JIGNESH TALAKSHI GALA ,MUMBAI vs. INCOME TAX OFFICER WARD 20(2)(1), MUMBAI

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ITA 1255/MUM/2026Status: DisposedITAT Mumbai18 May 2026AY 2009-104 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal, noting the contentious issues and the assessee's non-compliance before the lower appellate authority, decided to remand the case back to the CIT(A) for a proper adjudication. This was granted as a last opportunity, subject to a deposit.

What were the facts?

The assessee appealed against the CIT(A)'s order confirming reassessment proceedings and additions to business income. The assessee had failed to appear before the CIT(A) despite multiple opportunities, leading to an ex-parte order.

What were the issues?

The primary issues were the validity of reassessment proceedings and the addition of income, which could not be properly adjudicated due to the assessee's non-compliance before the CIT(A).

Which sections of the Income-tax Act were involved?

Section 147,Section 148,Section 143(2)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “J (SMC

Pronounced: 18.05.2026

आयकरअपीलीयअिधकरण�ायपीठमुंबईम�। IN THE INCOME TAX APPELLATE TRIBUNAL “J (SMC)” BENCH, MUMBAI BEFORENARENDER KUMAR CHOUDHRY, JM & SHRI ARUN KHODPIA, AM I.T.A. No.1255/Mum/2026 (Assessment Year: 2009-10) Jignesh Talakshi Gala Income Tax Officer, Ward 20(2)(1), 7/28, Meghchhaya C.H.S.L., Sai Mumbai Baba Road, Lalbaug, Mumbai- Vs. Piramal Chambers, Dr. S.S. Rao Road, 400012 Lalbaug, Mumbai-400012 PAN: ADTPG9942K Assessee- अपीलाथ� / Appellant Revenue-��थ�/ Respondent :

Assesseeby : Shri Vijay Shah : Shri Pankaj Kumar (CIT-DR)/Shri Revenueby Aditya Rai (Sr. DR) : 20.04.2026 Date of Hearing Date of Pronouncement : 18.05.2026

O R D E R Per Arun Khodpia, AM: This appeal is preferred by the assessee against the order of Commissioner of Income Tax Appeals-ADDL/JCIT (A)-3 Bengaluru [in short, “the Ld. CIT(A)”] dated 15.12.2025 for the assessment year 2009-10, which in turn arises from assessment order u/s 147 of the Income Tax Act, 1961 (“the Act”) dated 15.12.2016 passed by Income Tax Officer-20(2)(1), Mumbai (in short, “the Ld. AO”). The grounds of appeal are as under:

ITA No. 1255/Mum/2026 Jignesh Talakshi Gala “1. Validity of Reassessment Proceedings: - On the facts and circumstances of the case and in law, Learned Commissioner (Appeals) has erred in confirming the Reassessment Proceedings in spite of the fact that (i) the Notice U/S 148 is never ever served to the Assessee. (ii) the reasons recorded for reopening the assessment were not mentioning name of assessee. (iii) The Assessing Officer has failed to record her satisfaction about escapement of income in the reasons recorded for reopening the assessment. (iv) Copy of Approval from Appropriate Authority is not provided. (v) The information on the basis of which the Notice U/S 148 was received by the Department in March 2010 when the time limit for issue of Notice U/S 143 (2) for Regular Scrutiny Assessment was not over. Therefore, the Reassessment Proceedings U/S 147 are bad in law and liable to be quashed. 2. Validity of Addition of Rs.31,55,515/-:- On the facts and circumstances of the case and in law, Learned Commissioner (Appeals) has erred in confirming the actions of the Assessing Officer of rejection of Business Loss of Rs.45,317/- declared in the Return of Income by the Assessee and addition of Rs.31,55,515/- to the Business Income. The addition is arbitrary, unjustified and unsustainable in law as (i) No discrepancies found in the Details viz. Ledger, Global Report as well as Contract Notes filed by the Assessee in respect of all transactions. The Details viz. Ledger, Global Report as well as Contract Notes are completely matching with the Details of STT as per Form No. 10DB. (ii) The Assessing Officer has failed to provide the exact details of transactions in which client code modification has occurred during the course of Assessment Proceedings and therefore Assessee was not able to rebut the said information. (iii) The Assessing Officer has failed to carry out any independent verification of the information received from Investigation Wing and bringing any concrete evidence on record. (iv) The Commissioner (Appeals) as well as the Assessing Officer has failed to appreciate the fact that the client code modifications were during the normal course of business and within permissible limits set by Securities and Exchange Board of India (SEBI) as well as National Stock Exchange (NSE). (v) Assessee is not subjected any penal proceedings by SEBI in respect of all stock market transactions done by him.

ITA No. 1255/Mum/2026 Jignesh Talakshi Gala Thus, the Assessment Order is passed on the basis of reason to doubt and not reason to believe and hence the Order needs to be quashed. Consequently, the rejection of Business Loss of Rs.45,317/- and addition of Rs.31,55,515/- to the Business Income of the Assessee is bad in law and liable to be deleted.”

2.

At the outset, it is observed that despite affording 4 opportunities, the Assessee remain noncompliant before the first appellate authority.On being asked, unable to satisfactorily explain the reason for non-appearance and/or non- compliance. Further, it appears from the impugned order that the Ld. CIT(A) has passed a detailed order, analyzing the factual background and the documents as produced before the AO and therefore, the Assessee shall not be entitled for any leniency. Further, the ld. Counsel has prayed for last and final opportunity in the interest of justice. Admittedly, the Assessee before the Ld. Commissioner has failed to file the relevant submission/ documents and the issues involved appears to be contentious and therefore, in the forced circumstances, the ld. CIT(A) was constrained to pass the order as ex-parte.

3.

As observed above, the issues involved are contentious, thus without providing the relevant submission/documents, the same cannot be adjudicated in its right perspective and proper manner. We, therefore, considering the peculiar facts and circumstances in totality, are inclined to afford one more opportunity to the Assessee as well as for just and proper decision of the case for substantial justice, we are remanding the instant case to the file of the Id. CIT(A). However, subject to deposit of Rs.11,000/- in the Revenue Department under 'other heads' within 15 days from today. We clarify that in case of any subsequent default, the 3

ITA No. 1255/Mum/2026 Jignesh Talakshi Gala Assessee shall not be entitled for any leniency. The Assessee therefor directed to comply in the set aside proceedings without any default.

4.

The Assessee would be at liberty to raise all grounds, including legal in nature, as per the issues involved before the ld. Commissioner.

5.

In the result, Assessee's appeal is allowed for statistical purposes, in above terms. Order pronounced in the open court on 18-05-2026.

Sd/- Sd/- (ARUN KHODPIA) (NARENDER KUMAR CHOUDHRY) JUDICIAL MEMBER ACCOUNTANT MEMBER

Mumbai, Dated : 18-05-2026. Ankit K., Sr. PS

Copy of the Order forwarded to : 1. The Appellant 2. The Respondent 3. DR, ITAT, Mumbai 4. Guard File 5. CIT

BY ORDER,

(Dy./Asstt. Registrar) ITAT, Mumbai 4

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