NITIN SHANTARAM SAWARKAR,MUMBAI vs. ITO WARD 41(4)(3), MUMBAI

PER RATNA DASGPUTA, AM

The captioned appeal by the assessee arises from order dated 01/04/2025 passed by the National Faceless Appeal Centre [hereinafter referred to as Ld. CIT(A)] under section 250 of the Income tax Act - hereinafter referred to as “the Act”, on the following grounds:-

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i. On the facts & in the circumstances of the case and in law the Hon'ble CIT (A) erred in passing an ex parte order u/s 250 of the Act and confirming the addition made by the Id. Assessing Officer and the reasons assigned for doing so are wrong and contrary to the provisions of Income Tax and rules made there under. ii. On the facts and circumstances of the case and in law, the Hon'ble CIT(A) has erred in dismissing the appeal in limine by rejecting the application for condonation of delay, without appreciating that the delay in filing the appeal was due to sufficient and reasonable cause and not on account of any willful neglect or deliberate inaction on the part of the appellant and the reasons assigned for doing so are wrong and contrary to the provisions of Income Tax Act and Rules made there under. iii. On the facts and in the circumstances of the case and in law, the Hon'ble CIT(A) erred in upholding the addition of Rs. 70,50,000/- made by the Ld. AO on account of unexplained investment u/s 69B of the Act and the reasons assigned for doing so are wrong and contrary to the provisions of Income Tax Act and Rules made there under. iv. On the facts and in the circumstances of the case and in law, the Hon'ble CIT(A) erred in upholding the addition of Rs. 2,00,000/- made by the Ld. AO u/s 56(2)(vii)(b) of the Act being difference between the consideration paid and market value of the property purchased and the reasons assigned for doing so are wrong and contrary to the provisions of Income Tax Act and Rules made there under. v. On the facts and in the circumstances of the case and in law the Ld. AO erred in initiating penalty u/s 270A of the IT Act 1961 and the reasons assigned for doing so are wrong and contrary to the provisions of Income Tax Act and Rules made there under. vi. On the facts and in the circumstances of the case and in law the Ld. AO erred in initiating penalty u/s 272A(1)(d) of the IT Act 1961 and the reasons assigned for doing so are wrong and

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contrary to the provisions of Income Tax Act and Rules made there under. vii. On the facts and in the circumstances of the case and in law the Ld. AO erred in initiating penalty u/s 271AAC(1) of the IT Act 1961 and the reasons assigned for doing so are wrong and contrary to the provisions of Income Tax Act and Rules made there under. viii. On the facts and in the circumstances of the case and in law the Ld. AO erred in charging interest under section 234B 234C and 234D of the IT Act 1961 and the reasons assigned for doing so are wrong and contrary to the provisions of Income Tax Act and Rules made there under. ix. Your Appellant crave, leave to add, alter, amend or modify any or all grounds of appeal on or before the date of hearing. 2. Brief facts of the case are that the assessee, an individual, filed his return of income for AY 2017-18 on 20/08/2017 declaring total income of Rs. 8,98,160/-. As per information available with the Income-tax Department, the assessee had made the following transaction during the relevant year:-

Sr. Transaction Date Transaction Stamp duty Description No. Amount value 1. 08.04.2016 Rs. Rs. Property 70,50,000/- 72,50,000/- purchased

In view of the above, the Ld. Assessing Officer (AO) had reason to believe that income otherwise chargeable to tax has escaped assessment. Accordingly, with the prior sanction of the competent authority under Section 151 of the Act, the case was reopened for assessment as per provisions of Section 147 by issue of notice

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under Section 148 dated 12/07/2022. The assessee, however, did not file return of income in response to the notice u/s 148 of the Act, nor did he respond to the notices subsequently issued u/s 142(1), or even to the show-cause notice issued on 14/02/2023. In view of such repeated non-compliance, the Ld. AO completed the assessment u/s 144 of the Act to the best of his judgment. He noted that in the absence of any replies from the assessee, the source of investment in the purchase of the impugned immovable property could not be authenticated. Hence, the investment made in the immovable property to the tune of Rs. 70,50,000/- was treated as unexplained investment within the meaning of Section 69B of the Act. Further, since the impugned property was purchased for Rs. 70,50,000/- as against stamp duty value of the property at Rs. 72,50,000/- the differential of Rs. 2,00,000/- was added back to the assessee’s total income as per provisions of section 56(2)(vii)(b) of the Act.

