Income Tax Appellate Tribunal - Ahmedabad
Hirajibhai Jethabhai ... vs The Ito, Ward-1, Palanpur on 23 April, 2026
IN THE INCOME TAX APPELLATE TRIBUNAL
"B" BENCH, AHMEDABAD
BEFORE SMT. ANNAPURNA GUPTA, ACCOUNTANT MEMBER &
SHRI SIDDHARTHA NAUTIYAL, JUDICIAL MEMBER
I.T.A. No.2665/Ahd/2025
(Assessment Year: 2017-18)
Hirajibhai Jethabhai Jegoda, Vs. Income Tax Officer,
District Supply Office, Ward-1,
Collector Office Building, Palanpur
Banaskantha, Palan pur-385 001
[PAN No.ABOPJ2898Q]
(Appellant) .. (Respondent)
Appellant by : Shri Tej Shah, AR
Respondent by: Shri Abhijit, Sr. DR
Date of Hearing 22.04.2026
Date of Pronouncement 23.04.2026
ORDER
PER SIDDHARTHA NAUTIYAL - JUDICIAL MEMBER:
This appeal has been filed by the Assessee against the order passed by the Ld. Commissioner of Income Tax (Appeals), (in short "Ld. CIT(A)"), National Faceless Appeal Centre (in short "NFAC"), Delhi vide order dated 03.10.2025 passed for A.Y. 2017-18.
2. The assessee has raised the following grounds of appeal:
"1. That the Ld. CIT(A) erred in law and in the facts of the case in confirming the order of the AO in reopening u/s 147 of the act.
2. That the Ld. CIT(A) erred in law and in the facts of the case in confirming the order of the AO in making an addition of Rs. 65,06,000/- being time deposits as unexplained investment u/s 69B of the act.
3. That the Ld. CIT(A) erred in law and in the facts of the case in confirming the order of the AO in making an addition of Rs. 1,50,000/- being disallowance of claim u/s 80C of the act."
3. The brief facts of the case are that the assessee, an individual, did not file his return of income for Assessment Year 2017-18 within the prescribed time. Based on information flagged through the Risk Management Strategy ITA No. 2665/Ahd/2025 Hirajibhai Jethabhai Jegoda vs. ITO Asst.Year -2017-18
- 2- (RMS) on the Insight portal, the Department noted that the assessee had earned interest income from banks and had made substantial time deposits aggregating to ₹65,06,000/- during the relevant financial year. Consequently, proceedings under section 147 of the Income-tax Act, 1961 ("the Act") were initiated, in response to which the assessee filed return of income declaring total income of ₹6,22,150/-.
4. During the course of reassessment proceedings, notices under section 142(1) of the Act and show cause notices were issued; however, Assessing Officer observed that there was no compliance from the assessee and no documentary evidence was furnished to explain the source of the time deposits or to substantiate the claim of deduction under section 80C of the Act. The Assessing Officer, therefore, proceeded to complete the assessment ex-parte under section 147 read with section 144 of the Act and treated the time deposits of ₹65,06,000/- as unexplained investment under section 69B of the Act and further disallowed deduction of ₹1,50,000/- claimed under section 80C of the Act. Accordingly, the Assessing Officer assessed the total income at ₹72,78,150/- and penalty proceedings were also initiated. The assessment was thus framed ex parte based on material available on record.
5. Aggrieved, the assessee preferred an appeal before the Commissioner of Income Tax (Appeals), challenging the additions on both legal and factual grounds. The assessee contended that the deposits were made out of retirement benefits such as gratuity, GPF, leave encashment and pension, and that deduction under section 80C pertained to LIC premium. However, during the appellate proceedings, as recorded by the CIT(Appeals), the assessee failed to furnish supporting documentary evidences or effectively pursue the appeal despite issuance of multiple notices. The CIT(A) also noted delay in filing the appeal and found the reasons for condonation unsupported by evidence.
ITA No. 2665/Ahd/2025Hirajibhai Jethabhai Jegoda vs. ITO Asst.Year -2017-18
- 3-
6. On merits, the CIT(A) proceeded to examine the assessment order and upheld the action of the Assessing Officer on the ground that the assessee had failed to discharge the burden of proving the source of investments and eligibility of deduction. The CIT(Appeals) observed that no documentary evidence such as Form 16 or proof of retirement benefits was furnished by the assessee. The CIT(A) further invoked the principle that law assists the vigilant and not those who sleep over their rights and, relying on judicial precedents, held that the assessee had not cooperated either at the assessment stage or at the appellate stage. Accordingly, CIT(Appeals) confirmed the additions made by the Assessing Officer and the appeal of the assessee was dismissed.
7. The assessee is in appeal before us against the order passed by CIT(Appeals) dismissing the appeal of the assessee.
8. We have carefully considered the rival submissions and perused the material available on record. It is an undisputed position that the assessment in the present case has been completed ex parte under section 144 of the Act on account of alleged non-compliance by the assessee. It is further evident from the record that even before the CIT(Appeals), the appeal has been decided primarily on account of non-compliance and absence of documentary evidence, without the benefit of effective representation by the assessee. Thus, both the assessment order as well as the appellate order have been passed without proper participation of the assessee.
9. In our considered view, the principles of natural justice require that a reasonable and effective opportunity of being heard be granted to the assessee before any adverse view is taken. The Hon'ble Supreme Court in the case of Tin Box Company v. CIT (249 ITR 216) has held that where the assessee has not been provided adequate opportunity, the matter deserves to be restored ITA No. 2665/Ahd/2025 Hirajibhai Jethabhai Jegoda vs. ITO Asst.Year -2017-18
- 4- for fresh adjudication. Similarly, in Kapurchand Shrimal v. CIT (131 ITR
451), it has been held that appellate authorities are duty bound to ensure that justice is done by correcting procedural irregularities.
10. At the same time, we cannot ignore the conduct of the assessee in not diligently pursuing the matter before the lower authorities. Therefore, balancing the interest of justice with the need to ensure responsible conduct on part of the assessee, we deem it appropriate to restore the matter to the file of the Assessing Officer for de novo adjudication, subject to payment of cost.
11. Accordingly, the matter is restored to the file of the Assessing Officer for fresh adjudication after providing adequate opportunity of being heard to the assessee. The assessee is directed to cooperate in the proceedings and furnish all necessary evidences in support of his case. Further, as a condition for such restoration, the assessee is directed to deposit a cost of ₹5,000/- with the Prime Minister's Relief Fund and furnish proof of such payment before the Assessing Officer.
12. In the result, the appeal of the assessee is allowed for statistical purposes.
This Order pronounced in Open Court on 23/04/2026
Sd/- Sd/-
(ANNAPURNA GUPTA) (SIDDHARTHA NAUTIYAL)
ACCOUNTANT MEMBER JUDICIAL MEMBER
Ahmedabad; Dated 23/04/2026
TANMAY, Sr. PS TRUE COPY
आदे श की ितिलिप अ ेिषत/Copy of the Order forwarded to :
1. अपीलाथ / The Appellant
2. थ / The Respondent.
3. संबंिधत आयकर आयु / Concerned CIT
4. आयकर आयु (अपील) / The CIT(A)-
5. िवभागीय ितिनिध, आयकर अपीलीय अिधकरण, अहमदाबाद / DR, ITAT, Ahmedabad
6. गाड फाईल / Guard file.
आदे श ानु सार/ BY ORDER, उप/सहायक पंजीकार (Dy./Asstt.Registrar) आयकर अपीलीय अिधकरण, अहमदाबाद / ITAT, Ahmedabad