ITAT Ahmedabad Grants Second Opportunity to Assessee with a Cost; Case Remanded to CIT(A)

The present appeal has been filed by an individual named Bhoomi Manas Bhatt (Appellant) against ITO (Income Tax Officer) Ward – 3(3)(1) (Respondent) in the Income Tax Appellate Tribunal (ITAT) Ahmedabad “C” Bench, before Ms Suchitra Kamble (Judicial Member) and Shri Narendra Prasad Sinha (Accountant Member). The case was heard on November 03, 2025, and the final decision was taken on November 04, 2025.

The appeal has been filed challenging an order dated 18.03.2025, issued by the National Faceless Appeal Centre (NFAC), Delhi, under Section 147 read with Section 144 of the Income Tax Act, 1961, for the assessment year 2015-16.

The assessee did not file his income tax return (ITR) for the assessment year 2015-16. When the assessing officer got the information that the assessee bought an immovable property during the same assessment year worth Rs. 1.25 crore and additionally made a cash deposit of Rs. 13 lakh in his bank account. Considering these facts, the assessing officer reopened the case in pursuance of Section 147 of the Act. Even during the assessment, the assessee did not provide complete information as asked by the AO, even after being given 12 separate chances.

The tax officer checked the money used by the taxpayer to buy a property. The assessee could explain only Rs. 90,00,000 out of the total amount spent. But the Rs. 35,00,000 used for the purchase and the Rs. 6,12,500 paid as stamp duty were not explained. The officer also found a cash deposit of Rs. 13,00,000 in the taxpayer’s bank account with no explanation for its source.

Hence, in conclusion, the officer added Rs. 41,12,500 as an unexplained investment in the property under Section 69C and Rs. 13,00,000 as an unexplained cash deposit under Section 69A to the assessee’s income. The final assessment was done on March 24, 2023, under Section 147 read with Section 144B, and the total income was calculated as Rs. 56,42,380.

Assessee dissatisfied with the action of the AO, approached the CIT(A); however, the First Appellate Authority dismissed his appeal. Thereafter, the assessee approached the Appellate Authority (second appeal). The Tribunal analysed the arguments of both sides and made the following conclusions:

• The assessee did not explain the reason behind non-adherence before CIT(A). Therefore, the tribunal ruled that it is right to impose a cost of Rs. 10,000 on the assessee, which should be deposited in the Prime Minister’s National Relief Fund within a period of 15 days from the date of receipt of this order and after successful payment of the amount, CIT(A) must give the assessee a second chance of hearing. This time, the assessee has been directed to cooperate with CIT(A) and properly respond to the notices or directions issued. The assessee has the authority to furnish any additional evidence in the context of the present matter. CIT(A) is allowed to call for a remand report on the same from the Assessing Officer, if found necessary.
• In case the assessee does not comply with the aforementioned directions, then the CIT(A) is free to decide the matter on its merits based on the facts and materials available on record. Meaning, overall, the case has been decided in favour of the assessee for statistical purposes.