BHAVESHBHAI GOVINDBHAI PATEL,AHMEDABAD vs. THE ACIT, CENTRAL CIRCLE-1(1) NOW THE ITO, WARD- 4(1)(1), AHMEDABAD

ITSSA 127/AHD/2023Status: DisposedITAT Ahmedabad12 November 2024AY 2006-0719 pages
AI SummaryDismissed

What were the facts?

The assessee, Bhaveshbhai Govindbhai Patel, filed five appeals before the ITAT Ahmedabad against orders of the CIT(A)-11, Ahmedabad, for Assessment Years (AYs) 2005-06, 2006-07, 2007-08, 2009-10, and 2011-12. The assessee had not filed original returns. A search under Section 132 was conducted on 05.10.2010. A notice under Section 153A was issued on 22.09.2011, but the assessee did not file returns. Despite further notices and initiation of prosecution proceedings under Section 276CC, the assessee remained non-compliant. The case was selected for Special Audit under Section 142(2A). The assessee eventually filed a return for AY 2005-06 on 29.11.2012. The Special Audit report was received on 27.08.2013, and the Assessing Officer (AO) made additions based on it and seized documents, rejecting the assessee's books. The AO made additions of Rs. 63,000 under Section 69B and Rs. 1,65,151 for loan investment under Section 69B.

What did the Tribunal hold?

The Tribunal held that the Assessee's grounds regarding the special audit under Section 142(2A) were not maintainable as the appeal was filed against the assessment order passed under Section 144, and Section 246A does not provide for an appeal against the direction for a special audit. The Tribunal noted that the assessee had not filed returns for multiple years, and a search had been conducted, leading to the initiation of proceedings under Section 153A. The AO had found discrepancies and complexities necessitating a special audit. Regarding the additions, the Tribunal observed that the assessee had not filed returns and had not provided satisfactory explanations for seized documents. The AO had rejected the assessee's books and made additions based on the special audit report and seized documents. The Tribunal found that the assessee had not responded to notices and show-cause notices. The Tribunal did not decide on the merits of the additions concerning capital gains and notional rent as the primary issue of the maintainability of the special audit grounds was decided. The Tribunal did not expressly leave any issue undecided.

What were the issues?

1. Whether the CIT(A) erred in confirming the AO's direction for a special audit under Section 142(2A) without proper examination of accounts, especially since the assessee had not filed a return and the AO had no opportunity to review the books. (Assessee's contention). 2. Whether the CIT(A) erred in not adjudicating the grounds related to the special audit, citing Section 246A, when the appeal was against the Section 144 order and the special audit grounds were part of the original appeal. (Assessee's contention). 3. Whether the assessment order is bad in law as it was passed on 23.10.2013, after the receipt of the special audit report, exceeding the timeline required under Section 153B, given that the special audit was allegedly unwarranted. (Assessee's contention). 4. Whether the CIT(A) erred in confirming additions based solely on the special audit report without appreciating legal provisions, specifically: (i) Capital gain on sale of Thaltej Land amounting to Rs. 1,68,34,012. (Assessee's contention: no transfer or consideration received; incorrect computation of capital gain). (ii) Notional rent on vacant house properties amounting to Rs. 42,000. (Assessee's contention: addition not proper as per law). 5. Whether the AO erred in making additions in the absence of any incriminating material found during the search. (Assessee's additional ground). The Revenue did not record any specific arguments.

Which sections of the Income-tax Act were involved?

Section 132,Section 142(2A),Section 144,Section 153A,Section 246A,Section 153B,Section 23,Section 69B,Section 276CC

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, AHMEDABAD “A” BENCH, AHMEDABAD

Before: Ms. SUCHITRA KAMBLE & SHRI MAKARAND VASANT MAHADEOKAR

For Appellant: Shri Dhinal Shah & Shri Bhadresh Gandhakwala, ARs
For Respondent: Shri Veerabadram Vislavath, Sr. DR
Hearing: 16.10.2024Pronounced: 12.11.2024

PER SUCHITRA KAMBLE, JUDICIAL MEMBER:

These five appeals are filed by the Assessee against five different orders dated 30.06.2023, 04.07.2023, 30.06.2023, 04.07.2023 & 30.06.2023, passed by the CIT(A)-11, Ahmedabad for the Assessment Years 2005-06, 2006-07, 2007-08, 2009- 10 & 2011-12 respectively.

2.

Firstly, we are taking IT(SS)A No

The order continues below.

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