YOGESH SADHURAM PATEL,MUMBAI vs. NATIONAL FACELESS ASSESSMENT SENTRE WARD 42(3)(2), MUMBAI

IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH MUMBAI BEFORE SHRI SAKTIJIT DEY, VICE PRESIDENT & SHRI MAKARAND VASANT MAHADEOKAR, ACCOUNTANT MEMBER ITA No. 4165/Mum/2026 (Assessment Year: 2016-17) Yogesh Sadhuram NFAC/Ward 42(3)(2, Patel Mumbai Vs. R. No. 609, Kautilya 7B Suvas Apartment, Bhavan, C-41to C-43, 68F Nepean Sea Road, G Block, Bandra Kurla Mumbai-400 006 Complex, Bandra (E), Mumbai-400 051 PAN/GIR No. BGXPP0067L (Applicant) (Respondent) Assessee by Shri Tarang Mehta, Ld. AR Revenue by Shree Kumar C., Ld. DR Date of Hearing 23.06.2026 Date of Pronouncement 30.06.2026 आदेश / ORDER PER MAKARAND VASANT MAHADEOKAR, AM: This appeal by the assessee is directed against the order dated 24.02.2026 passed by the learned Commissioner of Income-tax (Appeals), National Faceless Appeal Centre, Delhi, [hereinafter referred to as "CIT(A)"]under section 250 of the Income-tax Act, 1961[hereinafter referred to as "the Act"], for the assessment year 2016-17, arising from the assessment order

2 ITA No. 4165/Mum/2026 Yogesh Sadhuram Patel dated 14.03.2024 passed by the Assessing Officer under section 147 read with section 144B of the Act.

3 ITA No. 4165/Mum/2026 Yogesh Sadhuram Patel property was purchased out of business savings accumulated over several years and amounts received from his parents and wife. The assessee also explained that the cash deposits represented receipts from the said business. The Assessing Officer accepted the explanation in respect of the cash deposits and made no separate addition thereon. However, for want of supporting documentary evidence regarding the source of the investment in the property, the Assessing Officer treated Rs. 55,12,941/- as unexplained investment under section 69 of the Act. The assessment was accordingly completed under section 147 read with section 144B of the Act vide order dated 14.03.2024, determining the total income at Rs. 57,40,096/-. 5. In appeal, the learned CIT(A) by order dated 24.02.2026 passed under section 250 of the Act, rejected the assessee’s application for condonation of the delay of 58 days in filing the appeal. The learned CIT(A), nevertheless, proceeded to consider the addition on merits and confirmed the addition of Rs. 55,12,941/- under section 69 of the Act, principally on the ground that the assessee had failed to produce documentary evidence substantiating the alleged past savings and gifts received from family members. 6. Before us the learned Authorised Representative submitted (AR) that the learned CIT(A) had declined to condone the delay of 58 days without properly appreciating the explanation of the assessee and had, at the same time, proceeded to decide the appeal on merits. He further submitted that the addition was

4 ITA No. 4165/Mum/2026 Yogesh Sadhuram Patel confirmed without examining the year-wise details of the payments made to M/s Lodha in respect of the property. 7. Referring to the statement placed on record, the learned AR submitted that the payments aggregating to Rs. 57,48,187/- were made in instalments between 09.09.2012 and 24.06.2017 and that only Rs. 2,84,164/- was paid during the previous year relevant to the assessment year 2016-17. It was, therefore, contended that the addition of the entire amount of Rs. 55,12,941/- under section 69 of the Act proceeded on an incorrect factual premise. He also submitted that the learned CIT(A) had not adjudicated the legal ground challenging the validity of the reassessment proceedings under section 148A of the Act. He accordingly prayed that the impugned order be set aside and the matter be restored to the learned CIT(A) for fresh adjudication, with liberty to the assessee to raise and substantiate all legal and factual grounds. 8. Per contra, the learned Departmental Representative relied upon the orders passed by the Assessing Officer and the learned CIT(A). He submitted that the assessee had failed to furnish satisfactory documentary evidence explaining the source of the investment made in the immovable property and that the addition under section 69 of the Act was, therefore, rightly confirmed. 9. We have considered the rival submissions and perused the material available on record. The first aspect which requires consideration is the manner in which the learned CIT(A) has

