MOHMED SAFI ABDULREHMAN SHEIKH,VADODARA vs. DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE 2(1)(1), VADODARA

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ITA 705/AHD/2026Status: DisposedITAT Ahmedabad13 August 2026AY 2016-201712 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal condoned the delay in filing appeals in several cases, directing the CIT(A) to adjudicate the matters on merits. In one instance, a penalty was set aside as the quantum addition on which it was based was already set aside.

What were the facts?

The assessee filed appeals against orders of the CIT(A) for various assessment years. The CIT(A) had dismissed some appeals on grounds of delay without adjudicating on merits, while in one case, a penalty was set aside because the underlying quantum addition was also set aside.

What were the issues?

Whether the CIT(A) erred in dismissing appeals due to delay without considering condonation requests and whether penalties can survive if the underlying additions are set aside.

Which sections of the Income-tax Act were involved?

Section 271(1)(c),Section 144,Section 147,Section 143(3),Section 270A

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “D” BENCH, AHMEDABAD

Before: SHRI SANJAY GARG & SHRI NARENDRA PRASAD SINHA

For Respondent: DR & Sh
Hearing: 17.06.2026Pronounced: 13.08.2026

PER NARENDRA PRASAD SINHA, ACCOUNTANT MEMBER:

These six appeals are filed by the Assessee against the separate orders of National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as “CIT(A)”] for different years as under:

Sr. ITA No. Assessment Year Proceeding Date of CIT(A) No. (A.Y) order.

1 704/Ahd/2026 2012-13 271(1)(c) 08.01.2026

ITA Nos. 704, 705, 719, 720, 721 &722/Ahd/2026 Mohmed Safi Abdulrehman Sheikh Vs DCIT, A.Ys. 2012-13, 2015-16, 2016-17 & 2018-19 2 2 705/Ahd/2026 2016-17 144 r.w.s 05.01.2026 263

3 719/Ahd/2026 2015-16 147 r.w.s 05.01.2026 144

4 720/Ahd/2026 2015-16 271(1)(c) 05.01.2026

5 721/Ahd/2026 2018-19 143(3) 05.01.2026

6 722/Ahd/2026 2018-19 270A 05.01.2026

2.

We have heard Sh. Sunil Talati, Ld. AR of the assessee and Sh. Akhilendra Pratap Yadav, CIT-DR & Sh. Rameshwar Prasad Meena, SR- DR appearing for the Revenue. As the issues involved in the above appeals were identical, all the matters were heard together and are being disposed of vide this common order for the sake of convenience.

ITA No. 704/Ahd/2026, A.Y. 2012-13

3.

The grounds taken by the assessee in this appeal are as under:

1) That the Ld. CIT(A) erred in law and on facts in dismissing the Appellant's appeal against the penalty of Rs.44,73,997/- being order passed u/s 271(1)(c) of the Act without considering the affidavit for condonation of delay duly filed in response to the show cause notice dated 10th December 2025. The affidavit explaining the delay which was not viewed on income tax portal by the Ld. CIT(A), and therefore, the impugned order passed ignoring the same is arbitrary and liable to be quashed. 2) That the order passed by the Ld. CIT(A) is bad in law as it suffers from gross violation of the principles of natural justice, inasmuch as the affidavit for condonation of delay duly filed along with prayer for delay in filing of appeal by

ITA Nos. 704, 705, 719, 720, 721 &722/Ahd/2026 Mohmed Safi Abdulrehman Sheikh Vs DCIT, A.Ys. 2012-13, 2015-16, 2016-17 & 2018-19 3 the Appellant, were not considered and were not dealt with in the impugned order. In view of the same, such an order passed is prayed to be set aside. 3) That the Ld. CIT(A) erred in law and on facts in not adjudicaling the appeal on merits inspite of statement of facts and details were submitted along with appeal. In view of the same, the Ld. CIT(A) should decide the matters on merits rather than on technical grounds. 4) Your appellant craves leave to add, alter and/or to amend all or any of the grounds before the final hearing of appeal.

4.

Shri Sunil Talati, the Ld. AR of the assessee submitted that the AO had imposed penalty of Rs. 44,73,997/- in respect of addition of bogus purchase of Rs. 1,42,03,168/- made in the assessment proceeding u/s. 254 r.w.s 143(3) of the Act dated 28.09.2021. He explained that the Co- ordinate bench of this Tribunal vide order in ITA No. 2339/Ahd/2025 dated 27.03.2026 has set aside the quantum appeal of the assessee to the file of the AO for fresh adjudication. Under the circumstances, the penalty imposed by the AO does not survive.

