BHARTI NEHRU KARIYA,MUMBAI V. ITO WARD 19(1)(1), MUMBAI, MUMBAI

ITA 7104/MUM/2025

AI Insights

The case involves Bharti Nehru Kariya, the appellant, contesting the orders of the Assessing Officer and the CIT(A) regarding disallowances and additions made to her income for the assessment year 2020-21. The Assessing Officer had disallowed an interest expenditure of Rs. 12,79,748 due to the absence of a bank certificate and loan sanction letter, and added Rs. 1.75 crores as unexplained investment in immovable property under section 69A of the Income Tax Act, 1961. The CIT(A) upheld these decisions, leading to the appeal before the Income Tax Appellate Tribunal. The Tribunal acknowledged the procedural lapses in not providing a fair hearing and the impact of digital communication barriers on the assessee, a factor contributing to her non-compliance with electronic notices.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 840310 (ITAT-MUMBAI)
• Duration Of Justice: 3 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-02-2026
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2020-2021
• Appeal Filed On: 01-11-2025
• Other Referred Cases: CIT vs. B. N. Bhattacharya [118 ITR 461]
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SWAPNIL CHOUDHARI
• Assessee Lawyers: MANISHA GHIND VIRTUALLY APPEARED
• Keywords: Set aside; Opportunity of being heard; Unexplained investment
• Section: 143(3)

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “B” MUMBAI BEFORE SHRI OM PRAKASH KANT (ACCOUNTANT MEMBER) AND MS. KAVITHA RAJAGOPAL (JUDICIAL MEMBER) ITA No. 7104/MUM/2025 Assessment Year: 2020-21 Bharti Nehru Kariya, Flat No. C101, Shree Pati Annexe 2, Gowalaia Tank Tardeo, Mumbai-400036. Vs. ITO Ward 19(1)(1), Piramal Chamber, Mumbai-400012. PAN NO. ALNPK 7260 Q Appellant Respondent Assessee by : Manisha Ghind (Virtually appeared) Revenue by : Mr. Swapnil Choudhari, Sr. DR Date of Hearing : 12/02/2026 Date of pronouncement : 23/02/2026 ORDER PER OM PRAKASH KANT, AM This appeal by the assessee is directed against order dated 12.09.2025 passed by the Ld. Commissioner of Income-tax (Appeals) – National Faceless Appeal Centre, Delhi [in short ‘the Ld. CIT(A)’] for assessment year 2020-21, raising following grounds: Printed from counselvise.com 1. The Hon'ble CIT (A) [NFAC] has erred in passing an Ex Appellate Order, without having offered reasonable opportunity of being heard. 2. The Hon'ble C that the Ld. Assessing Officer has erred in disallowing an amount of Rs. 12,79,748/ case, the documentary evidences furnished before him. 3. The Hon'ble CIT (A) that the Ld. Assessing Officer has erred in treating an amount of Rs. 1,75,00,000/ Act, 1961, not only without appreciating the facts of the case as well law, but wi the facts. 4. The appellant craves leave to add, amend, alter and/or vary any of the grounds at the time or before the hearing of this appeal. 5. The appellant therefore prays that the addition/ disallowanc made by the Ld. Assessing Officer and subsequently upheld by Hon'ble CIT (A) may please be deleted and/or alternatively the appellate order passed by the Hon'ble CIT (A) in an Ex manner and Assessment order passed by the Ld. Assessing Officer may p Assessing Officer for fresh adjudication after providing appellant with a fair and reasonable opportunity of being heard. 2. Facts qua the issue in dispute are that in the assessment completed, the Assessing expenditure amounting to Rs.12,79,748/ absence of bank certificate and loan sanction letter. Similarly, the AO made addition for amount of Rs.1.75 crores for investment in immovable property in absence of documentary evidence supporting the contention of the loan taken. Accordingly, the Assessing Officer completed the assessment u/s 143(3) of the Act on 20.09.2022 assessing the total income of Rs.1,89,84,368/ ITA No. 7104/MUM/2025 1. The Hon'ble CIT (A) [NFAC] has erred in passing an Ex Appellate Order, without having offered reasonable opportunity of being heard. 2. The Hon'ble CIT (A) [NFAC] has failed in appreciating the facts that the Ld. Assessing Officer has erred in disallowing an amount of Rs. 12,79,748/-, without appreciating the facts of the case, the documentary evidences furnished before him. 3. The Hon'ble CIT (A) [NFAC] has failed in appreciating the facts that the Ld. Assessing Officer has erred in treating an amount of Rs. 1,75,00,000/- as unexplained investment u/s 69A of the I.T. Act, 1961, not only without appreciating the facts of the case as well law, but without even having made any effort to cross verify 4. The appellant craves leave to add, amend, alter and/or vary any of the grounds at the time or before the hearing of this 5. The appellant therefore prays that the addition/ disallowanc made by the Ld. Assessing Officer and subsequently upheld by Hon'ble CIT (A) may please be deleted and/or alternatively the appellate order passed by the Hon'ble CIT (A) in an Ex manner and Assessment order passed by the Ld. Assessing Officer may please be restored back to Hon'ble CIT (A) or Ld. Assessing Officer for fresh adjudication after providing appellant with a fair and reasonable opportunity of being heard. Facts qua the issue in dispute are that in the assessment the Assessing Officer disallowed the claim of interest expenditure amounting to Rs.12,79,748/- on borrowed capital in