BEHRAM IRANI,MUMBAI vs. INCOME TAX OFFICER, INTERNATIONAL TAXATION-2(2)(1), MUMBAI

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ITA 3667/MUM/2023Status: DisposedITAT Mumbai02 July 2026AY 2015-1610 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal admitted the additional evidence, finding it relevant for a just decision. Consequently, the Tribunal set aside the AO's order and restored the matter to the AO's file for a fresh assessment, allowing the assessee an opportunity to present submissions and evidence.

What were the facts?

The assessee, a non-resident, failed to file income tax returns for multiple assessment years. The Assessing Officer (AO) made additions for unexplained investments and income based on AIR data. The assessee sought to admit additional evidence, including bank statements, which were not submitted earlier due to COVID-19 travel restrictions.

What were the issues?

Whether additional evidence not produced before lower authorities can be admitted by the Tribunal, and whether the assessment order should be set aside for a fresh assessment.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 144C(13),Section 148,Section 69,Section 69A,Section 144,Section 147

AI-generated summary — verify with the full judgment below

Before: SHRI SAKTIJIT DEY & SHRI BIJAYANANDA PRUSETH

For Appellant: Shri Madhur Agarwal, Adv
For Respondent: Shri Sridhar G. Menon (SR DR)
Hearing: 02.07.2026Pronounced: 08.07.2026

IN THE INCOME-TAX APPELLATE TRIBUNAL, MUMBAI “I” BENCH, MUMBAI BEFORE SHRI SAKTIJIT DEY, VICE PRESIDENT AND SHRI BIJAYANANDA PRUSETH, ACCOUNTANT MEMBER ITA Nos.3665, 3666, 3667, 3668 & 3669/MUM/2023 (AYs: 2013-14 to 2017-18) Mr. Behram K. Irani vs. ITO Intl. Taxation, Ward 2(2)(1) Near Dinshaw Baug Malyan East, Room No. 1725, 17th Floor, Air India Dahanu Road, Mumbai-401602. Building, Nariman Point, Mumbai- 400021. PAN/GIR No: AAUP19271M (Appellant) (Respondent) Assessee by Shri Madhur Agarwal, Adv. Revenue by Shri Sridhar G. Menon (SR DR) Date of Hearing 02.07.2026 Date of Pronouncement 08.07.2026 O R D E R PER BIJYANANDA PRUSETH, AM:

The present appeal emanates from the final assessment order passed under section 143(3) r.w.s 144C(13) of the Income-tax Act, 1961 (in short, ‘Act’) by the ITO, Int. Tax, Circle 2(2)(1), Mumbai [in short, ‘AO’], dated 08.12.2022 for the assessment year (AY) 2013-14 pursuant to the directions dated 08.12.2022 issued by the Dispute Resolution Panel- 1, Mumbai (DRP). Since the facts and grounds are similar, with the consent of both parties, the appeals were clubbed and heard together and a common order is being passed for the sake of convenience and brevity. ITA No.3665/Mum/2023 (AY: 2013-14) is taken as the “lead case.”

2.

The grounds of appeal raised by the assessee in ITA No.3665/Mum/2023

(AY 2013-14) are as under:

“1. The assessment order dated 09.01.2023 passed under section 144 r.w.s. 144C(13) is bad in law being barred by limitation.

2.

The AO erred in issuing notice u/s 148 of the Act by merely relying on the information received from the AIR data.

3.

On the facts and in the circumstances of the case and in law, the Ld. A.O. erred in making the addition of Rs. 4,10,00,000/- as unexplained investments under section 69 of the Act.

4.

On the facts and in the circumstances of the case and in law, the Ld. A.O erred in making the addition of Rs. 20,97,684/- as income from other sources towards interest received from Muthoot Finance Ltd.

5.

On the facts and in the circumstances of the case and in law, the Ld. A.O. erred in making the addition of Rs. 3,10,000/- as income from other sources towards commission received.

6.

On the facts and in the circumstances of the case and in law, the Ld. A.O. erred in taxing interest and commission at maximum marginal rate and not at the rates prescribed under Double Taxation Avoidance Agreement”

3.

The grounds of appeal raised by the assessee in ITA No.3666/Mum/2023

(AY 2014-15) are as under:

“1. The assessment order dated 09.01.2023 passed under section 144 r.w.s. 144C(13) is bad in law being barred by limitation.

2.

The AO erred in issuing notice u/s 148 of the Act by merely relying on the information received from the AIR data.

3.

On the facts and in the circumstances of the case and in law, the Ld. A.O erred in making the addition of Rs. 1,00,00,000/- as unexplained investments under section 69 of the Act.

4.

On the facts and in the circumstances of the case and in law, the Ld. A.O erred in making the addition of Rs. 31,00,000/- as unexplained investments under section 69A of the Act.

5.

