ALIA BHATT,MUMBAI vs. ASSISTANT COMMISSIONER OF INCOME TAX - 16(1), MUMBAI

PER PAWAN SINGH, JUDICIAL MEMBER:

Commissioner of Income Tax (Appeals)/National Faceless Appeal

Centre (NFAC), Delhi, [for short “Ld.CIT(A)”] dated 01.12.2025, for

the assessment year 2020-21. The assessee has raised following

grounds of appeal.

“The Appellant objects to the order dated 1 December 2025 passed under section 250 of the Income Tax Act, 1961 ('Act') passed by the learned Commissioner of Income-tax (Appeals) ['CIT(A)'], for the aforesaid assessment year on the following among other grounds: 1. Dismissing the appeal filed by the Appellant by rejecting condonation of delay 1.1 The Appellant submits that the learned CIT(A) erred in dismissing the appeal by rejecting the application relating to condonation of delay in filing the appeal.

1.2 The learned CIT(A) erred in holding that the delay was without adequate justification. 1.3 The learned CIT(A) failed to appreciate that: • The tax consultant handling the matter was impacted due to COVID-19 and later passed away. • The emails were checked post his demise and immediate actions were taken to file the appeal. 1.4 The learned CIT(A) erred in dismissing the appeal without appreciating the fact that the delay in filing of appeal before CIT(A) was inadvertent and beyond the control of the Appellant and for reason not attributable to the Appellant. 2. Erroneous levy of penalty under section 270A of the Act 2.1 On the facts and in the circumstances of the case and in law, the Assessing Officer erred in levying penalty under section 270A of the Act amounting to INR 99,26,513 by treating the expenditure amounting to INR 4,64,46,339 as personal expenses and accordingly, without appreciating the fact that the expenditure was incurred for the purposes of business. 2.2 The Assessing Officer erred in not appreciating the fact that the Appellant had disclosed complete particulars of income and expenditure in the audited financial statements and submitted bona fide explanation during the assessment proceedings. 2.3 The Appellant prays that the Assessing Officer be directed to delete the penalty amounting to INR 99,26,513 levied under section 270A of the Act. 3. General 3.1 Each of the above grounds of appeal is without prejudice to the other. 3.2 The Appellant craves leave to add to, alter, amend, vary, omit or substitute any of the aforesaid grounds of appeal or add a new ground or grounds of appeal at any time before or at the time of hearing of the appeal as it may be advised.”

are perused. The Learned Authorised Representative (‘Ld. AR’) of the

assessee fairly submits that, there is the delay of 636 days in filling

the appeal before Ld.CIT(A). The Assessing Officer (‘AO’) levied

penalty under Section 270A for under reporting income vide order

dated 14.02.2023. However, the appeal before the Ld.CIT(A) was filed only on 14.11.2024, resulted in the delay of 636 days. The delay

before the Ld.CIT(A) was neither intentional nor deliberate. The

Ld.CIT(A) not condoned such delay and dismissed the appeal as un-

admitted, thus, there is no adjudication on merit. While explaining

the delay the Ld. AR for the assessee submits that the assessee is an

well-known film artist and was dependant on her Consultant /

Chartered Accountant Mr. P. K. Dey. During the assessment her CA

was severely infected by Covid-19. Hence, no proper submission was

made before AO which resulted in certain disallowances aggregating

of Rs. 4.64 Crores. The assessee has already offered taxable income

of more than Rs. 20.00 Crores. Being a film artist and public figure

the assessee has to incur various expenses on her apparels, fitness,

tour and travel, lodging and boarding, security guards and other

related expenses. The AO while passing the Assessment Order made

certain disallowances and initiated penalty for under reporting of

income. The AO levied the penalty at the rate of 50% of tax sought

to be evaded and thereby levied the penalty of Rs. 99,26,513/-, in his

order dated 14.02.2023. During the penalty proceedings, no

compliance was made by CA namely P.K. Dey. The assessee later on

learnt after her CA’s death that there were certain emails about the

communication from Tax Authorities, which was not responded by CA

Mr. P.K. Dey, who ultimately expired in February 2024.

own email address for communication of notices of Income Tax

authorities. The assessee while filling the appeal before CIT(A) filed

detailed application for seeking condonation of delay. The contents of

the application for condonation of delay is recorded by CIT(A) in

Paragraph 2 on page no. 2 to 4 of his order. The Ld.CIT(A) held that

the reasons furnished by the assessee for delay is not acceptable as

it lacks sufficient merit to condone the delay. Resultantly, the appeal

was dismissed as un-admitted. The Ld. AR of the assessee submits

that the assessee is not going to be benefitted by filling appeal

belatedly. The assessee is interested in pursuing her case on merits.

