RAFAT SAIYED ABDULLAH SHAIKH,BANDRA ( W ) vs. DCIT-19(3), MUMBAI, LALBAUG PAREL

Reopening is bad in Law 1) On the facts and in the circumstances of the case, and in law, the learned A.O erred in reopened the assessment after the four years of end of the relevant assessment merely on the basis of information received without any material against the assessee and there no live link between material coming the notice of the Assessing Officer and the formation of belief regarding escapement of income. 2) The Learned A.O erred in facts, in law and the circumstances of the case for reopening the assessment by without providing the reason for reopening despite of specifically asked by the assessee vide letter dated. 17.04.2017. Therefore, reopening is bad in law. 3) The Learned A.O erred in facts, in law and the circumstances of the case for reopening the assessment by without issuing the approval u/s 151 of the act. Therefore, reopening is bad in law. II. Disallowance of ad-hoc expenses of Rs.15,00,000/- 4) On facts and in law, the learned CIT(A) erred in confirming the ad hoc disallowance of ₹15,00,000/- out of commission paid by the appellant to 298 persons for facilitating the vacation and possession of encroached land, without appreciating the nature of the activity, the documentary evidence furnished. 5) On facts and in law, the learned CIT(A) failed to appreciate that payments made to slum dwellers were an essential and integral part of earning the commission income and that the disallowance of ₹15,00,000/- on an ad hoc basis is unjustified and unsustainable in law. III. Disallowance of ad-hoc expenses of Rs.72,02,135/- 6) On facts and in law, the learned CIT(A) erred in upholding the action of the Assessing Officer in treating part of agricultural income amounting to Rs. 72,02,135/- as “income from other sources”, ignoring

At the outset, it was noticed that the instant appeal is delayed by 596 days. In this regard, the assessee has filed an application for condonation of the same alongwith an affidavit stating that the order u/s 250 was sent to my earlier Chartered Accountant email.ID: “cainformation@gmail.com” but who didn't intimate about the order being served upon his email ID. Further, due to ill-health, she could not make enquiry on the status of tax matter. The delay is bona fide and occurred due to circumstances beyond her control, specifically continuing medical conditions requiring evaluation and management, as evidenced by medical records in the form of orthopaedic consultation in respect of polyarthralgia involving knees and small joints; treatment with calcium/vitamin D and NSAID therapy; autoimmune and deficiency work-ups advised and mild adenomyotic changes of the uterus with two intramural fibroids and fatty liver. It was much later that the CA advised an appeal before the ITAT against the order of the learned CIT(A)/NFAC. Accordingly, the appeal was filed before the P a g e | 4 A.Y. 2010-11 Rafat Saiyed Abdullah Shaikh Hon'ble ITAT on 13.10.2025.It is submitted that she experienced recurring pelvic pain, menorrhagia/dysmenorrhea and other health issues which restricted mobility, frequent medical visits, and intermittent Incapacity, causing unintentional delay in consulting Counsel. There is no deliberate negligence or malafide on her part. The delay is neither intentional nor for purposes of gaining any unfair advantage.

On careful consideration of the submissions of the assessee, we are of the view that the delay was not intentional but due to unavoidable and sufficient cause. In this connection, reliance could be placed on the landmark decision of hon’ble Supreme Court which inter alia held in Collector, Land Acquisition v Mst. Katiji And Others- 167 ITR 471 (SC) that “ordinarily, a litigant does not stand to benefit by lodging an appeal late……..Refusing tocondone delay can result in a meritorious matter being thrown out at the very threshold and cause of justice being defeated….Any appeal or any application, other than an application under any of the provisions of Order XXI of the Code of Civil Procedure, 1908, may be admitted after the prescribed period if the appellant or the applicant satisfies the court that he had sufficient cause for not preferring the appeal or making the application within such period…. A litigant does not stand to benefit by resorting to delay.

