JAISHRI PANDE,PUNE vs. THE INCOME TAX OFFICER, WARD 27(1)(5), MUMBAI

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ITA 7481/MUM/2026Status: DisposedITAT Mumbai23 September 2026AY 2016-201716 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the assessee's explanation for the delay in filing appeals before the CIT(A) was bona fide and supported by attending circumstances and her sworn affidavit. The Tribunal noted that there was no material to demonstrate the assessee's personal receipt of notices or actual knowledge of the proceedings. The assertion of not residing at the PAN address, not being registered on the e-filing portal until 25.09.2025, and gaining knowledge of demands only on 04.02.2026 was not rebutted. Citing Supreme Court judgments in Collector, Land Acquisition v. Mst. Katiji & Others and N. Balakrishnan v. M. Krishnamurthy, the Tribunal found that the assessee was prevented by sufficient cause and condoned the delay in all four appeals, admitting them for adjudication on merits. Regarding the quantum addition, the Tribunal found that the Agreement for Sale and Deed of Assignment represented a single transaction for one property with a consideration of ₹1,10,00,000, not two independent purchases. The Deed of Assignment expressly referred to the Agreement for Sale. The Tribunal also noted that the property was financed through a housing loan from ICICI Bank, with the assessee as a joint holder and co-applicant, and no part of the consideration represented her unexplained investment. Therefore, the addition of ₹2,20,00,000 was deleted. The penalties under sections 271(1)(c), 271(1)(b), and 271F were consequently deleted as they were consequential to the addition.

What were the facts?

The assessee, Jaishri Pande, an individual and senior citizen, is in appeal before the ITAT against orders of the CIT(A) National Faceless Appeal Centre. The assessment year is 2016-17. The appeals arise from reassessment proceedings under section 147 read with section 144, which resulted in an addition of ₹2,20,00,000 under section 69, and consequential penalties under sections 271(1)(c), 271(1)(b), and 271F. The Assessing Officer reopened the assessment based on information flagged under the Risk Management System regarding two property purchase entries. The assessee did not file a return for the year. Notices were allegedly served by affixture, and the assessment was completed ex parte. The CIT(A) dismissed the assessee's appeals as belated without adjudicating on merits, finding the explanation for the delay not cogent.

What were the issues?

1. Whether the delay in filing the appeals before the CIT(A) is liable to be condoned on the ground of sufficient cause, as per Section 253(1) of the Income Tax Act, 1961 (mixed question of law and fact). Assessee's contention: The delay was due to circumstances beyond her control. She was not residing at the address in her PAN records, did not receive statutory notices, was not registered on the e-filing portal until 25.09.2025, and only became aware of the demands on 04.02.2026. She acted with expedition thereafter. Reliance was placed on the affidavit and Supreme Court judgments in Collector, Land Acquisition v. Mst. Katiji & Others and N. Balakrishnan v. M. Krishnamurthy. Revenue's contention: The learned CIT DR relied upon the orders of the authorities below and supported the dismissal of the appeals on account of delay, as well as the addition and penalties. 2. Whether the addition of ₹2,20,00,000 under section 69 is justified, and if so, whether the consequential penalties are leviable (mixed question of law and fact). Assessee's contention: The Agreement for Sale dated 18.09.2015 and Deed of Assignment dated 05.11.2015 were part of a single transaction for one property with a total consideration of ₹1,10,00,000. The property was primarily purchased by her son through a housing loan, and she was a joint holder/co-applicant, with no unexplained investment by her. Revenue's contention: Relied upon the orders of the authorities below.

Which sections of the Income-tax Act were involved?

