HITESHKUMAR BHARATBHAI PATEL,AHMEDABAD,GUJARAT vs. THE INCOME TAX OFFICER, WARD-2(1)(1),AHMEDABAD, AHMEDABAD,GUJARAT

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ITA 2843/AHD/2026Status: DisposedITAT Ahmedabad13 October 2026AY 2023-245 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal noted that the impugned order of the CIT(A) was ex parte. The assessee contended that they had a fair case on merits and had relied on various details and evidences furnished before the AO. The Tribunal, in the interest of justice, decided to give the assessee an opportunity to present their case before the CIT(A). For the negligence in not properly representing the case before the CIT(A), the assessee was burdened with a cost of Rs. 10,000/- to be deposited in the Prime Minister’s National Relief Fund within 60 days. Subject to this condition, the impugned order of the CIT(A) was set aside, and the matter was restored to the file of the CIT(A) for a fresh decision on merits after giving due opportunity to the assessee. The assessee was directed to remain vigilant. The appeal was treated as allowed for statistical purposes.

What were the facts?

The assessee, Hiteshkumar Bharatbhai Patel, filed an appeal before the Income Tax Appellate Tribunal (ITAT) against the order of the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi, dated 04.06.2026. The appeal pertains to Assessment Year 2023-24. The assessee had previously filed an appeal before the CIT(A) against the order of the Assessing Officer (AO). The CIT(A) passed an ex parte order dismissing the assessee's appeal. The assessee's grounds of appeal before the ITAT include allegations of violation of natural justice, confirmation of disallowance of expenses, confirmation of additions as cash credits, and confirmation of additions without rejecting audited books of accounts.

What were the issues?

1. Whether the Learned Commissioner of Income Tax (Appeals) erred in passing an ex parte order dismissing the appeal without providing a reasonable opportunity of being heard to the appellant, thereby violating principles of natural justice and equity? 2. Whether the Learned Commissioner of Income Tax (Appeals) erred in confirming the disallowance of Rs. 24,89,81,963/- under Section 37 of the Income Tax Act, 1961, made by the Assessing Officer, which was estimated at 15 percent of net purchases for alleged non-deduction of TDS under Section 194Q? 3. Whether the Learned Commissioner of Income Tax (Appeals) erred in confirming the addition of Rs. 5,23,97,797/- made by the Assessing Officer as cash credits under Section 68 read with Section 115BBE of the Income Tax Act, 1961, including Rs. 1,99,75,797/- from sales to Mr. Ashwnkumar Gaurishankar Nayak and Rs. 3,24,22,000/- as unsecured loans from four parties? 4. Whether the Learned Commissioner of Income Tax (Appeals) erred in confirming additions made by the Assessing Officer without rejecting the audited books of accounts of the appellant under Section 145 of the Income Tax Act, 1961? Assessee's Contentions: - The Learned Commissioner of Income Tax (Appeals) erred in passing an ex parte order, violating principles of natural justice. The assessee seeks an opportunity to present their case on merits, even if burdened with costs. - The disallowance of Rs. 24,89,81,963/- and additions of Rs. 5,23,97,797/- as cash credits were erroneous. The assessee claims to have furnished all necessary evidence before the AO and CIT(A). - The additions were confirmed without rejecting the audited books of accounts and without considering that the income was already accounted for, leading to double taxation. Revenue's Contentions: - The Learned DR relied on the order of the Learned CIT(A).

Which sections of the Income-tax Act were involved?

Section 37,Section 194Q,Section 68,Section 115BBE,Section 145,Section 250

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “B” BENCH, AHMEDABAD

Before: SHRI SANJAY GARG & SHRI R. GOVINDARAJAN

For Appellant: Shri Aseem L Thakkar, AR, Shri Ram Tiwari, CIT. D.R
For Respondent: Shri Ram Tiwari, CIT. D.R
Hearing: 12/10/2026Pronounced: 13/10/2026

Per Sanjay Garg, Judicial Member:

The present appeal has been filed by the assessee against the order of the Ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (hereinafter referred to as “NFAC”), Delhi (hereinafter referred to as “CIT(A)”), dated 04.06.2026 passed under Section 250 of the Income Tax Act, 1961 (hereinafter

ITA No.2843/Ahd/2026 [Hiteshkumar Bharatbhai Patel vs. ITO] A.Y. 2023-24 - 2 –

referred to as the “Act”) and relates to Assessment Year (A.Y.) 2023-24.

2.

