KUNAL ASHOK MEHTA,VILE PARLE, MUMBAI vs. INCOME TAX OFFICER WARD 34(2)(1), KAUTILYA BHAWAN, BANDRA EAST, MUMBAI

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ITA 2820/MUM/2026Status: DisposedITAT Mumbai22 September 2026AY 2014-154 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that the additional evidence, including cash book, purchase register, invoices, and bank statements, was essential for proper adjudication. While acknowledging the allegations against the erstwhile consultant, the Tribunal found no evidence that the assessee deliberately sought to defeat the law. The Tribunal admitted the additional evidence, subject to the assessee depositing Rs. 22,000/- with the Revenue Department within 15 days. Due to the need for detailed examination of this newly admitted evidence, the Tribunal set aside the impugned order and remanded the matter to the Commissioner (Appeals) for fresh adjudication. The Commissioner (Appeals) is to examine the additional evidence, consider the assessee's explanations, and afford a reasonable opportunity of being heard. The Tribunal explicitly stated that no opinion was expressed on the merits of the additions.

What were the facts?

The assessee, Kunal Ashok Mehta, is appealing an order dated February 20, 2026, passed by the Commissioner of Income-tax (Appeals), National Faceless Appeal Centre. The assessment year in question is 2014-15. The original assessment order, dated December 29, 2016, was passed under section 144 read with section 143(3) of the Income-tax Act, 1961. This order made additions of Rs. 60,51,000/- for short-term capital gain on property sale and Rs. 7,00,000/- for unexplained cash credit under section 68. The assessment was largely ex parte due to the assessee's failure to provide submissions and documents. The Commissioner (Appeals) upheld these additions. The assessee sought to admit additional evidence before the Tribunal, citing disputes with an erstwhile consultant, financial difficulties, and the departure of its accountant.

What were the issues?

1. Whether the Tribunal should admit additional evidence filed by the assessee under Rule 29 of the Income-tax (Appellate Tribunal) Rules, 1963, considering the reasons provided for non-production before the lower authorities? Assessee's Contention: The assessee argued that the non-production of evidence was due to disputes with its former Chartered Accountant, financial hardship, and the absence of its accountant. The evidence was not within its effective possession or control, and its non-production was not deliberate or mala fide. The assessee sought admission subject to costs. Revenue's Contention: The Revenue opposed the admission of additional evidence, contending that the assessee's reasons were not plausible and did not justify admission at this stage. Alternatively, the Revenue submitted that substantial costs should be imposed if the evidence were admitted.

Which sections of the Income-tax Act were involved?

Section 250,Section 144,Section 143(3),Section 68

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, MUMBAI BENCH “E”, MUMBAI

Before: SHRI NARENDER KUMAR CHOUDHRY & SHRI BIJAYANANDA PRUSETH

Pronounced: 22.09.2026

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH “E”, MUMBAI BEFORE SHRI NARENDER KUMAR CHOUDHRY, JUDICIAL MEMBER And SHRI BIJAYANANDA PRUSETH, ACCOUNTANT MEMBER ITA No. 2820/M/2026 Assessment Year: 2014-15 Kunal Ashok Mehta, Income Tax Officer Ward A-65, Verma Villa, Vithalbhai 34(2)(1), Road, Vile Parle (West), Vs. Kautilya Bhavan, G Block, Mumbai, Bandra Kurla Complex, Maharashtra - 400056 Bandra East, Mumbai, PAN – AFLPM1099M Maharashtra - 400051 (अपीलार्थी/ Appellant) (प्रत्यर्थी /Respondent) Present for: निर्धाऩिती द्वधिध/Assessee Shri Sumit Mantri, CA Ld. AR (Virtually) represented by: िधजस्‍व द्वधिध/Revenue represented Smt. Sujatha Iyyanger, Sr. Ld. by:

सुनवाईकीतारीख/Date of conclusion of hearing: 08.09.2026 घोषणाकीतारीख/Date of pronouncement: 22.09.2026

O R D E R Per : Narender Kumar Choudhry, Judicial Member

This appeal by the ASSESSEE is directed against the order dated 20.02.2026 passed by the learned Commissioner of Income- tax (Appeals), National Faceless Appeal Centre (“the ld. Commissioner”), under section 250 of the Income-tax Act, 1961 (“the Act”), for the assessment year 2014-15.

2.

