BHOGILAL KUNVARJI GANGAR,MUMBAI vs. INCOME TAX OFFICER ASSESSMENT UNIT, MUMBAI

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ITA 8484/MUM/2026Status: DisposedITAT Mumbai14 October 2026AY 2016-177 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal condoned the delay of approximately 230 days in filing the appeal, considering the assessee's age (72 years), medical condition, and the circumstances explained, citing the Supreme Court's decisions in Collector, Land Acquisition v. Mst. Katiji and N. Balakrishnan v. M. Krishnamurthy. The Tribunal found that the CIT(A) had dismissed the appeal mainly due to the assessee's non-compliance and failure to furnish evidence, without examining the merits of the addition. The addition of ₹43,00,000/- was based on documents and statements from a third party, which required examination of evidence and the assessee's explanation. The Tribunal held that the CIT(A) did not examine the merits of the addition. Therefore, the Tribunal set aside the order of the CIT(A) and restored the matter to his file for fresh adjudication. A cost of ₹10,000/- was imposed on the assessee, payable to the Prime Minister's National Relief Fund, as a condition for granting this opportunity, acknowledging the assessee's failure to pursue appellate proceedings despite several opportunities. The appeal was allowed for statistical purposes.

What were the facts?

The assessee, Bhogilal Kunvarji Gangar, filed an appeal against the order of the CIT(A)/NFAC for Assessment Year 2016-17. The Assessing Officer had reopened the assessment based on information from a search in the case of M/s Evergreen Enterprises, which allegedly indicated the assessee advanced cash loans of ₹43,00,000/-. The assessee denied these transactions. The CIT(A) dismissed the assessee's appeal ex parte, citing non-compliance and failure to rebut the Assessing Officer's findings. The assessee filed the present appeal before the ITAT, seeking condonation of a delay of approximately 230 days, attributing it to his advanced age (72 years), medical conditions (diabetes and uric acid ailments), and inability to monitor electronic communications. The assessee claimed to have learned of the CIT(A)'s order only in May 2026.

What were the issues?

1. Whether the learned CIT(A) erred in dismissing the appeal for alleged non-prosecution without adjudicating the grounds on merits, thereby failing to discharge statutory obligations under Section 250(6) of the Income-tax Act, 1961? 2. Whether the learned CIT(A) erred in confirming the addition of ₹43,00,000/- made by the Assessing Officer under Section 69 of the Act in respect of alleged cash advances without independent adjudication and proper examination of evidence? 3. Whether the learned CIT(A) erred in not adjudicating the assessee's contention that the addition was based on documentary material and a statement from a third party without examining the evidentiary connection to the assessee? Assessee's contentions: - The CIT(A) erred in dismissing the appeal ex parte, contrary to law and principles of natural justice. - The CIT(A) failed to adjudicate grounds on merits and discharge statutory obligations. - The CIT(A) made contradictory findings regarding adjournment requests. - The CIT(A) wrongly treated proceedings as involving total non-compliance without considering the adjournment request and sufficient cause. - The CIT(A) confirmed the addition under Section 69 without independent adjudication or establishing cogent evidence of cash advances. - The CIT(A) failed to examine the evidentiary connection between seized material/statements and the assessee. - The CIT(A) sustained the addition without examining explanations furnished to the AO. - The levy of interest under Sections 234A and 234B is consequential and needs recomputation. - The delay in filing the appeal before the ITAT should be condoned due to the assessee's age, medical condition, and inability to monitor electronic communications. Revenue's contentions: - Not recorded in the judgment.

Which sections of the Income-tax Act were involved?

Section 69,Section 132,Section 250(6),Section 253(5),Section 115BBE,Section 234A,Section 234B

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, MUMBAI

Before: SHRI SIDDHARTHA NAUTIYAL, JUDUCUIAL MEMBER & SHRI MAKARAND VASANT MAHADEOKAR

For Respondent: Ms. Kanupriya Damor

PER SHRI SIDDHARTHA NAUTIYAL, JUDUCUIAL MEMBER: This appeal is filed by the Assessee against the order of Ld. CIT (A) /NFAC vide dated 24-Oct-2025 for the Assessment Year 2016-17. The Assessee has raised the following grounds of appeal:

