BISHNU KRISHNA SHRESTHA THROUGH HIS LEGAL HEIR SMT SHOBHA SHRESTHA,NEW DELHI vs. DEPUTY COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE-13, NEW DELHI

ITA Nos. 4861 to 4865/Del/2025, 4868 to 4900/Del/2025 & 4902 to 4906/Del/2025,

IN THE INCOME TAX APPELLATE TRIBUNAL
DELHI BENCH “C” NEW DELHI

BEFORE SHRI CHALLA NAGENDRA PRASAD, JUDICIAL MEMBER
AND SHRI M BALAGANESH, ACCOUNTANT MEMBER

I.T.A Nos.4861 to 4865/Del/2025
And Stay Application Nos. 438 to 442/Del/2025
(Assessment Years: 2013-14 & 15-16 to 2018-19)

BISHNU KRISHNA SHRESTHA
Through His Legal Heir Smt.
Shobha Shrestha,
2 Commercial Complex,
Shrestha Vihar,
Trans Yamuna, Delhi.
PAN No.AUGPS2018G
बनाम
Vs.
DCIT,
Central Circle-13, New Delhi.
अपीलाथ
Appellant
यथ
/Respondent
I.T.A Nos.4868 to 4870/Del/2025
And Stay Application Nos. 443 to 445/Del/2025
(Assessment Years: 2013-14 to 2015-16)

SHOBHA SHRESTHA,
A-34, Vasant Marg,
Vasant Vihar,
New Delhi.
PAN No.AUGPS2017K
बनाम
Vs.
ACIT,
Central Circle-13, New Delhi.
अपीलाथ
Appellant
यथ
/Respondent
I.T.A Nos.4898 to 4900/Del/2025
And Stay Application Nos. 446 to 448/Del/2025
(Assessment Years: 2017-18 to 2019-20)
SHOBHA SHRESTHA,
A-34, Vasant Marg,
Vasant Vihar,
New Delhi.
PAN No.AUGPS2017K
बनाम
Vs.
DCIT,
Central Circle-13, New Delhi.
अपीलाथ
Appellant
यथ
/Respondent

ITA Nos. 4861 to 4865/Del/2025, 4868 to 4900/Del/2025 & 4902 to 4906/Del/2025,

&

I.T.A Nos.4902 to 4906/Del/2025
And Stay Application Nos. 430 to 434/Del/2025
(Assessment Years: 2014-15 to 16-17 & 2018-19 to 19-20)

MUKUNDA RAJ SHRESTHA,
A-34, Vasant Marg,
Vasant Vihar, New Delhi.
PAN No.BQLPS7226Q
बनाम
Vs.
DY. COMMIOSSIONER OF INCOME TAX,
Central Circle-13, New Delhi.
अपीलाथ
Appellant
यथ
/Respondent

Assessee by Dr. Manas Shankar Ray, Adv.
Mr. Shouryendu Ray, Adv.
Mr. Yashendra Singhwal, Adv. &
Ms. Istela Jameel. Adv.
Revenue by None

सुनवाईकतारीख/ Date of hearing:
10.10.2025
उोषणाकतारीख/Pronouncement on 10.10.2025

आदेश /O R D E R
PER BENCH

All these appeals and stay petitions are filed by different assessees of same group against different orders of the Ld.
CIT(Appeals)-NFAC, Delhi for various assessment years as referred to in the cause title above.
2. The appeals in the case of MUKUNDA RAJ SHRESTHA and the appeals in the case of SHOBHA SHRESTHA for assessment years
2017-18, 2018-19 to 2019-20 were filed with a delay of 72 days and ITA Nos. 4861 to 4865/Del/2025, 4868 to 4900/Del/2025 & 4902 to 4906/Del/2025, the appeals for the assessment years 2013-14 to 2015-16 in the case of Shobha Shrestha and the appeals in the case of BISHNU KRISHNA
SHRESTHA were filed with a delay of 69 days. The assessees have explained the delay for filing these appeals in the petitions for condonation of delay assessee Mukunda Raj Shrestha explained that he has not received any physical copy of the impugned order of the Ld. CIT(A) till date but the impugned order was communicated only through the department’s portal and through electronic mail through one of the staff members of the family concerns on 30.03.2025. It is also explained that assessee who is an elderly individual does not personally access to the Income tax portal, further the e-mail sent to the staff member also could not be brought to the assessees attention due to an inadvertent over sight on the part of the concerned staff member. It is stated that passing of impugned orders by the Ld.CIT(A) came to light during an internal review of the pending matters in the last week of July,
2025 and thereafter the assessee took steps to file appeals which resulted in a delay of 72 days and the delay in filing the present appeals is purely an unintentional devoid of any mala fide intent and arose from circumstances beyond the control of the assessee.

