ANIL KUMAR MALAKAR,MUMBAI vs. INCOME TAX OFFICER, WARD 24(1)(1), MUMBAI, PIRAMAL CHAMBER, 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. 4149/Mum/2026 (Assessment Year: 2015-16) Anil Kumar Malakar ITO Ward-24(1)(1) C/o- CA Arun Sahu, B- Piramal Chamber, 24B, Ground Floor, Vs. Mumbai-400 012 Borivali Vyomesh CHS, Borivali Gymkhana Road, Usha Nagar, Borivali(West), Mumbai-400 092 PAN/GIR No. AKJPM0535D (Applicant) (Respondent) Assessee by Shri Arun Sahu (virtually appeared0, 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 20.03.2025 passed by the Commissioner of Income-tax (Appeals), National Faceless Appeal Centre, Delhi [hereinafter referred to as "CIT(A)"],

2 ITA No. 4149/Mum/2026 Anil Kumar Malakar under section 250 of the Income-tax Act, 1961 [hereinafter referred to as "the Act"], for Assessment Year 2015-16, arising from the assessment order dated 27.12.2017 passed by the Income Tax Officer, Ward-24(1)(2), Mumbai [hereinafter referred to as "Assessing Officer"]under section 143(3) of the Act. Condonation of Delay 2. At the outset, it is noticed that the present appeal has been filed with a delay of 313 days. The Registry pointed out the aforesaid delay in filing the appeal. The assessee filed a petition for condonation of delay supported by a duly sworn affidavit explaining the circumstances which prevented him from filing the appeal within the prescribed period.In the petition and affidavit, the assessee explained that he was facing acute financial hardship during the relevant period and was not in a position to arrange funds for engaging professional assistance for pursuing the appellate remedy. It was submitted that the delay was neither deliberate nor intentional and had occurred solely because of financial constraints beyond his control. It was further stated that immediately upon arranging the necessary resources, the assessee engaged counsel and filed the appeal without any further delay. The learned Departmental Representative (DR) fairly submitted that he had no objection if the delay was condoned and the appeal was heard on merits. 3. We have considered the explanation furnished by the assessee in the condonation petition and supporting affidavit. The facts stated therein have not been controverted by the Revenue.

3 ITA No. 4149/Mum/2026 Anil Kumar Malakar The explanation appears to be bona fide and does not disclose any deliberate negligence or mala fide conduct on the part of the assessee. Further, the learned DR has not objected to the condonation of delay. Considering the totality of facts and circumstances and being satisfied that the assessee was prevented by sufficient cause from filing the appeal within the prescribed period, we condone the delay of 313 days and admit the appeal for adjudication on merits. 4. Briefly stated, the facts of the case are that the assessee, an individual, filed his return of income for Assessment Year 2015- 16 on 04.01.2016 declaring total income of Rs.17,63,110/-. The case was selected for scrutiny under CASS. Notice under section 143(2) dated 22.09.2016 was issued and served upon the assessee. Thereafter, notices under section 142(1) were issued from time to time. In response thereto, Shri Dixit Darji, the authorised representative of the assessee, appeared before the Assessing Officer and furnished details called for during the course of assessment proceedings. 5. During the scrutiny proceedings, the Assessing Officer observed that the assessee had disclosed receipts of Rs.1,85,34,832/- in the return of income, whereas receipts reflected in Form No.26AS amounted to Rs.2,42,93,748/-. Accordingly, a show cause notice dated 22.12.2017 was issued requiring the assessee to explain as to why the difference of Rs.57,58,916/- should not be treated as unaccounted receipts.

4 ITA No. 4149/Mum/2026 Anil Kumar Malakar 6. In response, the assessee submitted that the receipts appearing in Form No.26AS were Rs.2,17,43,230/- and that the discrepancy had arisen due to a genuine mistake while finalising the receipt side of the Profit and Loss Account. It was also explained that the return of income had been filed on the basis of the then available Form No.26AS and that there existed a difference in professional fees amounting to Rs.25,50,518/-. 7. The Assessing Officer was not convinced with the explanation furnished. According to him, the assessee was following the mercantile system of accounting and was required to offer income on accrual basis. He therefore treated the difference of Rs.57,58,916/- as unaccounted receipts and added the same to the total income of the assessee. Consequently, the assessment was completed under section 143(3) of the Act on 27.12.2017 determining the total income at Rs.75,22,020/- as against the returned income of Rs.17,63,110/-. 8. Aggrieved by the assessment order, the assessee preferred an appeal before the learned CIT(A). The appeal was filed belatedly by 172 days. The learned CIT(A), after considering the explanation furnished by the assessee, condoned the delay and admitted the appeal. The learned CIT(A) thereafter issued notices of hearing dated 28.12.2023, 15.01.2025 and 07.03.2025. Since there was no compliance from the side of the assessee, the learned CIT(A) proceeded to dispose of the appeal ex parte. 9. The learned CIT(A) observed that despite several opportunities no written submissions or supporting evidences

