DIPAKKUMAR R PATEL,KHEDA V. THE ITO, WARD-1, NADIAD

ITA 240/AHD/2026

AI Insights

This case involves Dipakkumar R. Patel, a Non-Resident Indian (NRI) permanently residing in the United Kingdom, who appealed against the order of the Commissioner of Income Tax (Appeals) National Faceless Appeal Centre, Delhi, which dismissed his appeal in limine due to a delay in filing. The delay was attributed to the assessee's lack of awareness of the assessment proceedings and the assessment order, as he was not in India and communications were sent to his brother's email, which was not regularly checked. The Tribunal found the explanation for the delay reasonable and bona fide, leading to the condonation of the delay and remanding the case for fresh assessment.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 850084 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-03-2026
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Ahmedabad
• Assessment Year: 2020-2021
• Appeal Filed On: 29-01-2026
• Other Referred Cases: Collector, Land Acquisition v. Mst. Katiji & Ors. (1987) 167 ITR 471 (SC), Brijeshkumar Natvarlal Patel vs. ITO, ITA No. 1333/Ahd/2025
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ARVIND KUMBHARE
• Assessee Lawyers: PRITHU PARIMAL
• Keywords: Condonation of delay; Set aside; Opportunity of being heard; Reassessment proceedings; Unexplained investment; Principle of natural justice; Source of fund; Recovery proceedings
• Section: 148; 142(1); 69; 133(6)

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH, AHMEDABAD BEFORE MS. SUCHITRA KAMBLE, JUDICIAL MEMBER ITA No.240/Ahd/2026 (Assessment Year: 2020-21) Dipakkumar R Patel Chopat Chowk, At Kanjari, Taluka: Nadiad, Dist: Kheda, Gujarat-387 325 [PAN : DBVPP6747L] Vs. The Income Tax Officer, Ward-1, Nadiad. (Appellant) .. (Respondent) Appellant by : Shri Prithu Parimal, A.R. Respondent by: Shri Arvind Kumbhare, Sr. DR Date of Hearing 18.03.2026 Date of Pronouncement 26.03.2026 O R D E R PER MS. SUCHITRA KAMBLE, JUDICIAL MEMBER:- This appeal is filed by the Assessee against the appellate order dated 31.10.2025 passed by the Commissioner of Income Tax (Appeals) National Faceless Appeal Centre, Delhi, relating to the Assessment Year 2020-21. 2. The assessee has raised the following grounds of appeal: 1. The Ld. CIT(A) has grossly erred in law and on facts in refusing to condone the delay of 197 days in filing the appeal and dismissing the same in limine without adjudication on merits. The Appellant submits that the delay was occasioned due to bona fide reasons and circumstances beyond the control of the Appellant. The Appellant, being a Non-Resident Indian (NRI) permanently residing in the United Kingdom, was completely unaware of the assessment proceedings and the passing of the assessment order. The Printed from counselvise.com ITA No.240/Ahd/2026 (Assessment Year: 2020-21) Dipakkumar R. Patel Vs. The ITO - 2– Appellant came to know about the assessment order only when recovery proceedings were initiated by the Ld. AO. Further, the email address of the Appellant's brother was on record with the Income Tax Authorities, and consequently, any communication from the Department may have been sent to the brother's email address. In such circumstances, the delay was neither intentional nor deliberate, but was caused due to circumstances beyond the reasonable control of the Appellant. The Ld. CIT(A) ought to have condoned the delay in the interest of substantial justice. 2. The Ld. CIT(A) has erred in failing to appreciate the settled legal position that the expression \"sufficient cause\" for condonation of delay should be given a liberal interpretation to ensure that substantial justice is done. The Hon'ble Supreme Court in the case of Collector, Land Acquisition v. Mst. Katiji & Ors. (1987) 167 ITR 471 (SC) has held that when substantial justice and technical considerations are pitted against each other, the cause of substantial justice deserves to be preferred. The Ld. CIT(A) ought to have appreciated that the Appellant, being an NRI residing abroad, faced genuine difficulties in monitoring the assessment proceedings and filing the appeal within the prescribed time. The refusal to condone the delay has caused grave prejudice to the Appellant who has been denied an opportunity to contest the merits of the additions made in the assessment order. 