NILESH JAYANTILAL SHAH,AHMEDABAD vs. NFAC, DELHI, JURIDIS. AO- THE ITO, WARD-2(1)(2), AHMEDABAD

O R D E R PER SHRI NARENDRA PRASAD SINHA, AM: These two appeals are filed by the assessee against the separate orders of the National Faceless Appeal Centre (NFAC), Delhi (in short “the CIT(A)”) dated 29.01.2025 & 31.01.2025, both for the Assessment Year (A.Y.) 2014-15, in the proceeding under Section 147 read with section 144 and under section 271(1)(c) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’).

& 908/Ahd/2025 (Assessment Year: 2014-15 for both) Nilesh Jayantilal Shah vs. NFAC, Delhi, J.A.O. Assessing Officer Page 2 of 7 2. There was a delay of 26 days in filing of both these appeals. The assessee has filed an affidavit explaining the reason for delay. It is stated that the assessee was out of the country during the period 18.02.2024 to 13.04.2025 and after returning to India in April 2025, he was occupied with personal and professional commitments, which led to delay in filing the present appeals. Considering the explanation of the assessee, the delay in filing the appeals is condoned.

& 908/Ahd/2025 (Assessment Year: 2014-15 for both) Nilesh Jayantilal Shah vs. NFAC, Delhi, J.A.O. Assessing Officer Page 3 of 7 4. Aggrieved with the order of the Assessing Officer, the assessee had filed an appeal before the First Appellate Authority which was decided by the Ld. CIT(A) vide the impugned order and the appeal of the assessee was partly allowed. The Ld. CIT(A) while confirming the addition of Rs.3,29,98,210/- in respect of deposits, had deleted the addition of Rs.3,21,38,779/- in respect of the withdrawals from the bank account.

5. The assessee is now in second appeal before us. The following grounds have been taken in this appeal: -

1. The AO & NFAC has grievously erred in facts and circumstances of the case and in law in initiating proceedings u/s.148 of the Act based on STR transaction

2. Without prejudice to the above, the Id AO & NFAC grievously erred in making addition of Rs.3,29,98,210/- towards unexplained income u/s. 69A r.w.s. 115BBE merely on the basis of bank statement of the appellant is patently wrong. The order be quashed being a nullity.

3. The AO & NFAC has further grievously erred in law and on facts in treating all the bank credits of Rs.3,29,98,210/- as alleged unaccounted income without any corroborative evidence as regards transactions simply on basis of bank statement u/s.69A r.w.s. 115BBE of the Act.

& 908/Ahd/2025 (Assessment Year: 2014-15 for both) Nilesh Jayantilal Shah vs. NFAC, Delhi, J.A.O. Assessing Officer Page 4 of 7 9. The assessee craves leave to add, amend, alter, delete, change or modify any or all grounds of appeal before or at the time of the hearing.”

6. Shri S.N. Divatia, Ld. AR of the assessee, explained that the assessee is a trader in tea business and was regular in filing his income tax return. However, no return was filed for A.Y. 2014-15 for the reason that heavy loss was incurred in this year and the business of the assessee was closed. As a result, no compliance could be made before the Assessing Officer and the order was passed ex-parte. He explained that the assessee was dependent upon the counsel Shri Pankaj Patel for proper compliance before the Assessing Officer as well as before the Ld. CIT(A). However, due to default of the counsel, no compliance could be made before the Ld. CIT(A) as well. The Ld. AR explained that all the transactions appearing in the bank account of the assessee were pertaining to the tea business. The Ld. AR explained that the transaction with Navkar Impex were on account of regular purchase and sales. The assessee had filed a paper-book with additional documents with a request to admit the same as per Rule 29 of the Income Tax (Appellate Tribunal) Rules. The Ld. AR submitted that the nature of transaction was not duly explained and the assessee may be allowed another opportunity by setting aside the matter to the file of the Ld. CIT(A).

7. Per contra, Shri R.P. Rastogi, Ld. CIT-DR supported the order of the Ld. CIT(A). He submitted that the Ld. CIT(A) had already given relief to the assessee in respect of withdrawals from the books of account. He further submitted ledger account of Navkar Impex and other details as brought on record doesn’t establish that the transactions pertained to purchases and no supporting bills & vouchers or transportation documents were filed.

& 908/Ahd/2025 (Assessment Year: 2014-15 for both) Nilesh Jayantilal Shah vs. NFAC, Delhi, J.A.O. Assessing Officer Page 5 of 7

8. We have considered the rival submissions. It is true that no compliance was made by the assessee before the Assessing Officer and the nature of deposits and withdrawals appearing in the bank account of the assessee was not explained. Before the Ld. CIT(A) also, the assessee did not make any compliance in spite of four opportunities provided by him. The assessee cannot escape by placing the blame for non- compliance on the counsel. It is a settled law that there is no general proposition that mistake of counsel by itself is always a sufficient ground. When the Assessing Officer had passed ex-parte order because of total non-compliance before him and the assessee had filed first appeal before the Ld. CIT(A), the assessee should have been careful enough to ensure that proper compliance was made before the appellate authority. It was the duty of the assessee to watch his affairs before the AO and the CIT(A). The assessee was aware of the order passed by the AO and the pending appeal, still he had not exercised any care to enquire about the status of appeal and tried to shift the responsibility on his lawyer. The assessee was certainly negligent and his act was lethargic. We are not convinced with the explanation of the assessee regarding non-compliance before the lower authorities. Therefore, we deem it proper to impose a cost of Rs.10,000/- on the assessee which should be deposited to the Prime Minister’s National Relief Fund within a period of 15 days from the date of receipt of this order. Subject to the payment of cost, we deem it proper to set aside the matter to the file of the Jurisdictional Assessing Officer with a direction to allow another opportunity to the assessee to explain the nature of deposits appearing in the bank account of the assessee. The assessee is free to produce the additional evidences filed before us as well as any other evidence in support of its contention that & 908/Ahd/2025 (Assessment Year: 2014-15 for both) Nilesh Jayantilal Shah vs. NFAC, Delhi, J.A.O. Assessing Officer Page 6 of 7 the transactions made with Navkar Impex represented normal purchase and sale transactions. The assessee is also directed to respond to the queries of the Assessing Officer vis-à-vis the source/explanation regarding the transactions appearing in the bank account. In case the assessee does not make compliance in the course of set aside proceeding, the Jurisdictional Assessing Officer will have liberty to pass the order on the basis of the materials available on record.

& 908/Ahd/2025 (Assessment Year: 2014-15 for both) Nilesh Jayantilal Shah vs. NFAC, Delhi, J.A.O. Assessing Officer Page 7 of 7 12. In the final result, both the appeals of the assessee are allowed for statistical purposes.

Order pronounced in the open Court on this 28th November, 2025.