MAHENDRA KISHORILAL JAIN,MAHARASHTRA, MUMBAI vs. INCOME TAX OFFICER, WARD 25(2)(1), MUMBAI

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ITA 3788/MUM/2026Status: DisposedITAT Mumbai31 July 2026AY 2016-177 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal condoned the delay, citing sufficient cause and the need for substantial justice over technicalities. The matter was restored to the Assessing Officer for de novo adjudication, subject to the assessee paying a nominal cost.

What were the facts?

The assessee filed an appeal with a significant delay of 576 days, attributing it to a lack of knowledge of taxation procedures and issues with communication from tax consultants. Both the assessment and first appellate orders were passed ex parte.

What were the issues?

The primary issues were the condonation of a significant delay in filing the appeal and the validity of ex parte assessment and appellate orders.

Which sections of the Income-tax Act were involved?

Section 147,Section 144B,Section 69

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, MUMBAI BENCHES, MUMBAI

Before: SMT. BEENA PILLAI, HON’BLE & SHRI ARUN KHODPIA, HON’BLE

Pronounced: 31/07/2026

आदेश / ORDER PER SMT. BEENA PILLAI, JUDICIAL MEMBER:

Present appeal is filed by assessee against the order dated 28/06/2024 passed by NFAC, Delhi, [hereinafter referred to as “Ld.CIT(A)”] for A.Y. 2016-17, on the following grounds of appeal:-

“1) The Learned Commissioner of Income Tax (Appeals) erred in confirming the action of the Ld. AO in initiating the reassessment proceedings by invoking the provisions of Section 147 r.w.s 144B of the Income Tax Act, 1961 (“the Act”) 1

2) The Learned AO at Assessment Unit, ITD has erred in considering Rs. 1,65,00,000/- towards purchase of immovable property as unexplained investments U/s 69 of the Income Tax Act, 1961.”

2.

At the outset, we notice that there is a delay of 576 days in filing the present appeal before the Tribunal. The assessee has filed an application for condonation of delay supported by a duly sworn affidavit explaining the reasons which prevented him from filing the appeal within the prescribed period. On perusal of the affidavit, we note that the assessee has stated that he is an individual with no knowledge of taxation or the online procedures of the Income-tax Department and was under the bona fide belief that his tax consultant would take care of the assessment as well as the appellate proceedings. It has been averred that all notices during the assessment proceedings were issued electronically and no physical notices were received by the assessee, resulting in the assessment being completed ex parte u/s 147 r.w.s. 144 of the Act. Thereafter, upon becoming aware of the assessment order, the assessee engaged a tax consultant and preferred an appeal before the Ld. CIT(A), believing that the consultant would monitor all future notices and communications.

2.1. It is further stated in the affidavit that the assessee came to know about the ex parte appellate order only when his bank account was attached by the Department on 07/03/2026. Upon making enquiries, he learnt on 20/03/2026 that the Ld. CIT(A) had already passed an ex parte order dated 28/06/2024. The assessee has explained that although Form No. 35 contained his email address, the notices appear to have been sent to the email address of the tax consultant. The consultant had responded to one of the notices by seeking an adjournment; however, according to the affidavit, the remaining notices had gone to the junk folder of the email account and consequently remained unattended. Immediately thereafter, the assessee engaged another tax consultant, who advised him to file the present appeal before the Tribunal, which was thereafter filed at the earliest possible opportunity. It has also been affirmed that the delay was neither deliberate nor intentional but occurred due to bona fide circumstances beyond the assessee's control.

