RAKESH SHUKLA,DELHI vs. INCOME TAX OFFICER, DELHI

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ITA 1480/DEL/2026Status: DisposedITAT Delhi03 September 2026AY 2015-167 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal condoned the delay in filing the appeal before the CIT(A), finding sufficient cause. The matter was remitted back to the AO for a denovo reassessment on merits, as the original assessment was ex-parte.

What were the facts?

The assessee failed to file a return of income, leading to reassessment proceedings. The Assessing Officer (AO) made additions based on unexplained bank deposits, and the assessee's appeal to the CIT(A) was dismissed due to a 240-day delay.

What were the issues?

Whether the delay in filing the appeal before the CIT(A) should be condoned, and whether the ex-parte reassessment order should be set aside for a fresh assessment on merits.

Which sections of the Income-tax Act were involved?

Section 139,Section 144,Section 147,Section 69A,Section 115BBE,Section 250,Section 249(2),Section 251(1)(a)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH ‘G’: NEW DELHI

For Appellant: Mr. Atul Puri,CA
For Respondent: Shri Sher Singh, CIT-DR
Hearing: 30.06.2026Pronounced: 03.09.2026

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘G’: NEW DELHI

BEFORE SHRI RAMIT KOCHAR, ACCOUNTANT MEMBER AND SHRI VIMAL KUMAR, JUDICIAL MEMBER ITA No.1480/Del/2026 (ASSESSMENT YEAR: 2015-16)

Mr. Rakesh Shukla The ITO, H.No. 10, Rama Park Ward 63(1) Kishan Ganj v. Civic Centre Delhi-110007 Minto Road PAN: CBYPS4085G New Delhi-110002 (Appellant) (Respondent) Assessee by Mr. Atul Puri,CA. Department by Shri Sher Singh, CIT-DR Date of Hearing 30.06.2026 Date of Pronouncement 03.09.2026

ORDER PER RAMIT KOCHAR, AM: This appeal in ITA No. 1480/Del/2026 for Assessment Year: 2015-16 has arisen form the learned CIT(A)’s appellate order u/s 250 of the Income-tax Act, 1961(in Short “1961Act”) dated 30.12.2025 in DIN & Order No: ITBA/NFAC/S/250/2025- 26/1084218088(1), which appeal in turn has arisen from the reassessment order dated 25.05.2023 passed by the AO u/s 144 r.w.s 147 of the 1961 Act (DIN & Order No. ITBA/AST/S/147/2023-24/1053157551(1) ).

2.

The brief facts of the case are that the assessee did not filed his return of income u/s 139 of the 1961 Act, for the impugned assessment year. The case of the assessee was reopened by Revenue by invoking provisions of Section 147 of the 1961 Act for the

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reasons that as per information uploaded on insight portal under the category of high risk, the assessee has debit and credit entries to the tune of Rs. 8,82,18,426/- in his bank accounts with Axis Bank( bank account nos. 914020011146052 and 914020013742683), and similarly there were debit and credit entries to the tune of Rs. 6,49,94,738/- in his bank account maintained with ICICI Bank ( bank account number 629505501021). As per AO, since the assessee has not filed return of income u/s 139, these amounts remained unexplained. Proceedings u/s 147/148 were initiated against the assessee by the AO, details of which are recorded in assessment order. However, the assessee did not file return of income even during reassessment proceedings in pursuant to notice issued by the AO nor filed any response thereto to the statutory notices issued by the AO u/s 142(1) of the 1961 Act as well to SCN issued by the AO to the assessee, which led AO to frame best judgment reassessment against the assessee u/s 144 of the 1961 Act , wherein deposits to the tune of Rs. 14,98,33,014/- by the assessee in his bank accounts maintained with the Axis Bank and ICICI Bank Limited were added to the income of the assessee by the AO as being unexplained as the assessee could not explain sources of said bank deposits , by invoking provisions of Section 69A of the 1961 Act read with Section 115BBE of the 1961 Act.

3.

