MANOJ NACHIMUTHU,COIMBATORE vs. WARD 22(2)(1),MUMBAI/, PIRAMAL CHAMBER,MUMBAI

ITA 5606/MUM/2026Status: DisposedITAT Mumbai08 October 2026AY 2019-204 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that the NFAC erred in dismissing the assessee's appeal at the threshold by invoking section 249(4)(b) without examining the substantive grounds raised against the assessment. The Tribunal noted that the assessee disputed the addition made by the Assessing Officer and had raised grounds concerning both the validity of the reassessment proceedings and the merits of the addition. Following the decision of the Chennai Bench of the Tribunal in Perumal Pillai Sreenivasan v. ITO, ITA No.3186/Chny/2024, dated 18.03.2025, which held that further payment of tax on disputed additions is not required merely for the admission of an appeal, the Tribunal set aside the impugned order of the NFAC. The appeal was restored to the NFAC's file for adjudication on merits. The NFAC was directed to admit the appeal and decide all grounds raised by the assessee, including legal/jurisdictional grounds and grounds on merits, after providing a reasonable opportunity of hearing. The assessee was granted liberty to place relevant material on record. The Tribunal explicitly stated that it had not expressed any opinion on the merits of the addition or the legal grounds challenging the reassessment proceedings, leaving these issues open for adjudication by the NFAC.

What were the facts?

The assessee, Manoj Nachimuthu, is in appeal before the Income Tax Appellate Tribunal (ITAT) against an order dated 24.02.2026 passed by the National Faceless Appeal Centre (NFAC), Delhi. The assessment year in question is 2019-20. The assessee had not filed a return of income. Reassessment proceedings were initiated based on information regarding a time deposit of Rs. 8,27,900/- with the State Bank of India, and an assessment was framed under section 147 read with section 144 of the Income Tax Act, 1961, determining the income at Rs. 8,27,900/-. The assessee's appeal before the NFAC was dismissed as not maintainable under section 249(4)(b) of the Act, without adjudication on merits, on the grounds of non-filing of return and non-payment of advance tax.

What were the issues?

1. Whether the appeal filed by the assessee before the NFAC was maintainable under section 249(4)(b) of the Income Tax Act, 1961, despite not filing a return of income and not paying advance tax, when the assessee disputed the addition on merits? Assessee's contentions: The assessee contended that the NFAC erred in dismissing the appeal without adjudicating the grounds on merits. The assessee argued that the impugned amount of Rs. 8,27,900/- represented the renewal of existing NRE fixed deposits, funded by earlier maturity proceeds of Rs. 4,80,792/- and an opening NRE account balance of Rs. 3,51,689/-. The assessee also challenged the validity of the reassessment proceedings. Revenue's contentions: The judgment does not record specific contentions from the revenue regarding the maintainability of the appeal or the merits of the addition.

Which sections of the Income-tax Act were involved?

Section 249(4)(b),Section 147,Section 144,Section 250

AI-generated summary — verify with the full judgment below

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

Before: SHRI NARENDER KUMAR CHOUDHRY & SHRI RATNA DASGUPTA

For Appellant: Mr. Abhishek Murali, Ld. AR
For Respondent: Shri Sandeep Lakra, CIT DR
Pronounced: 08.10.2026

Per : Narender Kumar Choudhry, Judicial Member

This appeal has been preferred by the ASSESSEE against the order dated 24.02.2026, impugned herein, passed by the Ld. National Faceless Appeal Centre (NFAC), Delhi (in short Ld. Commissioner) u/s 250 of the Income Tax Act, 1961 (in short ‘the Act’) for the A.Y. 2019-20. 2. Briefly stated, the Assessee had not filed the return of income for the year under consideration. On the basis of information relating to a time deposit of Rs.8,27,900/- with State Bank of India, reassessment proceedings were initiated and assessment was ulti

The order continues below.

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