SONALI SONU SOOD,MUMBAI vs. ACIT, CENTRAL CIRCLE 5(1), MUMBAI

At the outset, it is observed from the record that there is a delay of 245 days in filing the appeal before the Tribunal. The assessee has filed an application along with an affidavit seeking condonation of the said delay.

We have heard both parties on this preliminary issue and perused the material available on record, including the explanation offered in the affidavit.

The Hon’ble Supreme Court in the case of Collector, Land Acquisition, Anantnag & Anr. v. Mst. Katiji & Ors. [1987] 167 ITR 471 (SC) / 1987 AIR 1353 (SC) has held that when substantial justice and technical considerations are pitted against each other, the cause of substantial justice deserves to be preferred, provided the delay is not deliberate or on account of culpable negligence. Applying this principle, the expression "sufficient cause" must receive a liberal construction so as to advance substantial justice.

Considering the explanation tendered by the assessee and finding reasonable cause for the delay, we are satisfied that the delay of 245 days in filing the present appeal was neither intentional nor deliberate. Accordingly, the delay is condoned subject to costs of Rs. 5,000/-, which shall be deposited by the assessee in Prime Minister’s National Relief Fund, and a copy of the receipt thereof shall be placed before the AO within 30 days from the date of receipt of this order. Thus, the appeal is admitted for adjudication on merits.

As per the facts of the assessee filed her return of income for A.Y. 2013-14 on 31/03/2015 declaring total income of Rs.4,13,090/-.

Subsequently, a search and seizure action under section 132 of the Act was initiated on 15/09/2021 in the case of Shri Sonu Sood, husband of the assessee, and his related entities. During the course of the said search action, the assessee was also subjected to proceedings under section 132 of the Act.

Consequent to the search action, notice under section 148 of the Act dated 30/03/2023 was issued to the assessee under the post-Finance Act, 2021 reassessment regime. Pursuant thereto, the assessment was completed under section 147 of the Act vide order dated 27/06/2023, wherein an addition of Rs.76,00,000/- was made on account of alleged unexplained loans/cash credits received from the following entities:

The aforesaid addition was made principally on the basis of the statement of Shri Udayanlal Kishanlal Jain, proprietor of M/s. Om Shilpi Jewellers, recorded under section 131 of the Act.

Aggrieved by the reassessment order, the assessee preferred an appeal before the learned CIT(A), who, vide order dated 24/01/2025, dismissed the appeal and sustained the impugned addition.

Before us, the learned counsel for the assessee submitted that the addition on merits is squarely covered by the decision of the Coordinate Bench of the Tribunal in the case of the assessee’s husband, Sonu Pankaj Shakti Sagar Sood vs. ACIT, Central, reported in [2026] 186 taxmann.com 322 (Mum-Trib.), order dated 05/05/2026.

The learned counsel submitted that the addition in the present case arises out of the very same search action dated 15/09/2021 and is based upon the identical statement of Shri Udayanlal Kishanlal Jain. It was submitted that, in the case of the assessee’s husband, the Coordinate Bench had noted, inter alia, that no incriminating material was found during the search evidencing introduction of unaccounted cash; that the statement relied upon by the Revenue was not subjected to effective cross-examination; that the alleged e-mail correspondence referred to in the statement had neither been brought on record nor confronted to the assessee; and that no enquiry had been conducted with regard to the alleged brokers/intermediaries.

It was, accordingly, submitted that the Coordinate Bench had restored the issue to the file of the AO with a direction to afford the assessee an effective opportunity of cross-examination and to thereafter adjudicate the issue afresh in accordance with law. The learned counsel submitted that, in view of the identical factual matrix and the common evidentiary basis, the same course ought to be adopted in the present case. The grounds challenging the validity of the reassessment proceedings and the jurisdiction under section 148 of the Act were stated to be pressed without prejudice and were sought to be kept open.

The learned Departmental Representative (“learned DR”), while supporting the orders of the lower authorities, fairly submitted that the addition in the present case arises from the same search action and is based upon the same statement of Shri Udayanlal Kishanlal Jain as was considered by the Coordinate Bench in the case of the assessee’s husband. The learned DR did not object to restoration of the issue to the file of the AO with similar directions.

We have heard the rival submissions and perused the material available on record.

It is an admitted position that the impugned addition of Rs.76,00,000/- comprises Rs.45,00,000/- received from Krishnaraj Diamonds and Rs.31,00,000/- received from Renuka Exim. From the orders of the authorities below, it is evident that the addition has been made principally on the basis of the statement of Shri Udayanlal Kishanlal Jain recorded under section 131 of the Act.

We find that an identical issue arising from the same search action and based upon the same statement of Shri Udayanlal Kishanlal Jain was considered by the Coordinate Bench in the case of Shri Sonu Pankaj Shakti Sagar Sood vs. ACIT, Central, [2026] 186 taxmann.com 322 (Mum-Trib.), order dated 05/05/2026. The Coordinate Bench, after considering the evidentiary material and the contentions of the parties, observed as under:

In the present case also, the addition has been made on the basis of the very same statement of Shri Udayanlal Kishanlal Jain arising from the same search action. The learned DR has also fairly accepted the similarity of the factual and evidentiary position and has not objected to restoration of the issue to the file of the AO.

In these circumstances, following the decision of the Coordinate Bench and keeping in view the principle of judicial consistency, we deem it appropriate to restore the issue relating to the impugned addition of Rs.76,00,000/- to the file of the AO.

The AO shall provide the assessee with copies of all material, including any e-mail correspondence or other corroborative material, which is proposed to be relied upon against her. The assessee shall also be afforded an effective and meaningful opportunity to cross-examine Shri Udayanlal Kishanlal Jain in respect of the statement sought to be relied upon against her. The AO shall thereafter examine the issue afresh, conduct such further enquiries as may be warranted in accordance with law, and pass a speaking order after providing the assessee a reasonable opportunity of being heard.

We clarify that we have not expressed any opinion on the merits of the impugned addition. Further, the grounds raised by the assessee challenging the validity of the notice issued under section 148 of the Act and the jurisdiction of the AO are kept open and have not been adjudicated upon in the present proceedings. The assessee is also at liberty to raise any other grounds/objections before the AO, which shall also be adjudicated by the AO in accordance with law.

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