PRATIK RAVJIBHAI KACHAROLA,MORBI vs. ITO, WARD-1, MORBI, MORBI
Facts
The assessee individual filed return for AY 2017-18 declaring Rs. 8,45,580/-. The AO, suspecting investment in a partnership firm M/s Kera Vitrified LLP was not commensurate with declared income, initiated reassessment proceedings under Section 147. The AO added Rs. 62,50,000/- on account of alleged unsecured loans taken by the assessee, treating them as capital contribution.
Held
The Tribunal found that the Ld. CIT(A) had not decided the appeal as per the mandate of Section 250(6) of the Act. While acknowledging the assessee's failure to prove the genuineness of transactions, the Tribunal deemed it fit to grant one more opportunity to the assessee to plead their case before the Ld. CIT(A) in the interest of justice.
Key Issues
Whether the CIT(A) properly adjudicated the appeal, and whether the assessee was afforded adequate opportunity to present their case before the lower authorities.
Sections Cited
147, 148, 144B, 68, 250(6)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, RAJKOT BENCH, RAJKOT
Before: DR. ARJUN LAL SAINI & DR. DINESH MOHAN SINHA
IN THE INCOME TAX APPELLATE TRIBUNAL, RAJKOT BENCH, RAJKOT BEFORE DR. ARJUN LAL SAINI, ACCOUNTANT MEMBER AND DR. DINESH MOHAN SINHA, JUDICIAL MEMBER आयकरअपीलसं./ITA No. 692/RJT/2025 Assessment Year: (2017-18) Pratik Ravjibhai Kacharola Vs. The ITO, Ward – 1 4-Anumpam Society, B/h. Aayakar Bhavan, Race Course Akshardham Apartment, Ring Road, Rajkot – 360001 Ravapar Road, Morbi - 363641 �थायीलेखासं./जीआइआरसं./PAN/GIR No.: BWRPK4078C (Appellant) (Respondent)
: Shri Darshit Ranpara, Ld. A.R. Appellant by : Shri Abhimanyu Singh Yadav, Ld. Sr. DR Respondent by : 18/02/2026 Date of Hearing : 13/03/2026 Date of Pronouncement आदेश/ORDER Per, Dr. Dinesh Mohan Sinha, JM: Captioned appeal filed by the assessee, pertaining to Assessment Year (AY) – 2017-18, is directed against the order passed by the National Faceless Appeal Centre [(in short “NFAC/Ld. CIT(A)”] vide order dated 19.08.2025, which in turn assessment order passed by Income Tax Department/Assessing Officer under section 147 r.w.s. 144B of the Income Tax Act, 1961 (in short “the Act”), vide order dated 16.05.2023. 2. Grounds of appeal raised by the assessee are as follows: “1. The grounds of appeal mentioned hereunder are without prejudice to one another.
ITA No. 692/RJT/2025 Pratik Ravjibhai Kacharola 2. The Ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi (hereinafter referred to as the “CIT(A)”] erred on facts as also in law in dismissing the appeal ex-parte. 3. The Ld.CIT(A) erred on facts as also in law in rejecting the ground of appeal related to validity of notice issued u/s. 148 of the Income Tax Act, 1961. That on facts as also in law, initiation of action u/s. 147 of the Act is invalid and assessment made on such invalid initiation deserves to be quashed and may kindly be quashed. 4. The Ld. CIT(A) erred om facts as also in law in confirming addition of Rs. 62,50,000/- u/s. 68 of the Act on the alleged ground that appellant failed to prove genuineness of transaction in respect of source of fund invested in Rs.62,50,000/- in the M/s. Kera Vitrified LLP. The addition made and confirmed is bad id law as also on facts therefore the same may kindly be deleted. 5. Your Honour’s appellant craves leave to add, to amend, or withdraw any of more grounds of appeal on or before the hearing of appeal. ”
Brief facts of the case are that the appellant, an individual filed his return for the A.Y. 2017-18 on 09.11.2017, declaring total income of Rs. 8,45,580/-. The AO received an information that the appellant invested an amount of Rs. 68,05,000/- by way of partner's capital in the partnership firm M/s Kera Vitrified LLP. The AO noted that the investment was not commensurate with the income declared in the return of income for the relevant A.Y 2017-18. The AO issued notice u/s 148 on 11.06.2021. Following decision of the Supreme Court in Union of India vs. Ashish Agrawal and Others (2022 SCC Online SC 543), an order u/s 148A(d) was passed on 15.07.2022 and a fresh notice u/s 148 was issued on the same day. In response, the appellant filed a return of income for the A.Y. 2017- 18 on 09.01.2023, declaring total income of Rs. 8,45,580/-. Thereafter, the case was heard by issue of statutory notices and the appellant was asked to explain the source of capital introduction in the partnership firm M/s Kera Vitrified LLP. The AO observed that the appellant took unsecured loans from seven parties totalling to Rs. 62,50,000/-, which were advanced as capital contribution to the said partnership firm. The AO completed the assessment by making an addition of Rs. 62,50,000/- to the returned income in terms of section 68 of the Act. Total income was determined at Rs. 70,95,580/- u/s 147/143(3) dated 16.05.2023.
