KISHORKUMAR KOTUMAL CHANGLANI,AHMEDABAD vs. THE ITO, WARD-7(2)(1), AHMEDABAD

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ITA 1477/AHD/2025Status: DisposedITAT Ahmedabad09 February 2026AY 2018-19Bench: Shri Sanjay Garg (Judicial Member), Shri Makarand V. Mahadeokar (Accountant Member)5 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal noted the assessee's claim of non-receipt of notices from CIT(A) leading to unrepresentation. In the interest of justice, the Tribunal set aside the CIT(A) order and restored the matter to the file of CIT(A) for a fresh decision, with proper opportunity to the assessee. The assessee was directed to deposit Rs.5,000/- in the Prime Minister's National Relief Fund as costs.

What were the facts?

The assessee filed return for AY 2018-19. During a search on related entities for bogus/accommodation entries, the assessee was identified as a beneficiary of bogus unsecured loans of Rs.74,50,000/-. Additionally, Rs.48,00,000/- deposited in the HDFC bank account was treated as unexplained money. The Assessing Officer added these amounts under Section 69A, and the CIT(A) confirmed the additions.

What were the issues?

Whether the additions under Section 69A for unsecured loans and bank deposits were justified, and if the initiation of penalty proceedings under Section 271AAC was warranted, particularly given the appellant's claim of lack of opportunity before the CIT(A).

Which sections of the Income-tax Act were involved?

Section 250,Section 69A,Section 271AAC

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “C ” BENCH, AHMEDABAD

Before: Shri Sanjay Garg & Shri Makarand V. Mahadeokar

For Appellant: Shri Tushar Hemani, Sr. Advocate
Hearing: 12/11/2025Pronounced: 09/02/2026

Year : 2018-19 Kishorkumar Kotumal The ITO बनाम/ Changlani Ward-7(2)(1) v/s. Block No.413 B Ahmedabad – 380 015 Sardarnagar Pani Ni Tank Sardarnagar Ahmedabad – 382 345 "थायी लेखा सं./PAN: ACVPC 3793 K (अपीलाथ$/ Appellant) (%& यथ$/ Respondent) Assessee by : Shri Tushar Hemani, Sr. Advocate Revenue by : Shri Nitin Vishnu Kulkarni, Sr.DR सुनवाई की तारीख/Date of Hearing : 12/11/2025 घोषणा की तारीख /Date of Pronouncement: 09/02/2026 आदेश/O R D E R

Per Sanjay Garg, Judicial Member:

1.

The present appeal has been preferred by the assessee against the order of the Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as ‘CIT(A)’] dated 23/05/2025 passed u/s.250 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) for the Assessment Year (AY) 2018-2019.

2.

The assessee, in this appeal, has raised the following grounds of appeal: Kishorkumar Kotumal Changlani vs. ITO Asst.Year : 2018-19 “[Arising from an order u/s 250 of the Income Tax Act 1961 dated 23-05-2025]

1. On the facts and under the circumstances of the case and on appraisal of the relevant statutory provisions the learned Commissioner of Income Tax (Appeals) was not justified in confirming the addition of Rs. 74,50,000/- u/s 69A of the Act without taking into consideration the fact such amount was part of regular books of accounts and the identity, source and genuineness of the loan was established through the documentary evidences filed in the course of assessment proceedings.

2. On the facts and under the circumstances of the case and on appraisal of the relevant statutory provisions the learned Commissioner of Income Tax (Appeals) was not justified in confirming the addition of Rs. 48,00,000/- (Rs. 47,00,000/- on 16.01.2018 + Rs. 1,00,000/- on 01.03.2018) u/s 69A of the Act without taking into consideration the fact that the above amount was part of regular books of accounts and the identity, source and genuineness of the loan was established through the documentary evidences filed in the course of assessment proceedings.

3. On the facts and under the circumstances of the case and on appraisal of the relevant statutory provisions, the learned Commissioner of Income Tax (Appeals) was not justified in initiating penalty proceedings u/s 271AAC of the Act without satisfying the statutory requirement for initiation of penalty proceedings.

4.

On the facts and circumstances of the case the order is otherwise perverse, bad in law and passed in contravention to the principles of natural justice.

5.

The Appellant craves leave to produce documentary evidences as referred to in various grounds of appeal as above and add, amend or abandon any ground(s) of appeal taken above in course of the hearing/fling of ground wise submission in the case.”

3. The brief facts of the case are that the assessee is an individual and filed his return of income for AY 2018-19 on 31/08/2019 declaring income of Rs.10,07,140/-. The case has been flagged in the Income Tax Insight Portal under the category “High risk CRIU/VRU cases”. A search and seizure action was carried out in the case of Omkara Asset Reconstruction Pvt.Ltd. (for short “Omkara”) and related entities. These related entities included various companies of Areion Group, which were related to Omkara. From the post search enquiry, it was revealed that this group companies were Kishorkumar Kotumal Changlani vs. ITO Asst.Year : 2018-19 involved in providing bogus/accommodation entries. It was noticed that the assessee was also one of the beneficiaries, who had taken bogus unsecured loan of Rs.67,00,000/- from Shri Bhavesh Shah and Rs.7,50,000/- from M/s. Bhupendra Gandhi. Accordingly, the Assessing Officer (AO) made the addition of Rs.74,50,000/- treating the same as unexplained money of the assessee u/s.69A of the Act. The AO also added a sum of Rs.48,00,000/-, which was found deposited in the HDFC bank account of the assessee, as unexplained money u/s.69A of the Act. Thus, the AO assessed the income of the assessee of Rs.1,32,57,140/-.

4. Aggrieved by the aforesaid order of the AO, the assessee preferred an appeal before the Ld. CIT(A), who confirmed the action of the AO and dismissed the appeal of the assessee.

5. Aggrieved by the order of the Ld. CIT(A), the assessee is now in appeal before us.

6.

We have heard the rival contentions of the Ld. Representatives of the parties and gone through the record. At the outset, the Ld. AR of the assessee submitted that the assessee is an old-aged person. That the notices issued by the Ld. CIT(A) on the e-mail of the assessee could not be noticed by the assessee and, therefore, the case of the assessee remain unrepresented before the Ld. CIT(A). He has further submitted that assessee has a fair case on merits. He, therefore, has submitted that in the interests of justice, the assessee may be given an opportunity to present his case before the Ld. CIT(A). Kishorkumar Kotumal Changlani vs. ITO Asst.Year : 2018-19

7.

In our view, the interests of justice, will be well-served, if the assessee be given an opportunity to present his case before the Ld. CIT(A). The assessee for his failure to furnish the requisite details before the Ld. CIT(A), can be burdened with some costs. We, accordingly, direct the assessee to deposit a sum of Rs.5,000/- in Prime Minister’s National Relief Fund. The assessee will furnish the proof of such deposit before the Ld. CIT(A). Subject to fulfilment of the aforesaid condition, the impugned order of the Ld. CIT(A) is hereby set aside and matter is restored the matter to the file of Ld. CIT(A) for decision afresh. The Ld. CIT(A) will give proper and adequate opportunity to the assessee to present his case.

8.

With the above observations, the appeal of the assessee is treated as allowed for statistical purposes.

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