MAHAVEER GAUTAMCHAND JAIN,BHIWANDI vs. ITO WARD 1(1), KALYAN

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ITA 340/MUM/2026Status: DisposedITAT Mumbai28 April 2026AY 2016-175 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal condoned the delay in filing the appeals. It further held that since the quantum assessment proceedings were restored to the Assessing Officer, the penalty appeals should also be restored for fresh adjudication.

What were the facts?

The assessee filed appeals against penalty orders beyond the limitation period. The assessee claimed the delay was due to a bona fide belief that penalty proceedings were consequential to quantum appeal proceedings.

What were the issues?

Whether the delay in filing the penalty appeals was justifiable, and whether the penalty appeals should be decided independently or be consequential to the quantum assessment.

Which sections of the Income-tax Act were involved?

Section 271A,Section 271B

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, MUMBAI BENCH “A” MUMBAI

Before: SHRI OM PRAKASH KANT & SHRI ANIKESH BENERJEE

For Appellant: Shri Surendra Mohan, (SR. DR)
Hearing: 23.04.2026

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “A” MUMBAI

BEFORE SHRI OM PRAKASH KANT (ACCOUNTANT MEMBER) AND SHRI ANIKESH BENERJEE (JUDICIAL MEMBER)

ITA No.339 & 340/MUM/2026 Assessment Year: 2016-17

Mahaveer Gautamchand Jain, Income Tax Officer, Ward 1(1), Bolck No.1, Dev Aashish Building, Mohan Plaza, Near Poddar Vs. Ranisati Mandir, Bhiwandi – 421302, School, Vaile Nagar, Kalyan West, Maharashtra. Kalyan, Kalyan – Dombivali – 421301, Maharashtra. PAN NO. ALJPJ 4590 N APPELLANT RESPONDENT

: Shri Ambalal Jain Assessee by : Shri Surendra Mohan, (SR. DR) Department by Date of Hearing : 23.04.2026 : 28.04.2026 Date of pronouncement ORDER PER OM PRAKASH KANT, AM

These two appeals filed by the assessee are directed against two separate orders dated 29.06.2025 and 09.07.2025 passed by the Learned Commissioner of Income Tax (Appeals) - National Faceless Appeal Centre, Delhi [in short “the Ld.CIT(A)”] for the Assessment Year 2016–17, in relation to levy of penalty for non- maintenance of books of accounts and non-auditing of the books of accounts.

Mahaveer Gautamchand Jain Mahaveer Gautamchand Jain 2 ITA Nos.339 and 340 339 and 340/MUM/2026

2.

At the outset, it is At the outset, it is noticed that these appeals have been filed by that these appeals have been filed by the assessee beyond the period of limitation. The appeal having ITA the assessee beyond the period of limitation. The appe the assessee beyond the period of limitation. The appe No. 339 is delayed by No. 339 is delayed by 137 days, and similarly, ITA No. 340 of 2026 days, and similarly, ITA No. 340 of 2026 is also delayed by 107 days. is also delayed by 107 days. Before us, the learned counsel for the Before us, the learned counsel for the assessee referred to the affidavit filed assessee referred to the affidavit filed by the assessee by the assessee explaining the delay in filing the appeals. The ma delay in filing the appeals. The main contention of the assessee in in contention of the assessee in the affidavit is that he was the affidavit is that he was under impression that these appeals that these appeals will be decided after disposal of the quantum appeal, and therefore, disposal of the quantum appeal, and therefore, disposal of the quantum appeal, and therefore, he could not monitor the could not monitor the same on the Income Tax Portal Portal. The relevant statement of the assessee statement of the assessee is reproduced as under:

