RAJESH GOPIKRISHAN SHROFF,MUMBAI vs. INCOME TAX OFFICER, WARD 41(3)(3) , MUMBAI

IN THE INCOME-TAX APPELLATE TRIBUNAL, MUMBAI “D” BENCH, MUMBAI BEFORE SHRI SANDEEP GOSIAN, JUDICIAL MEMBER AND SHRI BIJAYANANDA PRUSETH, ACCOUNTANT MEMBER ITA No.1700/MUM/2026 (AY: 2020-21) Rajesh Gopikrishan Shroff vs. ITO WARD 41(3)(3) B 110 Upvan Tower Upper Govind Kautilya Bhawan, C41-43, Avenue 3, Nagar, Malad East, Mumbai – near Videsh Bhavan, G Block BKC, 400097. Gilban Area, Bandra Kurla Complex, Bandra East, Mumbai-400051. PAN/GIR No: AHCPS3274K (Appellant) (Respondent) Assessee by Shri Krishore Pandey Revenue by Shri Umashankar Prasad (CIT DR) & Shri Annavaram Kosuri (SR AR) Date of Hearing 18.05.2026 Date of Pronouncement 13.08.2026 O R D E R PER BIJYANANDA PRUSETH, AM:

This appeal filed by the assessee emanates from the order passed under

section 250 of the Income-tax Act, 1961 (in short, ‘Act’) by the National Faceless

Appeal Centre [in short, ‘CIT(A)’], dated 05.01.2026 for the assessment year

(AY) 2020-21.

“1 On the facts and in the circumstances of the case and as per the law, the National Faceless Appeal Centre/Commissioner of Income Tax (Appeals) (the learned Commissioner (Appeals)) erred in deciding the appeal ex-parte in violation of the principle of natural justice. Thus, the order dated 05.01.2026 may be set aside and the matter may be restored back to the file of the learned Commissioner (Appeals).

ITA No.1700/MUM/2026 Rajesh Gopikrishan Shroff the learned Commissioner (Appeals) is bad in law since it dismisses the appeal on the reason of non-prosecution and does not adjudicate on the grounds/additional grounds of appeal and the issues under consideration. The said order being in violation of the provisions of Section 250 and 251 of the Act and the decision of the Honble jurisdictional Bombay High Court in CIT vs. Premkumar Arjundas Luthra (HUF)- [2016] 69 taxmann.com 407 (Bombay) may be quashed. 3. Without prejudice to the above, on the facts and in the circumstances of the case and as per the law, the addition of Rs.55,25,575/- under the head income from salary being unsustainable in law may be deleted.

4 Without prejudice to the above, on the facts and in the circumstances of the case and as per the law, the addition of Rs. 3,43,695/- under the head income from other sources being unsustainable in law may be deleted.

Miscellaneous ground:

for the AY 2020-21. The case was reopened and after hearing the assessee, order

u/s 147 r.w.s 144 was passed on 12.03.2025 determining total income at

Rs.58,69,270/-. Aggrieved by the order of AO, the assessee filed appeal before the

CIT(A). The CIT(A) has issued 5 notices of hearing u/s 250 of the Act. There was

request for adjournment on 2 occasions and the assessee did not file any reply on

other 3 hearings. Therefore, the CIT(A) has dismissed the appeal for non-

prosecution.

Tribunal. The Ld. AR submitted that the ex parte order by the CIT(A) is in violation

of the principles of natural justice. He also submitted that the said order is in 2

ITA No.1700/MUM/2026 Rajesh Gopikrishan Shroff violation of the provisions of section 250 and 251 of the Act and the decision of

Hon’ble Bombay High Court in case of Premkumar Arjundas Luthara (HUF)

(Supra). He requested that the appellant may be given one more opportunity to

plead his case on merit.