ITA Nos. 4861 to 4865/Del/2025, 4868 to 4900/Del/2025 & 4902 to 4906/Del/2025,

Similarly in other appeals the assessee explained the delay in filing the appeals which is more or less identical.
3. Coming to the merits, the Ld. Counsel for the assessee, at the outset, submitted that these appeals were filed by the assessees against the ex parte order of the Ld. CIT(Appeals) for various assessment years. Ld. Counsel for the assessee further referring to page 7 of the PB which is the chart showing the dates of issue of notices by the Ld. CIT(A), the dates of compliance and the dates of adjournments applied by the assessee, submitted that Ld. CIT(A) did not provide adequate opportunity to the assessee to place/file the objections on various additions/disallowances made in the search assessments. Ld. Counsel for the assessee further made the following elaborate submissions against the ex parte order passed by the Ld. CIT(Appeals):
“BEFORE THE HON’BLE INCOME TAX APPELLATE TRIBUNAL, NEW DELHI
SHRESTHA GROUP APPEALS - SYNOPSIS OF ORAL ARGUMENTS
1. The present batch of appeals was filed in the matter of Late Mr Bishnu Krishna Shrestha (through his legal heir Smt
Shobha Shrestha), Smt Shobha Shrestha, Mr Mukunda Raj
Shrestha and Smt Sushma Shrestha, (hereinafter collectively referred to as “Appellants”) under Section 253 of the Income
Tax Act, 1961 (“Act”) seeking to set aside the identical ex- parte orders passed by the Ld. Commissioner of Income-Tax
(Appeals) - 26 on 13.03.2025 and 15.03.2025 (“Impugned
Orders”). By way of the Impugned Orders, the Ld. CIT(A) upheld the assessment orders passed by Respondent herein -