The assessee has taken following grounds in this appeal:

“1. The Learned Commissioner of Income tax (Appeals) has erred in passing an Ex Parte order dismissing the appeal without providing reasonable opportunity of being heard to the appellant. Hence the same being against the principles of natural justice and equity requires to be cancelled. 2. The Leamed Commissioner of Income tax (Appeals) has erred in confirming the disallowance of Rs.24,89,81,963/- u/s.37 of the Act made by the Assessing Officer estimating 15 percent of the net purchases of Rs.1,65,98,79,757/- for the alleged non deduction of TDS u/s. 1940 of the Act. 3. The Learned Commissioner of Income tax (Appeals) has erred in confirming the addition of Rs.5,23,97,797/- made by the Assessing Officer as cash credits u/s.68 r.w.s. 115BBE of the I.T.Act, 1961 details of which are as under:- 3.1. The Learned Commissioner of Income tax (Appeals) has erred in confirming the addition of Rs.1,99,75,797/- made by the Assessing Officer holding the sales made to Mr. Ashwnkumar Gaurishankar Nayak as cash credit u/s.68 r.w.s.115BBE of the L.T.Act, 1961. 3.2. The Learned Commissioner of Income tax (Appeals) has erred in confirming the addition of Rs.3,24,22,000/- made by the Assessing Officer holding the unsecured loans received from four parties namely 1.Patel Bharatbhai Bhikhabhai Rs.40,00,000/-2.Patel Nilamben Sunilbhai Rs.63,70,000/- 3.Patel Savitaben Bharatbhai Rs.24,00,000/- and 4. Patel Sunilkumar Bharatbhai Rs. 1,96,52,000/- as cash credits u/s.68 r.w.s. 115BBE of the I.T.Act, 1961. 4. The Learned Commissioner of Income tax (Appeals) has erred in confirming the additions made by the Assessing Officer without rejecting the audited books of accounts of the appellant u/s. 145 of the I.T. Act, 1961.

ITA No.2843/Ahd/2026 [Hiteshkumar Bharatbhai Patel vs. ITO] A.Y. 2023-24 - 3 –

5.

The Learned Commissioner of Income tax (Appeals) has erred in confirming the additions made by the Assessing Officer for the alleged purchases accepting the corresponding sales thereof and without considering fact that the appellant has considered the same while computing the income as per return of income filed. Hence this amounts to taxing the same income twice. 6. The Learned Commissioner of Income tax (Appeals) has erred in confirming the additions made by the Assessing Officer u/s.68 of the Act in spite of all the evidences, confirmations ledger accounts of the parties etc. furnished by the appellant at the time of assessment proceedings. 7. The Appellant craves leave to add, alter, amend or modify any of the grounds of appeal on or before the date of hearing of appeal.”

3.

At the outset, Ld. Counsel for the assessee submitted that the assessee had duly participated in the assessment proceedings before the Assessing Officer (in short ‘the AO’) and furnished the requisite details and submissions. However, the AO, somehow, did not get satisfied with the details and submissions furnished by the assessee and made the impugned additions.

4.

Being aggrieved by the said order of the AO, the assessee preferred an appeal before the Ld. CIT(A). The Ld. Counsel has submitted that, however, before the Ld. CIT(A), the then Counsel of the assessee could not properly represent the case. He had sought adjournments before the Ld. CIT(A) but could not present the case properly, resulting into the ex parte order passed by the Ld. CIT(A). Ld. Counsel has submitted that the assessee has a fair case on merits that the assessee may be given an opportunity to

ITA No.2843/Ahd/2026 [Hiteshkumar Bharatbhai Patel vs. ITO] A.Y. 2023-24 - 4 –

present his case before the Ld. CIT(A). He has submitted that the assessee may be burdened with some reasonable costs on account of failure of his Counsel to properly represent his case before the Ld. CIT(A).

5.

Ld. DR, on the other hand, has relied on the order of the Ld. CIT(A).

6.

We have considered the rival contentions of both the Ld. Representatives of the parties and gone through the record. Admittedly, the impugned order of the Ld. CIT(A) is ex parte of the assessee. The assessee has relied on various details and evidences as were furnished before the AO and contended that the assessee has a fair case on merits. In our view, the interests of justice will be well served, if the assessee be given an opportunity to present his case before the Ld. CIT(A). For the negligence on the part of the assessee in not properly representing the case before the Ld. CIT(A), the assessee is burdened with the cost of Rs.10,000/- to be deposited in the Prime Minister’s National Relief Fund. The assessee will deposit the aforesaid cost amount within 60 days from the receipt of copy of this order and will produce the evidence of such deposit before the Ld.CIT(A). Subject to the fulfilment of the aforesaid condition, the impugned order of the Ld. CIT(A) is set-aside and the matter is restored to the file of the Ld. CIT(A). The Ld. CIT(A) will pass the order afresh on merits, in accordance with law after giving due

ITA No.2843/Ahd/2026 [Hiteshkumar Bharatbhai Patel vs. ITO] A.Y. 2023-24 - 5 –

opportunity to the assessee. It is directed that the assessee will remain vigilant and present its case promptly as and when called for by the Ld. CIT(A). In view of the above observations, the appeal of the assessee is treated as allowed for statistical purposes.

7.

In the result, the appeal of the assessee treated as allowed for statistical purposes.

This Order is pronounced on 13/10/2026

Sd/- Sd/- (R. GOVINDARAJAN) (SANJAY GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER Ahmedabad; Dated 13/10/2026 S. K. SINHA True Copy आदेश क� �ितिल�प अ�े�षत/Copy of the Order forwarded to : अपीलाथ� / The Appellant 1. ��यथ� / The Respondent. 2. संबंिधत आयकर आयु� / Concerned CIT 3. आयकर आयु�(अपील) / The CIT(A)- 4. 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

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