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ITA No. 692/RJT/2025 Pratik Ravjibhai Kacharola 4. That the assessee filed an appeal against the order of the AO, before the Ld.CIT(A). that the Ld.CIT(A) dismissed the appeal of the assessee by following remarks:
“Ground No. 1 & 2 are general grounds challenging the initiation of proceedings u/s 147, although no specific issues have been raised as to for what reasons he considers that the reopening of assessment is bad in law. These grounds are, therefore, dismissed lacking in substance, evidence and facts. Ground No. 3 is against the addition made u/s 68. It has been contended that the appellant has discharged his primary onus regarding the loans accepted by him. However, as discussed above, the appellant has failed and failed miserably in proving the genuineness of the transactions and the incidence of cash deposits immediately prior to advancing of loans. This ground, therefore, stands dismissed. In the result, the appeal stands dismissed”
That the assessee filed an appeal against the impugned order dated 19.08.2025 passed by the Ld. CIT(A) before this Tribunal.
During the course of hearing, the Ld. AR of the assessee prayed for one more opportunity to be given to the assessee to represent the case before the lower authority.
On the contrary, the Ld. Sr. DR for the revenue relied on the order of the Ld. CIT(A) and not objected to the prayer of the Ld. AR of the assessee.
We have heard both the parties and perused the material available on record. The Ld. CIT(A) has issued several notices for hearing of the case. In response to the notices the appellant has submitted the response and the same is not proper no documents/ evidences submitted along with the response. The Ld. CIT(A) observed that the appellant has discharged the primary onus regarding the loans accepted by assessee. The appellant has failed in proving the genuineness of the transactions and the incidence of cash deposits immediately prior to advancing of loans. We note that Ld. CIT(A) has not decided the appeal as per mandate of provisions u/s. 250(6) of the Act. However, we are of the view, that one more
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ITA No. 692/RJT/2025 Pratik Ravjibhai Kacharola opportunity should be given to the assessee to plead his case before the Ld. CIT(A). It is settled law that principles of natural justice and fair play require that the affected party should be granted opportunity of being heard to contest his case. Keeping in view, in the interest of justice, we set aside the order of the Ld. CIT(A) and remitted the matter back to the file of the Ld. CIT(A) for fresh adjudication after giving due opportunity to the assessee.
In the result, the appeal of the assessee is allowed for statistical purposes.
Order is pronounced in the open court on 13/03/2026.
Sd/- Sd/- (Dr. Arjun Lal Saini) (Dr. Dinesh Mohan Sinha) Accountant Member Judicial Member Rajkot (True Copy) �दनांक/ Date: 13/03/2026 Copy of the Order forwarded to 1. The Assessee 2. The Respondent 3. The CIT(A) 4. Pr. CIT 5. DR/AR, ITAT, Rajkot 6. Guard File By order //True Copy// Assistant Registrar/Sr. PS/PS ITAT, Rajkot
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