KALPESH BABUBHAI VIRADIYA,BHAVNAGAR vs. THE ITO, WARD-1(1), BHAVNAGAR

ITA 1527/AHD/2025Status: DisposedITAT Ahmedabad12 October 2026AY 2018-196 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal allowed Ground No. 1, quashing the reassessment proceedings as void ab initio. The Tribunal found that the assessee was granted only 6 days to respond to the notice under Section 148A(b), which was a violation of the mandatory statutory prescription of not less than seven days, thus infringing the principles of natural justice. The Tribunal also noted that the notice and order under Section 148A incorrectly named a third party with a similar name and contained contradictory statements regarding the filing of the return of income. The Tribunal relied on the decision in Mukesh J Ruparel Vs Income Tax Officer. Consequently, the notice under Section 148A(b) and the order under Section 148A(d) were held unsustainable in law. Grounds No. 2 and 3, pertaining to the merits of the addition, were dismissed as infructuous due to the quashing of the reassessment proceedings.

What were the facts?

The assessee, Kalpesh Babubhai Viradiya, filed an appeal against the order of the National Faceless Appeal Centre (NFAC), Delhi, for Assessment Year 2018-2019. The NFAC had partly allowed the assessee's appeal against an assessment order passed by the Assessing Officer (AO) under Section 147 read with Section 144B of the Income Tax Act, 1961. The AO had initiated reassessment proceedings based on alleged accommodation entry transactions aggregating to INR 30,92,268. The AO treated these purchases as bogus and, inferring suppressed sales from the closing stock of INR 40,89,793, assessed the total income at INR 42,13,856. The CIT(A) granted partial relief, holding that treating closing stock as suppressed sales was double jeopardy and restricting the addition to 12.5% of the alleged bogus purchases.

What were the issues?

1. Whether the reassessment proceedings initiated under Section 147 of the Income Tax Act, 1961, are valid, considering alleged procedural irregularities in the notice and order under Section 148A of the Act. 2. Whether the addition made by restricting the suppressed profit to 12.5% of purchases from bogus entities is legally sustainable. 3. Whether the closing stock of INR 40,89,793 was correctly treated as suppressed sales. Assessee's Contentions: The assessee argued that the reassessment proceedings were invalid due to: (a) The notice under Section 148A(b) and order under Section 148A(d) incorrectly named 'Shri Kelpesh Babubhai Makwana' instead of the assessee 'Shri Kalpesh Babubhai Makwana', indicating a lack of verification. (b) The AO recorded incorrect basic facts regarding the returned income and filing date. (c) The assessee was granted less than the statutory minimum of 7 days to reply to the show cause notice under Section 148A(b), rendering the proceedings void ab initio. Revenue's Contentions: The revenue relied on the orders of the lower authorities and contended that the notice was issued on 09/03/2018, granting the assessee the statutory minimum period of 7 days to respond.

Which sections of the Income-tax Act were involved?

Section 147,Section 144B,Section 148A(b),Section 148A(d)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, C” BENCH, AHMEDABAD

Per Rahul Chaudhary, Judicial Member:

1.

The present appeal has been preferred by the Assessee against the Order, dated 09/06/2025, passed by the National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as the ‘CIT(A)’] whereby the Learned CIT(A) had partly allowed the appeal against the Assessment Order, dated 22/03/2023, passed under Section 147 read with Section 144B of the Income Act, 1961 [hereinafter referred to as ‘the Act’] for the Assessment Year 2018-2019. 2. The Assessee has raised following grounds of appeal:

1.

The Learned Commissioner of Income Tax Appeal

The order continues below.

Read the full judgment

A free account opens 10 full judgments a month. Re-reading one you have already opened does not count again.

Create a free accountSign in

See plans and prices

The summary, the parties, the sections and the citations above are open to everyone and always will be. Only the text of the order and the PDF are metered.

More judgments on Section 147

All 49,210 judgments and leading authorities on Section 147 →

Recent GST High Court judgments

Search GST case law →