DAMYANTI ATUL SHAH,KING CIRCLE V. INCOME TAX OFFICER WARD 20(1)(1) MUMBAI, LALBAUG

ITA 5891/MUM/2025

AI Insights

The case involves Damyanti Atul Shah, who appealed against the penalty order under section 271(1)(c) of the Income-tax Act, 1961, for the Assessment Year 2013-14. The penalty was imposed due to non-compliance in filing her income tax return and was based on undisclosed income identified through the ITBA system. The CIT(A) had dismissed her appeal for being filed late by 288 days, citing substantial business activities and income, which implied awareness of statutory obligations. The Tribunal found that the delay in filing the appeal was not intentional and set aside the CIT(A)'s decision, restoring the matter for a fresh evaluation.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 828732 (ITAT-MUMBAI)
• Duration Of Justice: 3 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-01-2026
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Mumbai
• Assessment Year: misc
• Appeal Filed On: 24-09-2025
• Other Referred Cases: Collector, Land Acquisition v Mst. Katiji And Others- 167 ITR 471 (SC)
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Matter Remanded
• Court: TRIBUNAL
• Department Lawyers: UMA SHANKAR PRASAD
• Assessee Lawyers: RYAN SALDHANA
• Keywords: Set aside; Business income; Ignorance of law; Non compliance
• Section: 148; 144; 271(1)(c)