5.

Per contra, the Ld. DR fairly conceded that the quantum addition stands set aside to the file of the AO. He, therefore, requested that the present matter may also be set aside to the file of the AO.

6.

We have considered the rival submissions and perused the material available on record. The penalty of Rs. 44,73,997/- was levied under section 271(1)(c) of the Act in respect of the addition of alleged bogus purchases of Rs. 1,42,03,168/- made in the assessment framed under section 254 read with section 143(3) of the Act dated 28.09.2021. It is an admitted position that the Co-ordinate Bench of the Tribunal, vide its order in ITA No. 2339/Ahd/2025 dated 27.03.2026, has set aside the quantum issue relating to the aforesaid addition to the file of the Assessing Officer for fresh adjudication in accordance with law. Once the very foundation of

ITA Nos. 704, 705, 719, 720, 721 &722/Ahd/2026 Mohmed Safi Abdulrehman Sheikh Vs DCIT, A.Ys. 2012-13, 2015-16, 2016-17 & 2018-19 4

the impugned penalty, namely the quantum addition, has been set aside and restored for de novo adjudication, the penalty levied thereon cannot survive independently. Accordingly, the impugned penalty order is set aside. However, it is clarified that the Assessing Officer shall be at liberty to initiate and conclude penalty proceedings afresh, if so warranted, depending upon the outcome of the fresh assessment proceedings and in accordance with law.

7.

In the result, the appeal of the assessee is allowed.

ITA No. 719 & 720/Ahd/2026: A.Y. 2015-16

8.

These two appeals pertains to assessment order and penalty u/s 271(1)(c) of the Act respectively for the A.Y. 2015-16. The grounds taken in these appeals are as under:

719/Ahd/2026

1) The Ld. CIT(A) erred in law and on facts in dismissing the Appellant's appeal against the assessment order u/s 147 r.w.s. 144 r. w.s. 144B of the Act and thereby confirming the addition of Rs 7,26,34,598/without considering the affidavit for condonation of delay duly filed in response to the show cause notice dated 10th December 2025. The affidavit explaining the delay which was not viewed on income tax portal by the Ld. CIT(A), and therefore, the impugned order passed ignoring the same is arbitrary and liable to be quashed 2) That the order passed by the Ld. CIT(A) is bad in law as it suffers from gross violation of the principles of natural justice, inasmuch as the affidavit for condonation of delay duly filed along with prayer for delay in filing of appeal by the Appellant, were not considered and were not dealt with in the impugned order In view of the same, such an order passed is prayed to be set aside 3) That the Ld. CIT(A) erred in law and on facts in not adjudicating the appeal on merits inspite of statement of facts and details were submitted along with appeal In view of the same, the Ld. CIT(A) should decide the matters on merits rather than on technical grounds

ITA Nos. 704, 705, 719, 720, 721 &722/Ahd/2026 Mohmed Safi Abdulrehman Sheikh Vs DCIT, A.Ys. 2012-13, 2015-16, 2016-17 & 2018-19 5

Without prejudice to the above grounds of appeals, your appellant is taking following legal grounds of appeal no 4 4) That the Ld. CIT(A) erred in law and on facts in confirming the impugned assessment order though the earlier notice u's 148 of the Act as well as subsequent notice u/s 148 of the Act along with order u/s 148A(d) under the new regime for the A.Y 2015-16 was barred by limitation and not saved by TOLA The reassessment being without jurisdiction and time-barred deserves to be quashed 5) Your appellant craves leave to add, alter and/or to amend all or any of the grounds before the final hearing of appeal.

