ITAT Ahmedabad Restores Matter for Fresh Hearing Over Consultant’s Negligence
The Income Tax Appellate Tribunal (ITAT) Ahmedabad recently passed an order dated 30th September 2025, where it restored the matter back to the Assessing Officer for fresh consideration.
The assessee, Gordhandas Narandas Vaishnav, had filed his income tax return (ITR) on 30.10.2018, reporting a total income of Rs 6,05,200. After the ITR was processed by the CPC (Centralised Processing Centre), it added a disallowance of Rs 1,35,27,979 under section 43B for the inconsistency in the amount debited to the profit and loss account and Rs 54,96,402 under section 40(a)(ia) for the non-compliance with the provisions of Chapter XVII-B.
The case was selected for limited scrutiny due to the mismatch in the audit report. Therefore, the income tax department issued a notice under section 143(2) along with other notices on dates including 04.11.2020, 02.12.2020, 19.12.2020, 01.01.2021, and 18.01.2021.
The assessee submitted some documents through the ITBA portal on 08.02.2021 and said that he trades agricultural commodities, primarily castor seeds and guar seeds. The AO observed in the Tax Audit Report that there were some payments that were subject to tax, but the tax was not deducted. The payments were as follows:
- C.M. Charges: Rs 14,03,537.
- Godown Rent: Rs 28,11,525
- Contractors: Rs 2,03,850
- Interest: Rs 1,33,52,177
- Commission: Rs 5,50,524
- Total: Rs 1,83,21,340
30% of the total amount, Rs 54,96,402 was disallowed u/s 40(a)(ia). Further, the section 43B disallowance of Rs 1,35,27,979 as per the Tax Audit Report was not shown in the return and hence was added. The total income vide order dated 25.02.2021, was calculated as Rs 1,96,29,580.
The assessee filed an appeal before the learned CIT(A). The learned CIT(A) sent many notices to the assessee on different dates, but the assessee did not respond to the notices. Therefore, the CIT(A) confirmed the additions ex parte due to non-compliance of the assessee.
The assessee approached the ITAT Ahmedabad, requesting the court to quash the ex parte. The assessee submitted that the non-compliance was not intentional. The assessee claimed the default was due to the negligence of his previous consultant. The assessor informed us that a new consultant has now been appointed. The Authorised representative also said that the assessee has now obtained Form 26A certificates from payees, which can be presented before the AO for verification. The Authorised Representative of the assessee requested the tribunal to give one more opportunity.
The ITAT observed that the assessee was non-compliant with both the assessing officer and the learned CIT(A). It noted that the assessee’s non-compliance before both the AO and CIT(A) was not intentional. Since the assessee had obtained the certificate in Form 26A, which needs to be verified by the assessing officer, the tribunal believed that the matter deserved a fresh look. Therefore, the Tribunal set aside the order of the CIT(A) and restored the matter to the file of the Assessing Officer for fresh consideration.
However, the restoration was subjected to certain conditions. The assessee was directed to deposit Rs 5,000 as a donation to the Prime Minister’s National Relief Fund and submit proof to the AO. Further, the assessee must cooperate fully and produce all relevant documents, including Form 26A.
Case Citation: Gordhandas Narandas Vaishnav Vs The ITO, Ward-1 (ITAT Ahemedabad); ITA No.2075/Ahd/2024; 30/09/2025; 2018-2019
