ALAMELU RAMESH,NAVI MUMBAI vs. ITO, WARD 28(1)(1), MUMBAI, NAVI MUMBAI

The brief facts of the case are that the assessee, an individual, had not filed her return of income for A.Y. 2016-17. On the basis of information available on the Insight Portal, the Assessing Officer reopened the assessment and issued notice under section 148 of the Income-tax Act, 1961 (“the Act”). Since the assessee did not respond to the statutory notices, the Assessing Officer completed the assessment ex parte under section 147 read with section 144 vide order dated 15.03.2024. The Assessing Officer made an addition of ₹6,36,30,000/- under section 69 of the Act towards purchase of immovable property, brought to tax the entire sale consideration of ₹43,00,000/- as capital gains and also added interest income of ₹63,880/-. The total income was accordingly assessed at ₹6,79,93,880/-. Consequent to the assessment, penalty of ₹2,33,29,442/- was levied under section 271(1)(c) vide order dated 25.09.2024.

The assessee filed an appeal against the penalty order before the learned CIT(Appeals). Since the appeal was filed beyond the prescribed period, the assessee sought condonation of delay. She explained that the Departmental communications had been sent to an old residential address and to an email account which was no longer operative and, therefore, she was not aware of the assessment and penalty proceedings. The learned CIT(Appeals), however, held that these assertions were not supported by evidence and rejected the request for condonation. The appeal was accordingly dismissed in limine without examining the penalty on merits.

The assessee is in appeal before us against the order passed by the CIT(Appeals) dismissing the appeal of the assessee.

We have heard the parties and perused the material available on record. The issue before us is whether the delay in filing the appeal before the learned CIT(Appeals) deserves to be condoned.

The assessee has filed an affidavit explaining the reasons for the delay. She has submitted that the Departmental communications were being sent to the email ID tararamesh64@rediffmail.com, which had become inactive and could not be accessed. She has further stated that the backup email linked to that account was also dormant. According to the assessee, her correct and active email ID is rameshdorairajan@gmail.com, which has since been updated in her profile. She has also explained that the residential address at Nerul, Navi Mumbai, to which the communications were sent, was an old rented accommodation where she had resided only during the period from 2003 to 2007. Thereafter, she shifted to Faridabad on account of her husband's employment. According to her, for these reasons the notices and orders did not come to her knowledge.

The assessee has further stated that she came to know of the outstanding demand only in February 2026 when she received a telephone call from the Income Tax Demand Management Centre. Thereafter, she accessed the income- tax portal, approached a Chartered Accountant and took steps to file the necessary appeals.

The learned Counsel for the assessee has also submitted before us that the separate appeal against the assessment order dated 15.03.2024 is still pending for adjudication before the learned CIT(Appeals). Thus, the very additions on the basis of which the penalty has been levied are yet to be examined in the quantum appeal at the first appellate stage.

Considering the affidavit filed by the assessee, the explanation regarding the inactive email ID and the old residential address and the fact that the penalty appeal has been dismissed without examining the matter on merits, we are of the view that the assessee has shown sufficient cause for the delay. There is also nothing on record to suggest that the delay was deliberate or that the assessee stood to gain by filing the appeal late.

Accordingly, we are of the view that, in the interest of justice, the penalty appeal should also be restored to the learned CIT(Appeals) for decision on merits. The issue of penalty under section 271(1)(c) of the Act will have to be considered in the light of the outcome of the quantum proceedings.

We therefore condone the delay in filing the appeal before the learned CIT(Appeals). The learned CIT(Appeals) shall also take into consideration the outcome of the quantum appeal arising from the assessment order dated 15.03.2024 while deciding the penalty appeal.

In the result, the appeal of the assessee is allowed for statistical purposes.