Aggrieved, the assessee filed first appeal with the ld. CIT(A). The said appeal was filed belatedly by the assessee with ld. CIT(A) beyond the time stipulated u/s 249(2) of the 1961 Act, by 240 days. The assessee submitted before ld. CIT(A) that the reassessment framed by the AO was best judgment reassessment framed ex-parte u/s 144 r.w.s. 147 of the 1961 Act . It was submitted that the assessee was not having any knowledge of the reassessment proceedings, and the assessee became aware of the reassessment order only when penalty and recovery messages were received by the assessee , and its only then the assessee realized that the assessment has been completed. It was submitted that he was aware of only one notice , which he handed over to ITP , but

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the said ITP did not took any action. It was submitted that he handed over the assessment order once received to ITP but again the said ITP did not took any action, and ultimately the assessee contacted a professional firm and then the appeal was filed with the ld. CIT(A). The ld. CIT(A) dismissed the appeal of the assessee at threshold being un- admitted by refusing to condone the delay in filing appeal by the assessee belatedly by 240 days beyond time allowed by the statute, as in the view of ld. CIT(A) the assessee was not having sufficient cause for filing appeal belatedly with ld. CIT(A).

4.

Aggrieved, the assessee has filed second appeal with ITAT. The ld. Counsel for the assessee submitted that the assessee was not aware of the reassessment proceedings and did not received the assessment order. The notices during the course of reassessment proceedings were not received. The reassessment order was not received by the assessee. It was submitted reassessment order was an ex-parte best judgment order passed by the AO u/s 144 read with Section 147. It was submitted that only when recovery and penalty messages started coming, the assessee became aware of the assessment order being passed, and filed an appeal with ld. CIT(A). Only one notice came which he gave to ITP, but he did not took any action. It was submitted that immediately on coming to know of the reassessment being framed against the assessee ex-parte, the assessee filed an appeal with ld. CIT(A) with the help of professional. It was submitted that there was delay of 240 days in filing appeal with ld. CIT(A). Prayers were made before ld. CIT(A) for condoning the delay, but the ld. CIT(A) did not condone the delay and rather dismissed the appeal of the assessee. The ld. Counsel prayed that delay in filing appeal with ld. CIT(A) be condoned. It was submitted reassessment order passed was an exparte best judgment reassessment u/s 144. It was submitted that the assessee was dealing in tyres. Tubes etc of road vehicles. It was submitted that the assessee imported tyres and tubes. Since, assessee was new to the business, he imported wrong description of tyres and tubes. There were losses in the business. The amount deposited in the bank accounts

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were,inter-alia, towards sale and purchase of tyres and tubes. It was submitted that the entire deposits in bank accounts were added by the AO to the income of the assessee without giving deduction of purchase costs and other expenditure related to business of the assessee. It was prayed that delay in filing appeal belatedly with ld. CIT(A) be condoned. It was stated that if the matter is restored back , the assessee will co-operate with department and submit all required details as called for by authorities below to enable them to compute correct income chargeable to tax in the hands of the assessee.

4.2 The ld. CIT- DR objected to condonation of delay by the assessee before ld. CIT(A) as the delay was of 240 days , but submitted that the matter can be restored back to the file of the AO for denovo assessment.

5.

We have considered rival contentions and perused the material on record. The facts in brief are narrated in preceding para’s of this order , and are not repeated. The assessee did not filed return of income u/s 139 of the 1961 Act. Based on information under the category of high risk information uploaded on the insight portal, wherein the assessee has deposited Rs. 14,98,33,014/- in his bank accounts with Axis Bank and ICICI Bank , Reassessment proceedings were initiated by the AO against the assessee . The assessee did not filed return of income even during reassessment proceedings nor participated in reassessment proceedings. This led to an ex-parte assessment order u/s 144 and 147 of the 1961 Act passed by the AO. The assessee filed appeal belatedly with ld. CIT(A) by 240 days beyond the time stipulated under statute. The ld. CIT(A) dismissed the appeal of the assessee un-admitted by not condoning the aforesaid delay. It is claimed that the assessee was not aware of the reassessment proceedings. It is claimed that when recovery and penalty messages started coming , then only he came to know that the AO has passed ex-parte reassessment order and that the demand is raised against the assessee, and it is claimed that the assessee handed over one notice received as well assessment order once