1) On the facts and circumstances of the case and in law the learned Commissioner of Income tax Appeals National Faceless Appeal Centre erred in dismissing the appellants appeal by order dated 24 October 2025 and the impugned order is contrary to law the material available on record and the principles of natural justice 2) The learned CITA erred in dismissing the appeal substantially for alleged non prosecution without adjudicating the grounds raised by the appellant on merits and thereby failed to discharge the statutory obligation imposed under section 2506 of the Income tax Act 1961 3) The learned CITA erred in not stating the points for determination the decision on each such point and the reasons for the decision and in merely observing that the assessment order was a well reasoned and speaking order without independently examining the correctness and legality of the assessment 4) The learned CITA erred in recording mutually contradictory findings by first acknowledging that the appellant had sought an adjournment of 15 days on 19 September 2025 and thereafter holding that the appellant had not sought any adjournment during the appellate proceedings 5) The learned CITA erred in treating the proceedings as involving total noncompliance without properly considering the adjournment request dated 19 September 2025 and without considering whether the appellant was prevented by sufficient and reasonable cause including his medical condition from effectively pursuing the appellate proceedings 6) The learned CITA erred in confirming without any independent adjudication the addition of 4300000 made by the Assessing Officer under section 69 of the Act in respect of alleged cash advances purportedly made by the appellant 7) On the facts and circumstances of the case and in law the Assessing Officer erred in invoking section 69 in respect of the alleged cash advances without establishing on the basis of cogent and legally admissible evidence that the appellant had made the alleged investment OR advance during the relevant previous year 8) The learned CITA erred in not adjudicating the appellants contention that the addition of 4300000 was made on the basis of documentary material found during a search and the statement of Shri Nilesh Bharani without properly examining the evidentiary connection between such material the statement and the appellant 9) The learned CITA erred in not examining the explanations and material furnished by the appellant before the Assessing Officer and in sustaining the addition merely on the ground that the appellant had allegedly failed to rebut the assessment order during the appellate proceedings 10) The learned CITA erred in sustaining the levy of interest under sections 234A and 234B Such levy is consequential and is required to be recomputed after determination of the appellants correct total income

11) The appellant therefore prays that the impugned order be set aside and the addition of 4300000 be deleted Without prejudice the appellant prays that the matter be restored to the file of the CITA for fresh adjudication on merits after granting an effective and reasonable opportunity of hearing. The appellant craves leave to add amend alter modify OR withdraw any of the foregoing grounds before OR at the time of hearing

2.

The brief facts of the case are that the assessee, Shri Bhogilal Kunvarji Gangar, filed his return of income for A.Y. 2016-17 declaring total income of ₹2,69,400/-. The Assessing Officer reopened the assessment on the basis of information received from the Investigation Wing following a search conducted under section 132 of the Act in the case of M/s Evergreen Enterprises. During the search, certain documents and statements of Shri Nilesh Bharani, a partner of the concern, and its employees which according to the Assessing Officer, showed that the assessee had advanced cash loans of ₹10,00,000/- on 22.06.2015 and ₹33,00,000/- on 01.07.2015, amounting to ₹43,00,000/-, which was recorded under the code name "B.Bros". The assessee denied these transactions and furnished bank statements and other details. However, the Assessing Officer by relying upon the seized records and statements recorded during the search and made an addition of ₹43,00,000/- under section 69 read with section 115BBE of the Act.

3.

The assessee carried the matter in appeal before the learned CIT(Appeals), who issued notices on 01.10.2023, 14.08.2025, 08.09.2025, 16.09.2025 and 17.10.2025. The assessee sought an adjournment of 15 days on 19.09.2025 but thereafter neither filed submissions nor furnished supporting evidence. The learned CIT(Appeals), therefore, decided the appeal ex parte on the basis of the available record. The CIT(Appeals) held that the assessee had failed to rebut the findings of the Assessing Officer and accordingly confirmed the addition and dismissed the appeal filed by the assessee.

4.

The assessee is in appeal before us against the order passed by the learned CIT(Appeals) dismissing the appeal of the assessee.

5.

