VISHNUPRASAD GYARASILAL AGRAWAL,FATEHPURA, PANCHMAHAL vs. ITO WARD-1 DAHOD, DAHOD

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ITA 2317/AHD/2026Status: DisposedITAT Ahmedabad30 October 2026AY 2020-217 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal noted that there was no effective representation of the Assessee either before the AO or before the CIT(A). The Tribunal found that the AO had not recorded any finding that the cash purchases were not part of the Assessee's books of account. The Assessee claimed that the addition of Rs. 7,60,000 was business income already disclosed under PAN ABVPA8714F. Considering the overall facts and circumstances, the Tribunal was of the view that the interests of justice would be served by giving the Assessee an opportunity to present his case before the Ld. AO. Therefore, the impugned order of the CIT(A) was set aside, and the matter was restored to the file of the AO for passing a fresh assessment order after giving due opportunity to the Assessee. The Assessee was directed to submit all relevant materials and supporting documents and comply with notices without seeking unnecessary adjournments. The appeal was allowed for statistical purposes.

What were the facts?

The assessee, Vishnuprasad Gyarasilal Agrawal, filed an appeal against the order of the Ld. Commissioner of Income Tax (Appeals) - National Faceless Appeal Centre (NFAC), Delhi, for Assessment Year 2020-21. The assessee was allotted two PANs due to a clerical error. The entire business income from firecrackers was declared under PAN ABVPA8714F. During reassessment proceedings under section 147, the Assessing Officer (AO) made an addition of Rs. 7,60,000 under PAN ADWPA2173R, treating it as undisclosed income. The assessee contended that this income was already declared and taxes paid under the other PAN. Despite submissions and supporting documents, the AO proceeded with the addition. The Ld. CIT(A) dismissed the appeal ex parte for want of appearance and submissions, affirming the AO's order. The assessee's appeal to the ITAT was filed with a delay of 100 days, which was condoned.

What were the issues?

1. Whether the Ld. CIT(A) erred in deciding the appeal ex parte and dismissing it for want of appearance/submissions, without adjudicating the grounds of appeal on their merits as mandated by sections 250(6) and 251 of the Act, thereby breaching the principles of natural justice? - Assessee's contention: The Ld. CIT(A) is duty-bound to dispose of the appeal on merits and cannot dismiss it for default. The order was non-speaking and reflected non-application of mind. The order was passed without affording an adequate opportunity of being heard. - Revenue's contention: Not recorded. 2. Whether the Ld. CIT(A) erred in confirming the addition of Rs. 4,80,000 (part of the total Rs. 7,60,000 addition) representing business income already declared under PAN ABVPA8714F, leading to double taxation? - Assessee's contention: The sum of Rs. 4,80,000 does not represent escaped income as it was disclosed in a validly filed return. The deactivation of the duplicate PAN at the assessee's request should not lead to double taxation. Credit for the return filed and taxes paid under the duplicate PAN was not given, resulting in the same income being taxed twice. Consequential interest under sections 234A, 234B and fee under section 234F are erroneous. - Revenue's contention: Not recorded. 3. Whether the Ld. CIT(A) erred in confirming the addition of Rs. 2,80,000 (part of the total Rs. 7,60,000 addition) under section 69C read with section 115BBE as alleged unexplained expenditure on cash purchases? - Assessee's contention: The addition is based on loose papers and parallel accounts seized from a third party, which have no evidentiary value against the assessee. Statements recorded under section 132(4) were used without providing copies or opportunity for cross-examination. The assessee explained the source of purchases with confirmations from relatives and associates. The addition is internally contradictory and excessive, exceeding the total alleged purchase. Without prejudice, only the profit element, not the entire amount, could be taxed. Section 115BBE is inapplicable, and the amount should be taxed as business income at normal rates. - Revenue's contention: Not recorded.

Which sections of the Income-tax Act were involved?