2.1 Aggrieved by the assessment order, the assessee carried the matter in appeal before the Ld. CIT(A). However, there was a delay of 634 days in filing Form- 35. The Ld. CIT(A) issued multiple notices of hearing for providing due opportunity to the assessee, but the assessee did not respond even to a single communication. The Ld. CIT(A) did not find merit in the reasons given in column No. 15 of Form 35 explaining the delay in filing appeal, and he, therefore,

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did not condone the delay. Otherwise also, he held - on the basis of judicial precedents which he has cited in his order - that the law aids those who are vigilant and not those who sleep upon their rights. Taking the stand that the assessee is not interested in prosecuting the appeal, he dismissed the appeal.

2.2 It is against the above order of the Ld. CIT(A) that the assessee has preferred further appeal before this Tribunal.

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the assessee thereafter approached a Chartered Accountant who advised to file second appeal before the ITAT, Mumbai. It is the Ld. AR’s contention that the delay in filing the appeal was in view of all this confusion and that the same was neither intentional nor deliberate.

3.1 We have given thoughtful consideration to the contents of the assessee’s affidavit and have also noted the persistent non- compliance by the assessee both at the assessment and the appellate stage. The assessment order was completed ex parte in the absence of any response, whatsoever, from the assessee. Thereafter, there was a delay of 634 days in filing appeal before the Ld. CIT(A). Even after filing the appeal, the assessee did not comply with any of the notices issued by the Ld. CIT(A). The Ld. CIT(A) did not condone the delay in filing in Form- 35, and dismissed the appeal, holding that the assessee was obviously not interested in prosecuting the same. Now, even before this Tribunal, the assessee has made a delay of 315 days in filing Form 36. In this backdrop, the assessee has created for itself a very bad record, which reflects negligence and a cavalier approach. The reasons given in the affidavit are also very general and cannot be an excuse for complete non-compliance at every stage of the income tax proceedings. Given the facts outlined above, it is difficult to accept the assessee’s contention that the persistent non-responsiveness on his part was

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not intentional. On the contrary, what flows from the sequence of events is that the assessee has displayed utter irresponsibility towards his duties as a tax payer. In view of the above, we deem it appropriate to impose a cost of Rs. 10,000/- on the assessee. The assessee is directed to pay this sum in favour of the State Legal Services Authority within three weeks of receipt of this order.

3.2 However, considering that one of the prime functions of this Tribunal is to administer justice, and also considering that both the assessment order and the order by the Ld. CIT(A) were completed without any explanation or evidence from the assessee’s end, we consider it fit to remand this matter to the file of Ld. CIT(A) for fresh adjudication as per law after giving the assessee sufficient opportunity to present his case. The assessee is directed to explain afresh the reasons for his delay in filing appeal, and fully co-operate in the said proceedings and furnish whatever information/documents that may be required.

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Order pronounced in the open Court on 11/09/2026

Sd/- Sd/- (BEENA PILLAI) (RATNA DASGPUTA) JUDICIAL MEMBER ACCOUNTANT MEMBER Mumbai; Dated: 11/09/2026 Z.U., P.S.

Copy of the Order forwarded to : 1. The Appellant 2. The Respondent. 3. CIT 4. DR, ITAT, Mumbai 5. Guard file. BY ORDER,

//True Copy// (Assistant Registrar) ITAT, Mumbai