SUVAS HITENDRABHAI BAROT,GANDHINAGAR vs. THE ITO, WARD-1, GANDHINAGAR

The learned CIT(A) erred in law and on facts in not appreciating that there is no delay in filing appeal in view of directions of Hon'ble Apex Court in "Cognizance for Extension of Limitation" granting extension of limitation on account of Covid-19 Asst.Year –2018-19 - 2–

The learned AO has erred in law and on facts of the case in making an addition pertaining to credit card payment amounting to Rs. 49,20,5657- u/s. 69 of the Act.

The learned AO has erred in law and on facts of the case in invoking provisions of Section 115BBE of the Act.

The learned AO has passed the order without properly appreciating the facts and they further erred in grossly ignoring various submissions, explanations and information submitted by the appellant from time to time which ought to have been considered before passing the impugned order. The action of the learned AO is in clear breach of law and Principles of Natural Justice and therefore deserves to be quashed.

The learned AO has erred in law and on facts of the case in levying interest u/s. 234A/B/C of the Act.

The learned AO has erred in law and on facts of the case in initiating penalty proceedings under Section 271A AC of the Act.

The appellant craves leave to add, amend, alter, edit, delete, modify or change all or any of the grounds of appeal at the time of or before the hearing of the appeal.”

The brief facts of the case are that the assessee, an individual, was subjected to limited scrutiny for the Assessment Year 2018-19 on the issue of substantial cash payments towards credit card expenses as reported under Statement of Financial Transaction (SFT-006). During the course of assessment proceedings, the Assessing Officer noticed that the assessee had made cash payments aggregating to ₹49,20,565/- towards a single credit card, which was allegedly used in connection with multiple entities including Infocity Club & Resort Pvt. Ltd., M/s Suhan Realty Pvt. Ltd., M/s Arudra Heights Pvt. Ltd., M/s Suhan Suvas Barot Family Trust, M/s First Hand Agro, Mr. Suvas Hitendra Barot (HUF) and Mrs. Anju Suvas Barot. The Assessing Officer issued notices under section 142(1) of the Income-tax Act, 1961 (“the Act”) asking the assessee to explain the nexus of the credit card transactions with these entities, to furnish the credit card statement and to submit a cash flow statement explaining the source of cash payments. As there was no response from the assessee to the said notices, the Assessing Officer treated the entire cash payment of ₹49,20,565/- as Suvas Hitendrabhai Barot vs. ITO Asst.Year –2018-19 - 3–

Aggrieved by the assessment order, the assessee preferred an appeal before the Commissioner of Income-tax (Appeals). However, there was a delay in filing the appeal before the CIT(Appeals). The CIT(Appeals) examined the delay condonation petition filed by the assessee and was of the view that the assessee had failed to show sufficient cause for not filing the appeal within the prescribed time. The CIT(Appeals) observed that the reasons furnished by the assessee were incorrect and contradictory, that the assessee had not responded to the notices during assessment proceedings, and that the explanation regarding non-receipt of assessment order was not acceptable. Relying upon various judicial pronouncements on the concept of “sufficient cause” and limitation, the CIT(Appeals) declined to condone the delay and dismissed the appeal in limine without adjudicating the issue on merits.

The assessee is now in appeal before us.

We have heard the rival contentions and perused the material on record. At the threshold, we deal with the issue of delay in filing the present appeal before the Tribunal. The delay of 369 days admittedly falls during the period affected by the Covid-19 pandemic. Accordingly, the delay of 369 days in filing the present appeal is condoned.

Coming to the merits, we find that the CIT(Appeals) has dismissed the appeal of the assessee in limine solely on the ground of delay, without adjudicating the additions made under section 69 of the Act on merits. We also find that the assessment has been completed ex parte on the issue of credit card Asst.Year –2018-19 - 4–

Accordingly, in the interest of justice, we set aside the impugned order of the CIT(Appeals) as well as the assessment order on this limited issue and restore the matter to the file of the Assessing Officer for de novo consideration. The Assessing Officer shall afford adequate opportunity of being heard to the assessee and shall examine the issue of cash payments towards credit card expenses afresh in accordance with law, after considering the explanations and evidences that may be furnished by the assessee. The assessee is also directed to cooperate with the assessment proceedings and furnish all relevant details as called for by the Assessing Officer.

In the result, the appeal of the assessee is allowed for statistical purposes. This Order pronounced in Open Court on 16/12/2025 (DR. BRR KUMAR) JUDICIAL MEMBER Ahmedabad; Dated 16/12/2025