ALHAD NARASINH KULKARNI,DELHI V. INCOME TAX OFFICER MUM-W-(432)(91), MUMBAI

ITA 2546/MUM/2025

AI Insights

The case involves Alhad Narasinh Kulkarni, the appellant, who challenged the order of the Commissioner of Income Tax (Appeals) regarding the disallowance of interest claimed on borrowed loans for a property under construction. The initial appeal was dismissed by the CIT(A) due to a significant delay in filing, which the Tribunal later found to be justifiable. The Tribunal directed the CIT(A) to reconsider the case on its merits, focusing on the allowability of the claimed interest expenditure.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 717052 (ITAT-MUMBAI)
• Duration Of Justice: 4 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-08-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: H
• Assessment Year: 2017-2018
• Appeal Filed On: 12-04-2025
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PRAVIN SALUNKHE
• Assessee Lawyers: B. N. RAO
• Keywords: Revised return; Period of limitation; TDS
• Section: 143(3)

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL “H(SMC)” BENCH, MUMBAI BEFORE SHRI OM PRAKASH KANT, AM AND MS. KAVITHA RAJAGOPAL, JM ITA No. 2546/Mum/2025 (Assessment Year: 2017-18) Alhad Narasinh Kulkarni Block 5, Flat 304, Jaypee CGHS, (Beverly Park), Plot 2, Sector 22, Dwarka, Delhi – 110077. Vs. Income Tax Officer Mum-W- (432)(91), Mumbai PAN/GIR No. ADQPK0726N (Appellant) : (Respondent) Assessee by : Shri B. N. Rao, CA Respondent by : Shri Pravin Salunkhe, SR DR Date of Hearing : 07.08.2025 Date of Pronouncement : 18.08.2025 O R D E R Per Kavitha Rajagopal, J M: This appeal has been filed by the assessee, challenging the order of the learned Commissioner of Income Tax (Appeals) ADDL/JCIT (A)-3 Ahmedabad (‘ld. CIT(A)’ for short), National Faceless Appeal Centre (‘NFAC’ for short) passed u/s.250 of the Income Tax Act, 1961 (‘the Act'), pertaining to the Assessment Year (‘A.Y.’ for short) 2017-18. 2. The assessee has raised the following grounds of appeal: 1. Ld. Commissioner of Income tax (Appeals) dismissed the appeal without considering the reason for delay as proper and justifiable. 2. Ld. Commissioner of Income tax (Appeals) ought to have considered the affidavit and the reasoning provided in looking to the hardship experienced by the appellant in filing appeal Printed from counselvise.com ITA No. 2546/Mum/2025 (A.Y. 2017-18) Alhad Narasinh Kulkarni 2 3. Thereby Ld Commissioner of Income Tax (Appeals) erred in upholding the addition of Rs. 6,22,459/- as inadmissible interest under section 24 of the Act.” 3. Brief facts of the case are that the assessee is an individual and had filed his return of income dated 05.08.2017, declaring total income at Rs. 26,00,220/- after claiming deduction under Chapter VI-A at Rs. 1,60,000/-. Subsequently, the assessee filed revised return dated 11.01.2018 declaring total income at Rs. 18,02,260/-, thereby claiming a refund of Rs. 2,55,700/- out of the TDS deducted by the employer of the assessee and claims that the reduction of income in the revised return is out of excess claim of interest amounting to Rs. 8,22,459/- after offering deemed rent of Rs. 35,000/- on the newly acquired property which was not claimed by the assessee in his original return on the property situated at Ulwe. The assessee’s case was selected for scrutiny and the ld. AO made addition/disallowance towards dividend income from co-operative bank and deduction claimed under Chapter VI-A of the Act vide assessment order dated 16.12.2019 passed u/s. 143(3) of the Act. 4. Aggrieved the assessee was in appeal before the first appellate authority, who vide order dated 13.03.2025 dismissed the appeal filed by the assessee in limine, for the reason that the appeal was filed belatedly after a delay of 1214 days beyond the period of limitation. 5. The assessee is in appeal before us, challenging the order of the ld. CIT(A). 