Section 69,Section 147,Section 144,Section 271(1)(c),Section 271(1)(b),Section 271F,Section 148,Section 142(1),Section 253(1)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘F’ BENCH

Before: SHRI AMIT SHUKLA & SHRI MAKARAND VASANT MAHADEOKAR

For Appellant: Ms. Daini Shinde (Virtual
For Respondent: Shri Dhiraj Kumar, SR DR
Hearing: 22/09/2026Pronounced: 23/09/2026

आदेश / O R D E R PER AMIT SHUKLA (J.M): The aforesaid four appeals have been preferred by the same assessee for Assessment Year 2016–17 against separate orders passed by the learned Commissioner of Income-tax (Appeals), National Faceless Appeal Centre, arising from the assessment framed under section 147 read with section 144

2 ITA No.7478-7481/Mum/2026 Jaishri Pande of the Income-tax Act, 1961 and the consequential penalties levied under sections 271(1)(c), 271(1)(b) and 271F of the Act. Since all these appeals arise from the same assessment proceedings and involve a common and interlinked set of facts, they were heard together and are being disposed of by this consolidated order. The respective proceedings comprise the quantum addition of ₹2,20,00,000 made under section 69, penalty of ₹66,00,000 levied under section 271(1)(c), penalty of ₹20,000 levied under section 271(1)(b) and penalty of ₹5,000 levied under section 271F of the Act.

ITA No. Nature of Amount proceedings 7478/Mum/2026 Penalty under section ₹5,000 271F 7479/Mum/2026 Penalty under section ₹66,00,000 271(1)(c) 7480/Mum/2026 Addition under section ₹2,20,00,000 69 in assessment under section 147 read with section 144 7481/Mum/2026 Penalty under section ₹20,000 271(1)(b)

2.

The facts leading to the quantum addition are that the assessee, an individual and a senior citizen, had not filed her return of income for the year under consideration. On the basis of information flagged under the Risk Management System, the Assessing Officer noticed two entries relating to purchase of immovable property, one for ₹1,10,00,000 dated

3 ITA No.7478-7481/Mum/2026 Jaishri Pande 18.09.2015 and another for an identical amount dated 05.11.2015. Proceeding on the premise that these represented two distinct purchases made by the assessee, the Assessing Officer reopened the assessment and issued notice under section 148 on 26.03.2023. The notices under section 142(1) dated 22.11.2023 and 28.12.2023 were stated to have been uploaded on the e-filing portal and the final show-cause notice dated 24.01.2024 was stated to have been served by affixture. As there was no compliance, the assessment was completed ex parte under section 147 read with section 144 vide order dated 29.02.2024, treating the aggregate amount of ₹2,20,00,000 as unexplained investment under section 69. Consequentially, penalty proceedings under sections 271(1)(c), 271(1)(b) and 271F were also initiated and culminated in the respective penalties referred to above.

3.

The assessee challenged the assessment as well as the three penalty orders before the learned CIT(A). All the appeals were filed belatedly. It was explained that the assessee was not residing at the address appearing in her PAN records; the postal communications sent to that address had not been received by her; and the subsequent service claimed to have been effected by affixture was also at an address where she was not residing during the relevant period. It was further explained that the assessee was not registered on the income- tax e-filing portal at the material time and registered herself

4 ITA No.7478-7481/Mum/2026 Jaishri Pande on the portal for the first time only on 25.09.2025. According to the assessee, effective knowledge of the assessment, the penalty orders and the consequential demands was acquired only upon receipt of a departmental communication dated 04.02.2026, whereafter she took immediate steps to ascertain the details of the proceedings, obtain the relevant records and avail the statutory appellate remedies. The learned CIT(A), however, declined to condone the delay, observing that the assessee had not furnished a cogent explanation for not attending to the earlier electronic communications and that the appeals had been filed after a substantial lapse of time. Accordingly, all four appeals were dismissed as non- maintainable without adjudicating either the quantum addition or the penalties on merits.

4.

Before us, the learned counsel submitted that the delay was occasioned by circumstances entirely beyond the assessee’s knowledge and control. Our attention was drawn to the affidavit of the assessee, wherein she has affirmed that during the relevant period she was residing at Flat No. 107, B-Wing, Progressive’s Celebrity Cooperative Housing Society, Plot No. 71, Sector 15, CBD Belapur, Navi Mumbai, and not at the address appearing in her PAN records, namely E-96, ONGC Colony, Vidya Vihar (East), Mumbai. She has further affirmed that she neither received the statutory notices nor had any knowledge of the proceedings or the alleged service