720/Ahd/2026

1) The Ld. CIT(A) erred in law and on facts in dismissing the Appellant's appeal against the penalty of Rs. 2.22,56.204/-being order passed u/s 271(1)(c) of the Act, without considering the affidavit for condonation of delay duly filed in response to the show cause notice dated 10th December 2025 The affidavit explaining the delay which was not viewed on income tax portal by the Ld. CIT(A). and therefore, the impugned order passed ignoring the same is arbitrary and liable to be quashed

2) That the order passed by the Ld. CIT(A) is bad in law as it suffers from gross violation of the principles of natural justice, inasmuch as the affidavit for condonation of delay duly filed along with prayer for delay in filing of appeal by the Appellant, were not considered and were not dealt with in the impugned order. In view of the same, such an order passed is prayed to be set aside 3) That the Ld. CIT(A) erred in law and on facts in not adjudicating the appeal on merits inspite of statement of facts and details were submitted along with appeal In view of the same, the Ld. CIT(A) should decide the matters on merits rather than on technical grounds. Without prejudice to the above grounds of appeals, your appellant is taking following legal grounds of appeal no 4. 4) That the Ld. CIT(A) erred in law and on facts in confirming the impugned assessment order, though the earlier notice u/s 148 of the Act as well as subsequent notice u/s 148 of the Act along with order u/s 148A(d) under the new regime for the A.Y. 2015-16 was barred by limitation and not saved by TOLA. The reassessment being without jurisdiction and time-barred deserves to be quashed and, consequently, the penalty levied u/s 271(1)(c) is also liable to be deleted. 5) Your appellant craves leave to add, alter and/or to amend all or any of the grounds before the final hearing of appeal

ITA Nos. 704, 705, 719, 720, 721 &722/Ahd/2026 Mohmed Safi Abdulrehman Sheikh Vs DCIT, A.Ys. 2012-13, 2015-16, 2016-17 & 2018-19 6 9. The brief facts of the case are that the assessee had filed his return of income for A.Y. 2015-16 on 21.05.2016 declaring total income of Rs.86,36,600/-. The case of the assessee was reopened on the basis of information received by the AO regarding purchase of immovable property and car for Rs. 3,53,77,156/-, accepting unsecured loan and deposits of Rs. 2,70,01,905/-, non-deduction of TDS etc. and a notice u/s. 148 of the Act was issued on 30.07.2022. Before the AO, no compliance was made by the assessee. The AO had, therefore, completed the assessment ex- parte on 27.05.2023 at total income of Rs. 8,87,21,320/-. The assessee had filed an appeal before the first appellate authority belatedly with a delay of 892 days, which was not condoned by the Ld. CIT(A) and the appeal of the assessee was dismissed without adjudicating the grounds taken by the assessee on merits. The Ld. AR of the assessee explained that the assessee is a senior citizen and was suffering from multiple disease and was hospitalized on several occasions. As a result, he could neither comply before the AO nor could he file the appeal before the Ld. CIT(A) in time. He submitted that there was a similar delay in the A.Y. 2012-13 in the quantum addition, which was condoned by the Ld. Tribunal and the matter was set aside to the AO for fresh adjudication. He further submitted that proceeding initiated u/s. 148 of the Act for this year was barred by limitation and, therefore, the Ld. CIT(A) was not correct in dismissing the appeal on account of delay without adjudicating the grounds taken by the assessee on merits. Per contra, the Ld. DR supported the order of the lower authorities.

10.

We have carefully considered the material available on record and the submissions of the assessee. It is an undisputed fact that the Ld. CIT(A) had dismissed the appeal of the assessee solely on the ground of

ITA Nos. 704, 705, 719, 720, 721 &722/Ahd/2026 Mohmed Safi Abdulrehman Sheikh Vs DCIT, A.Ys. 2012-13, 2015-16, 2016-17 & 2018-19 7 delay of 892 days without adjudicating any of the grounds raised by the assessee. The explanation offered by the assessee is that he is a senior citizen and was suffering from multiple ailments and had undergone hospitalization on several occasions, which prevented him from pursuing the proceedings diligently. From the materials brought on record, it is evident that the assessee had a heart attack and had angioplasty done. Thereafter, he suffered from severe Covid-19 infection requiring ventilator support for considerable period of time. He was under prolonged hospitalization and continuous medical consultation. The Revenue has not placed any material on record to demonstrate that the explanation furnished by the assessee was either false or lacking in bona fides. It is a settled proposition of law that the expression "sufficient cause" employed in the context of condonation of delay deserves a liberal construction where the explanation is bona fide and refusal to condone the delay would result in denial of an effective opportunity of hearing. It has been held by Hon’ble Gujarat High Court in the case of Vareli Textiles Industries [284 ITR 238(Guj.)] that meritorious case should not be thrown out on the ground of delay. We find merit in the submission of the learned AR that one of the grounds raised by the assessee challenges the very validity of the reassessment proceedings on the plea that the notice issued under section 148 of the Act was barred by limitation. Such a ground goes to the root of the jurisdiction assumed by the Assessing Officer and deserves adjudication on merits. Without expressing any opinion on the correctness of the said contention, we are of the considered opinion that the learned CIT(A) ought to have examined the explanation for delay in the backdrop of the facts and circumstances of the case and should have proceeded to adjudicate the appeal on merits. We further note that in the assessee's own case for A.Y. 2012-13, the Coordinate Bench had condoned a similar

