PRASAD BABAN JAVRAT,BHAYANDER vs. INCOME TAX OFFICER, MUMBAI

IN THE INCOME TAX APPELLATE TRIBUNAL “C” BENCH, MUMBAI

BEFORE SHRI SAKTIJIT DEY, VICE PRESIDENT AND SHRI GIRISH AGRAWAL, ACCOUNTANT MEMBER

ITA Nos. 2520 to 2522/Mum/2026 (Assessment Year: 2022-23)

Shri Prasad Baban Javrat Income Tax Officer C/702, Shree Ganesh Residency, 304, Piramal Chambers, Lalbaug, L N Patil Road, Indralok Phase, Vs. Mumbai-400 012 Bhayander East, Mumbai-401 105

PAN/GIR No. ADYPJ 1672 N (Appellant) : (Respondent)

Appellant by : Shri Ameya Chalke (Virtually Appear) Respondent by : Shri Ajay Soneji, Sr. DR

Date of Hearing : 08.07.2026 : 28.07.2026 Date of Pronouncement

O R D E R Per Saktijit Dey, Vice President:

The aforesaid appeals by the same assessee arises out of separate orders passed by

National Faceless Appeal Centre (‘NFAC’ for short), Delhi for the assessment year (A.Y.

for short) 2022-23.

2520/Mum/2026 is against imposition of penalty under section 270A of the Act and ITA

No. 2521/Mum/2026 is against imposition of penalty under section 271AAC(1) of the Act.

The brief facts of the case are, the assessee is a resident individual. For the assessment year

under dispute, the assessee filed his return of income on 31-12-2023, declaring income of

Rs.4,78,320/-. The return was initially processed under section 143(1) of the Act by the

2 ITA Nos. 2520 to 2522/Mum/2026 (A.Y.2022-23) Shri Prasad Baban Javrat vs. ITO Centralized Processing Centre (CPC), Bangalore. Subsequently, the return of income was

selected for scrutiny.

notices under section 142(1) of the Act as also under section 143(2) of the Act. As alleged

by the AO, the assessee did not respond to any of the notices. Thus, due to repeated non-

compliance by the assessee, the AO was compelled to invoke powers under section 144 of

the Act and issued a show-cause notice to the assessee, expressing that in the event of

further non-compliance, he would be proceeding to complete the assessment to the best of

his judgment based on materials available on record. Since, the assessee did not comply

with that notice also, the AO proceeded to complete the assessment ex parte to the best of

his judgment. While doing so, he made the following additions: i. Cash deposits added under section 69A of the Act - Rs.27,63,372/-. ii. Addition under section 44AB of the Act - Rs.26,80,007/-. iii. Addition made on account of payment made towards import of goods treated as

unexplained expenditure under section 69C of the Act - Rs.7,09,38,236/-.

learned first appellate authority. However, as observed by learned first appellate authority,

there was delay of 178 days in filing the appeals. Though the assessee furnished an

application seeking condonation of delay, however, learned first appellate authority was

not satisfied with the cause shown. Thus, learned first appellate authority dismissed the

appeal in limine without condoning the delay.

3 ITA Nos. 2520 to 2522/Mum/2026 (A.Y.2022-23) Shri Prasad Baban Javrat vs. ITO 5. In the meanwhile, based on the additions made in the assessment order, penalty

proceedings were initiated under section 270A and 271AAC(1) of the Act, and the AO

ultimately passed the orders imposing penalty under the aforesaid provisions. The penalty

orders were also challenged in appeal before learned first appellate authority. There was

delay in filing of the appeal relating to penalty imposed under section 270A of the Act as

well. While learned first appellate authority dismissed the appeal challenging imposition

of penalty under section 270A of the Act on the ground of delay. The appeal challenging

imposition of penalty under section 271AAC of the Act was dismissed on merits,

upholding the imposition of penalty.

penalty imposed under section 270A of the Act and 271AAC of the Act depends upon the

outcome of the additions made in the quantum proceeding. As discussed earlier, the appeal

arising out of the assessment order was dismissed by learned first appellate authority on

the ground of delay of 178 days. On perusal of the order of learned first appellate authority,

it is noticed that while explaining the cause of delay, the assessee had stated that his mother-

in-law was diagnosed with advanced stage of thyroid cancer and was undergoing treatment.

Therefore, the assessee being the senior member in the family had to take care and this

caused delay in filing the appeal. In our view, the explanation furnished by the assessee

regarding cause of delay coupled with the fact that delay in filing of the appeal was not

inordinate, learned first appellate authority should have considered the issue of

condonation of delay more sympathetically. As could be seen from the facts on record, the

quantum of addition made by the AO which lead to imposition of penalty is astronomical

compared to the income returned by the assessee. As against the returned of income of

4 ITA Nos. 2520 to 2522/Mum/2026 (A.Y.2022-23) Shri Prasad Baban Javrat vs. ITO Rs.4,78,320/-, the AO has determined the income at Rs.7,68,59,935/-, which no doubt is

considerably high in case of an individual.

time. Since the assessee, for whatever may be the reason, went unrepresented before the

AO, and the appeal was dismissed at the threshold due to non-consideration of delay, in

our considered opinion, the assessee deserves an opportunity to contest the addition made

by the AO on merits. In view of the aforesaid, we set aside the order of learned first

appellate authority, dismissing the assessee's quantum appeal with a direction to condone

the delay and decide the appeal on merits after providing due and reasonable opportunity

of being heard to the assessee. The assessee is also directed to co-operate with learned first

appellate authority in finalizing the proceedings. Since, we have restored the quantum

appeal to the file of learned first appellate authority for de novo adjudication on merits, the

orders passed by learned first appellate authority confirming the penalty imposed under

section 270A of the Act and 271AAC of the Act have to be restored back for de novo

adjudication depending upon the outcome of quantum appeal. Accordingly, the orders

passed by learned first appellate authority, confirming the penalty imposed under section

270A and 271AAC of the Act are hereby set aside to his file for de novo adjudication.

Order pronounced in the open court on 28.07.2026

Sd/- Sd/-

(Girish Agrawal) (Saktijit Dey) Accountant Member Vice President Mumbai; Dated : 28.07.2026 Roshani, Sr. PS

5 ITA Nos. 2520 to 2522/Mum/2026 (A.Y.2022-23) Shri Prasad Baban Javrat vs. ITO

Copy of the Order forwarded to : 1. The Appellant 2. The Respondent 3. The CIT(A) 4. CIT - concerned 5. DR, ITAT, Mumbai 6. Guard File BY ORDER,

(Dy./Asstt. Registrar) ITAT, Mumbai