absence of bank certificate and loan sanction letter. Similarly, the AO made addition for amount of Rs.1.75 crores for investment in in absence of documentary evidence supporting the contention of the loan taken. Accordingly, the Assessing Officer completed the assessment u/s 143(3) of the Act on 20.09.2022 assessing the total income of Rs.1,89,84,368/-. Bharti Nehru Kariya 2 ITA No. 7104/MUM/2025 1. The Hon'ble CIT (A) [NFAC] has erred in passing an Ex-parte Appellate Order, without having offered reasonable opportunity IT (A) [NFAC] has failed in appreciating the facts that the Ld. Assessing Officer has erred in disallowing an , without appreciating the facts of the case, the documentary evidences furnished before him. [NFAC] has failed in appreciating the facts that the Ld. Assessing Officer has erred in treating an amount of as unexplained investment u/s 69A of the I.T. Act, 1961, not only without appreciating the facts of the case as thout even having made any effort to cross verify 4. The appellant craves leave to add, amend, alter and/or vary any of the grounds at the time or before the hearing of this 5. The appellant therefore prays that the addition/ disallowance made by the Ld. Assessing Officer and subsequently upheld by Hon'ble CIT (A) may please be deleted and/or alternatively the appellate order passed by the Hon'ble CIT (A) in an Ex-parte manner and Assessment order passed by the Ld. Assessing lease be restored back to Hon'ble CIT (A) or Ld. Assessing Officer for fresh adjudication after providing appellant with a fair and reasonable opportunity of being heard. Facts qua the issue in dispute are that in the assessment Officer disallowed the claim of interest on borrowed capital in absence of bank certificate and loan sanction letter. Similarly, the AO made addition for amount of Rs.1.75 crores for investment in in absence of documentary evidence supporting the contention of the loan taken. Accordingly, the Assessing Officer completed the assessment u/s 143(3) of the Act on 20.09.2022 Printed from counselvise.com 2.1 In the first appellate pro the assessee remained non issued between November 2024 and August 2025. Applying the legal maxim \"Vigilantibus non dormientibus jura subveniunt\" assists the vigilant, not CIT(A) concluded that the assessee was not interested in pursuing the appeal. Relying on the ratio in ITR 461], the Ld. CIT(A) dismissed the appeal on merits based on the available record, confirming the additions for want of evidence. 2.2 Before us, the Ld. Counsel for the assessee has raised a plea of significant hardship. It is contended that the assessee, being an individual with limited literacy and unfamiliarity with the nuan of digital communication and the Application (ITBA) portal, was unaware of the electronic notices. The assessee maintains that the failure to comply was not a deliberate act of defiance but a consequence of the digital divide. A prayer is made to restore the matter to allow a fair opportunity to produce the loan sanction letters and bank certificates that were missing during the assessment. 3. We have carefully considered the rival contentions and perused the record. While we acknowledge the Ld. CIT(A)’s reliance on judicial discipline and the need for time consider the higher principle of the right to be heard. ITA No. 7104/MUM/2025 In the first appellate proceedings, the Ld. CIT(A) observed that the assessee remained non-responsive to three statutory notices issued between November 2024 and August 2025. Applying the \"Vigilantibus non dormientibus jura subveniunt\" assists the vigilant, not those who sleep over their rights), the Ld. CIT(A) concluded that the assessee was not interested in pursuing the appeal. Relying on the ratio in CIT vs. B. N. Bhattacharya ITR 461], the Ld. CIT(A) dismissed the appeal on merits based on e record, confirming the additions for want of evidence. Before us, the Ld. Counsel for the assessee has raised a plea of significant hardship. It is contended that the assessee, being an individual with limited literacy and unfamiliarity with the nuan of digital communication and the Income Tax Business portal, was unaware of the electronic notices. The assessee maintains that the failure to comply was not a deliberate act of defiance but a consequence of the digital divide. A prayer is made to restore the matter to allow a fair opportunity to e loan sanction letters and bank certificates that were missing during the assessment. We have carefully considered the rival contentions and perused the record. While we acknowledge the Ld. CIT(A)’s reliance on judicial discipline and the need for timely disposal, we must also consider the higher principle of the right to be heard. Bharti Nehru Kariya 3 ITA No. 7104/MUM/2025 ceedings, the Ld. CIT(A) observed that responsive to three statutory notices issued between November 2024 and August 2025. Applying the \"Vigilantibus non dormientibus jura subveniunt\" (the law those who sleep over their rights), the Ld. CIT(A) concluded that the assessee was not interested in pursuing CIT vs. B. N. Bhattacharya [118 ITR 461], the Ld. CIT(A) dismissed the appeal on merits based on e record, confirming the additions for want of evidence. Before us, the Ld. Counsel for the assessee has raised a plea of significant hardship. It is contended that the