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Facts
The assessee did not file a return of income for A.Y. 2016-17. The AO initiated reassessment proceedings based on information that the assessee sold an immovable property and made cash deposits. The AO treated the property sale consideration as short-term capital gain and cash deposits as unexplained money, completing an ex-parte assessment. The CIT(A) dismissed the assessee's appeal due to a delay in filing without hearing the merits.
Held
The Tribunal observed that the CIT(A) erred in dismissing the appeal on technical grounds. While noting the assessee's non-compliance during assessment, the Tribunal set aside the matter to the AO, providing another opportunity to the assessee to explain the capital gain on property sale and source of cash deposits. This was made subject to the payment of a cost of Rs.10,000/- to the Prime Minister's National Relief Fund.
Key Issues
1. Dismissal of appeal by CIT(A) on grounds of delay without merits. 2. Confirmation of addition as short-term capital gain without providing opportunity of hearing. 3. Confirmation of addition as unexplained money under Section 69A without providing opportunity of hearing.
Sections Cited
Section 147, Section 144, Section 148, Section 69A, Section 133(6)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, AHMEDABAD “C” BENCH, AHMEDABAD
Before: Ms. SUCHITRA KAMBLE & SHRI NARENDRA PRASAD SINHA
O R D E R
PER SHRI NARENDRA PRASAD SINHA, AM:
This appeal is filed by the assessee against the order of the National Faceless Appeal Centre (NFAC), Delhi (in short “the CIT(A)”) dated 30.09.2025 for the Assessment Year (A.Y.) 2016-17, in the proceeding under Section 147 r.w.s. 144 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’).
The brief facts of the case are that the assessee did not file his return of income for the A.Y. 2016-17. The AO had received an information that the assessee had sold an immovable property during the year and also deposited cash in his bank account. On the basis this information the proceeding under section 147 of the Act was initiated in (Assessment Year: 2016-17) Amarsinh Thakor vs. ITO Page 2 of 6 the case of the assessee and a notice u/s 148 of the Act was issued on 23.03.2023. In the course of assessment proceeding no compliance was made by the assessee. Therefore, the AO had treated the entire sale consideration of Rs.1,00,23,000/- as short-term capital gain and added to income. Further, the cash deposits of Rs.36,04,785/- in the bank account was also treated as unexplained. The assessment was completed u/s 147 r.w.s.144 of the Act on 16.01.2024 at total income of Rs1,36,27,785/-.
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 dismissed.
The assessee is now in second appeal before us. The following grounds have been taken in this appeal: -
“1. The learned CIT(A) has erred in law and on facts of the case, in rejecting the appeal on ground of delay in filing the appeal without hearing. 2. The ld CIT(A) has erred in Confirming addition of Rs. 1,00,23,000/- as short term capital gain on sale of land without providing opportunity of hearing to the appellant. 3. The ld CIT(A) has erred in making confirming addition of Rs 36,04,785/- as unexplained money u/s 69A of the Act without providing opportunity of hearing to the appellant.
4. The Appellant craves leave to add, amend or alter the grounds of appeal at the time of hearing, if need arise.”
(Assessment Year: 2016-17) Amarsinh Thakor vs. ITO Page 3 of 6 5. Shri Pamil H Shah, Ld. AR of the assessee, submitted that the assessee was an agriculturalist and not acquainted with Income-tax proceedings. His regular income was below the taxable limit and, hence, no return of income was filed by him. The Ld. AR explained that the assessee was not aware of the assessment proceeding as no physical notice was received by him. Being not tech-savvy the assessee could not access the notices sent on the portal or on the e-mail id registered thereon. As a result, no compliance could be made by the assessee before the AO, which had resulted in ex-parte assessment order. The assessee came to know about the order of the AO only when the recovery of the demand was pursued. Thereafter, the assessee consulted the counsel and filed appeal before the CIT(A) and in the process there was a delay of 216 days. The Ld. AR submitted that the Ld. CIT(A) did not condone the delay in filing of appeal before him and had dismissed the appeal without adjudicating the grounds taken on merit. The Ld. AR, therefore, requested that the assessee may be allowed another opportunity to explain the transactions by setting aside the matter to the file of the AO.
Per contra, Shri Ashok Kumar Suthar, Ld. CIT-DR supported the order of the lower authorities. He, however, had no objection if the matter was set aside to the file of AO for allowing another opportunity to the assessee.
We have considered the submissions of the assessee. The action of the AO to treat the entire sale consideration as STCG, without allowing any deduction for cost of acquisition, cannot be held as correct. Considering this aspect, the Ld. CIT(A) should have examined the (Assessment Year: 2016-17) Amarsinh Thakor vs. ITO Page 4 of 6 matter on merits rather than dismissing the appeal of the assessee on technical ground of delay in filing of appeal. At the same time, it is found that the AO had allowed as many as nine opportunities to the assessee but no compliance was made by the assessee on any of the occasion. In the course of assessment, the AO had made enquiries with the buyer of the property by issue of notice u/s 133(6) of the Act, which was duly complied. Further, the AO has reproduced the evidence for service of show cause notice to the assessee in the assessment order, which was sent to the email account. In view of these facts the contention of the assessee that he was unaware about assessment proceeding cannot be accepted. The receipt of show cause notice on the email account has not been disputed. The contention that the e-mail was delivered to spam account has not been substantiated with any evidence. In view of these facts, we are not convinced with the explanation of the assessee for non-compliance before the AO. 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 Jurisdictional AO with a direction to allow another opportunity to the assessee to explain the capital gain arising on sale of immovable property and also to explain the source of cash deposits in the bank account. The assessee is also directed to make compliance before the JAO in the course of set aside assessment proceeding. In case the assessee does not make compliance, the JAO will have liberty to decide the matter on merits on the basis of the materials available on record.
Order pronounced in the open Court on this 09th January, 2026.