GOMTIDAS GOVINDRAM SADHU,RAMJI MANDIR SHERTHA, GANDHINAGAR vs. INCOME TAX OFFICER, WARD 2 GANDHINAGAR, UDYOG BHAWAN, GANDHINAGAR

This appeal filed by the assessee is directed against the order dated 19.12.2023 passed by the Learned Commissioner of Income-tax (Appeals), National Faceless Appeal Centre [NFAC], Delhi [hereinafter referred to as “CIT(A)”] under section 250 of the Income-tax Act, 1961 [hereinafter referred to as “the Act”] for the Assessment Year 2017-18 arising out of the order dated 01.10.2019 of the Income Tax Officer, Ward 2, Gandhinagar [hereinafter referred to as “AO”] passed under section 144 of the Act.

Gomtidas Govindram Sadhu vs. ITO A.Y. 2017-18 2 Condonation of Delay 2. The appeal is delayed by 362 days. In support of the petition for condonation of delay, the assessee filed a duly notarized affidavit. It is stated therein that the assessee is a Sadhu (priest) of Ramji Mandir, Shertha, Gandhinagar, with limited education and no knowledge of tax procedures. It is submitted that the assessee was initially represented by an incompetent authorised representative, who was unaware of the procedure and timeline for filing appeals before the Hon’ble Tribunal. It is further stated that due to technical difficulties, the assessee was unable to download the order passed by the CIT(A) and a grievance was lodged for the same. On learning of the procedural default, the assessee appointed a new authorised representative and promptly filed the present appeal.

Gomtidas Govindram Sadhu vs. ITO A.Y. 2017-18 3 Facts of the Case 5. The assessee is an individual engaged in performing religious duties as a priest of Ramji Mandir, Shertha. The assessee did not file a return of income for A.Y. 2017-18. Based on information received, the AO noticed that the assessee had made cash deposits of Rs. 5,00,000/- each in two bank accounts with Dena Bank and Rs. 2,00,000/- in another account with Ahmedabad District Central Co-operative Bank during the demonetization period (08.11.2016 to 30.12.2016), aggregating to Rs. 12,00,000/-. In addition, there were credits other than cash deposits amounting to Rs. 81,763/-, resulting in a total credit of Rs. 12,81,763/-. Notices under section 142(1) were issued on multiple occasions—dated 08.03.2018, 11.06.2019, 02.08.2019, and 21.08.2019—and a final show cause notice dated 21.09.2019 was also issued with the prior approval of the JCIT under section 144A. Despite these, there was no substantive compliance from the assessee. Subsequently, the assessment was completed ex parte under section 144 r.w.s. 143(3) by making an addition of Rs. 12,81,763/- under section 69A of the Act. The AO also directed to charge tax at 60% under section 115BBE, along with interest under sections 234A/B/C and initiated penalty proceedings under sections 271AAC(1), 270A, and 272A(1)(d).

1. “Addition of Rs. 12,00,000/- on the basis of cash deposits in the bank account u/s 69A of the Income Tax Act. On facts and in the circumstances of the case and in law, Ld. CIT(A) by confirming the order passed by the Ld. AO has grossly erred in making addition of Rs.12,00,000/- on account of cash deposits u/s 69A of the Income Tax Act.

2. Addition of Rs. 81,763/- on the basis of credit deposits in the bank account u/s 69A of the Income Tax Act On facts and in the circumstances of the case and in law, Ld. CIT(A) by confirming the order passed by the Ld. AO has grossly erred in making addition of Rs. 81,763/- on account of credit deposits u/s 69A of the Income Tax Act.

3. The Ld. AO passed order calculating tax @60% as per section 115BBE of the Income Tax Act: On facts and in the circumstances of the case and in law, the Ld. AO has grossly erred in calculating tax @60% as per section 115BBE of the Income Tax Act for AY 2017-18. The tax rate for the AY 2017-18 was 30% as per section 115BBE ofthe Income tax act. 4. Initiating penalty proceeding u/s 271AAC(1) of the Act: On facts and in the circumstances of the case and in law, the Ld. AO has grossly erred in initiating the proceedings for levy of penalty u/s. 271AAC(1) of the Act when no such penalty is leviable. The proceedings initiated by the Ld. AO should be dropped as it is wrongly initiated. 5. Initiating penalty proceeding u/s 272A(1)(d) of the Act: On facts and in the circumstances of the case and in law, the Ld. AO has grossly erred in initiating the proceedings for levy of penalty u/s. 272A(1)(d) of the Act when no such penalty is leviable. The proceedings initiated by the Ld. AO should be dropped as it is wrongly initiated. The appellant craves leave to add, amend, alter, edit, delete, modify or change all or any grounds of appeal at the time of or before the hearing of the appeal.”

10.1 Accordingly, the impugned order of the CIT(A) is set aside, and the matter is restored to the file of the AO for denovo adjudication. The assessee shall produce relevant evidence and documents in support of his contentions and cooperate in the proceedings. The AO shall examine the matter afresh on merits and pass a speaking order in accordance with law after providing adequate opportunity of being heard.

10.2 At the same time, considering that the assessee failed to comply with proceedings at multiple stages, we deem it appropriate to impose a cost of Gomtidas Govindram Sadhu vs. ITO A.Y. 2017-18 6 Rs. 5,000/- on the assessee to be paid to the credit of Income Tax Department within 30 days of receipt of this order, as a measure of deterrence and to enforce procedural discipline.

Order pronounced in the Open Court on 9th April, 2025 at Ahmedabad.