2.2. It is noted that there is no malafide intention on behalf of assessee in not filing the present appeal before this Tribunal, within the period of limitation. Nothing to establish any such intention has been filed by the revenue before this Tribunal. In our opinion there was sufficient cause for condoning the delay as observed by Hon’ble Supreme Court in case of Collector Land Acquisition Vs. Mst. Katiji & Ors., reported in (1987) 167 ITR 471 in support of his contentions. 2.3. We refer to the Third Member decision of Hon’ble Chennai, ITAT in the case of People Education & Economic Development Society Vs/ ITO reported in 100 ITD 87 (TM) (Chen), wherein it was held that "when substantial justice and technical consultation are pitted against each other, the cause of substantial justice deserves to be preferred for the other side cannot claim to have vested right in injustice being done because of non-deliberate delay". 2.4. It is also necessary to ascertain whether there was excessive or inordinate delay in the present facts of the case. Hon’ble Madras High Court in the case of CIT vs. K.S.P. Shanmugavel Nadai and Ors. (153 ITR 596) considered a situation of condonation of delay and held that where there exists a reasonable cause, period of delay may not be a relevant factor. Hon’ble Madras High Court relying on this principle had condoned the delay of nearly 21 years. 2.5. We also refer to the decision of Co-ordinate Bench of this Tribunal in the case of Bajaj Hindusthan Ltd. v. Jt. CIT (AT) (277 ITR 1) wherein this Tribunal has condoned the delay of 180 days when the appeal was filed after the pronouncement of the Judgment of the Hon’ble Supreme Court. It was noted that, the revenue had not file any counter-affidavit opposing the application of the assessee for condonation of delay. The Hon’ble Supreme Court under similar circumstances had noted in case of Mrs. Sandhya Rani Sarkar vs. Smt. Sudha Rani Debi (AIR 1978 SC 537) held that non-filing of affidavit in opposition to an application for condonation of delay may be a sufficient cause to condone the delay. 2.6. In the present facts of the case, we note that no such affidavit has been furnished by the revenue countering the condonation application of the assessee. At this juncture, we also take assistance and support from the observation of Justice Krishna Iyer wherein he has quoted at various occasion while dealing with technicalities that "any interpretation that alludes substantive justice is not to be followed and that substantive justice must always prevail over procedural technicalities". Similar is the observation by Hon’ble Supreme Court in the case of Collector Land Acquisition Vs. Mst. Katiji & Ors., reported in (1987) 167 ITR 471. 3. Having considered the averments made in the affidavit, which have not been controverted by the Revenue by placing any material to the contrary, we are satisfied that the assessee has demonstrated sufficient cause for not preferring the appeal within the period prescribed under the Act. It is well settled that where the explanation furnished is bona fide and does not indicate any deliberate negligence or mala fide intention, a liberal approach should be adopted while considering an application for condonation of delay in order to advance substantial justice. Accordingly, in the facts and circumstances of the present case, we condone the delay of 576 days in filing the appeal and admit the same for adjudication on merits.

4.

Considering the facts and circumstances of the case, particularly the reasons explained by the assessee for non- compliance and the fact that both the assessment order as well as the first appellate order have been passed ex parte, we are of the considered view that the interest of substantial justice would be served by affording the assessee one final opportunity to substantiate her claim. However, the repeated non-participation before the lower authorities has resulted in avoidable litigation and wastage of judicial time. Therefore, while restoring the matter, it is considered appropriate to impose a nominal cost.

4.1. Accordingly, subject to the assessee depositing a sum of ₹5,000 with the Legal Aid Cell of the Hon'ble Bombay High Court within 30 days from the date of receipt of this order and furnishing proof of such payment before the Assessing Officer, we set aside the impugned orders of the authorities below and restore the matter to the file of the Ld.AO for de novo adjudication. The Ld. AO shall examine the issues afresh after considering the evidence that may be produced by the assessee, afford a reasonable and effective opportunity of being heard, and thereafter pass a speaking order in accordance with law. The assessee shall extend full cooperation and furnish all such details and evidences as may be called for by the Ld. AO. Subject to the above direction regarding payment of costs, the grounds are allowed for statistical purposes.

Accordingly, the grounds raised by the assessee are allowed for statistical purposes.

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

Order pronounced in the open court on 31/07/2026.

Sd/- Sd/- ARUN KHODPIA BEENA PILLAI ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai Dated: 31/07/2026 SC, Sr. P.S.

Copy to: MAHENDRA KISHORILAL JAIN, 705, 7TH FLOOR, ASHIRWAD 1 BUILDING, 10TH KHETWADI,, MUMBAI-400004, MAHARASHTRA

INCOME TAX OFFICER, WARD 25(2)(1), KAUTILYA BHAVAN, BANDRA (EAST), 2 MUMBAI, MUMBAI-400051, MAHARASHTRA

3 THE PCIT / CIT, 4 THE D.R., ITAT, MUMBAI BENCH 5 GUARD FILE

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