KIRTIDAN KARNIDAN GADHVI,AHMEDABAD vs. THE ITO, WARD-3(3)(2), AHMEDABAD

The present appeal has been preferred by the Assessee against the Order, dated 08/12/2025, passed by the National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as the ‘CIT(A)’] whereby the Learned CIT(A) had dismissedthe appeal against the Assessment Order, dated 29/04/2023, passed under Section 147 r.w.s 144 read with Section 144B of the Income Act, 1961 [hereinafter referred to as ‘the Act’] for the Assessment Year 2013-2014. 2. The Assessee has raised following grounds of appeal:

On the facts and circumstances of the case as well as law on the subject, the Ld. CIT(A) has erred in passing order without discussing grounds on merits.

On the facts and circumstances of the case as well as law on the subject, the Ld. CIT(A) has erred in upholding the addition of Rs. 1,19,25,763/- by treating the entire sale consideration of shares as unexplained income, without considering the corresponding purchase transactions and ignoring that the assessee had not claimed any exempt Long Term Capital Gain or set-off of Short Term Capital Loss in the return of income.

On the facts and circumstances of the case as well as law on the subject, the Ld. CIT(A) has erred in relying mechanically on general information from the Insight portal and stock exchange data without establishing any nexus between the assessee and alleged accommodation entry providers. thereby making the addition on mere suspicion and presumption.

On the facts and circumstances of the case as well as law on the subject, the Ld. CIT(A) has erred in sustaining the assessment order passed u/s 144 r.w.s. 147 without appreciating that the Assessing Officer failed to consider purchase transactions and thereby miscomputed income.

On the facts and circumstances of the case as well as law on the subject, the Ld. CIT(A) has erred in dismissing the appeal in limine by refusing to condone the delay, despite the assessee being a small trader and agriculturist who had relied on his accountant for statutory compliance, and despite the lapse being bona fide and beyond the control of the assessee.

On the facts and circumstances of the case as well as law on the subject, the Ld. CIT(A) has erred in upholding the demand Rs.84,49,186/- without properly computing the income and tax liability, ignoring that the impugned transactions, as per stock exchange data, resulted in short-term capital loss and not any taxable gain.

On the facts and circumstances of the case as well as law on the subject, the Ld. CIT(A) has erred in sustaining initiation of penalty u/s 271(1)(c) of the Act.

It is prayed that the addition made by the assessing officer may kindly be deleted considering the facts and evidence on record.

On perusal of record it emerges that the Assessee filed return of income for the Assessment Year 2013-2014 on 30/11/2014 declaring total income of INR.2,87,720/-. The case of the Assessee was reopened under Section 147 of the Act on the basis of information from the Insight portal that M/s Frontline Business Solutions Ltd. is a penny stock script used for introduction of unaccounted income or Short Term Capital Loss. In response to the notice issued by the Assessing Officer, the Assessee submitted that the Assessee was a small trader in raw cotton, unaware of trading in his account by the broker, and was mentally disturbed by this episode. Since the Assessee disowned the trade transactions, the Assessing Officer completed assessment under Section 147 r.w.s. 144B of the Act vide Assessment Order, dated 29/04/2023, making an addition of INR.1,19,25,763/- under Section 69A of the Act as unexplained money. The Assessing Officer brought to tax the aggregate sale consideration of INR.1,21,86,530/- reduced by the income of INR.2,87,720/- offered to tax by the Assessee.

Aggrieved by the Assessment Order, the Assessee preferred an appeal before the Learned CIT(A) with a delay of 220 days. In the application for condonation of delay, the Assessee submitted that the Assessee was a small trader and agriculturist, unaware of tax laws, and had relied on his accountant for statutory compliances. It was contended that the lapse on the part of the Assessee was bona fide. However, the Learned CIT(A), vide impugned Order, dated 08/12/2025, refused to condone the delay of 220 days holding that sufficient cause was not demonstrated with documentary evidence.

Being aggrieved by the above order passed by the CIT(A), the Assessee has preferred the present appeal on the grounds reproduced in paragraph 2 above. Ground No. 5 raised by the Assessee relates to the dismissal of appeal in limine by the Learned CIT(A) by refusing to condone the delay of 220 days in filing the appeal.

The Learned Authorized Representative for the Assessee submitted that the Assessee is a small trader dealing in raw cotton and an agriculturist having limited awareness of tax procedures, who bona fide relied upon his accountant for statutory compliances. It was submitted that the delay of 220 days was neither deliberate nor intentional, and prayed that the delay be condoned and the matter be restored for adjudication on merits.

Per contra, the Learned Departmental Representative relied upon the order of the Learned CIT(A) and submitted that the Assessee failed to furnish supporting evidence to justify the delay before the Learned CIT(A).

We have given thoughtful consideration to the rival submissions. The Assessee is stated to be an individual, small trader in raw cotton and agriculturist who relied upon his accountant for statutory compliances. When technical considerations are pitted against cause of substantial justice, the cause of substantial justice deserves to be preferred, as refusing to condone delay in genuine circumstances would cause irreparable injustice. Considering the background of the Assessee and the explanations offered, we are of the considered view that there was sufficient cause for the delay of 220 days in filing the appeal before the Learned CIT(A), and the lapse was bona fide. The Assessee was not set to gain by delaying the filing of appeal. Further, we note that the data available with the Assessing Officer had details of purchase consideration paid and sale consideration received. The Assessing Officer proceeded to add the entire sale consideration in the hands of the Assessee without taking note of the purchase consideration. Further we note that the Assessee had made a loss from the trading transactions under consideration. Accordingly, keeping in view the judgment of Hon’ble Supreme Court in the case of Collector, Land Acquisition, Anantnag & Another v. Mst. Katiji & Others [1987 (2) SCR 387], overturn the decision of CIT(A); condone the delay of 220 days in filing appeal before the Learned CIT(A). The order passed by the Learned CIT(A) is set aside and the issue is restored back to the file of the Assessing Officer for denovo adjudication as per law. All rights and contentions of the Assessee are left open. The Assessee is directed to file all submission and supporting documents before Assessing Officer without seeking any unnecessary adjournments and co-operate in the proceedings. The Assessing Officer is directed to grant the Assessee a reasonable opportunity of being heard. It is clarified that in case the Assessee failed to make submission and make proper representation, the Assessing Officer would be at liberty to adjudicate the issue on merits as per law. In terms of the aforesaid, Ground No. 5 raised by the Assessee is allowed while all the other grounds are dismissed as having been rendered infructuous at this stage since we have restored the issue back to the file of the Assessing Officer.

In result, appeal preferred by the Assessee is partly allowed.

""यथ"/ The Respondent. 3. संबंिधतआयकरआयु"/ Concerned CIT JEETENDRA DEVENDRABHAI UPADHYAY 4. आयकरआयु"(अपील) / The CIT(A) DN: c=IN, o=PERSONAL, title=6087, DEVENDRA 2.5.4.20=7e5568a89b633f174b28a80 f5e63c638da40b7313fb47ebaefda84 1cf59d1703, postalCode=380059, 5. िवभागीय"ितिनिध, आयकरअपीलीयअिधकरण/ DR, ITAT, BHAI st=Gujarat, serialNumber=816dc56e896211a1a2 1ccc4abc94ddc94458f4a1b37be8e18 54e9399295106d4, cn=JEETENDRA UPADHYAY 6. गाड"फाईल /Guard file. DEVENDRABHAI UPADHYAY Date: 2026.10.28 10:05:22 +05'30' आदेशानुसार/BY ORDER, उप/सहायकपंजीकार (Dy./Asstt.