ABHISHEK GAUTHAMCHAND JAIN,MUMBAI vs. CIRCLE 24(1), MUMBAI, LALBAUG

IN THE INCOME-TAX APPELLATE TRIBUNAL, MUMBAI “A” BENCH, MUMBAI BEFORE SHRI ANIKESH BANERJEE, JUDICIAL MEMBER AND SHRI BIJAYANANDA PRUSETH, ACCOUNTANT MEMBER ITA No.2513/MUM/2026 (AY: 2016-17) Abhishek Gauthamchand Jain vs. DCIT Circle 24(1) 1401, Bldg no. 5, Raheja Classique, 408, 4th Floor, Piramal Chambers, Infinity Mall, Andheri (W), Azad Lalbaug, Parel, Mumbai-400 012. Nagar S.O (Mumbai), 400053. PAN/GIR No: ALFPJ5948L (Appellant) (Respondent) Assessee by Shri Amit Jhaveri, CA Revenue by Shri Surendra Mohan (Sr. DR) (Virtual) Date of Hearing 23.07.2026 Date of Pronouncement 24.07.2026 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 National Faceless

Appeal Centre [in short, ‘CIT(A)’], dated 23.05.2025 for the assessment year

(AY) 2016-17.

“1. Ground No 1: Validity of reassessment and enhancement

On the facts and in the circumstances of the case and in law, the learned CIT(A), NFAC, erred in upholding the reassessment under section 147 r.w.s. 1448 determining total income at Rs. 2,23,63,969 as against returned income of Rs. 20,85,800, without satisfying the jurisdictional conditions for valid reassessment.

The learned CIT(A) erred in confirming the addition of Rs. 1,97,48,621 under section 68 as alleged unexplained cash credits in respect of LTCG 1

ITA No.2513/MUM/2026 Abhishek Gauthamchand Jain on shares of Toyam Industries Ltd., ignoring that the transactions were through a recognized stock exchange and registered broker, duly reflected in the demat account and routed through banking channels.

The learned CIT(A) erred in sustaining the addition merely on generic Investigation Wing reports branding the scrip as penny stock and on the theory of "human probabilities", without bringing any specific adverse material or evidence of cash exchange in the appellant's case.

The learned CIT(A) erred in upholding (i) the taxation of even the cost of acquisition of shares, though paid out of disclosed and recorded funds, as unexplained income under section 68, and (ii) the addition of Rs. 5,92,548 under section 69C as alleged commission @3% without any evidence of actual incurrence or identification of payees.

The learned CIT(A) erred in dismissing the appeal for alleged non- prosecution without adjudicating the grounds on merits, in passing a non-speaking order ignoring the evidences on record, and in not affording effective opportunity of hearing or cross-examination of persons whose statements or reports were relied upon, thereby violating principles of natural justice.

Without prejudice, the learned authorities below ought not to have disallowed the entire exempt LTCG but, at the highest, restricted any adverse inference only to such transactions for which specific adverse material existed, after a scrip-wise and transaction-wise examination.

The appellant craves leave to add, alter, amend or withdraw any of the above grounds of appeal at or before the time of hearing.”

ITA No.2513/MUM/2026 Abhishek Gauthamchand Jain 3. There is a delay of 223 days in filing the appeal. The appellant has filed an affidavit for condonation of delay in filing appeal before the Tribunal. In the said affidavit, the assessee stated that the order of the CIT(A) dated 23.05.2025 was never brought to his knowledge as all notices and communications were issued electronically through the NFAC portal and the email alerts were inadvertently delivered to the spam/junk folder, due to which they remained unnoticed. The assessee, being a young individual with no formal knowledge of Income-tax laws, appellate procedures, or portal-based compliances, did not regularly monitor his email account or the Income-tax portal, under the bona fide belief that the appeal was pending for disposal. He also stated that during the relevant period, he was preoccupied with professional responsibilities, family health issues, and financial hardships. The assessee became aware of the dismissal of his appeal only upon initiation of recovery proceedings by the Department, whereafter he immediately engaged a tax professional and filed the present appeal without any further avoidable delay. It is submitted that the delay was not intentional and was beyond his control. Therefore, 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

ITA No.2513/MUM/2026 Abhishek Gauthamchand Jain 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 2016-17 on 22.06.2016 declaring total income at Rs.20,85,800/- u/s 143(1) of the Act. During the relevant previous year, the assessee had purchased 50,000 equity shares of M/s Toyam Industries Ltd. (formerly Ojas Asset Reconstruction Company Ltd.) through banking channels, which were subsequently credited to his Demat account. The said shares were sold during the year through a SEBI- registered broker, resulting in long-term capital gain (LTCG) of ₹1,97,48,621/-, which was claimed as exempt u/s 10(38) of the Act in the return of income. The AO made the impugned additions. 5. Aggrieved by the order of AO, the assessee filed appeal before the CIT(A). The CIT(A) observed that the assessee has not pursued the appeal despite being granted several opportunities as elaborated in para 3 above of the impugned order of CIT(A). It was further observed by the CIT(A) that no details, documents or submissions were provided to come to any conclusion other than those arrived at by the AO. Thus, the CIT(A), vide order dated 23.05.2025, dismissed the appeal ex parte. 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 all

ITA No.2513/MUM/2026 Abhishek Gauthamchand Jain 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.1,97,48,621 - u/s 68 of the Act treating LTCG as unexplained cash credit and Rs.5,29,548/- on account of alleged commission at 3%. The CIT(A) has upheld the addition due to non-compliance to the notices issued u/s 250 of the Act. The appellant has explained the reasons for non-compliance to the notices of the CIT(A). We also find that the order of CIT(A) is not as per the mandate 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.

ITA No.2513/MUM/2026 Abhishek Gauthamchand Jain 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.

Order is pronounced on 24.07.2026.

Sd/- Sd/- (ANIKESH BANERJEE) (BIJYANANDA PRUSETH) JUDICIAL MEMBER ACCOUNTANT MEMBER *Aniket Chand; Sr. PS MUMBAI Date: 24.07.2026 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