HEMANT MANUBHAI MEHTA,MUMBAI vs. INCOME TAX OFFICER 34(2)(1), MUMBAI, 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. 4090/Mum/2026 (Assessment Year: 2016-17) Hemant Manubhai ITO 34(2)(1) Mehta Kautilya Bhavan, 385, Bhagat Bunglows, Vs. Mumbai-400 051 S. V. Road, Vile Parle, Mumbai-400 056 PAN/GIR No. ACLPM7012K (Applicant) (Respondent) Assessee by None 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 filed by the assessee is directed against the order passed by the learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi[hereinafter referred to as "CIT(A)"], dated 17.02.2026 under section 250 of the Income-tax Act, 1961 [hereinafter referred to as "the Act"]for Assessment Year 2016-17, arising out the assessment order

2 ITA No. 4090/Mum/2026 Hemant Manubhai Mehta dated 27.02.2024 passed under section 147 r.w.s 144 read with section 144B of the Act by the Assessment Unit, Income Tax Department [hereinafter referred to as “Assessing Officer”].

3 ITA No. 4090/Mum/2026 Hemant Manubhai Mehta 4. Pursuant thereto, notice under section 148 of the Act dated 23.03.2023 was issued. Thereafter, notices under section 142(1), centralized communications, intimation for non-compliance and show-cause notices under section 144 of the Act were issued from time to time. The Assessing Officer recorded that no compliance whatsoever was made by the assessee to any of the notices issued during the reassessment proceedings. 5. During the course of reassessment proceedings, the Assessing Officer required the assessee to furnish details regarding the immovable property sold, copies of purchase and sale agreements, working of capital gains, details regarding receipt of sale consideration, relevant bank account statements and details of tax deducted at source under section 194-IA of the Act. According to the Assessing Officer, despite repeated opportunities, the assessee failed to furnish any explanation or documentary evidence. 6. The Assessing Officer further recorded that information regarding sale of immovable property for a consideration of Rs.52,00,000/- had been received from the office of the Joint Sub-Registrar (MSD), Andheri-2 through the Insight Portal. Since no details regarding cost of acquisition, cost of improvement or any other claim were furnished by the assessee, the Assessing Officer completed the assessment ex parte under section 147 read with section 144 and section 144B of the Act vide order dated 27.02.2024 and treated the entire sale consideration of Rs.52,00,000/- as Long Term Capital Gain taxable in the hands

4 ITA No. 4090/Mum/2026 Hemant Manubhai Mehta of the assessee. Consequently, the total income of the assessee was assessed at Rs.52,00,000/-. The Assessing Officer also initiated penalty proceedings under sections 271(1)(b) and 271(1)(c) of the Act. 7. Aggrieved by the aforesaid assessment order, the assessee preferred an appeal before the learned CIT(A). However, the appeal was filed on 16.11.2024 against the assessment order dated 27.02.2024 and was thus delayed by approximately 234 days. In the application seeking condonation of delay, the assessee submitted that he had earlier been filing returns of income through his tax consultant, M/s Hingora & Associates, whose e-mail address and contact details were updated on the Income Tax Portal. It was stated that all notices relating to reassessment proceedings had been sent to the e-mail address of the tax consultant and were never received by the assessee. It was further submitted that during the relevant period the assessee's wife was suffering from serious health issues and had undergone heart surgery, because of which the assessee remained occupied with her treatment and hospitalization. Accordingly, it was pleaded that the delay in filing the appeal occurred due to circumstances beyond the control of the assessee. 8. The learned CIT(A), however, was not convinced with the explanation furnished by the assessee. According to the learned CIT(A), the assessee had himself mentioned the date of receipt of the assessment order as 27.02.2024 and the reasons advanced

