LAXMANJI KHODAJI SOLANKI (THAKOR),GANDHINAGAR vs. THE ITO, WARD-1, GANDHINAGAR

(िनधा�रण वष� / Assessment Year : 2017-18) बनाम/ Laxmanji Khodaji Solanki ITO (Thakor) Ward-1, Gandhinagar Vs. 445, Zalanpura Vas, Simandhar City, Adalaj, Gandhinagar, Gujarat - 382421 �थायी लेखा सं./जीआइआर सं./PAN/GIR No. : DHXPS9766L (Appellant) .. (Respondent) अपीलाथ� ओर से /Appellant by : Shri Parin Shah, A.R. ��यथ� क� ओर से/Respondent by : Smt. Kakoli Uttam Ghosh, Sr. DR Date of Hearing 25/08/2025 Date of Pronouncement 28/08/2025 (आदेश)/ORDER

PER SMT. ANNAPURNA GUPTA, AM:

Khodaji Solanki (Thakor) vs. ITO] A.Y. 2017-18 - 2 – 2. The brief facts relating to the case are that no return of income was filed by the assessee however On the basis of information in the possession of the AO that the assesse had purchased immoveable property for Rs. 4,26,00,000/-, the case of the assessee was reopened for the impugned year by issuing notice u/s.148 of the Act. The assessee, however, did not respond to any notice issued to him. The assessee was also noted to be a non-filer of return of income. Having not filed return of income for the impugned year and in the absence of any assistance or cooperation by the assessee during assessment proceedings, the AO acted upon the information in his possession, of the assessee having invested in immovable property to the tune of Rs.4,26,00,000/- and with no explanation of the source of the same, he added the entire amount to the income of the assessee. Accordingly, exparte assessment was framed u/s.144 of the Act making addition of Rs.4,26,00,000/- u/s 69 of the Act to the income of the assessee.

3. The assessee filed appeal before the Ld. CIT(A) who in turn, dismissed the appeal as non-maintainable noting that the assessee had not paid any advance tax and by referring to the provisions of Section 249(4)(b) of the Act, as per which, where no return is filed by the assessee, the assessee has to pay an amount equal to the amount of advance tax which was payable by him, for admitting the appeal for hearing before the Ld.CIT(A). The Ld. CIT(A) refused to admit the appeal of the assessee for adjudication and dismissed the same as infructuous.

Khodaji Solanki (Thakor) vs. ITO] A.Y. 2017-18 - 3 – 4. Aggrieved by the same, the assessee has come up in appeal before us raising following grounds of appeal as under:

“1. The order passed by lower authorities is bad in law and required to be quashed.

6. Ld. NFAC failed to pass order as per the provision of section 250(6) of the Act and appellant prays that same may be set aside to the file of CIT (A) / NFAC for readjudication.

9. Initiation of penalty u/s 271F is unjustified.

5. The appeal is filed belatedly before us by a delay of 198 days. The Ld. Counsel for the assessee pointed out that even the appeal filed before the Ld. CIT(A) was belated. He contended that the reason was that the assessee was an illiterate person living in Khodaji Solanki (Thakor) vs. ITO] A.Y. 2017-18 - 4 – rural area and is a farmer. That he was never in the past required to file any return of income and, therefore, was not aware of the legalities and technicalities involved in the same. Therefore, neither notices of hearing before the AO were responded to nor was the assessee aware of the passing of either the assessment order or the CIT(A) order. He drew our attention to this very reason stated before the Ld. CIT(A) also for condoning the delay in filing appeal before it in Form No.35. Ld. Counsel for the assessee also contended that during the impugned year the assesses brother had sold his portion of agricultural land jointly held with the assessee and the impugned sale was registered on 26th September, 2016 in Sub-registrar Office at Gandhinagar at registered no. 13916. That the said sale was made for Rs.1,06,50,000/- which entire amount was paid to his brother by the purchasing party. That the assesses brother’s name was Ramaji Khodaji having PAN No. CQHPS6308C. That TDS u/s.194IA of the Act was also deducted @ 1% of the sale consideration by the purchasing party from his brother’s PAN. It was contended that the assessee was only a confirming party and did not get a single rupee from the sale transaction. The assessee, therefore, contended that considering the facts of the case, if the delay in filing of the present appeal were not condoned, the cost to be paid by the assessee would be very heavy since he would be held liable to pay taxes on the addition made to his income to the income of Rs.4.26 Crore, which would be highly unjust considering that neither the assessee had made any investment nor did he have any source for making such investment of huge amount or for paying Khodaji Solanki (Thakor) vs. ITO] A.Y. 2017-18 - 5 – any taxes thereon. Ld. Counsel for the assessee pointed out that the above facts of the transaction, if any, in immovable property was carried out by his brother was also mentioned in the Form No.35 filed to the Ld. CIT(A). It was, therefore, pleaded by the Ld. Counsel for the assessee that the delay in filing of the present appeal of 198 days to be condoned and the assessee’s appeal be restored back to the AO so as to give assessee an opportunity of presenting all facts before the AO duly supported with evidences.