5 ITA No. 4165/Mum/2026 Yogesh Sadhuram Patel disposed of the appeal. The learned CIT(A) has expressly rejected the assessee’s request for condonation of the delay of 58 days in filing the appeal on the ground that the reasons stated were not satisfactory. Having rejected the application for condonation of delay, the learned CIT(A) nevertheless proceeded to adjudicate the addition on merits and confirmed the addition under section 69 of the Act. 10. In our considered view, the aforesaid approach is not legally consistent. Once the learned CIT(A) had declined to condone the delay, the appeal could not ordinarily have been entertained and adjudicated on merits. Conversely, where the learned CIT(A) proceeded to examine and decide the substantive issue, the application for condonation of delay was required to be considered in a proper and judicious manner after appreciating the explanation of the assessee and the surrounding facts. 11. We further find that the learned CIT(A) has substantially reproduced the findings recorded by the Assessing Officer and has not undertaken an independent examination of the material aspects arising from the appeal. In particular, the learned CIT(A) did not examine whether the entire amount of Rs. 55,12,941/- represented an investment made during the previous year relevant to the assessment year 2016-17. 12. The payment statement placed before us indicates that the payments relating to the property were spread over several financial years commencing from September 2012 and extending

6 ITA No. 4165/Mum/2026 Yogesh Sadhuram Patel up to June 2017. According to the assessee, only an amount of Rs. 2,84,164/- was paid during the financial year 2015-16 relevant to the assessment year under consideration. This factual contention has a direct bearing upon the applicability and quantum of any addition under section 69 of the Act. The said contention requires examination with reference to the agreement for purchase, the builder’s demand letters, payment receipts, bank records, ledger account, registration documents and such other contemporaneous evidence as may be placed on record. 13. We also find that the assessee has raised a legal ground challenging the validity of the reassessment proceedings on account of alleged non-compliance with the mandatory provisions of section 148A of the Act. The learned CIT(A) has not recorded any finding on the said jurisdictional ground. A legal ground going to the root of the validity of the assessment is required to be adjudicated by the first appellate authority after considering the relevant notices, replies, order under section 148A(d), approval under section 151 and the other material forming part of the reassessment record. 14. The impugned order is, therefore, set aside and the entire appeal is restored to the file of the learned CIT(A) for fresh adjudication in accordance with law. The learned CIT(A) shall first consider the assessee’s application for condonation of delay on its own merits after granting the assessee an effective opportunity to explain the delay and place the relevant material on record.

7 ITA No. 4165/Mum/2026 Yogesh Sadhuram Patel 15. The learned CIT(A) shall thereafter adjudicate all the grounds raised by the assessee, including the legal grounds challenging the validity of the reassessment proceedings under sections 147 and 148A of the Act, as well as the addition made under section 69 of the Act. The assessee shall be at liberty to raise such additional legal grounds as may be permissible in law and to furnish the payment schedule, agreement, receipts, bank statements, confirmations and all other supporting documentary evidence relating to the purchase of the property and the source of the payments. 16. The learned CIT(A) shall examine the year-wise payments made in respect of the property and determine whether any investment, and if so, what amount, was actually made during the previous year relevant to the assessment year 2016-17. The learned CIT(A) shall pass a speaking and reasoned order after independently considering the submissions and evidence placed by the assessee. Needless to state, a reasonable opportunity of being heard shall be afforded to the assessee. 17. We make it clear that we have not expressed any opinion on the merits of the legal grounds or the addition made under section 69 of the Act. All issues are left open for adjudication by the learned CIT(A) in accordance with law. 18. In view of the restoration of the entire matter to the learned CIT(A), the grounds raised by the assessee are treated as allowed for statistical purposes.

8 ITA No. 4165/Mum/2026 Yogesh Sadhuram Patel 19. In the result, the appeal filed by the assessee is allowed for statistical purposes.

Order pronounced in the open court on 30.06.2026.

Sd/- Sd/- (SAKTIJIT DEY) (MAKARAND VASANT MAHADEOKAR) VICE PRESIDENT ACCOUNTANT MEMBER Mumbai, Dated 30/06/2026 Dhananjay, Sr.PS आदेश की प्रतितिति अग्रेतिि/Copy of the Order forwarded to : 1. अपीलाथी / The Appellant 2. प्रत्यथी / The Respondent. संबंधधत आयकर आयुक्त / The CIT(A) 3. आयकर आयुक्त(अपील) / Concerned CIT 4. धिभागीय प्रधतधनधध, आयकर अपीलीय अधधकरण, मुम्बई / DR, ITAT, Mumbai 5. गार्ड फाईल / Guard file. 6. आदेशानुसार/ BY ORDER, सत्याधपत प्रधत //True Copy// 1. उि/सहायक िंजीकार ( Asst. Registrar) आयकर अिीिीय अतिकरण, मुम्बई / ITAT, Mumbai