5 ITA No. 4090/Mum/2026 Hemant Manubhai Mehta for condonation were not supported by documentary evidence. The learned CIT(A) held that the assessee had failed to establish sufficient cause for condonation of delay of 234 days. Consequently, the application for condonation of delay was rejected and the appeal was dismissed in limine as time-barred without adjudicating the grounds raised on merits. 9. During the course of hearing before us, the learned Authorised Representative (AR) reiterated that the assessee is a resident individual whose principal source of income during the year was interest from savings bank accounts. It was submitted that the assessee had regularly filed returns up to Assessment Year 2013-14. The learned AR submitted that during the year under consideration the assessee and his wife, Smt. Bharati Hemant Mehta, jointly sold a business premises for a total consideration of Rs.52,00,000/- after closure of the business. It was contended that the property was jointly owned and therefore only 50% of the sale consideration could at best be attributed to the assessee. It was further submitted that even such consideration could not be brought to tax without allowing deduction towards cost of acquisition and other admissible deductions while computing capital gains. The learned AR invited our attention to the statement of facts submitted before the CIT(A) and submitted that notices issued during reassessment proceedings were sent to the e-mail address of the erstwhile tax consultant and never came to the knowledge of the assessee. Consequently, the assessee could not participate in the

6 ITA No. 4090/Mum/2026 Hemant Manubhai Mehta proceedings and the assessment came to be completed ex parte. It was submitted that when the assessee subsequently became aware of the tax demand, he voluntarily computed the actual capital gains and paid self-assessment tax of Rs.1,94,790/-. The learned AR submitted that the learned CIT(A) dismissed the appeal merely on the ground of limitation without examining the merits of the additions made by the Assessing Officer. He therefore prayed that one final opportunity be granted and the matter be restored to the file of the Assessing Officer for fresh adjudication after considering all relevant facts and evidences. 10. The learned Departmental Representative did not object to the request of the assessee for restoration of the matter to the file of the Assessing Officer for fresh adjudication, subject to the assessee extending full cooperation and furnishing all requisite details during the reassessment proceedings. 11. We have heard the rival submissions and perused the material available on record. The short issue arising for our consideration is whether, in the facts and circumstances of the present case, the learned CIT(A) was justified in declining to condone the delay and dismissing the appeal without examining the issues involved on merits. 12. It is an undisputed position that the assessment was framed ex parte under section 147 read with section 144 and section 144B of the Act. The Assessing Officer treated the entire sale consideration of Rs.52,00,000/- as Long Term Capital Gain primarily because no details were furnished by the assessee

7 ITA No. 4090/Mum/2026 Hemant Manubhai Mehta regarding ownership of the property, cost of acquisition, computation of capital gains or other relevant particulars. The learned CIT(A), on the other hand, dismissed the appeal as time- barred and did not adjudicate the grounds raised on merits. 13. We find that the assessee has consistently maintained that notices issued during the assessment proceedings were sent to the e-mail address of the erstwhile tax consultant and therefore did not come to his knowledge. The assessee has also explained the circumstances relating to the medical condition of his wife during the relevant period. Be that as it may, we find that substantial issues relating to computation of capital gains arising from sale of immovable property remain unexamined. The assessee has specifically contended that the property was jointly owned, that only 50% of the sale consideration pertained to him and that deduction towards cost of acquisition has not been considered while computing the alleged capital gains. These aspects go to the root of the assessment and require proper verification on the basis of documentary evidence. 14. It is well settled that procedural provisions are intended to advance the cause of justice and not to defeat it. In the facts of the present case, we are of the considered view that the ends of justice would be met if one effective opportunity is granted to the assessee to substantiate his claim before the Assessing Officer. More particularly, when the assessment has been framed ex parte and the appeal has been dismissed on the ground of limitation without examination of merits, denial of an opportunity to the

8 ITA No. 4090/Mum/2026 Hemant Manubhai Mehta assessee may result in taxation of income without proper verification of relevant facts. 15. Considering the totality of facts and circumstances of the case, in the interest of substantial justice, we deem it appropriate to set aside the order of the learned CIT(A). We condone the delay in filing the appeal before the learned CIT(A) and restore the matter to the file of the Assessing Officer for de novo adjudication. The Assessing Officer shall examine all contentions of the assessee, including the claim regarding joint ownership of the property, computation of capital gains, cost of acquisition and any other claim permissible in accordance with law. The assessee shall furnish all relevant documentary evidence in support of his contentions and shall extend full cooperation in the proceedings. Needless to clarify, the Assessing Officer shall afford adequate opportunity of being heard and thereafter decide the matter afresh in accordance with law. All issues are left open.

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 : 1. अपीलाथी / The Appellant

9 ITA No. 4090/Mum/2026 Hemant Manubhai Mehta 2. प्रत्यथी / The Respondent. 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