This appeal has been filed against the order u/s. 143(3) r.w.s 147 of the Act passed wherein the Assessing Officer completed the assessment, assessing total income of Rs. 1,24,67,380/- for the A.Y. 2010-11 after making addition of Rs. 87,02,135/- under various provisions of the Act. As per NMS cycle it was noticed that the assessee had purchased immovable property for an amount of Rs. 1,14,24,270/- and received commission income from Monarch & Qureshi Builder of Rs. 1,10,55,000/- during the year. However, she has not filed return of income for the relevant year. In response to notice u/s 148 of the Act, she filed a manual return showing commission income from Monarch & Qureshi Builder of Rs. 1,10,55,000/- against which she had claimed expenses f Rs. 73,52,135/-. The expenses debited was considered as too high and unreasonable looking at the nature of income. The assessee had paid purchase consideration through J. V. entry on 25.11.2009 of Rs. 99,49,500/- which was passed by Monarch & Qureshi Builder. Thus, assessee had not paid purchase consideration in cash/cheque/DD/RTGS or any other banking channel.

1 During assessment proceedings, it was noticed that the assessee had claimed payment of commission on account of 75,79,821/- to 298 persons @ 37,000/- per person for felicitating vacation and taking possession of the encroached land. In support the assessee furnished an affidavit and the list of individuals to whom payments were made. The assessee also furnished affidavits of few persons to whom commission was paid. She had claimed to have incurred a huge amount for payment of compensation to the slum dwellers who had encroached the land of the builder and had received the flat in kind. The assessee had also furnished the list of persons which contains the seal of Additional Collector (Encroachment).It was observed by the AO that even then, the assessee had claimed to have paid all compensation / commission in cash and was unable to prove the payments in totality. Therefore, a lump sum amount of Rs.15,00,000/- was disallowed and added back to the total income of the assessee.

2 During assessment proceedings, the assessee was specifically asked to substantiate the agricultural income of Rs.71,48,346/- with supporting evidences. In reply, the assessee stated that she had taken land at Village Amnoti, Taluka Sindhugad, Distt. Raigad belonging the Veena Prakash Porwal for a period commencing from 26.06.2002 till 25.06.2012 to carry agricultural activity on the plot of land wherein the P a g e | 7 A.Y. 2010-11 Rafat Saiyed Abdullah Shaikh assessee attempted and cultivated betel leaves & pepper etc. However, she could provide any further evidence in support of claim of Agricultural Income. From the above, the AO noted that the assessee has failed to substantiate the agricultural income. Without having land holding, by taking land on “concessionaire” basis on lease and claim of earning of whopping Rs.73,52,135/-was not acceptable. From the concessionaire agreement furnished by the assessee, it was found that the assessee had cultivated land of around 10 acres. After concluding that these expenses were on higher side, he allowed claim to the extent of Rs.1,50,000/- only as genuine and the rest amount of Rs.72,02,135/- was taken as income from undisclosed sources and was assessed under the head “Income from other sources.”

In the subsequent appeal, the ld.CIT(A) observed that there was no response to appeal notices issued from time to time. Accordingly, he concluded that the assessee had been provided reasonable number of opportunities but had not chosen to avail any of these. She had not filed any submissions/documentary evidence during appellate proceedings. In the absence of any submissions/evidences, the adjudication was done on the basis of material on record. Since the assessee had not filed any documentary evidence in support of her claim in statement of facts and grounds of appeal, therefore, the claim of the assessee could not be P a g e | 8 A.Y. 2010-11 Rafat Saiyed Abdullah Shaikh considered in absence of any supporting document. In view of the fact that there is no material on record to warrant interference in the order of AO and the appeal was dismissed.

Before us, the ld.AR has requested to remitting the appeal back to the ld.CIT(A) stating that the non compliance occurred due to several reason including health related matters. The ld.DR did not raise any objections to the request.

We have carefully considered all relevant facts of the case. It is evident that the ld.CIT(A) dismissed the appeal in limine on account of non compliance by the assessee. Therefore, substantive adjudication of the issues could not be done by him without opportunity of hearing to the assessee. In the grounds of appeal, we find that the assessee has raised various grounds of appeal challenging the impugned addition. In the light of these facts and in the substantial interest of justice, we set aside the appellate order and restore the entire matter back to the ld.CIT(A) for deciding the appeal order de novo. Needless to state, he would allow adequate opportunity of hearing to the assessee who would ensure necessary compliance without fail. She would be at liberty to file all necessary evidences as considered fit, before the appellate authority.

In the result, the appeal is allowed for statistical purposes.