Section 250(6),Section 251,Section 139(1),Section 234A,Section 234B,Section 234F,Section 69C,Section 115BBE,Section 132(4),Section 147,Section 144,Section 271AAC,Section 272B,Section 139A,Section 274

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, AHMEDABAD BENCHES, AHMEDABAD

Before: NARENDRA PRASAD SINHA & SHRI SANJAY KUMAR

Pronounced: 30.10.2026

आयकर अपील�य अ�धकरण, अहमदाबाद पीठ�, अहमदाबाद INCOME TAX APPELLATE TRIBUNAL, AHMEDABAD BENCHES, AHMEDABAD BENCH: SMC BEFORE NARENDRA PRASAD SINHA, ACCOUNTANT MEMBER AND SHRI SANJAY KUMAR, JUDICIAL MEMBER ITA 2317/AHD/2026 (िनधा�रण वष�/Assessment Year: 2020-21) Vishnuprasad Gyarasilal ITO Agrawal Ward-1 Dahod Karodia Purva Main Bazar, Ward-1 Fatehpura, Santrampura, Vs. Dahod-389260, Gujarat Panchmahal, Panchmahal-389260, Gujarat अपीलाथ� Appellant ��थ� Respondent

Permanent Account Number of Assessee: ADWPA2173R

अपीलाथ� �ारा/Appellant represented by: Shri Parag Jain, AR ��थ� �ारा/Respondent represented by: Shri Sachin Kumar, Sr. DR. सुनवाई की तारीख / Date of conclusion of hearing: 31.08.2026 घोषणा की तारीख / Date of pronouncement: 30.10.2026 आदेश / ORDER PER SANJAY KUMAR, JUDICIAL MEMBER:- This appeal has been filed by the Assessee against the order dated 10.10.2025 passed by the Ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi (hereinafter referred to as ‘Ld. CIT (A)’ in short), under Section 263 of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’ in short) for Assessment Year 2020-21.

ITA 2317/AHD/2026 Vishnuprasad Gyarasilal Agrawal - 2– 2. The Assessee has raised following grounds of Appeal:-

“Ground 1- Order passed in breach of the principles of natural justice

1.

That the Ld. CIT(A) erred in law and on facts in deciding the appeal ex parte and in dismissing it for want of appearance/submissions, without adjudicating the grounds of appeal on their merits in the manner mandated by sections 250(6) and 251 of the Act.

1.1 That the Ld. CIT(A) is duty-bound to dispose of the appeal on merits and has no power to dismiss an appeal for default or non-prosecution; the impugned order, which merely reproduces and affirms the assessment order without independent reasons on each ground, is a non-speaking order reflecting non-application of mind.

1.2 That the impugned order having been passed without affording effective and adequate opportunity of being heard, and without considering the material already on the assessment record, is in violation of the principles of natural justice and is liable to be set aside.

Ground 2-Addition of Rs. 4,80,000: double taxation of income already returned

2.

That the Ld. CIT(A) erred in confirming the addition of Rs. 4,80,000 representing the very business income that the Appellant had already declared in his return of income filed u/s 139(1) under PAN ABVPA8714F for A.Y. 2020-21.

2.1. That the said sum of Rs. 4,80,000 does not represent any income that had 'escaped assessment'; it stood disclosed in a validly filed return and could not be added again as undisclosed income merely because the duplicate PAN was deactivated at the Appellant's

own request. 2.2 That the authorities below failed to give credit for the return filed and taxes, if any, paid/credited under PAN ABVPA8714F, resulting in the same income being brought to tax twice.

2.3 That the consequential treatment of the Appellant as a complete non-filer under PAN ADWPA2173R and the resulting levy of interest u/s 234A, 234B and fee u/s 234F is erroneous, the income having in fact been returned under the duplicate PAN.

ITA 2317/AHD/2026 Vishnuprasad Gyarasilal Agrawal - 3–

Ground 3- Addition of Rs. 2,80,000 u/s 69C r.w.s. 115BBE

3.

That the Ld. CIT(A) erred in law and on facts in confirming the addition of Rs. 2,80,000 made u/s 69C r.w.s. 115BBE as alleged unexplained expenditure on cash purchases.

3.1 That the addition rests solely on loose papers/'rojmel' entries and a parallel set of accounts (allegedly generated through software named 'MITI') seized from a third party, M/s Ambica Ashish Tradelink LLP; such documents are not in the handwriting of the Appellant, bear no signature of the Appellant, and have no evidentiary value against him.