The assessee has filed an application seeking condonation of delay of approximately 230 days in filing the present appeal. In support, he has furnished an affidavit dated 11.08.2026 along with medical certificates, prescriptions and treatment records. The assessee, aged about 72 years, has stated that he has been suffering from diabetes and uric acid-related ailments since July 2025 and was undergoing treatment under Dr. Kiran Jain and Dr. Prakash D. Gada. Due to his prolonged illness, he could not properly attend to his business and taxation matters. He has further explained that the notices and Ld.CIT(A) order were communicated electronically through the Income-tax portal or registered email address, which he was unable to monitor regularly. Consequently, he remained unaware of the disposal of his appeal.

6.

The assessee has further stated that he first came to know about the CIT(Appeals) in May 2026 when his son, Shri Piyush Gangar, checked the Income-tax portal while assisting him in managing his affairs. Thereafter, he contacted his professional adviser, collected the relevant records and medical documents and filed the present appeal on 11.08.2026. He has submitted that the delay was neither deliberate nor intentional and has requested its condonation in the interest of justice.

7.

We have heard the rival contentions and perused the material on record. We have also examined the application for condonation of delay, the affidavit and the supporting medical records. We find that the assessee is a senior citizen aged about 72 years and has been undergoing treatment for diabetes and other ailments. The medical certificate issued by Dr. Prakash D. Gada confirms that the assessee has been under his treatment since July 2025 and that his medical condition affected his ability to attend to his routine, business and administrative matters. Considering his health condition and the fact that the appellate proceedings were conducted electronically, his explanation that he became aware of the order only when his son checked the portal in May 2026 appears reasonable.

8.

We are conscious that the assessee was required to exercise due care in pursuing his appeal and that non-monitoring of electronic notices cannot, by itself, justify the delay. However, in the present case, there is nothing to suggest that the delay was deliberate or that the assessee gained any advantage from it. The Hon'ble Supreme Court in Collector, Land Acquisition v. Mst. Katiji (1987) 167 ITR 471 (SC) and N. Balakrishnan v. M. Krishnamurthy (1998) 7 SCC 123 has held that delay should be condoned where sufficient cause is shown and the explanation is bona fide. Considering the assessee's age, medical condition and the circumstances explained, we are satisfied that sufficient cause has been shown. We, therefore, condone the delay of approximately 230 days under section 253(5) of the Act and admit the appeal for adjudication.

9.

Coming to the merits, we find that the learned CIT(Appeals) dismissed the appeal mainly because the assessee failed to comply with the notices and furnish supporting evidence. The addition of ₹43,00,000/- was based on documents recovered from a third party and statements recorded during the search, whereas the assessee had denied the cash transactions. These issues require examination of the relevant evidence and the assessee's explanation. We find that the learned CIT(Appeals), because of the assessee's non-compliance, did not examine the merits of the addition and dismissed the appeal of the assessee.

10.

Considering the assessee's age and medical condition, we are of the view that one final opportunity should be granted to him to present his case before the learned CIT(Appeals). At the same time, we cannot overlook his failure to pursue the appellate proceedings despite several opportunities. Such non-compliance causes unnecessary delay and wastage of judicial and administrative time. We, therefore, consider it appropriate to impose a reasonable cost while granting another opportunity in the interest of justice.

11.

Accordingly, we set aside the order of the learned CIT(Appeals) dated 24.10.2025 and restore the matter to his file for fresh adjudication, subject to payment of cost of ₹10,000/- by the assessee to the Prime Minister's National Relief Fund. The assessee shall deposit the amount within 30 days from the date of receipt of this order and furnish proof of payment before the learned CIT(Appeals).

12.

In the result, the appeal of the assessee is allowed for statistical purposes.

Order pronounced in the open court on 14th Oct, 2026.

Sd/- Sd/- MAKARAND VASANT MAHADEOKAR SIDDHARTHA NAUTIYAL ACCOUNTANT MEBER JUDUCIAL MEMBER

Mumbai Dated: 14th Oct, 2026 KRK, Sr.PS Copy to: BHOGILAL KUNVARJI GANGAR, 479 LAXMI NARAYAN BUILDING VEER 1 SAVARKAR MARG PRABHADEVI, MUMBAI-400025, MAHARASHTRA INCOME TAX OFFICER ASSESSMENT UNIT, 2 ASSESSMENT UNIT INCOME TAX DEPARTMENT, MUMBAI-400000, MAHARASHTRA 3 THE PCIT / CIT, 4 THE D.R., ITAT, MUMBAI BENCH 5 GUARD FILE

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