section 271F,Section 270AA,Section 274

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, SURAT BENCH, SURAT

Before: MS. SUCHITRA KAMBLE & SHRI B.M. BIYANI

For Appellant: Shri Saurabh Soparkar, Sr.Advocate with Ms. Ukti Shah, AR
For Respondent: Shri Aashish Pophare, CIT(DR) with Shri Ashish Kumar, Sr DR
Hearing: 29.06.2026Pronounced: 25.09.2026

Per B.M. Biyani, AM: This bunch of seven appeals, consisting of four quantum-appeals and three penalty-appeals, has been filed by assessee. Since these appeals relate to same assessee and the issues and underlying facts are identical/inter- linked, they were heard together at the request of parties and are being disposed of by this single order for the sake of clarity, brevity and Maheshkumar Bhagwandas Patel ITA Nos. 656-662/SRT/2023 (AY 2010-11,

The order continues below.

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