ITA Nos. 4861 to 4865/Del/2025, 4868 to 4900/Del/2025 & 4902 to 4906/Del/2025,

DCIT, Central Circle-13 for various AYs (“Assessment Orders”).
A table showing details of proceedings before the Ld. CIT(A) is set out at Annexure - 2 of this Paper book and a table showing the details of the assessment orders passed by the Respondent against the Appellants along with the status of payment against the demand raised is set out as Annexure-3 of this Paper book.
Brief Background
2. At the outset, it is pointed out that all these cases were taken up by the Respondent for assessment under Section 153A of the Income Tax Act, 1961 (“Act”) pursuant to a search and seizure operation conducted under Section 132 of the Act on 31.10.2018 at various premises of SBL Pvt Ltd - of which Late Bishnu Krishna Shrestha was a promoter. These proceedings culminated into passing of assessment orders under the IT Act in which the Respondent determined their residential status as “Resident and Ordinarily Resident.”
However, the Appellants being foreign nationals - with Late Mr
Bishnu Krishna Shrestha, Smt Shobha Shrestha, Mr Mukunda
Raj Shrestha being Nepalese citizens and tax residents, and Smt Sushma Shrestha being a US citizen and tax resident - had contested the assessment orders before the Ld. CIT(A).
3. Notably, the same issue - determination of tax residency of the Appellants except in Ire case of Smt Sushma
Shrestha - is currently sub judice before the Hon’ble High
Court of Delhi in WP(C) 5660 to 5662 of 2024, albeit in separate proceedings under the Black Money (Undisclosed
Foreign Income and Assets) and Imposition of Tax Act, 2015
(“BMA”). The fundamental issue before the Hon’ble Delhi High
Court - on which the notice was issued vide order dated
14.05.2024 by the Hon’ble Delhi High Court (Annexure - 10 of this Paperbook) - is the applicability of Article 4 of the India-
Nepal Double Taxation Avoidance Agreement (“India-Nepal
DTAA”) on the Appellants in accordance with Section 90(2) of the Act. In order to determine the Appellants’ tax residency, the Respondent, instead of referring to the said clause of the India-Nepal DTAA, simply applied the numerical criteria laid down under Section 6 of the Act. For this, the Respondent has blindly relied on the Foreign Regional Registration Office
(“FRRO”) records - which was never shared with the Appellants despite repeated requests - regarding the number of days the Appellants have allegedly stayed in India. In this regard, the Appellants have submitted before the Hon’ble High Court that ITA Nos. 4861 to 4865/Del/2025, 4868 to 4900/Del/2025 & 4902 to 4906/Del/2025, since there is a provision of free movement of citizens between the citizens of India and Nepal pursuant to Article 7
of the India-Nepal Friendship Treaty, 1950 (Annexisre-9 of this Paperbook), the movement of the Appellants to their native country from India will not be reflected in FRRO records and therefore, these records as such are inaccurate and unreliable for determining the residential status.
4. Similarly, in the case of Smt Sushma Shrestha, the Ld.
CIT(A)-31 vide order dated 28.11.2024
passed under BMA
(Annexure-11 of this Paperbook) has already determined her residential status as that of “Non-resident” on the basis of similar submissions qua her tax residency. Pertinently, the Ld.
CIT(A) in his order dated 28.11.2024 accepted the unreliability of the FRRO records and applicability of the India-Nepal DTAA in view of the India-Nepal Friendship Treaty,
1950. For ease of reference, relevant paragraph of the said order is produced below:
20. The crux of the matter under dispute is the residential status of the appellant. Since the country involved in the present case in Nepal (other than India &
US), the appellant laid emphasis on the peculiar arrangement between India & Nepal and the Peace Treaty entered into between the two countries. It seems that the AO had lost sisht of the said Peace Treaty while appreciating the facts of the present case. A perusal of the India Nepal Peace Treaty clearly establishes the fact that because of the privileges' offered as per the said
Treaty, the India-Nepal border is a porous border. That being the situation, it is not feasible to only rely on the number of days as per the passport stamps as these would not cover the travel between India and Nepal.
(Emphasis supplied)
However, in the present batch of matters, the Ld. AO relied solely on the FRRO records to determine the residential status of the Appellants without considering the effect of the said international treaties along with Section 90(2) of the Act which mandate application of the tie-breaker test laid down in double taxation avoidance agreements for determining tax residency of individuals who are dual residents.
5. Aggrieved by the Assessment Orders passed by the Respondent, the Appellants had approached the Ld. CIT(A) impugning the erroneous determination of their residential

ITA Nos. 4861 to 4865/Del/2025, 4868 to 4900/Del/2025 & 4902 to 4906/Del/2025, status. However, the Ld. CIT(A) without providing adequate opportunity to the Appellants, summarily rejected the submissions of the Appellant and proceeded to pass the Impugned Orders ex-parte. A bare perusal of the Impugned
Orders depicts that the Ld. CIT(A) merely reproduced the Respondent’s determination of the Appellants’ residential status and confirmed the impugned additions (except in the case of Smt. Sushma Shrestha where no additions had been made) without duly considering the documents submitted by the Appellants. Further, the Impugned Orders were passed without affording the Appellant a fair and reasonable opportunity of being heard. The orders were also passed belatedly over four to six months after the date of last notice/adjournment application in violation of CBDT circulars.
Therefore, the Appellant is approaching this Hon’ble Tribunal seeking to set aside the Impugned Orders.
Details of the Appellants
6. Late Mr Bishnu Krishna Shrestha was a renowned
Nepalese citizen who set up one of Nepal’s largest commercial banks viz., the Everest Bank Limited. He served as the Founder
Chairman of Everest Bank, Nepal until his demise in Nepal on October 23, 2023 at 94 years of age. He also supported numerous social and charitable activities in Nepal during his life-time. Alongside, he was a promoter of an India-based company - SBL Pvt Ltd. - engaged in manufacturing of homeopathy medicines in India. Consequently, he was a tax resident of Nepal as per TRCs issued by Nepalese tax authorities and was duly assessed there for his global income.
His wife, Smt Shobha Shrestha is an octogenarian homemaker and a serious cancer patient, undergoing treatment at Sir
Ganga Ram Hospital, New Delhi since February 2024. Both of them have been permanent residents of Lalitpur Metropolitan
City, Ward No. 3, Pulchowk, Lalitpur, Kathmandu, Nepal. The relevant records of Late Mr Bishnu Krishna Shrestha and Smt
Shobha Shrestha are set out at Annexures-4 and 5 of this Paperbook respectively.
7. Mr Mukunda Raj Shrestha - the son of Late Mr Bishnu
Krishna Shrestha - is a Nepalese citizen who was working as a member of the staff of the United Nations Development
Programme (“UNDP”) for 32 years, i.e., from 01.06.1976 to 27.05.2008, after which he was repatriated back to Nepal.
Primarily, he has income from his salary from the UNDP which is exempt from tax under Section 18 of the United Nations