3. The Ld. CIT(A) has failed to appreciate the peculiar circumstances of the Appellant who is a Non-Resident Indian permanently residing in the United Kingdom. The Appellant submits that due to his physical absence from India and the communication being sent to the email address of his brother, he remained completely unaware of the assessment proceedings and the assessment order. The Appellant only became aware of the assessment order when recovery proceedings were initiated. Thereafter, the Appellant could not immediately travel to India to attend to the matter and compile the necessary documents. Hence, necessary documents were compiled by relatives of the Appellant and therefore a short delay has occurred in filling of the appeal before the Ld. CIT(A) u/s 250 of the Act. 4. The Ld. CIT(A) ought to have appreciated these genuine difficulties faced by the Appellant and should have condoned the delay. Reliance is placed on the recent judgment of the Hon'ble ITAT, Ahmedabad in the case of Brijeshkumar Natvarlal Patel vs. ITO, ITA No. 1333/Ahd/2025, wherein in similar facts and circumstances, the Hon'ble Tribunal was pleased to condone the delay and remand the matter back for fresh consideration. 4. The Ld. AO erred grossly in law and in fact in initiating and conducting reassessment proceedings under Section 148 of Act r.w.s 148A of the said Printed from counselvise.com ITA No.240/Ahd/2026 (Assessment Year: 2020-21) Dipakkumar R. Patel Vs. The ITO - 3– Act, and in issuing notice under Section 148A(a) dated 16.02.2024, notice u/s 148A(b) dated 29.02.2024, and notice u/s 148 dated 29.03.2024, inasmuch as the Appellant being admittedly a non-resident for the Assessment Year 2020- 21, the territorial Assessing Officer, Ward 1, Nadiad, lacked inherent jurisdiction to initiate, conduct and complete the reassessment proceedings in respect of the Appellant. The very foundation of the reopening proceedings is vitiated by want of jurisdiction, rendering the entire proceedings including the assessment order passed thereunder as void ab initio and liable to be quashed. 5. Without prejudice to the above and further, the learned Assessing Officer erred in law in assuming jurisdiction to reopen the assessment when the very basis of reopening, as evident from the Order u/s 148A(d) dated 29.03.2024, includes transactions under Section 195 of the Income Tax Act, 1961 pertaining to 'Payment made to non-residents' amounting to Rs. 7,938/-. Jurisdiction to examine and assess matters involving Section 195 transactions and payments to non-residents vests exclusively with the ITO (International Taxation), and not with the territorial/ward AO. The reopening proceedings and the consequent assessment order are therefore wholly without jurisdiction and liable to be quashed. 6. The Assessing Officer erred grossly in law and on facts in adding the entire sale consideration of Rs. 30,00,000/- (to the income of the Appellant for A.Y. 2020-21, when the payment schedule annexed to the sale deed itself, which was submitted by the Appellant during the course of assessment proceedings and was available on record before the Assessing Officer, clearly establishes and demonstrates that the payments towards the said property were made in instalments spread across multiple financial years. In fact, in A.Y. under consideration, only Rs. 5,71,155/- have been paid by the Appellant. The Assessing Officer, despite having the aforesaid payment schedule on record and being fully aware of the fact that the payments were staggered over multiple assessment years, has erroneously and arbitrarily proceeded to add the entire consideration of Rs. 30,00,000/-as unexplained investment under Section 69 of the Income Tax Act, 1961 for A.Y. 2020-21 alone, which action is wholly unsustainable in law, perverse, contrary to the material on record, and liable to be set aside. 