5 ITA No.7478-7481/Mum/2026 Jaishri Pande by affixture, and that she was not registered on the income- tax e-filing portal until 25.09.2025. It was submitted that immediately after acquiring knowledge of the outstanding demands on 04.02.2026, the assessee acted with reasonable expedition and pursued the appellate remedies. On the merits of the addition, the learned counsel submitted that the Agreement for Sale dated 18.09.2015 and the Deed of Assignment dated 05.11.2015 did not represent two independent purchases but were two instruments forming part of the same transaction concerning one property having a total consideration of ₹1,10,00,000. It was further submitted that the property had principally been purchased by the assessee’s son, Shri Manu Pande, through a housing loan obtained from ICICI Bank; the assessee was merely included as a joint holder and co-applicant; and no part of the consideration represented any unexplained investment made by her. The learned CIT DR, on the other hand, relied upon the orders of the authorities below and supported the dismissal of the appeals on account of delay as well as the addition and penalties arising from the assessment.

5.

We have heard the rival submissions and perused the material placed on record. At the outset, we find that the explanation furnished by the assessee for the delay is bona fide and stands supported by the attending circumstances as well as her sworn affidavit. The assessment order itself

6 ITA No.7478-7481/Mum/2026 Jaishri Pande records that there was no compliance throughout the proceedings and that the final show-cause notice was served by affixture. There is no material demonstrating that the assessee personally received any of the notices or otherwise acquired actual knowledge of the proceedings at the relevant time. The categorical assertion that she was not residing at the address appearing in the PAN records, was not registered on the e-filing portal until 25.09.2025 and became aware of the demands only on receipt of the departmental communication dated 04.02.2026 has not been rebutted through any independent material. The assessee is a senior citizen who had no independent source of taxable income and had not been regularly filing returns of income. Immediately after acquiring knowledge of the proceedings, she took steps to obtain the orders and pursue the remedies available under the Act. Her conduct does not indicate conscious inaction, negligence or an intention to allow the limitation to expire, nor could she have derived any conceivable advantage by delaying appeals against an assessment resulting in a demand exceeding ₹2 crore and three consequential penalties.

6.

The expression “sufficient cause” cannot be construed in a manner which converts a rule of limitation into an instrument for foreclosing adjudication despite the existence of a bona fide and reasonable explanation. The Hon’ble Supreme Court in Collector, Land Acquisition v. Mst. Katiji & Others [1987]

7 ITA No.7478-7481/Mum/2026 Jaishri Pande 167 ITR 471 (SC) has emphasised that an ordinarily prudent litigant does not stand to benefit by lodging an appeal belatedly and that, when substantial justice and technical considerations are placed in opposition, the cause of substantial justice deserves to be preferred. Likewise, in N. Balakrishnan v. M. Krishnamurthy [1998] 7 SCC 123, it has been held that the length of delay is not decisive and that what is material is the acceptability and bona fides of the explanation. In the present case, the explanation covers the material period, is supported by an affidavit and is consistent with the circumstances recorded in the assessment order itself. We are, therefore, satisfied that the assessee was prevented by sufficient cause from filing the appeals before the learned CIT(A) within the prescribed period. Accordingly, the delay in all four appeals is condoned and the appeals are admitted for adjudication on merits.

7.

Ordinarily, where the first appellate authority dismisses an appeal solely on the ground of limitation without adjudicating the substantive grounds, the matter may be restored to that authority for a decision on merits. However, remand is neither an inexorable rule nor a ritualistic necessity. Where the dispute turns upon documents which are unambiguous, emanate from registered or certified records and require no elaborate factual investigation, the Tribunal, being the final fact-finding authority, would be justified in deciding the issue

8 ITA No.7478-7481/Mum/2026 Jaishri Pande instead of prolonging the proceedings through another round of remand. In the present case, the controversy rests upon the registered Agreement for Sale, the registered Deed of Assignment, the receipt acknowledging the sale consideration and the certified housing-loan statement issued by ICICI Bank. These documents go to the root of the addition, are intrinsically connected with the transaction forming the subject matter of the reassessment, and furnish a complete and readily ascertainable answer to the inference drawn by the Assessing Officer. The learned CIT DR has not pointed out any discrepancy in the identity of the property, the registered instruments or the bank record which may necessitate any further factual enquiry. We, therefore, consider it appropriate to adjudicate the quantum appeal on merits rather than remit a small and clearly ascertainable factual issue for another round of proceedings.

8.