“2. That the delay has occurred due to bona fide and unavoidable circumstances, 2. That the delay has occurred due to bona fide and unavoidable circumstances, 2. That the delay has occurred due to bona fide and unavoidable circumstances, explained as under ⅰ) During the relevant period, the was simultaneously facing appellant was ) During the relevant period, the was simultaneously facing appellant was ) During the relevant period, the was simultaneously facing appellant was multiple proceedings and apocals, including penalties undes proceedings arising ngs and apocals, including penalties undes proceedings arising ngs and apocals, including penalties undes proceedings arising out of reassessment under section 147. sections 271A. 2718. 2718271/(c) out of reassessment under section 147. sections 271A. 2718. 2718271/(c) out of reassessment under section 147. sections 271A. 2718. 2718271/(c) 271(11(bl, as well as quantum 271(11(bl, as well as quantum ii) That the penalty in the present case is purely consequential to the quantum ii) That the penalty in the present case is purely consequential to the quantum ii) That the penalty in the present case is purely consequential to the quantum addition made by the Assessing Officer. Against the said quantum addition, the de by the Assessing Officer. Against the said quantum addition, the de by the Assessing Officer. Against the said quantum addition, the appellant had already filed an appeal before the Ld. CIT(A), and the hearing of appellant had already filed an appeal before the Ld. CIT(A), and the hearing of appellant had already filed an appeal before the Ld. CIT(A), and the hearing of the said quantum appeal was in progress. the said quantum appeal was in progress. iil That since the penalty proceedings were entirely dependent upon the outcome iil That since the penalty proceedings were entirely dependent upon iil That since the penalty proceedings were entirely dependent upon of the quantum appeal, the appellant was under a bona fide belief that if the of the quantum appeal, the appellant was under a bona fide belief that if the of the quantum appeal, the appellant was under a bona fide belief that if the quantum addition is deleted, the penalty would automatically not survive. quantum addition is deleted, the penalty would automatically not survive. quantum addition is deleted, the penalty would automatically not survive. iv) That till 26.12.2025, no order was passed in the quantum appeal and the iv) That till 26.12.2025, no order was passed in the quantum appeal and the iv) That till 26.12.2025, no order was passed in the quantum appeal and the appellant genuinely believed that the quantum appeal would be decided in his nely believed that the quantum appeal would be decided in his nely believed that the quantum appeal would be decided in his favour on merit. v) However, subsequently, the Ld CIT(A) passed the quantum appeal order dated v) However, subsequently, the Ld CIT(A) passed the quantum appeal order dated v) However, subsequently, the Ld CIT(A) passed the quantum appeal order dated 26.12.2025 against the appellant. Only after receipt of the said adverse quantum 26.12.2025 against the appellant. Only after receipt of the said adverse quantum 26.12.2025 against the appellant. Only after receipt of the said adverse quantum order, it became necessary and relevant for the appellant to prefer an appeal ecessary and relevant for the appellant to prefer an appeal ecessary and relevant for the appellant to prefer an appeal against the penalty order before the Hon'ble ITAT. against the penalty order before the Hon'ble ITAT.

Mahaveer Gautamchand Jain Mahaveer Gautamchand Jain 3 ITA Nos.339 and 340 339 and 340/MUM/2026

vi) That the delay in filing the present appeal is neither intentional nor deliberate, vi) That the delay in filing the present appeal is neither intentional nor deliberate, vi) That the delay in filing the present appeal is neither intentional nor deliberate, but occurred due to the above bona fide belief and due to the fact that the but occurred due to the above bona fide belief and due to but occurred due to the above bona fide belief and due to outcome of the quantum appeal was awaited. outcome of the quantum appeal was awaited. vii) That the appellant has a good case on merits, and if the delay is not vii) That the appellant has a good case on merits, and if the delay is not vii) That the appellant has a good case on merits, and if the delay is not condoned, the appellant will suffer irreparable loss and hardship, whereas no condoned, the appellant will suffer irreparable loss and hardship, whereas no condoned, the appellant will suffer irreparable loss and hardship, whereas no prejudice will be caused to the Revenue. prejudice will be caused to the Revenue. viii) That it is a settled legal position that procedural delays should not defeat iii) That it is a settled legal position that procedural delays should not defeat iii) That it is a settled legal position that procedural delays should not defeat substantial justice, and the Hon'ble Courts have consistently held that matters substantial justice, and the Hon'ble Courts have consistently held that matters substantial justice, and the Hon'ble Courts have consistently held that matters should be decided on merits rather than on technicalities. should be decided on merits rather than on technicalities. ix) The delay is thus caused due to ix) The delay is thus caused due to reasonable and sufficient cause, and reasonable and sufficient cause, and therefore, the appellant humbly prays that the Hon'ble Tribunal may kindly therefore, the appellant humbly prays that the Hon'ble Tribunal may kindly therefore, the appellant humbly prays that the Hon'ble Tribunal may kindly condone the delay and admit the appeal for adjudication on merits. condone the delay and admit the appeal for adjudication on merits. condone the delay and admit the appeal for adjudication on merits. x) Due to multiplicity of proceedings, preparation of records, coordination with x) Due to multiplicity of proceedings, preparation of records, coordination x) Due to multiplicity of proceedings, preparation of records, coordination counsel, and financial and mental stress, the appellant could not file the present counsel, and financial and mental stress, the appellant could not file the present counsel, and financial and mental stress, the appellant could not file the present appeal within the prescribed time. appeal within the prescribed time.”