6. The learned Authorised Representative ('ld. AR' for short) for the assessee contended that the assessee was an employee with AIR India Limited and had shifted to New Delhi from his hometown, Mumbai for employment purpose, where he was provided with Printed from counselvise.com ITA No. 2546/Mum/2025 (A.Y. 2017-18) Alhad Narasinh Kulkarni 3 house accommodation which was surrendered after his transfer to New Delhi. The ld. AR further stated that the assessee had let out two properties out of three and the third property was under construction during the relevant year which possession was received in September, 2016. As the assessee had not occupied the same, he had offered deemed notional rent and claimed the interest on borrowed loans u/s. 23(4)(b) of the Act. The ld. AR further stated that the ld. AO disallowed the interest claimed by the assessee for the reason that the same can be claimed only on self-occupied property of the assessee and made an addition/disallowance of Rs. 2,00,000/- on the total claim of interest amounting to Rs. 8,22,459/-. The ld. AR further contended that the delay in filing the appeal before the first appellate authority was partly due to covid pandemic and further due to the reason that the assessee had shifted his residential address from Delhi to Mumbai due to which the Digital Signature Certificate (DSC) which was required for filing of the appeal could not be received by the assessee. The ld. AR further contended that the delay in filing of the was not wanton or deliberate and prayed that the delay in filing the first appeal be condoned. 7. The learned Departmental Representative ('ld. DR' for short) for the revenue on the other hand vehemently opposed for condoning the delay in filing the appeal before the ld. CIT(A) for the reason that there has been inordinate delay beyond covid pandemic period. The ld. DR relied on the order of the lower authorities. 8. We have heard the rival submissions and perused the materials available on record. It is observed that the ld. CIT(A) has dismissed the appeal in limine for the reason that the appeal before the first appellate authority was with a delay of 1214 days which was Printed from counselvise.com ITA No. 2546/Mum/2025 (A.Y. 2017-18) Alhad Narasinh Kulkarni 4 also substantiated by the ld. AR for the assessee vide an affidavit specifying the reason for the delay. As the ld. CIT(A) held that the reason specified by the assessee does not tantamount to ‘sufficient cause’, the appeal of the assessee was dismissed. 9. Upon perusal of the same, it is observed that the various decisions of the Hon'ble Apex Court and High Courts have held that a liberal view has to be taken in case of condoning the delay which is a mere procedural requirement and the appeal has to be decided on the substantial issue of law, unless there is gross negligence on the part of the assessee. In the present in hand, we find that the assessee has substantiated well as to the reason for the delay in filing the appeal before the first appellate authority which tantamount to ‘sufficient cause’ for not filing the appeal within a period of limitation. We therefore deem it fit to hold that the assessee had ‘sufficient cause’ for the delay and hereby direct the ld. CIT(A) to condone the delay in filing the appeal before the first appellate authority. We also direct the ld. CIT(A) to decide the issue on the merits as to the allowability of the interest expenditure claimed by the assessee in accordance with law based on the submission of the assessee. We also direct the assessee to comply with the proceeding before the first appellate authority without any undue delay from his side. 10. In the result, the appeal filed by the assessee is allowed for statistical purpose. Order pronounced in the open court on 18.08.2025 Sd/- Sd/- (OM PRAKASH KANT) (KAVITHA RAJAGOPAL) ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai; Dated: 18.08.2025 Karishma J. Pawar (Stenographer) Printed from counselvise.com ITA No. 2546/Mum/2025 (A.Y. 2017-18) Alhad Narasinh Kulkarni 5 Copy of the Order forwarded to: 1. The Appellant 2. The Respondent 3. CIT- concerned 4. DR, ITAT, Mumbai 5. Guard File BY ORDER, (Dy./Asstt.Registrar) ITAT, Mumbai Printed from counselvise.com "