AMIT NARAYAN KARKERA,USA vs. INCOME TAX OFFICER , KAUTILYA BHAVAN

The assessee contends that he became aware of the reassessment order only on 05.04.2025, when he consulted his Chartered Accountants, M/s Abhishek Surana & Co., who downloaded the copy of the order from the Income-tax Portal and provided a hard copy to him, and that thereafter the appeal before the learned CIT(A) was filed on 17.04.2025. The Amit Narayan Karkera appeal was thus delayed by 56 days from the prescribed period of limitation. Before the learned CIT(A), the assessee filed a detailed application for condonation of delay, wherein he explained that the delay was not deliberate, nor attributable to negligence or inaction, but was occasioned due to bona fide and genuine reasons beyond his control. The assessee specifically pointed out that he was residing and working in the United States, was unaware of the new Income-tax Portal, and had not been served with the reassessment order in any effective manner. It was also stated that there was no history of delay on his part and that refusal to condone the delay would permanently shut the door of statutory redressal available to him. Notwithstanding these explanations, the learned CIT(A) dismissed the appeal as barred by limitation without appreciating the peculiar factual context, the non-resident status of the assessee, and the genuine constraints under which he was operating.

We have carefully examined the application for condonation of delay and the reasons articulated therein. It is a settled principle of law that the expression “sufficient cause” employed in section 249(3) of the Act is to be construed liberally so as to advance substantial justice, particularly when no mala fides or deliberate inaction is attributable to the appellant. In the present case, the assessee is a non- resident Indian who has been residing in the United States since 2006. The record demonstrates that he was genuinely unaware of the reassessment proceedings and the passing of the assessment order, and that he came to know about the Amit Narayan Karkera same only when he consulted his Chartered Accountants in April 2025. The moment he became aware of the order, he acted with promptitude and filed the appeal within a reasonable time. The delay involved is only 56 days, which, in the given factual matrix, cannot be regarded as either inordinate or reflective of any contumacious conduct. The explanation tendered by the assessee is plausible, bona fide, and supported by surrounding circumstances. The Revenue has not demonstrated any mala fides or deliberate inaction on the part of the assessee. On the contrary, refusal to condone such marginal delay would result in grave miscarriage of justice by foreclosing the assessee’s statutory remedy. In view of the totality of the facts and circumstances, we hold that sufficient cause has been shown within the meaning of section 249(3) of the Act. Accordingly, the delay in filing the appeal before the learned CIT(A) is condoned, and the dismissal of the appeal on the ground of limitation is set aside.

Having condoned the delay, we now proceed to adjudicate the substantive issue on merits. The addition of ₹1,43,49,885/- has been made by the Assessing Officer by invoking section 69 of the Act, treating the entire investment in the residential flat as unexplained. The record before us reveals that the assessee had availed a housing loan of ₹1,29,00,000/- from HDFC Ltd., a public financial institution. The loan was sanctioned on 06.01.2017 and disbursed in five installments, all of which were credited directly towards the purchase of the flat. The assessee has now placed on record Amit Narayan Karkera the loan sanction letter, disbursement advice, and installment-wise details issued by HDFC Ltd., which constitute independent third-party evidence and prima facie establish the source of a substantial portion of the investment. The balance amount of the purchase consideration has been stated to have been funded out of remittances made by the assessee from the United States, where he was gainfully employed and earning a substantial salary. This explanation, in the context of the assessee’s long- standing overseas employment and income profile, is neither implausible nor inherently improbable. However, it is equally true that none of these documents or explanations were before the Assessing Officer at the stage of reassessment, since the proceedings were conducted ex parte and the assessee had no effective notice or opportunity to place the material on record. The addition, therefore, has been made purely on account of non-compliance and absence of explanation before the Assessing Officer, and not on the basis of any adverse finding on the veracity or genuineness of the source of investment. In such circumstances, to sustain the addition mechanically as unexplained investment, without affording an opportunity to the assessee to substantiate the source of funds, would be contrary to the settled principles of natural justice. It is trite law that section 69 can be invoked only when the assessee either offers no explanation about the nature and source of the investment or the explanation offered is found to be unsatisfactory; and where no explanation could be tendered only because the proceedings themselves were ex parte without effective service of notice, Amit Narayan Karkera the assessee cannot be non-suited on that ground alone. In the present case, the assessee has now furnished cogent documentary evidence establishing the source of ₹1,29,00,000/- from bank finance and has offered a plausible explanation for the balance amount being sourced from overseas remittances, which clearly warrants verification at the level of the Assessing Officer. Ordinarily, in such circumstances, the matter would merit restoration to the file of the Assessing Officer for fresh adjudication after affording due opportunity to the assessee. However, considering that the principal documentary evidence pertains to a housing loan from a reputed public financial institution and the supporting documents are already on record, we deem it appropriate, in the interests of substantial justice, to direct the Assessing Officer to verify these documents and grant appropriate relief in accordance with law. Accordingly, the addition of ₹1,43,49,885/- is set aside, and the Assessing Officer is directed to verify the loan documents and remittance details and recompute the income of the assessee after granting due relief.

In the result, the appeal of the assessee is allowed. Order pronounced on 21st January, 2026.