AFZAL PASHA,BENGALURU vs. INCOME TAX OFFICER, WARD 3(3)(1), BENGALURU

PER PRASHANT MAHARISHI, VICE PRESIDENT 1. This appeal has been filed by Mr. Afzal Pasha [assessee/appellant] against the appellate order dated 9 September 2025 passed by the learned Commissioner of Income Tax (Appeals), whereby the assessee’s appeal was dismissed on the ground of delay. The assessee had filed that appeal against the assessment order passed by the Assistant Commissioner of Income Tax, Circle 3(3)(1), Bengaluru [Assessing Officer/AO], under section 147 read with section 144 of the Income Tax Act. 2. The records before us show that the appeal filed by the assessee has been delayed by 44 days. The assessee received the appellate order on 9 September 2025, as stated in Form No. 36 filed before us; however, the appeal was filed only on 13 January 2026. The assessee has filed an application seeking condonation of delay, stating that the delay occurred due to circumstances beyond his control. The appellant is an individual assessee and lacks adequate technical knowledge of income tax laws and appellate procedures. After receiving the order of the learned CIT(A), he searched for a suitable and competent professional consultant to advise and represent him before the Hon’ble ITAT,

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Bengaluru. Given the complexity of the issues involved, and with a bona fide intention to ensure proper and effective representation, he consulted various professionals, which caused the delay. After engaging the present authorised representative and examining the matter, the appeal was prepared and filed without any further delay. The delay, therefore, arose from a bona fide and reasonable cause, and the appellant acted diligently and in good faith. No prejudice would be caused to the Revenue if the delay is condoned, whereas the appellant would suffer grave hardship and irreparable loss if the appeal is rejected on technical grounds. It is settled law that substantial justice should prevail over technicalities and that matters should be decided on merits. 3. The assessee’s representative reiterated the submissions made in the petition. 4. The learned Departmental Representative submitted that the assessee had not shown any reasonable or sufficient cause for the delay in filing the appeal and, therefore, the delay should not be condoned. 5. We have carefully considered the rival contentions and find that the delay in filing the appeal is only 44 days. The delay occurred because the assessee was not conversant with the procedure for filing appeals before the Tribunal and, in view of the substantial demand involved, was searching for a Chartered Accountant or an advocate to represent him. After consulting various professionals, the assessee filed the appeal before us. Considering the assessee’s lack of familiarity with the relevant procedures, we are satisfied that there was sufficient cause for the delay and that the appeal should be heard on merits, as the delay was bona fide. Accordingly, we condone the delay and admit the assessee’s appeal. 6. Briefly, information from the Insight Portal showed that the assessee was listed as a non-filer for AY 2016-17 despite substantial transactions. As no return was filed under section 139(1), the transactions remained unverifiable. The assessment was therefore reopened by notice under section 148 dated 11 March 2023, after an order under section 148A(d) on the same date; no return was filed in response. The assessee furnished only partial details on 24 November 2023 and did not substantiate the source of funds. On notice under section 133(6), Brigade Enterprises Limited provided the sale deed and accounts showing land cost of Rs.31,50,000, construction cost of Rs.35,51,200, and additional charges of Rs.4,75,951, aggregating to Rs.71,77,151, which remained unexplained. The Insight Portal also showed salary of Rs.1,94,246 and receipt under section 195 of Rs.635. By show-cause notice dated 12 February 2024, the assessee was asked why Rs.71,77,151 should not be treated as unexplained investment and why salary income of Rs.1,94,246 should not be added. In reply, the assessee submitted Axis Bank account and loan details, salary certificate, Brigade Enterprises letter, Form 16, and home-loan no-dues certificate. These showed employment with Axis Bank since 5 January 2013, monthly salary of AED 19,380,

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and a loan of Rs.35,00,000 from Axis Bank during FY 2015-16; another loan of Rs.26,31,315 was taken only in FY 2020-21. 7. The AO held that the assessee failed to explain the source of the remaining funds used to purchase the property and added Rs.36,77,151 under section 69 read with 115BBE. He also added salary perquisites of Rs.97,097 from Axis Bank Ltd. and receipts of Rs.635 subject to TDS under section 195. The assessment order was passed on 28 February 2024 under section 147 read with section 144 of the Act. 8. The assessee filed an appeal before the CIT(A) against the assessment order dated 28 February 2024. The order was served on 28 February 2024, but the appeal was filed only on 7 February 2025, resulting in a delay of about one year. 9. The assessee explained that he had updated his email ID on the Income Tax Portal on 14 March 2023 to afzal.pashaadro@gmail.com, but the assessment order dated 28 February 2024 under section 147 was not served on that updated email ID. Consequently, he was unaware of the demand and could not file the appeal by the due date of 29 March 2024. He became aware of the order only after receiving an email regarding refund adjustment. As he was unfamiliar with income-tax appeal proceedings, he needed time to understand the matter and engage a professional consultant. He therefore requested CIT(A) to admit the appeal and decide it on merits. 10. The learned CIT(A) found no sufficient cause for the delay in filing the appeal. He observed that the appeal was filed nearly one year after service of the order passed under section 147 read with section 144/144B of the Act. The reasons given for condonation were general and were not supported by any convincing explanation, facts, or documentary evidence. Since the appellant failed to discharge the onus of showing a plausible, specific, and substantiated reason for the inordinate delay, the learned CIT(A) held that the delay could not be condoned. 11. We have heard the rival contentions of Ms. Smitha R, Chartered Accountant, for the assessee, and Shri Ganesh R. Ghale, Standing Counsel for the Department. The learned CIT(A) dismissed the appeal by refusing to condone the delay. The material on record shows that the assessment order dated 28 February 2024 was not served on the assessee’s updated and valid email address furnished on the portal, and the assessee states that he did not receive the order. The assessee became aware of the assessment order only when recovery of tax was initiated. It is not the case of the learned CIT(A) that the assessee had received the assessment order or that he had not changed or updated his email address. Although the assessee had mentioned an email ID in Form No. 35, there is no prohibition against changing the email ID subsequently when circumstances so require, nor has any requirement to file a revised Form No. 35 been shown to us. In these circumstances, there was uncertainty regarding the way the revised email ID was to be intimated to the learned CIT(A). We therefore find that the

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assessee did not receive the assessment order despite updating his email address on the portal and came to know of it only upon recovery action. Accordingly, there was sufficient cause for the delayed filing of the appeal before the learned CIT(A). We therefore reverse the order of the learned CIT(A) refusing to condone the delay. 12. Ideally, the appeal should have been restored to the file of the learned CIT(A). However, since the assessment order was passed under section 144 of the Income Tax Act, the learned CIT(A) would also have remanded the matter to the Assessing Officer. We therefore put the matter to the file of the learned Assessing Officer, with directions to the assessee to substantiate his claim by producing cogent evidence. The Assessing Officer shall examine such evidence and pass a fresh order on merits after giving the assessee an opportunity of being heard, if requested. 13. In the result, the appeal filed by the assessee is allowed for statistical purposes.

Order pronounced in the open court on 27th JULY 2026

Sd/- (PRASHANT MAHARISHI) VICE PRESIDENT

Bangalore,

Dated, the 27th July 2026.

*VM* / DSM Copy to: 1. Appellant 2. Respondent 3. CIT 4. DR, ITAT, Bangalore 5. CIT(A) By order

Assistant Registrar, ITAT, Bangalore

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