ITA Nos. 704, 705, 719, 720, 721 &722/Ahd/2026 Mohmed Safi Abdulrehman Sheikh Vs DCIT, A.Ys. 2012-13, 2015-16, 2016-17 & 2018-19 8 delay and restored the matter for fresh adjudication. Although each assessment year is separate and the facts relating to condonation must be independently examined, the existence of such an order lends support to the bona fides of the explanation advanced by the assessee.

11.

Considering the totality of the facts and circumstances, particularly the advanced age of the assessee, the medical reasons explained before us, and the existence of jurisdictional grounds challenging the reassessment proceedings, we are satisfied that the assessee has shown sufficient cause for the delay in filing the appeal before the learned CIT(A). In our considered opinion, the ends of justice would be met by condoning the delay and restoring the matter to the file of the learned CIT(A) for disposal afresh. Accordingly, we set aside the impugned order of the learned CIT(A), condone the delay in filing the appeal before him, and restore the matter to his file with a direction to adjudicate all the grounds raised by the assessee, including the jurisdictional grounds relating to the validity of the reassessment proceedings, by passing a speaking order in accordance with law after affording adequate opportunity of hearing to the assessee. The assessee is also directed to make compliance in the course of set aside proceeding and shall not seek unnecessary adjournments.

12.

Since the quantum appeal of the assessee has been set aside, the appeal against the penalty u/s 271(1)(c) of the Act is also set aside to the file of Ld. CIT(A) for fresh adjudication. As the penalty appeal is consequential to the quantum proceedings, the learned CIT(A) shall decide the penalty appeal in accordance with law, keeping in view the outcome of the quantum appeal.

ITA Nos. 704, 705, 719, 720, 721 &722/Ahd/2026 Mohmed Safi Abdulrehman Sheikh Vs DCIT, A.Ys. 2012-13, 2015-16, 2016-17 & 2018-19 9 13. In the result, both the appeals of the assessee are allowed for statistical purpose.

ITA No. 705/Ahd/2026: A.Y. 2016-17

14.

This appeal pertains to assessment order passed u/s 144 r.w.s 263 of the Act for the A.Y.2016-17. In this case also, the Ld. CIT(A) did not condone the delay of 220 days in filing of the appeal by the assessee and had dismissed the appeal. Consequently, the grounds raised by the assessee on merits were not adjudicated. We find that the issue involved in the present appeal is identical to that considered by us in the assessee's own case for A.Y. 2015-16 in ITA No. 719/Ahd/2026. For the reasons recorded therein, we are satisfied that the assessee has shown sufficient cause for the delay in filing the appeal before the learned CIT(A). Accordingly, following our decision in the aforesaid appeal, we condone the delay of 220 days in filing of the appeal before the learned CIT(A), set aside the impugned order, and restore the matter to the file of the learned CIT(A) with a direction to adjudicate all the grounds raised by the assessee on merits by passing a speaking order in accordance with law, after affording adequate opportunity of being heard to the assessee. The assessee is also directed to make compliance in the set-aside appellate proceedings and should not seek unnecessary adjournments.

15.

Accordingly, the appeal of the assessee is allowed for statistical purposes.

ITA Nos. 721/Ahd/2026 & 722/Ahd/2026: A.Y. 2018-19

ITA Nos. 704, 705, 719, 720, 721 &722/Ahd/2026 Mohmed Safi Abdulrehman Sheikh Vs DCIT, A.Ys. 2012-13, 2015-16, 2016-17 & 2018-19 10 16. These two appeals pertain to assessment order and penalty u/s 270A of the Act respectively for the A.Y. 2018-19. Both the appeals were dismissed by the Ld. CIT(A) on the ground of delay and without adjudicating the issues on merits. The brief facts are that the assessee filed the return of income for A.Y. 2018-19 on 31.10.2018 declaring Nil income. The case was selected for complete scrutiny under CASS. During the course of assessment proceedings, the assessee did not comply with the notices issued by the Assessing Officer. Consequently, the Assessing Officer completed the assessment ex-parte vide order dated 12.03.2021 determining the total income at Rs.52,45,300/-. While completing the assessment, the AO also initiated penalty proceedings under section 270A of the Act. Subsequently, a separate penalty order u/s 270A of the Act dated 12.01.2022 was passed imposing a penalty of Rs. 5,55,762/-.

