SANDESH HEMACHANDRA SHETTY,USA vs. INCOME-TAX OFFICER WARD 42(3)(3), MUMBAI

ITA 7333/MUM/2026Status: DisposedITAT Mumbai28 September 2026AY 2017-20187 pages
AI SummaryAllowed

What were the facts?

The assessee, Sandesh Hemachandra Shetty, an individual, is in appeal against the order of the NFAC/CIT(A) dated 22-Apr-2025 for Assessment Year 2017-18. The assessee did not file a return of income. Based on information from the Insight Portal, the Assessing Officer (AO) noted time deposits of ₹1,04,20,586/- made by the assessee. The assessee did not respond to notices under Section 148A, leading to an order under Section 148A(d) and a notice under Section 148. During reassessment, the assessee also failed to file a return and responded partially to notices under Section 142(1). The AO completed the assessment ex parte under Section 147, treating the ₹1,04,20,586/- as unexplained investment under Section 69. The appeal before the CIT(A) was filed with a delay of 345 days. The CIT(A) dismissed the appeal as not maintainable without adjudicating on merits.

What did the Tribunal hold?

The Tribunal held that the delay of 345 days in filing the appeal before the CIT(A) should be condoned in the interest of substantial justice. The Tribunal noted the assessee's status as an NRI residing and working in the USA, his unfamiliarity with electronic assessment, and the personal circumstances involving his father's serious illness and subsequent demise, as well as his mother's care. The Tribunal found these circumstances could not be brushed aside. Citing the Supreme Court's decisions in Collector, Land Acquisition v. Mst. Katiji & Others and N. Balakrishnan v. M. Krishnamurthy, the Tribunal emphasized a liberal approach to condonation of delay to avoid defeating substantial justice on technicalities. The length of delay is not decisive; a reasonable explanation and the merits of the case are material. Since the appeal had not been examined on merits by the CIT(A), the Tribunal condoned the delay and set aside the CIT(A)'s order. The matter was restored to the file of the Assessing Officer for de novo consideration. The Tribunal did not decide on the other grounds raised by the assessee, as the appeal was allowed on the preliminary issue of condonation of delay.

What were the issues?

1. Whether the CIT(A) erred in dismissing the appeal solely on the ground of delay without adjudicating the substantial grounds of appeal on merits, and whether the delay should be condoned. (Question of law and fact, turning on principles of natural justice and condonation of delay). 2. Whether the impugned order of the CIT(A) is bad in law and contrary to principles of natural justice due to issuance without any notice of hearing/opportunity. (Question of law, turning on principles of natural justice). 3. Whether the initiation of proceedings under Section 147 is without jurisdiction and void ab initio due to the absence of a valid 'reason to believe that income has escaped assessment'. (Question of law, turning on Section 147 and Section 148). 4. Whether there was an erroneous and excessive tax demand due to a gross arithmetic error in computation under Section 156, resulting in double addition of ₹1,04,20,586/-. (Question of fact and law, turning on Section 156 and Section 69). 5. Whether the initiation of multiple penalty proceedings under Sections 271AAC(1), 271(1)(d), and 271F is bad in law. (Question of law, turning on penalty provisions). Assessee's contentions: The delay in filing the appeal before the CIT(A) should be condoned due to the assessee being an NRI residing in the USA, unfamiliar with Indian electronic assessment proceedings, and facing personal family circumstances (father's serious illness and demise, mother's care). The CIT(A) order was passed without a hearing opportunity. The assessment was completed ex parte without the assessee being able to present evidence regarding fixed deposits, which were renewals of NRE fixed deposits, and bank records were difficult to obtain due to the merger of Corporation Bank with Union Bank of India. The assessee seeks an opportunity to present the material before the AO. The AO erroneously considered the income twice, leading to double addition. Penalty proceedings are bad in law. Revenue's contentions: Not recorded in the judgment.

Which sections of the Income-tax Act were involved?

Section 148A,Section 148,Section 142(1),Section 147,Section 69,Section 156,Section 271AAC(1),Section 271(1)(d),Section 271F

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, MUMBAI

Before: SHRI SIDDHARTHA NAUTIAL & SHRI PRABHASH SHANKAR

For Respondent: Shri Rajgopal Parthasarathi, Sr

PER SHRI SIDDHARTHA NAUTIAL, JUDICIAL MEMBER:

This appeal is filed by the assessee against the order of Ld. NFAC / Ld. CIT(A) vide order dated 22-Apr-2025 for the Assessment Year 2017-18. The assessee has raised the following grounds of appeal:

GROUND NO. 1: ERRONEOUS DISMISSAL OF APPEAL BY CIT(A) ON ACCOUNT OF DELAY-FAILURE TO EXERCISE JURI ICTION

1.

1 On the facts and circumstances of the case and law, the Commissioner of Income- tax (Appeal) (hereinafter referred to as the CIT(A)) erred in d

The order continues below.

Read the full judgment

A free account opens 10 full judgments a month. Re-reading one you have already opened does not count again.

Create a free accountSign in

See plans and prices

The summary, the parties, the sections and the citations above are open to everyone and always will be. Only the text of the order and the PDF are metered.

More judgments on Section 148A

All 3,491 judgments and leading authorities on Section 148A →

Recent GST High Court judgments

Search GST case law →