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received, to ITP who did not took any action on both the occasions. Then , the assessee hired some professional, who helped assessee file an appeal with ld. CIT(A), but in process the said appeal got delayed by 240 days. The prayers were made before ld. CIT(A) for condonation of delay of filing the appeal belatedly beyond time prescribed u/s 249(2) of 240 days, but ld. CIT(A) did not condone the delay and dismissed the appeal of the assessee, as in the opinion of ld. CIT(A), the assessee did not have any sufficient cause for delay in filing the appeal. We have observed that the assessee has claimed that he was dealing in tyres. Tubes etc of road vehicles. It is claimed that the assessee imported tyres and tubes. It is further claimed that since, assessee was new to the business, he imported wrong description of tyres and tubes. It is also claimed that there were losses in the business. It is also claimed that the amount deposited in the bank accounts were, inter-alia, towards sale and purchase of tyres and tubes. It is claimed that the entire deposits in the bank accounts were added by the AO without giving deduction of purchase costs and other expenditure related to business of the assessee.These contentions need verification, but prima-facie (without commenting on merits of the issue) it appears that prejudice is caused to the assessee by framing of high pitched assessment wherein entire deposits in the bank accounts to the tune of Rs. 14,98,33,014/- stood added as income in the hands of the assessee, which , inter-alia, is now claimed to be sale proceeds of tyres, tubes etc dealt with by the assessee without giving deduction of purchase cost and other expenditure. The assessee has claimed that he was not aware of reassessment proceedings nor received assessment order . One notice which stood received as well assessment order once received , were claimed to be handed over to ITP , but the said ITP did not took any action which led assessee to appoint professional who helped file appeal with the ld. CIT(A). We have observed that the assessee has demonstrated sufficient cause for not filing appeal in time with ld. CIT(A). When substantial justice is pitted against technicalities, the Courts will lean towards advancement of substantial justice, unless malice is at writ large or there is gross

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negligence . We donot see any malice or gross negligence on the part of the assessee in filing the appeal belatedly before ld. CIT(A) beyond time prescribed u/s 249(2) , as the assessee is not likely to gain any thing by filing the appeal before ld. CIT(A) belatedly by 240 days beyond the time prescribed u/s 249(2) of the 1961 Act. What best could happen if the delay is condoned is that the assessment will be framed on merits in accordance with law, instead of shutting the doors of justice altogether to the assessee. Ultimately, the object of the assessment/appellate proceedings under the Income-tax Act is to compute income chargeable to income-tax within the mandate and statutory provisions of the Income-tax Act, and to collect correct taxes , interest etc from the assessee as is statutorily provided. Reliance is placed on judgment and order of Hon’ble Supreme Court in the case of Collector , Land Acquisition , Anantnag v. Mst. Katiji & Ors. 1987 (2) SCC 107. Thus, taking a liberal view and overall peculiar facts and circumstances surrounding the case, we are condoning the delay by the assessee in filing the appeal belatedly before ld. CIT(A). So far as merits of the additions is concerned , the contention of the assessee requires verification and examination. Since the reassessment order itself is an ex-parte order u/s 144, and now even ld. CIT(A) has been granted powers u/s 251(1)(a) of the 1961 Act read with proviso to set aside such order to the file of the AO for denovo reassessment. Since in the instant case, even reassessment order is an ex-parte best judgment assessment u/s 144 r.w.s. 147 wherein ex-parte assessment has been framed without considering the contentions of the assessee by both the authorities below, thus, keeping in view overall facts and circumstances of the case , in the interest of justice and fairness to both the parties , we are remitting the matter back to the file of the AO for framing denovo reassessment on merits in accordance with law, after providing proper and adequate opportunity to the assessee . The assessee is directed to co-operate in reassessment proceedings before the AO , and submit all the requisite details as may be required by the AO for framing denovo reassessment, otherwise the AO shall be free to frame denovo reassessment on merits in accordance with law. We clarify that we have

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not commented on the merits of the issue in this appeal. All the contentions are kept open. The appeal of the assessee is allowed for statistical purposes. We order accordingly.

6.

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

Order is pronounced in the Open Court on 03.09.2026. S/- - -/- Sd/- Sd/- (VIMAL KUMAR) (RAMIT KOCHAR) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated: 03.09.2026 Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI

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