KHUSHI SANJAY KHANDAR,MUMBAI vs. WARD 41(4)(2), MUMBAI

IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH MUMBAI BEFORE SHRI SAKTIJIT DEY, VICE PRESIDENT & SHRI MAKARAND VASANT MAHADEOKAR, ACCOUNTANT MEMBER 1. ITA No. 4370/Mum/2026 (Assessment Year: 2016-17) 2. ITA No. 4371/Mum/2026 (Assessment Year: 2018-19) Khushi Sanjay ITO Ward 41(4)(2) Khandar Kautilya Bhavan, 612, 6th Floor, Om Sai Vs. Bandra Kurla Complex Samarth CHS Ltd (BKC), Bandra East, Reilab Building no. 1, Mumbai-400 051 Ladkya Compound Goregaon East, SO, Mumbai-400 063 PAN/GIR No. BHHPK8418F (Applicant) (Respondent) Assessee by None Revenue by Shree Kumar C., Ld. DR Date of Hearing 22.06.2026 Date of Pronouncement 24.06.2026 आदेश / ORDER PER MAKARAND VASANT MAHADEOKAR, AM: These two appeals are directed against separate orders passed by the learned Commissioner of Income Tax (Appeals),

2 ITA No. 4370 & 4371/Mum/2026 Khushi Sanjay Khandar National Faceless Appeal Centre, Delhi [hereinafter referred to as "CIT(A)"], both dated 16.03.2026 under section 250 of the Income Tax Act, 1961 [hereinafter referred to as "the Act"], whereby the appeals filed by the assessee against penalty orders were dismissed in limine on the ground of delay in filing the appeals. Since common facts and identical issues are involved, both appeals were heard together and are disposed of by this consolidated order for the sake of convenience and brevity. Facts in brief 2. The assessee is an individual. In both the years under consideration, additions came to be made in the assessments on account of the difference between the stamp duty value of an immovable property and the purchase consideration disclosed by the assessee. Consequent to such additions, penalty proceedings were initiated by the Assessing Officer. Separate penalty orders were thereafter passed under different provisions of the Act for the respective assessment years. 3. Aggrieved by the levy of penalties, the assessee preferred appeals before the learned CIT(A). However, the appeals were filed beyond the period prescribed under the Act. Along with the memorandum of appeals, the assessee filed applications seeking condonation of delay explaining the circumstances under which the appeals could not be filed within the prescribed period. 4. The common explanation furnished by the assessee before the learned CIT(A) was that she had entrusted all income-tax

3 ITA No. 4370 & 4371/Mum/2026 Khushi Sanjay Khandar matters, including assessment proceedings, penalty proceedings and appellate proceedings, to Advocate Shri Rajendra Soni. According to the assessee, replies had been filed during the penalty proceedings and she was under a bona fide belief that all consequential proceedings, including filing of appeals wherever required, were being duly attended to by the authorised representative. It was stated that due to an inadvertent lapse on the part of the authorised representative, only the quantum appeals were pursued and the penalty matters were not properly attended to. The assessee further stated that she remained completely unaware of such omission and came to know about the penalty orders only when recovery proceedings were initiated by the Department and her bank account was attached. Immediately thereafter, she engaged another professional, namely CA Shri Himanshu Gandhi, and filed the appeals before the learned CIT(A) along with applications for condonation of delay. 5. The learned CIT(A), however, was not satisfied with the explanation offered by the assessee. According to the learned CIT(A), the assessee had failed to comply with several notices issued during the course of penalty proceedings. The learned CIT(A) observed that the filing of belated appeals constituted yet another instance of non-compliance. It was further observed that the assessee was responsible for the acts and omissions of her authorised representative and that no independent confirmation or version of the counsel had been placed on record. The learned CIT(A), therefore, held that the explanation furnished did not

4 ITA No. 4370 & 4371/Mum/2026 Khushi Sanjay Khandar constitute sufficient cause for condonation of delay and accordingly dismissed the appeals in limine without adjudicating the grounds raised on merits.