3.2 That the statements recorded u/s 132(4) of partners/persons of the searched entity were used against the Appellant without supplying copies and without affording any opportunity to cross-examine those persons in breach of natural justice rendering the addition unsustainable.

3.3 That the Appellant duly explained the source of the alleged purchases and furnished confirmations from relatives and associates aggregating Rs. 1,16,125/-which the authorities below brushed aside without cogent reasons.

3.4 That the addition of Rs. 2,80,000 is internally contradictory and excessive: the Ld. AO's own finding records total purchases of only Rs. 1,78,355 from the said party (of which Rs. 50,000 was through banking channels), so an addition of Rs. 2,80,000 as 'unexplained expenditure' exceeds even the total alleged purchase and is wholly unsustainable.

3.5 That without prejudice, even if any unaccounted purchase were assumed, only the profit element embedded in such purchases and not the entire amount could be brought to tax particularly where corresponding sales/turnover are not disturbed.

3.6 That without prejudice, the provisions of section 115BBE (tax @ 60% plus surcharge) have no application and the amount, if at all assessable, being referable to the Appellant's regular firecracker business and assessable as business income at normal rates.

Ground 4-Interest u/s 234A and 234B

ITA 2317/AHD/2026 Vishnuprasad Gyarasilal Agrawal - 4– 4. That the Ld. CIT(A) erred in confirming the levy of interest u/s 234A (Rs. 1,12,847) and u/s 234B (Rs. 1,38,180), which is excessive, consequential and liable to be deleted, especially in light of the return filed under PAN ABVPA8714F and the reliefs claimed above.

Ground 5- Penalty proceedings

5.

That the Ld. AO erred in initiating penalty proceedings u/s 271AAC and u/s 272B r.w.s. 139A r.w.s. 274, the same being unwarranted and without basis; the initiation is challenged without prejudice to separate remedies against any penalty order.

Ground 6-General

6.

That the Appellant craves leave to add, alter, amend, substitute, modify or withdraw any of the above grounds, and to file additional evidence and a paper book, at or before the hearing of the appeal.”

3.

The present appeal is barred by delay of 100 days in filling the present appeal. Considering the delay affidavit filed by the Assessee, sufficient cause is made. Hence, delay in preferring the present appeal is condoned.

4.

Brief facts of the case as recorded in the impugned order that the appellant is an individual assessee engaged in the business of firecrackers, among other activities. Due to an inadvertent clerical issue, the assessee was allotted two Permanent Account Numbers (PANs), namely ADWPA2173R and ABVPA8714F. The entire business income from firecrackers for the relevant assessment year was duly disclosed under PAN ABVPA8714F, and the corresponding Income Tax Return (ITR) was filed under that PAN along with Audit Report. During the reassessment proceedings under section 147, the learned Assessing Officer (AO) made an addition of Rs. 7,60,000 under PAN ADWPA2173R, treating the same as undisclosed income from the firecracker business. The assessee had duly submitted a comprehensive

ITA 2317/AHD/2026 Vishnuprasad Gyarasilal Agrawal - 5– reply during the reassessment proceedings, explaining that the income in question was already declared under PAN ABVPA8714F and that taxes if any, had already been paid on it. Along with the reply, the assessee provided: a. Bank statements, b. Confirmation of accounts from the relevant parties, c. An affidavit requesting deletion of the duplicate PAN, d. Supporting documentation evidencing disclosure of the firecracker business income under PAN ABVPA8714F.Despite the above, the AO proceeded with the addition. Before the ld. CIT(A), the Assessee remained unrepresented and ld. CIT(A) has observed as under:

“Assessment was completed u/s. 147 r.w.s 144 of the I.T.Act, 1961 on 24.03.2025 whereby income was assessed at Rs. 7,60,000/- by making addition of the same amount. During the course of appellate proceedings appellant has failed to produce any submission/evidence in support of his grounds of appeal in spite of several opportunities being given. In the absence of any evidence, whatsoever, whether documentary or otherwise I am constrained to agree with the approach adopted by the AO in making the addition during the course of assessment proceedings. The AO has passed an order considering all the facts and the circumstances of the case and hence, no interference with the order of the AO is called for. As such the grounds of appeal raised by the appellant are therefore dismissed.” 4.1 Hence, the Assessee is in appeal before us.