Judgement Text

"IN THE INCOME-TAX APPELLATE TRIBUNAL “D” BENCH, MUMBAI BEFORE SHRI ANIKESH BANERJEE, JUDICIAL MEMBER & SHRI PRABHASH SHANKAR, ACCOUNTANT MEMBER ITA No.5891/MUM/2025 (A.Y. 2013-14) Damyanti Atul Shah, 21/6 Rohit Villa, Opp. Sahakari Bhandar King Circle, Mumbai – 400 019, Maharashtra v/s. बनाम Income Tax Officer, Ward – 20(1)(1), Room No. 124, 1st Floor, Piramal Chambers, Lalbaug, Mumbai – 400 012, Maharashtra स्थायी लेखा सं./जीआइआर सं./PAN/GIR No: ABVPS5956K Appellant/अपीलार्थी .. Respondent/प्रतिवादी Appellant by : Shri Ryan Saldhana,AR Respondent by : Shri Umashankar Prasad, (CIT DR) Date of Hearing 03.12.2025 Date of Pronouncement 12.01.2026 आदेश / O R D E R PER PRABHASH SHANKAR [A.M.] :- The present appeal arising from the appellate order dated 22.09.2025 is preferred by the assessee against the order passed by the Learned Commissioner of Income-tax (Appeals)/National Faceless Appeal Centre, Delhi [hereinafter referred to as “CIT(A)”] pertaining to penalty order passed u/s. 271(1)(c) of the Income-tax Act, 1961 [hereinafter referred to as “Act”] dated 21.09.2022 for the Assessment Year [A.Y.] 2013-14. Printed from counselvise.com P a g e | 2 ITA No. 5891/Mum/2025 A.Y. 2013-14 Damyanti Atul Shah, Mumbai 2. The grounds of appeal are as under: 1) The Ld CIT(A) erred in not condoning the delay on 288 days in filing the appeal despite the fact that:  The assessee was not aware that such Penalty Order was passed on 21.09.2022.  The assessee does not regularly access her email id.  The assessee is a metric layperson and she had no knowledge of the technicalities of income tax proceedings.  The assessee's Chartered Accountant did not give proper advice to her. 2) The Ld CIT(A) erred in upholding the Penalty Order passed u/s 271(1)(c) of the Act and levying penalty of Rs 33,11,220/- despite the fact that:  Assessee did not file her return of income since she was not aware of the provisions of the Income Tax Act 1961.  There was no deliberate concealment of income. 3. In the instant case, the assessee had not filed her return of income for the year. Her case was re-opened by way of issue of notice u/s 148 of the Act on the basis of information available as NMS (Non- Filers of return) as per ITBA system. From the ‘NMS’ data, it was seen that although the assessee had not filed her return of income, yet she had carried out certain financial transactions i.e. Rental income of Rs 27,83,236/-,Payment to Contractor of Rs 84,99,352/-.In absence of any compliance, the assessment order was passed u/s 144 of the Act determining the total income at Rs.1,12,82,588/- treating the above amounts as undisclosed income. Penalty u/s 271(1)(c) was also initiated for concealment of income. However, the assessee did not file any reply Printed from counselvise.com P a g e | 3 ITA No. 5891/Mum/2025 A.Y. 2013-14 Damyanti Atul Shah, Mumbai in response to the notices issued on various dates. Also, it was seen from the system data that assessee had not filed appeal before the CIT(A). Thus, in the absence of any compliance, it was concluded that the assessee had nothing to submit with respect to levy of penalty .Accordingly, minimum penalty of Rs.33,11,220/- u/s 271(1)(c) of the Act was levied. 4. The subsequent appeal before the ld.CIT(A) was filed with a delay of 288 days who did not condone the delay and dismissed the appeal observing that there was substantial delay in filing the appeal. He noted that the appellant was engaged in business activity and had significant business receipts as well as taxable income during the year. Any person carrying on business and earning substantial income was expected to be aware of their statutory obligation to file a return of income within the prescribed time, irrespective of the educational qualification. Ignorance of law could not be accepted as a valid excuse for non-compliance with statutory provisions. 5. Before us, the ld.AR has admitted that the appeal was filed late before the ld.CIT(A).In this regard, a condonation application has been filed claiming that the assessee is an old lady and was not aware of the fact that ex-parte penalty order was passed. She did not access her email Printed from counselvise.com P a g e | 4 ITA No. 5891/Mum/2025 A.Y. 2013-14 Damyanti Atul Shah, Mumbai id on regular basis. The assessee is matric passed and has no knowledge of Income Tax. Only in August 2023, she came to know that the assessment order was passed in her case by invoking the provisions of section 144 of the Act. However, the ld.CIT(A) did not give any relief and dismissed the appeal in limine. It is humbly requested to condone the delay in filing penalty appeal before the CIT(A). The delay was not intentional. The ld.DR however, objected to the condonation application stating that the assessee was careless in this regard as evident from non compliance before the AO both during assessment and penalty proceedings as also during appellate proceedings. 6. On careful consideration of the submissions of the assessee, we are of the considered opinion that the delay in filing of the appeal does not appear to be intentional. A lenient view needed to be taken considering the contention of the assessee being old lady, moderately educated and not conversant with e-proceedings. The ld.CIT(A) did not appreciate the explanation of the assessee in correct perspective. In this connection, reliance could be placed on the landmark decision of hon’ble Supreme Court which inter alia held in Collector, Land Acquisition v Mst. Katiji And Others- 167 ITR 471 (SC) that “ordinarily, a litigant does not stand to benefit by lodging an appeal late……..Refusing to Printed from counselvise.com P a g e | 5 ITA No. 5891/Mum/2025 A.Y. 2013-14 Damyanti Atul Shah, Mumbai condone delay can result in a meritorious matter being thrown out at the very threshold and cause of justice being defeated….Any appeal or any application, other than an application under any of the provisions of Order XXI of the Code of Civil Procedure, 1908, may be admitted after the prescribed period if the appellant or the applicant satisfies the court that he had sufficient cause for not preferring the appeal or making the application within such period…. A litigant does not stand to benefit by resorting to delay. In fact, he runs serious risk.” We therefore, condone the delay. 6.1 The ld.AR has also submitted the assessee has challenged the quantum addition before the Hon'ble Income Tax Appellate Tribunal. The case was heard and the matter was set aside to the CIT(A) and the matter is pending before him. 7. In the light of above observations and in the substantial interest of justice, we set aside the appellate order and restore the entire matter back to the ld.CIT(A) for passing the appellate order de novo. In case of any failure on the part of the assessee, he would be at liberty to pass order after considering the materials on record. The assessee will not seek any adjournment on frivolous ground and remain cooperative during the course of proceedings before the ld.CIT(A). Printed from counselvise.com P a g e | 6 ITA No. 5891/Mum/2025 A.Y. 2013-14 Damyanti Atul Shah, Mumbai 8. In the result, the appeal is allowed for statistical purposes. Order pronounced in the open court on 12/01/2026. Sd/- Sd/- ANIKESH BANERJEE PRABHASH SHANKAR (न्याययक सदस्य /JUDICIAL MEMBER) (लेखाकार सदस्य/ACCOUNTANT MEMBER) Place: म ुंबई/Mumbai ददनाुंक /Date 12.01.2026 Lubhna Shaikh / Steno आदेश की प्रयियलयि अग्रेयिि/Copy of the Order forwarded to : 1. अपीलार्थी / The Appellant 2. प्रत्यर्थी / The Respondent. 3. आयकर आयुक्त / CIT 4. विभागीय प्रविविवि, आयकर अपीलीय अविकरण DR, ITAT, Mumbai 5. गार्ड फाईल / Guard file. सत्यावपि प्रवि //True Copy// आदेशानुसार/ BY ORDER, उि/सहायक िंजीकार (Dy./Asstt. Registrar) आयकर अिीलीय अयिकरण/ ITAT, Bench, Mumbai. Printed from counselvise.com "