HASMUKHBHAI ISHWARBHAI CHAVDA,AHMEDABAD vs. INCOME TAX OFFICER, WARD 3(3)(7), AHMEDABAD, AHMEDABAD

The present appeal has been preferred by the Assessee against the Order, dated 07/11/2025, passed by the National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as the ‘CIT(A)’] whereby the Learned CIT(A) had allowed the appeal for statistical purpose against the Assessment Order, dated 24/12/2019, passed under Section 143(3) of the Income-tax Act, 1961 [hereinafter referred to as ‘the Act’] for the Assessment Year 2017-2018. 2. There is a delay of 115 days in filing the present appeal. We have taken into consideration the explanation offered by the Assessee for the delay in filing the present appeal. The Assessee, an individual engaged in the business of ornament and bullion trading. In the affidavit accompanying application seeking condonation of delay it has been stated that the Assessee was not conversant with taxation laws or computer operations and was dependent on his Tax Consultant. The order passed by the Ld. CIT(A) on 07/11/2025 was communicated via email, which got filtered into the ‘spam folder’ of the consultant and went unnoticed until the receipt of a Show-Cause Notice under Section 271AAC(1) on 05/05/2026. This resulted in delay in filing the present appeal. We are of the view that the Assessee was prevented by reasonable cause from filing the present appeal within the prescribed time. Accordingly, keeping in view the judgment of the Hon’ble Supreme Court in the case of Collector, Land Acquisition, Anantnag & Another v. Mst. Katiji & Others [1987 (2) SCR 387], we condone the delay of 115 days in filing the present appeal and proceed to adjudicate the grounds raised by the Assessee.

The Assessee has raised following grounds of appeal: Ground No. 1

2 That the learned CIT (Appeals) has further erred in law and on facts in failing to furnish to the Appellant the requisite particulars and details pertaining to the unsecured loans aggregating to Rs. 14,25,000/-, which were treated as non-genuine on the ground of alleged non-substantiation of the identity, creditworthiness, and genuineness of the creditors.

The relevant facts as emanating from the records are that the Assessee filed return of income for the Assessment Year 2017-2018 on 31/10/2017 declaring total income of INR.8,57,380/-. The case of the Assessee was selected for complete scrutiny. The Assessing Officer passed Assessment Order, dated 24/12/2019, under Section 143(3) of the Act assessing the total income at INR.89,06,880/- after making the following additions under Section 68 of the Act:

Being aggrieved, the Assessee preferred appeal before the Learned CIT(A). During the appellate proceedings, additional evidence in the form of VAT returns and bank statements of loan creditors were submitted by the Assessee along with application for admission of additional evidence under Rule 46A of the Income Tax Rules, 1962 [for short ‘IT Rules’]. The Learned CIT(A) called for a Remand Report from the Assessing Officer. The Assessing Officer submitted a Remand Report, dated 09/04/2024, wherein he reported that out of the total unsecured loans of INR.28,56,000/-, the Assessee had furnished adequate evidence to the extent of INR.14,31,000/-, while the remaining INR.14,25,000/- remained unsubstantiated. Regarding the cash deposits of INR.51,93,500/-, the Assessing Officer reported that the VAT returns showed an abnormal surge in sales during the demonetization period and recommended upholding the addition. The Learned CIT(A), vide impugned Order, dated 07/11/2025, confirmed the addition of INR.51,93,500/- towards cash deposits and restricted the addition on account of unsecured loans to INR.14,25,000/- thereby granting relief of INR.14,31,000/-.

Not being satisfied with the above relief granted by the Learned CIT(A), the Assessee has preferred the present appeal on the grounds reproduced in paragraph 3 above.

We have heard the rival submissions and perused the material available on record.

The primary contention advanced on behalf of the Assessee was that the Learned CIT(A) has confirmed the additions without appreciating the additional evidence furnished by the Assessee. Further, the Assessee was never confronted with the Remand Report. Thus, the Assessee was deprived of the opportunity to file objections/response thereto. The Learned Departmental Representative could not controvert the aforesaid submission advanced by the Learned Authorised Representative for the Assessee. When a Remand Report was called from the Assessing Officer, fairness demanded that a copy of the said remand report be furnished to the Assessee for comments/rejoinder. In the present case the Learned CIT(A) failed to do so and relied upon the remand report while adjudicating the appeal. Thus, there was clear violation of principles of natural justice. Further, we note that the contention/submission of the Assessee have also not been addressed by the Learned CIT(A). Therefore, taking into consideration the totality of facts and circumstances of the present case, we set-aside the order passed by the Learned CIT(A) confirming addition of INR.51,93,500/- towards cash deposits and confirming addition to the extent of INR.14,25,000/- on account of unsecured loans. Both the aforesaid issues are restored back to the file of the Learned CIT(A). The Learned CIT(A) is directed to furnish a copy of the Remand Report, dated 09/04/2024, to the Assessee; afford an adequate and reasonable opportunity to the Assessee to file his objections/rejoinder thereto; and re-adjudicate the issues afresh after taking into consideration the additional evidence filed by the Assessee as well as the submissions filed by the Assessee (including the response to the Remand Report). Thus, Ground No. 1 and Ground No. 2 raised by the Assessee are allowed for statistical purposes.

In the result, the present appeal preferred by the Assessee is allowed for statistical purposes.

""यथ"/ The Respondent. 3. संबंिधतआयकरआयु"/ Concerned CIT 4. आयकरआयु"(अपील) / The CIT(A) 5. िवभागीय"ितिनिध, आयकरअपीलीयअिधकरण/ DR, ITAT, 6. गाड"फाईल /Guard file. आदेशानुसार/BY ORDER, उप/सहायकपंजीकार (Dy./Asstt.