NEHA SINGH VARAYA ,MUMBAI vs. INCOME TAX OFFICER WARD 25(3)(1), MUMBAI

IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH MUMBAI BEFORE SHRI CHALLA NAGENDRA PRASAD, JUDICIAL MEMBER & SHRI MAKARAND VASANT MAHADEOKAR, ACCOUNTANT MEMBER ITA No. 7456/Mum/2025 (Assessment Year: 2016-17) Neha Singh Varaya ITO Ward 25(3)(1) Room No. 2A, 1st Floor, Kautilya Bhavan, 23/25, Hasmi Vs. Bandra Kurla Building, Pydhonie, Complex, Bandra Nagdevi, Mandvi, Mumbai-400 051 Mumbai-400 003 PAN/GIR No. CEEPS3310B (Applicant) (Respondent) Assessee by Ms. Neha Paranjpe, Ld. AR Revenue by Shree Kumar C., Ld. DR Date of Hearing 16.06.2026 Date of Pronouncement 18.06.2026 आदेश / ORDER PER MAKARAND VASANT MAHADEOKAR, AM: This appeal is directed against the order dated 15.05.2024 passed by the 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 Assessment Year 2016-17, arising out of the assessment order dated 07.12.2018

2 ITA No. 7456/Mum/2025 Neha Singh Varaya passed by the Income Tax Officer, Ward-17(2)(4), Mumbai [hereinafter referred to as "Assessing Officer or AO"]under section 143(3) of the Act. Condonation of Delay 2. At the outset, the Registry has pointed out that there is a delay of 475 days in filing the present appeal before us. The assessee has filed a petition seeking condonation of delay along with a duly sworn affidavit explaining the reasons for the delay. The assessee has submitted that she is engaged in the business of trading in ready-made garments and had entrusted all income- tax related matters to her tax consultant, Shri Rafique Makker. It has been stated that the appellate order dated 15.05.2024 passed by the learned CIT(A) was communicated to the registered e-mail address of the tax consultant and, therefore, the assessee remained unaware of the disposal of the appeal. It has further been explained that during the relevant period the tax consultant was suffering from cervical spondylosis and other allied ailments and was under medical advice to take rest. In support thereof, a medical report evidencing cervical spondylosis has been placed on record. It has been stated that owing to his medical condition, the tax consultant could not regularly attend his office and consequently could not effectively monitor the e-mails received from the Department. According to the assessee, the appellate order came to the notice of the tax consultant only in November 2025 while reviewing unread e-mails, whereafter immediate steps were taken to prepare and file the present appeal.

3 ITA No. 7456/Mum/2025 Neha Singh Varaya 3. We have considered the petition for condonation of delay, the affidavit filed in support thereof and the material placed on record. We find that the explanation furnished by the assessee demonstrates that the delay occurred on account of circumstances beyond the control of the assessee. The explanation appears to be bona fide and there is nothing on record to suggest that the delay was deliberate or attributable to any mala fide intention. In our opinion substantial justice deserves to prevail over technical considerations and that a liberal approach should ordinarily be adopted while considering applications for condonation of delay. Having regard to the totality of facts and circumstances of the case, we are satisfied that the assessee was prevented by sufficient cause from filing the appeal within the prescribed period. Accordingly, the delay of 475 days in filing the present appeal is condoned and the appeal is admitted for adjudication on merits. Facts of the Case 4. Briefly stated, the facts of the case are that the assessee filed her return of income on 17.12.2016 declaring total income of Rs.3,84,430/-. The case was selected for limited scrutiny under CASS and assessment proceedings were carried out by the Income Tax Officer, Ward-17(2)(4), Mumbai. The assessment was completed under section 143(3) of the Act vide order dated 07.12.2018 determining the total income at Rs.1,21,66,200/-.