On examining the registered instruments, we find that the Agreement for Sale dated 18.09.2015 and the Deed of Assignment dated 05.11.2015 do not represent two independent purchases. The Deed of Assignment expressly records that it was executed in furtherance of the Agreement for Sale dated 18.09.2015, which had already been registered with the Sub-Registrar, Thane-6, under Serial No. TNN6- 5138-2015. Both instruments concern the very same residential premises, namely Flat No. 107, B-Wing, in the

9 ITA No.7478-7481/Mum/2026 Jaishri Pande building known as “Progressive’s Celebrity,” situated at Plot No. 71, Sector 15, CBD Belapur, Navi Mumbai. The receipt forming part of the registered documentation acknowledges a total sale consideration of ₹1,10,00,000 from the assignees, Shri Manu Pande and Smt. Jaishri Pande, towards the full and final consideration of the same flat. There is no reference in the registered record to the purchase of a second property or to payment of another consideration of ₹1,10,00,000. Thus, the two entries appearing in the information system represented two connected instruments or stages of one and the same property transaction and could not have been aggregated as two separate investments. The addition of ₹2,20,00,000 consequently proceeds from a manifest duplication of the same transaction merely because the Agreement for Sale and the consequential Deed of Assignment were registered or reported on different dates.

9.

Even insofar as the actual consideration of ₹1,10,00,000 is concerned, its source stands duly explained by the certified housing-loan statement issued by ICICI Bank. The statement identifies Shri Manu Pande as the principal borrower and the assessee as the co-applicant, refers to the same property and records a sanctioned and disbursed housing loan of ₹1,09,71,988. The loan was sanctioned on 29.09.2015 and disbursed in two tranches of ₹50,90,235 and ₹58,81,753, aggregating to ₹1,09,71,988. The dates of sanction and

10 ITA No.7478-7481/Mum/2026 Jaishri Pande disbursement, cheque particulars, amount of the loan and description of the property correspond with the contemporaneous purchase documents. The registered receipt also records the manner in which the sale consideration was discharged. The documentary trail, therefore, establishes that substantially the entire consideration was sourced through an institutional housing loan obtained by the assessee’s son, who was the principal borrower and the first named purchaser. The mere fact that the assessee was included as a joint holder in the property and as a co-applicant in the loan documentation does not lead to the conclusion that the investment emanated from her independent or undisclosed funds.

10.

Section 69 can be invoked only where an investment made by the assessee is found to be unrecorded and the assessee either offers no explanation regarding its nature and source or the explanation offered is found to be unsatisfactory. Before an addition can be fastened upon a particular assessee, there must be some positive material demonstrating that the investment was made by that assessee and emanated from funds belonging to her. The mere appearance of the assessee’s name as a joint holder in a registered instrument cannot, without examination of the payment trail, justify attribution of the entire investment to her, particularly when contemporaneous banking records

11 ITA No.7478-7481/Mum/2026 Jaishri Pande identify the son as the principal borrower and disclose the institutional source from which the consideration was substantially funded. In the present case, no material has been brought on record to show that the assessee made any payment towards the purchase from an unexplained source. On the contrary, the registered instruments establish a single transaction of ₹1,10,00,000 and the certified bank statement explains the source of the consideration through the housing loan obtained by her son. The addition is thus unsustainable on two independent counts: first, the same property transaction has been counted twice, resulting in an artificial enhancement of the alleged investment from ₹1,10,00,000 to ₹2,20,00,000; and secondly, the source of the actual consideration stands explained by contemporaneous and verifiable bank records. The addition does not emanate from any positive evidence of an unexplained investment made by the assessee, but from a mechanical aggregation of two registered documents pertaining to the same property. We accordingly direct the Assessing Officer to delete the addition of ₹2,20,00,000 made under section 69. The quantum appeal is, therefore, allowed.

11.

The assessee has also challenged the validity of the reassessment proceedings under section 147 on the grounds of absence of valid jurisdictional foundation, lack of independent application of mind and non-compliance with the

12 ITA No.7478-7481/Mum/2026 Jaishri Pande statutory requirements governing reassessment. Since we have examined the documentary evidence and deleted the entire addition on merits, adjudication of the jurisdictional challenge would not afford any further substantive relief to the assessee. The said ground is, therefore, left open and treated as academic in the present appeal. The ground relating to levy of interest under sections 234A, 234B and 234C is consequential, and the Assessing Officer is directed to recompute the same, if any, while giving effect to this order.

