ARUSHA ATUL BORA,MUMBAI vs. INCOME TAX OFFICER, WD-17(1)(1), MUMBAI

आदेश / ORDER PER BEENA PILLAI, JUDICIAL MEMBER: Present appeal by the assessee is directed against the order passed by the NFAC, Delhi [hereinafter referred to as “Ld.CIT(A)”], dated 16/09/2025, for A.Y. 2015-16 arising out of the penalty order passed by the Ld. AO u/s 271(1)(c) of the Income Tax Act, 1961 ("the Act") on the following grounds of appeal:-

“1) On facts and circumstances of the case and in law, Ld. CIT(A) erred in not condoning the delay in filing of the first appeal by 968 days, though there existed bonafide reasons and compelling circumstances that had precluded the appellant to file the first appeal in time.

2) On facts and circumstances of the case and in law, Ld. CIT(A) erred in not considering the appellants Affidavit and supporting documents, establishing the bonafide reasons for delay in filing of the first appeal.

3) On facts and circumstances of the case and in law, Ld. AO erred in issuing the notice u/s 274 in general and mechanical manner without intimating the specific charge of Furnishing inaccurate particulars of income OR Concealing the particulars of income, thereby the consequential levy of penalty is bad in law.

4) On facts and circumstances of the case and in law, the levy of penalty u/s.271(1)(c) is invalid, since the initiation of penalty in the assessment order had been made without intimating the specific charge of Furnishing inaccurate particulars of income OR Concealing the particulars of income.

5) On facts and circumstances of the case and in law, Ld. CIT(A) ought to have deleted the Penalty u/s 271(1)(c) of Rs.10,10,661/- in respect of addition made of unexplained cash deposits made in bank accounts of Rs.35,20,240/-.

6) The Ld. CIT(A), ought to have deleted the Penalty u/s 271(1)(c) of Rs.10,10,661/-, on considering the bonafide explanation of the appellant, as under - a) The cash deposits made in bank accounts is sourced out of withdrawal of cash from same bank accounts in earlier and impugned year. b) The documentary evidences containing date-wise details of cash deposits and withdrawals, bank statements and other documents are filed on assessment record.”

2.1. The Ld.DR on the other hand, relied on the orders passed by the authorities below.

We have perused the submissions advanced by both sides in light of the record places before this Tribunal.

3.1. The grievance of the assessee before us is that the Ld. CIT(A) failed to properly appreciate the affidavit and supporting documents filed in support of the condonation petition and rejected the explanation furnished by the assessee without considering the attendant facts and circumstances. We find merit in the contention of the assessee that the cause of substantial justice deserves to be preferred over technical considerations. It is a settled proposition that a liberal approach is required while considering an application for condonation of delay, particularly where refusal to condone the delay would result in denial of an opportunity to have the dispute adjudicated on merits.

3.2. We further find that in the corresponding quantum proceedings arising out of the same assessment year, the Tribunal has already condoned the delay in filing the appeal before the Ld. CIT(A) and restored the matter for adjudication on merits. In our considered view, the facts and circumstances in the present penalty proceedings warrant a similar approach.

3.3. Considering the totality of the 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 968 days in filing the appeal before the Ld. CIT(A) is condoned. Since the Ld. CIT(A) has not adjudicated the grounds raised by the assessee on merits, we deem it appropriate to set aside the impugned order and restore the matter to the file of the Ld. CIT(A) for fresh adjudication in accordance with law after affording reasonable opportunity of being heard to the assessee.

Accordingly, the impugned order is set aside and the appeal is restored to the file of the Ld. CIT(A) for adjudication afresh on merits along with quantum proceedings. The grounds raised by the assessee are allowed for statistical purposes.

In the result, appeal filed by assessee stands allowed for statistical purposes.

Order pronounced in the open court on 18/06/2026

Sd/- Sd/- JAGADISH BEENA PILLAI ACCOUNTANT MEMBER JUDICIAL MEMBER

Mumbai Dated: 18/06/2026 SC. Sr. P.S. Copy to: ARUSHA ATUL BORA, 919, MAKER CHAMBER, NARIMAN 1 POINT, MUMBAI, MUMBAI-400021, MAHARASHTRA

INCOME TAX OFFICER, WD-17(1)(1), KAUTILYA BHAVAN, BANDRA KURLA 2 COMPLEX, MUMBAI, MUMBAI-400051, MAHARASHTRA

3 THE PCIT / CIT, 4 THE D.R., ITAT, MUMBAI BENCH 5 GUARD FILE