4 ITA No. 7456/Mum/2025 Neha Singh Varaya 5. During the course of assessment proceedings, the Assessing Officer noticed that the assessee had purchased a property from M/s. Sai Builders & Developers for a consideration of Rs.23,61,130/-, whereas the stamp duty value of the property was Rs.31,15,000/-. Since the difference of Rs.7,53,870/- was not explained to the satisfaction of the Assessing Officer, the same was added under section 56(2)(vii)(b) of the Act. 6. The Assessing Officer further observed that the assessee had declared business income of Rs.3,81,044/- under section 44AD and gross receipts of Rs.40,97,245/-. Notices under section 133(6) of the Act were issued to Bank of Baroda and Axis Bank and the bank statements were obtained. On examination of the bank accounts, the Assessing Officer noted cash deposits aggregating to Rs.91,61,600/- and other credits aggregating to Rs.35,05,808/-. According to the Assessing Officer, the assessee failed to explain the source of the cash deposits. Accordingly, cash deposits of Rs.91,61,600/- were treated as unexplained cash credits and added under section 68 of the Act. The Assessing Officer also separately added a sum of Rs.18,66,299/- representing certain credits appearing in the Axis Bank account. 7. Aggrieved, the assessee preferred an appeal before the learned CIT(A). The learned CIT(A), vide order dated 15.05.2024 passed under section 250 of the Act, upheld the addition of Rs.7,53,870/- made under section 56(2)(vii)(b) and also upheld the addition of Rs.91,61,600/- on account of cash deposits. However, the addition of Rs.18,66,299/- was deleted on the

5 ITA No. 7456/Mum/2025 Neha Singh Varaya ground that the Assessing Officer had not assigned any cogent reason for treating the said credits as unexplained. Consequently, the appeal of the assessee was partly allowed.

6 ITA No. 7456/Mum/2025 Neha Singh Varaya memorandum of appeal. In respect of Grounds Nos. 1 and 2, it was submitted that the Assessing Officer made the addition of Rs.7,53,870/- under section 56(2)(vii)(b) of the Act merely on the basis of stamp duty valuation without referring the matter to the Departmental Valuation Officer (DVO), despite the assessee having requested for such a reference during the assessment proceedings. It was contended that the property purchased by the assessee was under construction and that the issue requires fresh examination after obtaining an appropriate valuation report. The learned AR therefore prayed that the issue may be restored to the file of the Assessing Officer for fresh adjudication in accordance with law. 10. In respect of Grounds Nos. 3 and 4, the learned AR submitted that the cash flow statement, monthly summary of cash, cash book and sales register placed at Serial Nos. 8 to 11 of the paper book were not produced before the lower authorities. It was submitted that these documents directly relate to the addition of Rs.91,61,600/- sustained by the learned CIT(A) and go to the root of the matter. Accordingly, it was prayed that the issue may also be restored to the file of the Assessing Officer for verification of the additional evidences. 11. The learned Departmental Representative fairly submitted that both the issues would require fresh factual verification. He therefore raised no objection if the issues relating to the addition of Rs.7,53,870/- under section 56(2)(vii)(b) and the addition of

7 ITA No. 7456/Mum/2025 Neha Singh Varaya Rs.91,61,600/- on account of cash deposits are restored to the file of the Assessing Officer for de novo adjudication. 12. We have considered the rival submissions and perused the material available on record. We find that the addition of Rs.7,53,870/- under section 56(2)(vii)(b) was made on the basis of the stamp duty valuation adopted by the Assessing Officer. The contention of the assessee is that the property was under construction and that the matter ought to have been referred to the Departmental Valuation Officer. Considering the facts of the case and the fair stand adopted by the learned Departmental Representative, we are of the view that this issue requires fresh examination at the end of the Assessing Officer. Accordingly, the orders of the lower authorities on this issue are set aside and the matter is restored to the file of the Assessing Officer for fresh adjudication in accordance with law after providing adequate opportunity of being heard to the assessee. 13. As regards the addition of Rs.91,61,600/- on account of cash deposits, we find that the assessee has produced additional evidences in the form of cash flow statement, monthly summary of cash, cash book and sales register, which admittedly were not before the Assessing Officer or the learned CIT(A). Since these documents have a direct bearing on the issue in dispute and require factual verification, we admit the additional evidences in the interest of justice and restore this issue also to the file of the Assessing Officer for de novo adjudication. The Assessing Officer shall examine the additional evidences and all supporting

8 ITA No. 7456/Mum/2025 Neha Singh Varaya documents that may be furnished by the assessee and thereafter decide the issue afresh in accordance with law after granting adequate opportunity of hearing.

Order pronounced in the open court on 18.06.2026.

Sd/- Sd/- (CHALLA NAGENDRA PRASAD) (MAKARAND VASANT MAHADEOKAR) JUDICIAL MEMBER ACCOUNTANT MEMBER Mumbai, Dated 18/06/2026 Dhananjay, Sr.PS आदेश की प्रतितिति अग्रेतिि/Copy of the Order forwarded to : अपीलाथी / The Appellant 1. प्रत्यथी / The Respondent. 2. 3. संबंधधत आयकर आयुक्त / The CIT(A) 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