17.

Aggrieved by the assessment order as well as the penalty order, the assessee had preferred separate appeals before the learned CIT(A). However, there was a delay of 1,698 days in filing the quantum appeal and of 1,392 days in filing the penalty appeal. The learned CIT(A), without condoning the delay, dismissed both the appeals in limine. Before us, the Ld. AR submitted that the reasons for the delay in this year were identical to as in the earlier years. The learned DR, on the other hand, supported the impugned orders of the lower authorities.

18.

We have considered the rival submissions and perused the material available on record. We find that the issue relating to condonation of delay in the present appeals is substantially similar to that considered by us for A.Y. 2015-16 in ITA No. 719/Ahd/2026. For the reasons recorded therein, we are of the considered view that the explanation furnished by the assessee constitutes sufficient cause for the delay in filing both the

ITA Nos. 704, 705, 719, 720, 721 &722/Ahd/2026 Mohmed Safi Abdulrehman Sheikh Vs DCIT, A.Ys. 2012-13, 2015-16, 2016-17 & 2018-19 11 appeals before the learned CIT(A). Accordingly, the Ld. CIT(A) is directed to condone the delay and adjudicate the grounds taken by the assessee on merits. However, considering the inordinate delay on the part of the assessee in pursuing the statutory remedies and to ensure that the indulgence shown by this Tribunal is not treated as a matter of course, the assessee is directed to deposit cost of Rs.10,000/- (Rupees Ten Thousand only) with the Prime Minister's National Relief Fund within 30 days from the date of receipt of this order. The assessee shall furnish proof of such payment before the learned CIT(A). In the event of failure to deposit the aforesaid cost within the stipulated period, the benefit of this order restoring the appeals shall stand withdrawn and the orders of the learned CIT(A) dismissing the appeals on the ground of limitation shall revive automatically, without requiring any further order. Subject to compliance with the above condition, the learned CIT(A) shall adjudicate the appeals on merits in accordance with law after affording adequate opportunity of hearing to the assessee.

19.

Accordingly, the impugned orders of the learned CIT(A) are set aside and both the matters are restored to his file with a direction to adjudicate the respective appeals on merits by passing reasoned and speaking orders in accordance with law after affording adequate opportunity of hearing to the assessee. Since the penalty appeal is consequential to the quantum proceedings, the learned CIT(A) shall decide the penalty appeal in accordance with law, keeping in view the outcome of the quantum appeal. The assessee is also directed to make compliance before the Ld. CIT(A) and bring on evidences and materials in support of the grounds as taken. If necessary, the Ld. CIT(A) may call

ITA Nos. 704, 705, 719, 720, 721 &722/Ahd/2026 Mohmed Safi Abdulrehman Sheikh Vs DCIT, A.Ys. 2012-13, 2015-16, 2016-17 & 2018-19 12 for a remand report of the AO on the fresh evidences filed before him and, thereafter, decide the matter as per law.

20.

In the result, both the appeals of the assessee are allowed for statistical purpose.

Order pronounced in the Court on 13/08/2026 at Ahmedabad.

Sd/- Sd/- (SANJAY GARG) (NARENDRA PRASAD SINHA) Judicial Member Accountant Member Dated – 13th August, 2026 Neelesh, Sr. PS (True Copy) आदेश की �ितिलिप अ�ेिषत/Copy of the Order forwarded to : 1. अपीलाथ� / The Appellant 2. ��थ� / The Respondent. 3. संबंिधत आयकर आयु� / Concerned CIT 4. आयकर आयु�(अपील) / The CIT(A) 5. िवभागीय �ितिनिध, आयकर अपीलीय अिधकरण / DR, ITAT, 6. गाड� फाईल /Guard file. आदेशानुसार/BY ORDER, उप/सहायक पंजीकार (Dy./Asstt.Registrar) आयकर अपीलीय अिधकरण, अहमदाबाद / ITAT, Ahmedabad

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