He would, however, have no objection if the matter is restored to the file of CIT(A)

for fresh decision.

passed the order by making addition of Rs.58,69,270/-. The CIT(A) has upheld the

addition due to non-compliance to the notices issued u/s 250 of the Act. The

appellant has explained the reasons for non-compliance to the notices of the

CIT(A). We also find that the order of CIT(A) is not as per the mandate of sub-

section 250(6) of the Act, which mandates that the order must clearly state the

specific points for determination, the final decision on each point and the

rationale for the decision. We also find that the Hon’ble Bombay High Court in

case of Premkumar Arjundas Luthara (supra), after considering provisions of

section 250 and 251 of the Act, has decided similar issue by observing as under:

“8. From the aforesaid provisions, it is very clear once an appeal is preferred before the CIT(A), then in disposing of the appeal, he is obliged to make such further inquiry that he thinks fit or direct the Assessing Officer to make further inquiry and report the result of the same to him as found in Section 250(4) of the Act. Further Section 250(6) of the Act obliges the CIT(A) to dispose of an appeal in writing after stating the points for determination and then render a decision on each of the points which arise for consideration with reasons in

ITA No.1700/MUM/2026 Rajesh Gopikrishan Shroff support. Section 251(1)(a) and (b) of the Act provide that while disposing of appeal the CIT(A) would have the power to confirm, reduce, enhance or annul an assessment and/or penalty. Besides Explanation to subsection (2) of Section 251 of the Act also makes it clear that while considering the appeal, the CIT(A) would be entitled to consider and decide any issue arising in the proceedings before him in appeal filed for its consideration, even if the issue is not raised by the appellant in its appeal before the CIT(A). Thus once an assessee files an appeal under Section 246A of the Act, it is not open to him as of right to withdraw or not press the appeal. In fact the CIT(A) is obliged to dispose of the appeal on merits. In fact with effect from 1st June, 2001 the power of the CIT(A) to set aside the order of the Assessing Officer and restore it to the Assessing Officer for passing a fresh order stands withdrawn. Therefore, it would be noticed that the powers of the CIT(A) is co-terminus with that of the Assessing Officer i.e. he can do all that Assessing Officer could do. Therefore just as it is not open to the Assessing Officer to not complete the assessment by allowing the assessee to withdraw its return of income, it is not open to the assessee in appeal to withdraw and/or the CIT(A) to dismiss the appeal on account of non- prosecution of the appeal by the assessee. This is amply clear from the Section 251(1)(a) and (b) and Explanation to Section 251(2) of the Act which requires the CIT(A) to apply his mind to all the issues which arise from the impugned order before him whether or not the same has been raised by the appellant before him. Accordingly, the law does not empower the CIT(A) to dismiss the appeal for non-prosecution as is evident from the provisions of the Act. 6.1 Considering the facts of the case and the decision cited above, we are of

the considered opinion that in the interest of justice, the assessee deserves one

more opportunity to explain its case on merit. In view of these facts, we set aside

the order of CIT(A) and restore the matter to the file of CIT(A) for fresh

adjudication on merit in accordance with law after granting adequate and

reasonable opportunity of being heard of the assessee. The ground is allowed for

statistical purpose.

6.2 We make it clear that we have not expressed our opinion on merit of the

case, which the CIT(A) shall independently decide as per law.

ITA No.1700/MUM/2026 Rajesh Gopikrishan Shroff 7. Since we have set aside the order of CIT(A) and remanded it to his file for

fresh adjudication, the other grounds become academic in nature and do not

require adjudication.

Order is pronounced on 13.08.2026.

Sd/- Sd/- (SANDEEP GOSAIN) (BIJYANANDA PRUSETH) JUDICIAL MEMBER ACCOUNTANT MEMBER

*Aniket Chand; Sr. PS MUMBAI Date: 13.08.2026 Copy of the Order forwarded to: 1. The Assessee 2. The Respondent 3. The CIT(A) 4. CIT 5. DR/AR, ITAT, MUMBAI 6. Guard File

By Order

Assistant Registrar ITAT, MUMBAI