The assessee is an honest tax-payer and offered taxable income of

more than Rs. 20.00 Crores and paid due tax. Otherwise, there was

no misreporting or under-reporting of income, rather the additions

was made by disallowing legitimate expenses. The Ld. AR of the

assessee submits that delay in filing appeal before ld CIT(A) may be

condoned and the appeal may be decided on merits. In the

alternative submission, the Ld. AR of the assessee submits that there

is no finding on merit by lower authorities as there was no response

on behalf of the assessee before the lower authorities. Therefore, the

matter may be restored to the file of ld CIT(A) for adjudication on

merit. He undertakes on behalf of the assessee to be more vigilant in

making timely compliance.

(‘Ld. Sr. DR’) for the revenue opposed the plea of the Ld. AR of the

assessee for seeking condonation in filling the appeal before the Ld.

CIT(A). The Ld. Sr. DR for the revenue submits that, being a public

figure the assessee should act as a Role Model in making timely

compliances. The assessee has not explained the delay in a

reasonable manner.

submits that, being a public figure and as a well-known actress, the

assessee should not suffer due to technicalities and for the reasons

that there is no wilful or intentional delay in filling the appeal before

the Ld. CIT(A). The ld AR of the assessee prayed for one more

opportunity to contest

have gone through the orders of the lower authorities carefully. We

have also deliberated certain case law referred and relied by the

assessee in her application for condonation of delay. We find that the

assessee is a well-known film artist. The assessee while filling the

return of income has declared more than Rs. 20.00 Crores income

and has paid the tax. The return of income was filed within due date.

The AO while passing the assessment order made certain

disallowances consisting of expenditure incurred on apparels and

accessories, beauty and fitness, foreign travelling, shopping expenses, travels & tours, on PR activities, salary to security guards,

gift expenses, hotel expenses, flight maintenance expenses etc.

aggregating to Rs. 4,64,46,339/-. The AO while passing the

assessment order also initiated penalty for under-reporting of income.

The AO issued show cause notice to the assessee on 26.09.2022 for

levy of penalty under Section 270A r.w.s. 274. The said notice was

issued on email address – itax15@pkfc.in for making the compliances

which follows another show cause notice dated 19.10.2022, in

response of which the adjournment was sought. The AO further

recorded that various notices were issued on the same email id,

however, no response was made. The AO ultimately levied penalty for

under reporting of income and computed amount of penalty @ 50%

of tax liability on such disallowances and worked out penalty of Rs.

99,26,513/-. The appeal was filed against such order on 14.11.2024.

Along with the appeal, the assessee filed an application for

condonation of the delay. The application was filed on similar line as

per the submission of the Ld. AR of the assessee. The application for

condonation of delay was not allowed by Ld.CIT(A) by taking the

view that, the reasons furnished by the assessee are not acceptable

as they lacks sufficient merit.

assessee is really interested in pursuing her case on merits and there

is no wilful or intentional default or delay in not filling an appeal in time before the Ld.CIT(A). Considering the overall facts of the

present case and keeping in view the fact that the assessee is an

individual and has offered income of more than Rs. 20.00 Crores. No

doubt that the assessee is a well-known film artist, yet she has to

depend upon the legal consultant for taking remedial action/

compliances in case of tax matters. We find that the, assessee was

represented by Mr. P.K. Dey (CA) who suffered severe covid-10

infection and ultimately died in February 2024. We find that there is

well-known principle under Law of Limitation that when technical

consideration and cause of substantial justice are kept against each

other, then the cause of substantial justice may be preferred /

provided there is no intentional or deliberate delay in filling the

appeal. On considering the totality of the fact, we are of the view

that the delay in filling the appeal before the Ld.CIT(A) was not

intentional. Hence, the delay in filling the appeal deserves to be

condoned. Resultantly, the delay in filling the appeal is condoned.

an ex-parte order for want of proper compliance. The Ld.CIT(A) had

not admitted the appeal for the want of the delay. Therefore, we

deem it appropriate to restore the appeal to the file of the Ld.CIT(A)

to adjudicate various grounds of the appeal on merit. Needless to

direct that before passing the order afresh, the Ld.CIT(A) shall allow

reasonable opportunity to the assessee. The assessee has also directed to be more vigilant in future in making timely compliances.

In the result, grounds of the appeal raised by the assessee are

allowed for statistical purposes.

purposes.

Order pronounced in open court on 10.07.2026.

Sd/- Sd/- GIRISH AGRAWAL PAWAN SINGH ACCOUNTANT MEMBER JUDICIAL MEMBER

Mumbai, Dated: 10/07/2026 Aditi Pandare, PS Aditi Pandare, PS Aditi Pandare, PS Aditi Pandare, PS

Copy of the order forwarded to: (1) The Assessee; (2) The Revenue; (3) The PCIT / CIT (Judicial); (4) The DR, ITAT (5) Guard file. By Order

Assistant Registrar/Sr Private Secretary ITAT, Mumbai