7. Having heard the contention of both the parties, we find that the assessee has adduced sufficient cause for the delay of 198 days in filing of the present appeal before us. We have noted from the contents of Form No.35, which is the form in which the appeal is filed to the Ld. CIT(A) and is part of the appeal set filed before us, that the first appeal was delayed and the assessee had mentioned the fact of him being an illiterate farmer having nothing to do in the past with income tax matters and, which therefore had resulted in the notices of hearing in assessment remaining unresponded to and also the assessment order passed going unnoticed for some time resulting in delay in filing appeal before the Ld.CIT(A). We have also noted the assessee to have stated as a matter of fact that he had not entered into any transaction in immovable property which he had stated had in fact been entered into by his brother who had sold his property for a consideration of Rs.1.06 Crore on which TDS was also deducted by the Khodaji Solanki (Thakor) vs. ITO] A.Y. 2017-18 - 6 – purchasing party on his brothers PAN and that the assessee was only a confirming party to the said transaction.

8. Since, these pleadings were made by the assessee on the first occasion before the Ld. CIT(A), we are of the considered view that the assessee being totally unaware of income tax proceedings, it is not highly improbably, that he was unaware of passing of the CIT(A) order which, accordingly, resulted in the delay in filing the present appeal before us by 198 days. Moreover, the assessee has not been heard at any stage both before the AO and the Ld. CIT(A) and the contention of the assessee has been that he had nothing to do with any transaction relating to immovable property and that it was only his brother who was involved in it. In the light of the same, with the assessee remaining unheard at both the initial assessment stage and in first appeal before the Ld.CIT(A), we agree with the Ld. Counsel for the assesse that if the delay is not condoned, the assessee would have to pay heavy price by way of taxes to be paid on the huge addition made to its income, all without hearing him at all, and who completely denies having purchased any immoveable property during the impugned year.

Khodaji Solanki (Thakor) vs. ITO] A.Y. 2017-18 - 7 – 10. Having held so, we have noted that before the AO the assessee remained unheard and the Ld. CIT(A) dismissed assessee’s appeal as non-maintainable on account of the fact that no return of income was filed by the assessee and no advance taxes were paid by the assessee. The Ld. CIT(A), we hold was grossly incorrect in treating the assessee’s appeal non- maintainable for the aforesaid reasons. Advance tax liability of an assessee arises on admitted and undisputed income of the assessee and not on addition made to the income of the assessee which are disputed by the assessee. The provisions of section 208-211 of the Act deal with conditions, computation and payment of advance tax. And on perusal of the said sections it is abundantly clear that suo moto computation of advance tax liability of assesses is based on estimation of current years income and tax liability thereon and where the AO calculates advance tax liability, the same is based on latest previous year income assessed of the assessee or any subsequent year income returned by the assessee whichever is higher. Section 208 & 209 of the Act are reproduced hereunder for clarity:

Conditions of liability to pay advance tax.

This Order pronounced on 28/08/2025

Sd/- Sd/- (SANJAY GARG) (ANNAPURNA GUPTA) JUDICIAL MEMBER ACCOUNTANT MEMBER Ahmedabad; Dated 28/08/2025 S. K. SINHA True Copy आदेश क� �ितिल�प अ�े�षत/Copy of the Order forwarded to : अपीलाथ� / The Appellant 1. 2. ��यथ� / The Respondent. संबंिधत आयकर आयु� / Concerned CIT 3. 4. आयकर आयु�(अपील) / The CIT(A)- �वभागीय �ितिनिध, आयकर अपीलीय अिधकरण, अहमदाबाद / DR, ITAT, Ahmedabad 5. गाड� फाईल / Guard file. 6. आदेशानुसार/ BY ORDER,