assessee, being an individual with limited literacy and unfamiliarity with the nuances Income Tax Business portal, was unaware of the electronic notices. The assessee maintains that the failure to comply was not a deliberate act of defiance but a consequence of the digital divide. A prayer is made to restore the matter to allow a fair opportunity to e loan sanction letters and bank certificates that were We have carefully considered the rival contentions and perused the record. While we acknowledge the Ld. CIT(A)’s reliance ly disposal, we must also consider the higher principle of the right to be heard. Printed from counselvise.com 3.1 The transition to a faceless and digital appellate regime is intended to enhance efficiency, but it must not become a barrier to justice for those who lack the technical systems. The Hon’ble Supreme Court has repeatedly emphasized that \"substantial justice\" must prevail over technical lapses. If the assessee has a plausible explanation for the source of investment (alleged housing loan of merits should not be stifled due to a failure to respond to electronic notices, provided such failure is not mala fide. 3.2 In the interests of justice and to ensure that the assessment is based on the \"real income\" the assessee a final opportunity to substantiate the claims. 3.3 Accordingly, the order of the Ld. CIT(A) is matter is restored to the file of the Assessing Officer (AO) for a fresh adjudication on merits. The AO shall: (i) Verify the housing loan sanction letter and bank certificates regarding the ₹1.75 Crore (ii) Examine the interest certificates for the let (iii) Allow the assessee a reasonable opportunity to present documentary evidence. ITA No. 7104/MUM/2025 The transition to a faceless and digital appellate regime is intended to enhance efficiency, but it must not become a barrier to justice for those who lack the technical proficiency to navigate such systems. The Hon’ble Supreme Court has repeatedly emphasized that \"substantial justice\" must prevail over technical lapses. If the assessee has a plausible explanation for the source of investment (alleged housing loan of ₹1.75 Cr.) and the interest expenditure, the merits should not be stifled due to a failure to respond to electronic notices, provided such failure is not mala fide. In the interests of justice and to ensure that the assessment is based on the \"real income\" principle, we find it appropriate to grant the assessee a final opportunity to substantiate the claims. Accordingly, the order of the Ld. CIT(A) is set aside to the file of the Assessing Officer (AO) for a fresh on merits. The AO shall: Verify the housing loan sanction letter and bank certificates 1.75 Crore investment. Examine the interest certificates for the let-out properties. Allow the assessee a reasonable opportunity to present vidence. Bharti Nehru Kariya 4 ITA No. 7104/MUM/2025 The transition to a faceless and digital appellate regime is intended to enhance efficiency, but it must not become a barrier to proficiency to navigate such systems. The Hon’ble Supreme Court has repeatedly emphasized that \"substantial justice\" must prevail over technical lapses. If the assessee has a plausible explanation for the source of investment Cr.) and the interest expenditure, the merits should not be stifled due to a failure to respond to electronic In the interests of justice and to ensure that the assessment is principle, we find it appropriate to grant the assessee a final opportunity to substantiate the claims. set aside, and the to the file of the Assessing Officer (AO) for a fresh Verify the housing loan sanction letter and bank certificates out properties. Allow the assessee a reasonable opportunity to present Printed from counselvise.com 3.4 The assessee is strictly cautioned to be diligent in the remand proceedings. Any further failure to cooperate may result in an adverse inference. 3.5 The ground No. 1 of the appeal of the assessee is accordingly allowed for statistical purpose 4. The remaining grounds are rendered academic. 5. In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open Court on Sd/- (KAVITHA RAJAGOPAL JUDICIAL MEMBER Mumbai; Dated: 23/02/2026 Rahul Sharma, Sr. P.S. Copy of the Order forwarded to 1. The Appellant 2. The Respondent. 3. CIT 4. DR, ITAT, Mumbai 5. Guard file. //True Copy// ITA No. 7104/MUM/2025 The assessee is strictly cautioned to be diligent in the remand proceedings. Any further failure to cooperate may result in an The ground No. 1 of the appeal of the assessee is accordingly allowed for statistical purposes. The remaining grounds are rendered academic. In the result, the appeal of the assessee is allowed for ounced in the open Court on 23/02/2026. Sd/ (KAVITHA RAJAGOPAL) (OM PRAKASH KANT JUDICIAL MEMBER ACCOUNTANT MEMBER Copy of the Order forwarded to : BY ORDER, (Assistant Registrar) ITAT, Mumbai Bharti Nehru Kariya 5 ITA No. 7104/MUM/2025 The assessee is strictly cautioned to be diligent in the remand proceedings. Any further failure to cooperate may result in an The ground No. 1 of the appeal of the assessee is accordingly The remaining grounds are rendered academic. In the result, the appeal of the assessee is allowed for /02/2026. Sd/- OM PRAKASH KANT) ACCOUNTANT MEMBER BY ORDER, (Assistant Registrar) ITAT, Mumbai Printed from counselvise.com "