Particulars A.Y. 2016-17 A.Y. 2018-19 Assessment Assessment completed pursuant Assessment completed under Order to reassessment proceedings section 143(3) read with section initiated under section 148 of 144B of the Act the Act Date of 26.05.2023 22.04.2021 Assessment Order Nature of Addition of Rs.32,62,500/- Addition of Rs.32,62,500/- Addition under section 56(2)(vii)(b) of the under section 56(2)(x) of the Act Act on account of difference on account of difference between stamp duty value and between stamp duty value and purchase consideration of purchase consideration of immovable property immovable property Penalty Section 271(1)(c) of the Act Section 270A of the Act Section Date of 16.06.2025 26.12.2024 Penalty Order Amount of Rs.9,27,341/- Rs.4,61,128/- Penalty Date of Filing 17.10.2025 18.10.2025 of Appeal before CIT(A) Delay in Filing 93 days 266 days Appeal before CIT(A) Date of CIT(A) 16.03.2026 16.03.2026 Order

5 ITA No. 4370 & 4371/Mum/2026 Khushi Sanjay Khandar substance, the common grievance of the assessee in both appeals is that the learned CIT(A) dismissed the appeals solely on the ground of delay without properly examining the explanation furnished by the assessee for condonation of delay and without adjudicating the grounds raised against the penalty orders on merits. The assessee, therefore, seeks restoration of the matters to the file of the learned CIT(A) for adjudication in accordance with law after condoning the delay and granting adequate opportunity of hearing. 8. Before us, the learned Authorised Representative (AR) submitted that the learned CIT(A) has dismissed the appeals solely on the ground of delay without examining the merits of the case. It was submitted that the assessee had furnished a detailed explanation explaining the circumstances leading to the delay. The learned AR contended that the assessee was a lay person who had entrusted the conduct of tax proceedings to a professional and had remained under a bona fide belief that all necessary compliances were being duly attended to. It was submitted that the assessee became aware of the penalty orders only when coercive recovery proceedings were initiated by the Department and immediately thereafter took corrective steps by engaging another professional and filing the appeals. 9. The learned AR further submitted that although the learned CIT(A) found the explanation to be unsatisfactory, no opportunity was afforded to the assessee to substantiate the explanation by filing supporting evidence or additional material. It was argued

6 ITA No. 4370 & 4371/Mum/2026 Khushi Sanjay Khandar that the learned CIT(A) neither issued any notice seeking further explanation nor called upon the assessee to furnish any evidence in support of the averments made in the condonation applications. It was therefore submitted that the appeals were dismissed without granting an effective opportunity to substantiate the cause shown for delay. 10. The learned Departmental Representative relied upon the orders of the learned CIT(A). 11. We have considered the rival submissions and perused the material available on record. The issue before us is not the sustainability of the penalties levied under sections 271(1)(c) and 270A of the Act. The limited issue requiring adjudication is whether the learned CIT(A) was justified in dismissing the appeals in limine without affording adequate opportunity to the assessee to substantiate the explanation furnished for condonation of delay. 12. From a perusal of the impugned orders, it is evident that the learned CIT(A) has primarily relied upon the alleged non- compliances during the penalty proceedings and the absence of supporting material from the authorised representative while rejecting the applications for condonation of delay. At the same time, it is equally evident that no opportunity appears to have been granted to the assessee to substantiate the assertions made in the condonation applications by producing supporting documents, affidavits, correspondence with the authorised

7 ITA No. 4370 & 4371/Mum/2026 Khushi Sanjay Khandar representative, or any other material that may have been relevant for deciding the issue of sufficient cause. 13. It is well settled that while considering an application for condonation of delay, the appellate authority is required to adopt a justice-oriented approach and examine whether the explanation furnished discloses a bona fide cause for the delay. Where the appellate authority entertains doubts regarding the correctness or sufficiency of the explanation, fairness demands that the assessee be afforded an opportunity to substantiate the explanation before an adverse view is taken. 14. In the present case, the learned CIT(A) has not adjudicated any of the substantive grounds raised in the appeals. The appeals have been dismissed solely on the preliminary issue of limitation. Having regard to the facts and circumstances of the case, particularly the explanation furnished by the assessee and the absence of any opportunity to substantiate the same, we are of the considered view that the ends of justice would be adequately met if the impugned orders are set aside and the matters are restored to the file of the learned CIT(A) for fresh adjudication. 15. We accordingly set aside the impugned orders passed by the learned CIT(A) for both assessment years and restore the matters to his file. The learned CIT(A) shall reconsider the applications for condonation of delay after granting adequate opportunity of hearing to the assessee and after considering such evidence and material as may be produced in support of the explanation

8 ITA No. 4370 & 4371/Mum/2026 Khushi Sanjay Khandar furnished. In the event the delay is condoned, the learned CIT(A) shall adjudicate the appeals on merits in accordance with law by passing a reasoned and speaking order.

Order pronounced in the open court on 24.06.2026.

Sd/- Sd/- (SAKTIJIT DEY) (MAKARAND VASANT MAHADEOKAR) VICE PRESIDENT ACCOUNTANT MEMBER Mumbai, Dated 24/06/2026 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