5.

At the outset, ld. AR submitted that the Assessee is not effectively participated during the assessment proceeding as well as before the ld. CIT(A). He has also submitted that addition of Rs. 7,60,000/- made in this case was business income, which has already been disclosed under PAN ABVPA8714F. He has requested that the Assessee may be given one more opportunity to represent his case before the ld. AO, in the interest of justice.

6.

Per contra, Ld. Sr.DR. has supported the order of the AO as well as CIT(A).

ITA 2317/AHD/2026 Vishnuprasad Gyarasilal Agrawal - 6– 7. We have heard both the parties and perused the materials available on the record.

8.

Admittedly, there was no effective representation of the Assessee either before the AO or before the CIT(A). We find that AO has not recorded any finding that cash purchases were not part of the books of account of the Assessee. The Assessee has claimed before us that addition of Rs. 7,60,000/- made in this case was business income, which has already been disclosed under PAN ABVPA8714F. In the overall facts and circumstances of the case, we are of the considered view that the interests of justice will be well served, if the Assessee be given an opportunity to present his case before the Ld. AO. Hence, the impugned order of the CIT(A) is set-aside and the matter is restored to the file of the AO. The AO will pass afresh assessment order after giving due opportunity to the Assessee. The Assessee shall submit all relevant materials and supporting documents before the AO in support of its case and shall comply with the notices issued by the Revenue Authorities without seeking unnecessary adjournments.

9.

In the result, the appeal of the assessee is treated as allowed for statistical purposes. The order pronounced on 30.10.2026.

Sd/- Sd/- (NARENDRA PRASAD SINHA) (SANJAY KUMAR) ACCOUNTANT MEMBER JUDICIAL MEMBER Ahmedabad; Dated 30.10.2026 DS, PS

ITA 2317/AHD/2026 Vishnuprasad Gyarasilal Agrawal - 7– JEETENDRA DEVENDRABHAI आदेश की �ितिलिप अ�ेिषत / Copy of the Order forwarded to : UPADHYAY 1. अपीलाथ�/ The Appellant 2. ��थ�/ The Respondent. Digitally signed by JEETENDRA DEVENDRABHAI 3. संबंिधतआयकरआयु�/ Concerned CIT UPADHYAY DN: c=IN, o=PERSONAL, title=6087, आयकरआयु�(अपील) /The CIT(A)- 4. 2.5.4.20=7e5568a89b633f174b28a80f5e63c638da40b 7313fb47ebaefda841cf59d1703, postalCode=380059, st=Gujarat, 5. िवभागीय�ितिनिध, आयकरअपीलीयअिधकरण, अहमदाबाद/ DR, ITAT, Ahmedabad serialNumber=816dc56e896211a1a21ccc4abc94ddc9 4458f4a1b37be8e1854e9399295106d4, गाड�फाईल /Guard file. 6. cn=JEETENDRA DEVENDRABHAI UPADHYAY Date: 2026.10.30 17:15:43 +05'30' आदेशानुसार/ BY ORDER, True Copy सहायकपंजीकार (Dy./Asstt. Registrar) आयकरअपीलीयअिधकरण, अहमदाबाद / ITAT, Ahmedabad

1.

Date of dictation (words processed by the Hon’ble JM on his PC) on 13.10.2026. Date on which the typed draft is placed before the Dictating Member 14.10.2026. 2. Other Member .2026. 3. 4. Date on which the approved draft comes to the Sr.P.S./P.S .2026 5. Date on which the fair order is placed before the Dictating Member for pronouncement .2026 Date on which the fair order comes back to the Sr.P.S./P.S .2026 6. Date on which the file goes to the Bench Clerk .2026 7. 8. Date on which the file goes to the Head Clerk .2026 9. The date on which the file goes to the Assistant Registrar for signature on the order Date of Dispatch of the Order .2026 10.

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