On the facts and in the circumstances of the case and in law, the Ld. A.O. erred in making the addition of Rs. 57,34,877/- as income from other sources towards interest received from Muthoot Finance Ltd.

6.

On the facts and in the circumstances of the case and in law, the Ld. A.O. erred in making the addition of Rs. 25,000/- as income from other sources towards commission received.

7.

On the facts and in the circumstances of the case and in law, the Ld. A.O. erred in taxing interest and commission at maximum marginal rate and not at the rates prescribed under Double Taxation Avoidance Agreement.

4.

The grounds of appeal raised by the assessee in ITA No.3667/Mum/2023

(AY 2015-16) are as under:

“1. The assessment order dated 10.01.2023 passed under section 144 r.w.s. 144C(13) is bad in law being barred by limitation.

2.

The AO erred in issuing notice u/s 148 of the Act by merely relying on the information received from the AIR data.

3.

On the facts and in the circumstances of the case and in law, the Ld. A.O. erred in making the addition of Rs. 63,20,000/- as income from other sources towards interest received from Muthoot Finance Ltd.

4.

On the facts and in the circumstances of the case and in law, the Ld. A.O erred in taxing interest at maximum marginal rate and not at the rates prescribed under Double Taxation Avoidance Agreement.”

5.

The grounds of appeal raised by the assessee in ITA No.3668/Mum/2023

(AY 2016-17) are as under:

“1. The assessment order dated 24.01.2023 passed under section 147 r.w.s. 144 is bad in law being barred by limitation.

2.

The AO erred in issuing notice u/s 148 of the Act by merely relying on the information received from the AIR data.

3.

On the facts and in the circumstances of the case and in law, the Ld. A.O. erred in making the addition of Rs. 58,66,695/- as income from other sources towards interest received from Muthoot Finance Ltd.

4.

On the facts and in the circumstances of the case and in law, the Ld. A.O. erred in taxing interest at maximum marginal rate and not at the rates prescribed under Double Taxation Avoidance Agreement.”

6.

The grounds of appeal raised by the assessee in ITA No.3669/Mum/2023

(AY 2017-18) are as under:

“1. The assessment order dated 24.01.2023 passed under section 147 r.w.s. 144 is bad in law being barred by limitation.

2.

The AO erred in issuing notice u/s 148 of the Act by merely relying on the information received from the AIR data.

3.

On the facts and in the circumstances of the case and in law, the Ld. A.O. erred in making the addition of Rs. 49,03,574/- as income from other sources towards interest received from Muthoot Finance Ltd.

4.

On the facts and in the circumstances of the case and in law, the Ld. A.O. erred in taxing interest at maximum marginal rate and not at the rates prescribed under Double Taxation Avoidance Agreement.”

7.

There is delay of 215 days in filing the appeal before the Tribunal. An affidavit has been filed for condonation of delay in filing appeal before the ITAT. It is stated therein that the appellant is a non-resident residing at Australia since 17.06.1985. It is also stated that the AR of the assessee appeared before the DRP. Subsequently, AO passed order u/s 144 r.w.s. 144C of the Act. After receiving the demand notice on or about 02.08.2023, he forwarded the order and demand notice to another tax consultant who filed the appeal before the ITAT. It is submitted that the delay in filing the appeal by 215 days was completely unintentional and was on account of being unaware of the provisions and procedures of the Act. The Ld. AR of the appellant has submitted that the assessee was not filing return of income and the delay was beyond the control of the assessee. There was no negligence or lack of diligence on part of the assessee. He requested to condone the delay in the interest of justice. 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 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. 7.1 For the same reason, the delays ranging from 200 to 215 days for the other AYs under appeal are also condoned and the appeals are admitted. 8. Facts of the case, in brief, are that the assessee has not filed return of income for the AY 2013-14. From the records available with the department, it was found that the assessee has made substantial investments in bonds and debentures. He was also in receipt of substantial interest income and commission/brokerage; but, he did not file the return of income for the subject year. Therefore, the AO had reasons to belief that the source of investment of Rs.4,10,00,000/-, interest income of Rs.22,64,385/- and commission receipt of Rs.3,10,000/- remained undisclosed and escaped assessment. Hence, notice u/s 148 was issued on 30.03.2021. The AO issued various statutory and show cause notices but the assessee did not attend and merely stated that he is unable to attend due to travel restrictions owning to COVID. Therefore, the AO invoked provisions of section 144 of the Act and added Rs.4,10,00,000/- u/s 69 of the Act and also added Rs.20,97,684/- and Rs.3,10,000/- towards interest income and commission income under the head income from other sources. The draft assessment order u/s 144C was passed on 21.03.2022. Against the said order, assessee filed objection along with Form 35A on 21.04.2022 before the DRP. After hearing the assessee, the DRP passed order u/s 144C(5) of the Act on 08.12.2022 rejecting the objections to the proposed additions , but directed AO to give credit for TDS on the income earned. Accordingly, the AO passed order u/s 144 r.w.s. 144C(13) of the Act on 09.01.2023 by making the impugned additions totaling to Rs.4,34,07,684/-. 9. Aggrieved by the order of AO u/s 144 r.w.s. 144C(13) of the Act, the