The assessment was completed vide order dated 29.12.2016 passed under section 144 read with section 143(3) of the Act, making additions of Rs. 60,51,000/- towards short-term capital gain on the

2 ITA No. 2820/M/2026 Kunal Ashok Mehta sale of property and Rs. 7,00,000/- towards unexplained cash credit under section 68 of the Act. The assessment proceedings were conducted substantially ex parte, in the absence of submissions and supporting documents from the Assessee.

Thus, the Assessee being aggrieved, preferred an 1st appeal 3. before the ld. Commissioner, who sustained the additions primarily on account of the Assessee’s failure to furnish relevant submissions and supporting material, including:

(i) retrieved or reconstructed TALLY data; (ii) cash flow statements or evidence of bank withdrawals; (iii) affidavits from the consultant or a third party confirming the source of funds; and (iv) cash book extracts reflecting withdrawals corresponding to the timing of the deposits. 4. Before us, the Assessee has filed additional evidence along with an application seeking its admission under Rule 29 of the Income-tax (Appellate Tribunal) Rules, 1963 (“the Rules”). The Assessee submitted that the assessment proceedings were initially entrusted to its erstwhile Chartered Accountant/Tax Consultant. However, disputes concerning professional fees and the consequent lack of cooperation from the consultant prevented proper attendance to the proceedings and production of complete accounting records and supporting documents. The Assessee further submitted that it was facing financial difficulties during the relevant period, its bank account had been classified as a non-performing asset, and it was required to attend to various legal and banking matters. The accountant maintaining its business records had also left its employment, leaving it without the necessary staff or immediate access to complete records. According to the Assessee, the evidence was thus not within its effective possession and control, and its non-production was

3 ITA No. 2820/M/2026 Kunal Ashok Mehta neither deliberate nor motivated by any mala fide intention. The Assessee accordingly sought admission of the additional evidence, including the affidavits filed, subject to reasonable costs ranging from Rs. 11,000/- to Rs. 22,000/-.

5.

The ld. Departmental Representative on the contrary opposed the application, contending that the reasons advanced by the Assessee were not plausible and did not justify admission of the additional evidence at this stage. Alternatively, the Ld. DR submitted that substantial costs should be imposed, if the additional evidence is to be admitted.

6.

We have heard the parties and considered the rival submissions, perused the additional evidence and examined the reasons stated in the application under Rule 29 of the Rules. The documents filed include copies of the cash book and its summary, the purchase register, purchase invoices and the bank statement. In our prima facie view, these documents are essential for the proper adjudication of the issues involved.

7.

We also note that the explanation for non-production of additional evidence before the authorities below rests, in part, on allegations against the Assessee’s erstwhile consultant. However, nothing has, been brought to our notice to demonstrate that the Assessee deliberately sought to defeat the purpose of the law. Its failure to produce the supporting documents has itself resulted in prolonged litigation. Having regard to the peculiar facts and circumstances of the case, the conduct of the Assessee and the necessity of examining the additional evidence for proper adjudication, we deem it appropriate to admit the same, however, subject to deposit of Rs. 22,000/- with the Revenue Department under “Other Heads” within 15 days from the date of this order.

4 ITA No. 2820/M/2026 Kunal Ashok Mehta

8.

Since the additional evidence has been produced for the first time before the Tribunal and requires detailed examination, we consider it appropriate to restore the issues concerning both additions to the file of the ld. Commissioner. Accordingly, the impugned order is set aside, and the matter is remanded to the ld. Commissioner for fresh adjudication after examining the additional evidence, considering the Assessee’s explanations in relation to the respective additions and affording the Assessee a reasonable opportunity of being heard.

9.

The ld. Commissioner shall decide the issues in accordance with law by a reasoned order. The Assessee shall, in accordance with its undertaking, furnish the additional evidence and receipt of cost and comply with the requirements of the remanded proceedings in a timely manner, without delay or default. We clarify that in the event of any subsequent default, the Assessee shall not be entitled to any further leniency. We further clarify that no opinion is expressed by us, on the merits of either addition.

10.

In the result, the appeal filed by the Assessee is allowed for statistical purposes.

Order pronounced in the open court on 22.09.2026.

Sd/- Sd/- (BIJAYANANDA PRUSETH) (NARENDER KUMAR CHOUDHRY) ACCOUNTANT MEMBER JUDICIAL MEMBER (ANKIT SWARNKAR) Private Secretary Copy to: The Appellant The Respondent The CIT, Concerned, Mumbai The DR Concerned Bench //True Copy// By Order Dy/Asstt. Registrar, ITAT, Mumbai.

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