3.

In view of the above above explanation, we are of the considered opinion explanation, we are of the considered opinion that there was a sufficient and reasonable cause sufficient and reasonable cause due to which sufficient and reasonable cause assessee was prevented by way of filing the appeal prevented by way of filing the appeal prevented by way of filing the appeal within the limitation period. The explanation of the assessee is accepted and The explanation of the assessee is accepted and The explanation of the assessee is accepted and the delay in filing the appeal the appeal is condoned and the is condoned and the appeals are admitted for adjudication. admitted for adjudication.

4.

Before us , the learned cou , the learned counsel for the assessee submitted that nsel for the assessee submitted that the quantum proceedings for the Assessment Year 2016–17 has the quantum proceedings for the Assessment Year 2016 the quantum proceedings for the Assessment Year 2016 been restored to the file of the Assessing Officer by the Hon’ble been restored to the file of the Assessing Officer by the Hon’ble been restored to the file of the Assessing Officer by the Hon’ble Coordinate Bench of the Coordinate Bench of the Tribunal vide order dated 26 Tribunal vide order dated 26.03.2026. The Ld. Counsel submitted that Ld. Counsel submitted that one of the issue is determination of determination of the

Mahaveer Gautamchand Jain Mahaveer Gautamchand Jain 4 ITA Nos.339 and 340 339 and 340/MUM/2026

turnover of the assessee. Since the penalty he assessee. Since the penalty for non- -maintenance of books of accounts and books of accounts and non- auditing of books of account auditing of books of accounts is consequent to the determination of the turnover and therefore the consequent to the determination of the turnover and therefore the consequent to the determination of the turnover and therefore the Ld. Counsel submitted Ld. Counsel submitted that these appeals may also be that these appeals may also be restored to the file of the Assessing Officer for the file of the Assessing Officer for deciding afresh after deciding afresh after determination of the the turnover of the assessee in the quantum in the quantum assessment proceedings. proceedings.

5.

We have heard the rival submissions and perused the material We have heard the rival submissions and perused the material We have heard the rival submissions and perused the material available on record. The penalties under sections 271A and 271B available on record. The penalties under sections 271A and 271B available on record. The penalties under sections 271A and 271B are levied for non-maintenance of books of account maintenance of books of accounts and non- maintenance of books of account auditing of books of accounts auditing of books of accounts, beyond a particular threshold of the a particular threshold of the turnover of the business business. Since, in the case of the assessee in in the case of the assessee in dispute in regard whether the assessee was whether the assessee was engaged in engaged in earning commission income or commission income or was in trading activity, and therefore the and therefore the penalty are consequent to the penalty are consequent to the determination of turnover determination of turnover of the assessee.

6.

Since the Hon’ble Tribunal, has restored the matter Since the Hon’ble Tribunal, has restored the matter Since the Hon’ble Tribunal, has restored the matter to the file of the Assessing Officer, we of the Assessing Officer, we feel it appropriate to set aside the it appropriate to set aside the orders of the learned CIT(A) in both orders of the learned CIT(A) in both these appeals and restore the appeals and restore the matter back to the file of the Assessing Officer for to the file of the Assessing Officer for to the file of the Assessing Officer for afresh, after decision in the case of quantum assessment p decision in the case of quantum assessment proceedings. roceedings.

Mahaveer Gautamchand Jain Mahaveer Gautamchand Jain 5 ITA Nos.339 and 340 339 and 340/MUM/2026

7.

In the result, both appeals of the assessee are allowed for In the result, both appeals of the assessee are allowed for In the result, both appeals of the assessee are allowed for statistical purposes.

Order pronounced in the open Court on ounced in the open Court on 28/04/2026. /04/2026.

Sd/- Sd/ Sd/- (ANIKESH BENERJEE ANIKESH BENERJEE) (OM PRAKASH KANT OM PRAKASH KANT) JUDICIAL MEMBER JUDICIAL MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER Mumbai; Dated: 28/04/2026 M. Ranganath Vittal , Sr. P.S. M. Ranganath Vittal , Sr. P.S. Copy of the Order forwarded to Copy of the Order forwarded to : 1. The Appellant 2. The Respondent. 3. CIT 4. DR, ITAT, Mumbai 5. Guard file. BY ORDER, BY ORDER, //True Copy// (Assistant Registrar) (Assistant Registrar) ITAT, Mumbai ITAT, Mumbai

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