ITA Nos. 4861 to 4865/Del/2025, 4868 to 4900/Del/2025 & 4902 to 4906/Del/2025,

Privileges and Immunity Act, 1947. During his employment with the UNDP, he was posted at various locations around the globe outside of India. The relevant records of Mr Mukunda Raj
Shrestha are set out at Annexure-6 this Paperbook.
8. Smt Sushma Shrestha - wife of Mr Mukunda Raj
Shrestha - was bom in Nepal and then moved to US in 1974
where she married Mr Mukunda Raj Shrestha in 1982 and, since
September 2012, has been a citizen of the United States of America by way of naturalization. The Appellant is a permanent resident of the United States and currently resides at 7940, Auberge Cir, San Diego, CA 92127, USA. Since the grant of U.S. citizenship, the Appellant has been a tax resident of the United States. Being a housewife, she has no source of income, except for the tax year 2018 when she sold a house property acquired out of her husband’s income and held jointly with her husband for which they filed a joint tax return in the US. The relevant records of Smt Sushrm Shrestha are set out at Annexure-7 of this Paperbook.
Legal Submissions
9. It is submitted that the Impugned Orders are vitiated for having been passed ex pan without affording a fair opportunity of hearing. Notably, in certain appeal not a sing notice for hearing was issued by the Ld. CIT(A). In other appeals, the notices for hearing were merely uploaded on the Income Tax Portal, not served physically, and the Appellants - being foreigners and old persons - did not regularly access the Portal. Further, emails in this regard sent to an employee of the family concern went unnoticed inadvertently. Despite seeking adjournment upon learning of the proceedings,
Impugned Orders were passed in mechanical manner, thereby rendering them arbitrary, illegal and violative of natural justice. Further, the Impugned Orders have failed comply with the requirements set out by the Hon’ble Supreme Court in Dhakeswar Cotton Mills Ltd v. Commissioner of Income Tax,
1955 AIR 65 which protects assessee’s right to full opportunity to be heard and place material on record. The Hon’ble Apex
Court further held that improper rejection of the assessee's submission by the Ld. Income Tax Appellate Tribunal and reliance on conjectures and suspicions of the assessing officer is a gross violation of natural justice and directed the appeal to be remanded for reassessment.
10. It is further submitted that the Respondent caused a grave error in determining the Appellants’ residential status