5 ITA No. 4149/Mum/2026 Anil Kumar Malakar had been filed by the assessee. Relying upon various dealing with non-prosecution of appeals, the learned CIT(A) held that the assessee had failed to bring any material on record warranting interference with the assessment order. Accordingly, the addition of Rs. 57,58,916/- was confirmed and the appeal was dismissed. 10. Before us, the learned Authorised Representative submitted that the ex parte order passed by the learned CIT(A) deserves to be set aside. Inviting our attention to the written submissions and affidavit placed on record, he submitted that during the period when notices were issued by the learned CIT(A), the assessee was facing severe financial hardship and was unable to engage a tax professional for representing the matter before the first appellate authority. It was submitted that the assessee's income during the relevant years was modest and barely sufficient to meet day-to-day living expenses. Consequently, the assessee could not effectively respond to the notices issued by the learned CIT(A). According to the learned Authorised Representative, the non-compliance before the learned CIT(A) was neither deliberate nor intentional but was attributable to genuine financial constraints. 11. The learned AR further submitted that the addition itself requires detailed examination and reconciliation. He drew our attention to the fact that Form No.26AS downloaded at different points of time reflected different figures of receipts for the same financial year. According to him, Form No.26AS downloaded as updated up to 31.08.2015 reflected receipts of Rs.2,17,43,230/-,

6 ITA No. 4149/Mum/2026 Anil Kumar Malakar whereas Form No.26AS downloaded subsequently reflected receipts of Rs.2,42,93,748/-, resulting in a variation of Rs.25,50,518/-. It was therefore submitted that the matter requires detailed verification of books of account, Form No.26AS and supporting records. The learned AR accordingly prayed that the impugned order be set aside and the matter restored to the file of the Assessing Officer for fresh adjudication. 12. The learned DR relied upon the orders of the lower authorities. However, he fairly left the issue regarding restoration of the matter to the discretion of the Bench. 13. We have heard the rival submissions and perused the material available on record. We find that the learned CIT(A) has dismissed the appeal ex parte primarily on account of non- compliance by the assessee. The merits of the addition have not been examined in detail. We further find that the assessee has placed before us an explanation for non-appearance before the learned CIT(A), namely severe financial hardship and inability to engage professional assistance. The explanation appears to be consistent with the averments contained in the affidavit filed before us. 14. We also find that the dispute relates to reconciliation of receipts reflected in the books of account vis-à-vis receipts appearing in Form No.26AS. The assessee has specifically contended that Form No.26AS downloaded at different points of time reflected different figures and that the addition requires detailed verification of the underlying records. Such factual

7 ITA No. 4149/Mum/2026 Anil Kumar Malakar aspects require proper examination by the first appellate authority after granting adequate opportunity to the assessee to furnish supporting documents and explanations. 15. It is a settled principle that a litigant should ordinarily be afforded a reasonable opportunity of being heard and that disputes should, as far as possible, be resolved on their merits rather than on account of technical defaults. In the present case, we find that the controversy revolves around reconciliation of receipts disclosed in the books of account vis-à-vis the receipts reflected in Form No.26AS. The assessee has also raised a specific contention that Form No.26AS reflected different figures at different points of time and that the addition has been made without carrying out a proper verification of the underlying records. Such issues, in our considered view, require detailed factual examination and verification of documentary evidences at the assessment stage. Considering the totality of the facts and circumstances of the case, we are of the view that the interests of justice would be adequately served by setting aside the orders of the authorities below and restoring the matter to the file of the Assessing Officer for fresh examination. 16. Accordingly, we set aside the impugned order dated 20.03.2025 passed by the learned CIT(A) under section 250 of the Act as well as the assessment order dated 27.12.2017 passed under section 143(3) of the Act to the extent challenged before us, and restore the issue relating to the addition of Rs.57,58,916/- to the file of the Assessing Officer for de novo adjudication. The

8 ITA No. 4149/Mum/2026 Anil Kumar Malakar Assessing Officer shall examine the assessee's claim afresh, including the reconciliation of receipts reflected in the books of account and Form No.26AS, after affording adequate opportunity of hearing to the assessee and after considering such evidences and explanations as may be furnished in support of the claim. The assessee is also directed to extend full cooperation and promptly furnish all documents, reconciliations and details as may be called for by the Assessing Officer. We clarify that we have not expressed any opinion on the merits of the addition and all contentions of both parties are left open for consideration by the Assessing Officer in accordance with law.

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. संबंधधत आयकर आयुक्त / The CIT(A) 3. 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