assessee filed appeal before the Tribunal. At the outset, the Ld. AR of the assessee

filed an application for admission of additional evidence which includes bank

statements of appellant’s father, Late Kaikhshroo Irani, for the period 01.01.2012

to 31.12.2012 and 01.01.2013 to 14.09.2013, bank statement of appellant from

14.09.2013 to 31.03.2014 and certificate of Australian citizenship. It is submitted

that these documents could not be furnished during the course of the assessment proceedings or the proceedings before the Dispute Resolution Panel. The

appellant is a NRI residing at Australia and, owing to the travel restrictions and

practical difficulties arising during the COVID-19 pandemic, he was unable to

travel to India and effectively collate and furnish the relevant documents before

the lower authorities. It is also submitted that the documents now being placed

on record are only in support of and corroborate the facts already forming part of

the assessment records. They do not introduce any new claim or alter the factual

matrix of the case but merely substantiate the contentions already raised by the

appellant. The admission of these documents would assist the Tribunal in arriving

at a just and proper adjudication of the issues involved. The Ld. AR relied on the

following decisions: (i) Prabhavati S. Shah v. CIT (1998) 231 ITR 1 (Bom), (ii) CIT v.

Ganibhai Wahabbhai (1998) 232 ITR 900 (MP), (iii) Dwarka Prasad v. ITO (1997) 63

ITD 1 (Pat) (TM), (iv) Abhay Kumar Shroff v. ITO (1997) 63 ITD 144 (Pat) (TM), (v)

K. Venkataramiah v. A. Seetharama Reddy AIR 1963 SC 1526 and (vi) Rajmoti

Industries v. ITO (1995) 52 ITD 286.

10.

On the other hand, the Ld. Sr. DR supported the order of lower authorities.

Regarding the admission of the additional evidence, the ld. DR submitted that the

Bench may decide the matter as it thinks fit.

11.

We have heard both sides and perused the materials on record. We have

also deliberated on the decisions relied upon by the Ld. AR. The question before 7 us is as to whether the additional evidence could be admitted by the Tribunal,

which were not submitted before the lower authorities. The ld. AR submitted that

bank statements of the appellant and his father could not be submitted before

the AO and DRP because the assessee is an Australian citizen and could not travel

to India due to COVID-19 pandemic. On the other hand, the Ld. Sr. DR has not

objected to the prayer of the appellant to admit the additional evidence. We find

that the additional evidences are relevant to decide the case. Rule 29 permits ITAT

to admit additional evidence for any substantial cause. The intention behind the

rule is that substantial justice should be done and the interest of justice should be

the overriding consideration. Considering the facts and the above discussion, the

additional evidences are admitted.

12.

We find that the additional evidences are necessary for proper

appreciation of the impugned issue. The said evidences were not before the lower

authorities. Therefore, without delving further into the matter, we deem it proper

to set aside the order of AO and restore the matter to his file for fresh assessment

after granting adequate opportunity of being heard to the assessee. The AO shall

consider the submissions including the additional evidences and decide the issue

in accordance with law. Accordingly, the grounds are allowed for statistical

purpose.

13.

We make it clear that no opinion has been expressed on the merit of the

additions made by the AO. The AO shall independently decide the same in

accordance with law after considering the submission and evidences filed by the

appellant.

14.

In the result, the appeal is allowed for statistical purpose. ITA Nos. 3666, 3667, 3668 & 3669/MUM/2023 (AYs: 2014-15 to 2017-18)

15.

The grounds of appeal as well as the facts and circumstances of the appeals

for assessment years 2014-15 to 2017-18 are similar to the grounds and facts and

circumstances of the case for AY 2013-14; therefore, the findings given in the

appeal for AY 2013-14 in ITA No.3665/Mum/2023 (supra) shall apply mutatis

mutandis to the assessment years 2014-15 to 2017-18. Accordingly, the appeals

are allowed for statistical purpose.

16.

In the combined result, the appeals of the assessee are allowed for

statistical purpose.

Order is pronounced on 08.07.2026.

Sd/- Sd/- (SAKTIJIT DEY) (BIJYANANDA PRUSETH) VICE PRESIDENT ACCOUNTANT MEMBER *Aniket Chand; Sr. PS MUMBAI Date: 08.07.2026 Copy of the Order forwarded to: 1. The Assessee 2. The Respondent 9

3.

The CIT(A) 4. CIT 5. DR/AR, ITAT, MUMBAI 6. Guard File By Order

Assistant Registrar ITAT, MUMBAI

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