ITA Nos. 4861 to 4865/Del/2025, 4868 to 4900/Del/2025 & 4902 to 4906/Del/2025, as “resident - ordinary resident” without considering the documents and submissions. It is submitted that the Respondent’s assessment was based on irrelevant considerations and extraneous factors relating to the Appellants including reference to possessing Aadhar Cards,
Indian bank accounts etc — which has no relevance in determining the tax residency of an individual. This assessment was premised on an inadvertent clerical error by the family’s accountant in the original returns showing them as resident, which was later rectified in returns filed under Section 153 A, which in law replace the earlier returns under Section 139(1) of the Act.
11. It is submitted that the belated Impugned Orders ought to be set aside and the appeal ought to be reassessed by Ld.
CIT
(A) in consonance with the established judicial precedence. It is submitted that, in G. Shoes Exports v. CIT,
MA No. 25/Mum/2017. the Mumbai bench of this Ld. Tribunal, reinforced the judgement of the Hon’ble Bombay High Court’s in Shivsagar Veg. Restaurant v. ACIT, 317 ITR 433 and held that an inordinately delayed order is liable to be recalled and heard afresh. In the present case, the Ld. CIT (A) passed the Impugned Orders after an unwarranted delay of nearly four to six months after the date of notice/adjournment application and in certain case without issuing any notice at all.
Therefore, in light of the established judicial precedent, the Impugned Orders are vitiated and ought to be set aside.
12. It is further submitted that Impugned Order is vitiated for non-compliance with the statutory mandate requiring physical hearings before the Central Charge CIT(A). The proceedings were conducted entirely through electronic mode, contrary to Central Board of Direct Taxes (“CBDT”) notifications and the applicable provisions of the Act, thereby denying the Appellant an effective opportunity of hearing and rendering the Impugned Order unsustainable in law.
13. It is submitted that Impugned Orders are bad in law for being violative of the binding CBDT Instructions dated
23.12.2003, 19.06.2015, and 08.03.2018 (“Instructions”). These
Instructions mandate that appellate orders be passed within
15 days of the last hearing. In ITO, Noida v. Jayant Budhiraja,
ITA 1178 DEL 2020, this Hon’ble Tribunal held that deciding an appeal beyond 15 (fifteen) days of the last hearing is - juri ictional error as it contravene the CBDT’s Instruction; therefore, such inordinate delayed order of the Ld. CIT(A) is ITA Nos. 4861 to 4865/Del/2025, 4868 to 4900/Del/2025 & 4902 to 4906/Del/2025, ultra vires. This is further bolstered by Durgesh Autofin Pvt.
Ltd., Bijnor v. ACIT, ITA 2605 DEL 2018, wherein this Hon’ble
Tribunal held that the order passed by the Ld. CIT(A) was invalid as it contravened the 15 (fifteen) days’ timelines set out by the CBDT. However, in the present matters, the CIT(A) passed the Impugned Orders in late March 2025, nearly four to six months after the date of notice/adjournment application and in certain case without issuing any notice at all, constituting a serious error and rendering the order liable to be set aside. The said CBDT Instructions form part of this Paperbook and are attached at Annexure-12. 14. It is lastly submitted that the IT Act must be interpreted in a manner that no prejudice is caused to the assessees. It is submitted that even in cases where the assessee has failed to comply with the notices for hearing, in the absence of mala fide, the benefit of doubt ought to be given favourably, and a fair opportunity must be granted to the assessee before passing an order. The Raipur bench of this Hon’ble
Tribunal in Brajesh
Singh
Bhadoria vs.
The Deputy/Assistant Commissioner of Income Tax, Central Circle-
2. Naya Raipur, IT(SS)A Nos.1 to 6, 8 & 9/RPR/2025 and Ravikumar Kumhar v. ITO, Bilaspur, ITA No.36/RPR/2024 has reiterated the same and on this basis, granted the assessees therein fresh opportunities to be heard by the Ld. CIT(A).
15. In view of the above factual situation and legal submissions, the Appellants humbly pray that the captioned
Appeals are allowed and Impugned Orders are set aside.”

ITA Nos. 4861 to 4865/Del/2025, 4868 to 4900/Del/2025 & 4902 to 4906/Del/2025,

ITA Nos. 4861 to 4865/Del/2025, 4868 to 4900/Del/2025 & 4902 to 4906/Del/2025, appeared on behalf of the assessee nor filed any written submissions and therefore the appeals are adjudicated on merits.
The chart furnished by the Assessee at page 7 of Paper Book clearly suggests that the assessee had in fact filed adjournment applications. It is also observed that the appeals were disposed of in the month of March 2025 though the Ld. CIT(A) listed the appeals for hearing lastly in the month of October & November, 2024 i.e.
after a period of four months from the due date of listing for compliance. In view of the submissions of the Ld. Counsel for the assessee, and also since all these appeals were disposed of ex parte by the Ld. CIT(A), we are of the view that all these appeals should go back to the file of the Ld. CIT(A) for hearing afresh and in accordance with law after providing adequate opportunity of hearing to the assessees. Thus, we restore all the appeals to the file of the Ld. CIT(Appeals) accordingly.

ITA Nos. 4861 to 4865/Del/2025, 4868 to 4900/Del/2025 & 4902 to 4906/Del/2025,