12.

We now take up the penalty of ₹20,000 levied under section 271(1)(b) for the alleged failure to comply with the notices issued under section 142(1). The material before us shows that the assessee was not residing at the address appearing in the PAN records, was not registered on the e- filing portal at the relevant time and had no effective knowledge of the notices. The final show-cause notice was claimed to have been served by affixture at an address where, as affirmed on oath, the assessee was not residing. A failure to comply with a notice can attract penalty under section 271(1)(b) only where such default is without reasonable cause. Section 273B expressly provides that no penalty shall be imposable where the assessee establishes that there was reasonable cause for the failure. A person cannot consciously or deliberately comply with a notice which never came to her knowledge. The very circumstances which have been accepted

13 ITA No.7478-7481/Mum/2026 Jaishri Pande by us while condoning the delay equally constitute reasonable cause for the alleged non-compliance. The default was neither deliberate nor contumacious and, therefore, the penalty of ₹20,000 levied under section 271(1)(b) is directed to be deleted.

13.

Insofar as the penalty of ₹5,000 levied under section 271F is concerned, the undisputed case of the assessee is that she had no independent source of income and no income chargeable to tax during the relevant previous year. The Revenue has not brought any material on record, apart from the impugned addition under section 69, to show that her total income before giving effect to deductions under Chapter VI-A exceeded the maximum amount not chargeable to tax so as to attract an obligation to furnish a return under section 139(1). Since the entire addition made under section 69 has been deleted and there is no independent material establishing that the assessee was otherwise statutorily required to furnish a return of income, the essential foundation for levy of penalty under section 271F ceases to exist. Even otherwise, the absence of any independent taxable income, the assessee’s bona fide belief that she was not required to file a return and the circumstances surrounding the non-receipt of statutory communications furnish reasonable cause within the meaning of section 273B.

14 ITA No.7478-7481/Mum/2026 Jaishri Pande Accordingly, the penalty of ₹5,000 levied under section 271F is also directed to be deleted.

14.

The remaining appeal concerns the penalty of ₹66,00,000 imposed under section 271(1)(c) with reference to the addition of ₹2,20,00,000 made under section 69. The penalty has no independent factual basis apart from the quantum addition. We have already found that the addition arose because the same property transaction was counted twice and that the source of the actual consideration stood duly explained through the housing loan obtained by the assessee’s son. Once the entire quantum addition has been deleted, no income survives with reference to which concealment of particulars or furnishing of inaccurate particulars could be alleged. The substratum of the penalty having disappeared, the penalty of ₹66,00,000 levied under section 271(1)(c) cannot survive and is accordingly directed to be deleted.

15.

Before parting, we may clarify that our decision is founded upon the peculiar and incontrovertible documentary facts obtaining in the present case. The registered instruments establish only one property transaction; the total consideration acknowledged in the registered record is ₹1,10,00,000; the certified bank statement identifies the assessee’s son as the principal borrower and records disbursement of a housing loan of ₹1,09,71,988 in relation to

15 ITA No.7478-7481/Mum/2026 Jaishri Pande the same property; and there is no material showing any unexplained investment by the assessee. A remand in such circumstances would merely prolong the proceedings without serving any meaningful adjudicatory purpose. Accordingly, the addition of ₹2,20,00,000 made under section 69 and the penalties levied under sections 271(1)(c), 271(1)(b) and 271F are deleted.

16.

In the result, all four appeals filed by the assessee are allowed. Order pronounced in the open Court on 23rd September, 2026.

Sd/- Sd/- (MAKARAND VASANT (AMIT SHUKLA) MAHADEOKAR) ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai; Dated 23/09/2026 KARUNA, sr.ps

16 ITA No.7478-7481/Mum/2026 Jaishri Pande Copy of the Order forwarded to : 1. The Appellant 2. The Respondent. 3. CIT 4. DR, ITAT, Mumbai 5. Guard file. //True Copy//

BY ORDER,

(Asstt. Registrar) ITAT, Mumbai

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