REKHA LALIT JAIN,SANTACRUZ vs. ASSISTENT COMMISSIONER, MUMBAI

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ITA 3962/MUM/2026Status: DisposedITAT Mumbai13 August 2026AY 2010-115 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal condoned the delay in filing the appeal. It found that the CIT(A)'s order was passed ex parte and lacked proper adjudication, violating principles of natural justice and statutory requirements.

What were the facts?

The assessee's appeal was filed with a significant delay due to health and financial issues. The Assessing Officer made an addition of Rs. 15,67,775/- on account of alleged fictitious loss from client code modification. The CIT(A) upheld this addition ex parte due to the assessee's non-compliance with notices.

What were the issues?

Whether the CIT(A) erred in passing an ex parte order without affording adequate opportunity and whether the addition made by the AO was justified.

Which sections of the Income-tax Act were involved?

Section 250,Section 143(3),Section 147

AI-generated summary — verify with the full judgment below

IN THE INCOME-TAX APPELLATE TRIBUNAL, MUMBAI “E” BENCH, MUMBAI BEFORE SHRI SANDEEP GOSAIN, JUDICIAL MEMBER AND SHRI BIJAYANANDA PRUSETH, ACCOUNTANT MEMBER ITA No.3962/MUM/2026 (AY: 2010-11) Rekha Lalit Jain vs. ACIT CIRCLE 22(3), 3-4 Jet Terrace, 6th Road Santacruz Piramal Chambers, Lower Parel, East, Mumbai-400055. Mumbai-400013. PAN/GIR No: AAAAA1953D (Appellant) (Respondent) Assessee by Shri Radhe Shyam Sharma Revenue by Smt. Sujatha Iyyanger (Sr. DR) Date of Hearing 13.08.2026 Date of Pronouncement 02.09.2026 O R D E R PER BIJYANANDA PRUSETH, AM:

This appeal filed by the assessee emanates from the order passed under

section 250 of the Income-tax Act, 1961 (in short, ‘Act’) by the Commissioner of

Income-tax, Appeal, ADDL/JCIT(A)-4, Chennai [in short, ‘CIT(A)’], dated

29.01.2025 for the assessment year (AY) 2010-11.

2.

The grounds of appeal raised by the assessee are as under:

“The learned CIT(A) has erred in confirming the addition of Rs. 15,67,775/- on account of alleged fictitious loss arising from client code modification (CCM) without appreciating that no such loss was ever claimed by the appellant in the return of income OR books of account, rendering the addition perverse and without jurisdiction.”

3.

There is a delay of 368 days in filing the appeal. The appellant has filed an application along with affidavit for condonation of delay in filing appeal before the Tribunal. In the said affidavit, the assessee stated that during the relevant period, she was suffering from health issues as well as financial constraints. She was not able to access the Income-tax portal and registered email account through which communication under faceless regime are received. Due to financial constraints, she could not engage a CA for pursuing appellate remedies. The Ld. AR of the assessee submitted that the assessee was under the bona fide

belief that the appeal was pending for disposal. It is submitted that the delay was

not intentional and was beyond his control. There was genuine reason and

sufficient cause for non-filing of appeal within time. Further, the assessee has a

good case on merit. Therefore, in the interest of justice, the delay may be

condoned and the appeal may be heard on merit. On the other hand, the Ld. Sr.

DR has not opposed the prayer of the appellant for condonation of delay.

Considering the entire factual position as explained before us and keeping in view

the principles laid down by the Hon’ble Supreme Court in case of Collector, Land

Acquisition v Mst. Katiji And Others-167 ITR 471 (SC), where it was held that when

substantial justice and technical considerations are pitted against each other,

cause of substantial justice deserves to be preferred for the other side cannot

claim to have vested right in injustice being done because of a non-deliberate

delay, we condone the delay.

4.

Facts of the case, in brief, are that the assessee filed return of income for

the AY 2010-11 on 15.10.2010 declaring total income at Rs. 39,69,280/-. The case

was reopened and order u/s 143(3) r.w.s. 147 was passed on 22.12.2017 by making addition of Rs.15,67,775/- towards fictitious loss by way of client code modification. The total income was determined at Rs.55,37,060/-.

5.

Aggrieved by the order of AO, the assessee filed appeal before the CIT(A).

The CIT(A) issued three notices fixing the hearing on 05.12.2024, 23.12.2024 and

17.01.2025. There was no response from the assessee to any of the notices.

Therefore, relying upon the decision of the Hon’ble Supreme Court in case of B.N.

Bhattarcharjee and Another (118 ITR 461) and Hon’ble Bombay High Court in case

of M/s Chemipol vs. UOI in Excise Appeal No.62 of 2009, he observed that appeal

is liable to be dismissed. On merit he reproduced the assessment order and

upheld the addition made by the AO.

6.

Aggrieved by the order of CIT(A), the assessee filed appeal before the

Tribunal. The Ld. AR submitted that the CIT(A) has passed an ex parte order and

dismissed the order without affording adequate opportunity of being heard to the

assessee thereby violating the principles of natural justice. He submitted that the

order is a non-speaking order in violation of provisions of section 250(6) of the

Act. Even in absence of appearance, it was incumbent upon the CIT(A) to

adjudicate the issues on merits based on materials available on record. He

submitted that all the details are available with the assessee and one more

opportunity may be granted in the interest of justice to plead the case on merit.

7.

On the other hand, the Ld. Sr. DR supported the order of lower authorities. He would, however, have no objection if the matter is restored to the file of CIT(A) for fresh decision. 8. We have heard both sides and perused the materials on record. The AO

passed the order by making addition of Rs.15,67,775/- on account of fictitious

loss claimed by the assessee. The CIT(A) has upheld the addition due to non-

compliance to the notices issued u/s 250 of the Act. We also find that the order

of CIT(A) is not as per the provisions of sub-section 250(6) of the Act, which

mandates that the order must clearly state the specific points for determination,

the final decision on each point and the rationale for the decision. Considering

the totality of the facts and the discussion made as above, we are of the

considered opinion that the assessee deserves one more opportunity in the

interest of justice to explain its case on merit. In view of these facts, we set aside

the order of CIT(A) and restore the matter to the file of CIT(A) for fresh

adjudication on merit in accordance with law after granting adequate and

reasonable opportunity of being heard of the assessee. The ground is allowed for

statistical purpose.

8.1 We make it clear that we have not expressed our opinion on merit of the

case, which the CIT(A) shall independently decide as per law.

9.

Since we have set aside the order of CIT(A) and remanded it to his file for

fresh adjudication, the other grounds become academic in nature and do not

require adjudication.

10.

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

Order is pronounced on 02.09.2026.

Sd/- Sd/- (SANDEEP GOSAIN) (BIJYANANDA PRUSETH) JUDICIAL MEMBER ACCOUNTANT MEMBER

*Aniket Chand; Sr. PS MUMBAI Date: 02.09.2026 Copy of the Order forwarded to: 1. The Assessee 2. The Respondent 3. The CIT(A) 4. CIT 5. DR/AR, ITAT, MUMBAI 6. Guard File By Order

Assistant Registrar ITAT, MUMBAI

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