7. Without prejudice to the above grounds, and on merits, the Ld. AO has gravely erred in law and on facts in making an addition of Rs. 30,00,000/- under Section 69 of the Act treating the purchase of immovable property as unexplained investment. The Appellant submits that the property was purchased from disclosed and legitimate sources of income. The Appellant was in a position to explain the source of funds for the purchase of the property. Printed from counselvise.com ITA No.240/Ahd/2026 (Assessment Year: 2020-21) Dipakkumar R. Patel Vs. The ITO - 4– However, due to the circumstances explained above, the Appellant could not participate effectively in the assessment proceedings. The Ld. AO, without proper consideration of the facts and circumstances, mechanically treated the entire investment as unexplained, which is wholly arbitrary and unsustainable in law. 8. The Ld. AO has further erred in law and on facts in making an addition of Rs. 36,174/- being interest income earned during the year under consideration. The Appellant submits that this income is below the taxable threshold and the Appellant had a bona fide belief that no return was required to be filed for the year under consideration. 9. The assessment order passed by the Ld. AO is in violation of the principles of natural justice as the Appellant was not given an adequate and reasonable opportunity to present his case and explain the source of investment. The assessment was completed ex-parte without proper consideration of the genuine difficulties faced by the Appellant who is a Non-Resident. The entire assessment proceedings and the consequent additions are liable to be set aside. 10. In the facts and circumstances of the case, the matter deserves to be remanded back to the Ld. CIT(A) for fresh adjudication on merits after condoning the delay, or alternatively, to the Ld. AO for fresh assessment after providing proper opportunity of hearing to the Appellant. The Appellant undertakes to fully cooperate in the proceedings and place all relevant documents on record to establish that the investment in immovable property was made from disclosed sources of income. 11. The order of the Ld. CIT(A) dismissing the appeal in limine without adjudication on merits is contrary to law, facts, evidence, equity and natural justice and deserves to be set aside. 3. The assessee did not file his return of income return u/s 139(1) for A.Y. 2020-21. As per information the assessee purchased immovable property of Rs. 30,00,000/- and earned bank interest and other income of Rs. 36,174/- during FY 2019-20. Notices u/s 148A(a) on 16.02.2024 and 148A(b) on 29.02.2024 were issued, but no response was furnished. Based on this, notice u/s 148 was issued on 29.03.2024. However, the assessee did not respond to the said notice. During assessment, notice Printed from counselvise.com ITA No.240/Ahd/2026 (Assessment Year: 2020-21) Dipakkumar R. Patel Vs. The ITO - 5– u/s 142(1) was issued on 21.12.2024; assessee partly complied on 07.01.2025 by submitting payment details and sale deed, but no evidence of source of funds or ITR was provided. SCN dated 06.02.2025 also remained un-complied. Notice u/s 133(6) to bank also remained unanswered. The AO held that the appellant failed to explain the source of investment and interest income. Accordingly, investment of Rs. 30,00,000/- was treated as unexplained u/s 69 taxable u/s 115BBE, and Rs. 36,174/-was taxed as income from other sources. Total income was assessed at Rs. 30,36,174/- 4. Aggrieved by the Assessment Order, the assessee filed an appeal before the Ld. CIT(A), who dismissed the appeal of the assessee in limini. 5. I observe that there is a delay of 29 days in filing the present appeal before the Tribunal. In the application for condonation of delay, the assessee submitted that he is a Non-Resident Indian (NRI) and while registering his PAN on the income-tax portal, the email ID of his brother was provided by his tax consultant for correspondence. However, the assessee’s brother was not regularly using the said email ID, and therefore the notices issued by the Department could not be responded to in time, resulting in the passing of an ex-parte order. Considering these circumstances, the Ld. Counsel prayed for condonation of delay. The explanation furnished by the assessee appears to be reasonable and bona fide, and accordingly, the delay is condoned. Printed from counselvise.com ITA No.240/Ahd/2026 (Assessment Year: 2020-21) Dipakkumar R. Patel Vs. The ITO - 6– 6. The Ld. DR relied upon the Assessment Order and the order of the Ld. CIT(A). 7. On perusal of the record, I find that there was a delay of 197 days in filing the appeal before the Ld. CIT(A). Since the assessee had not furnished sufficient cause for condonation of delay, the Ld. CIT(A) dismissed the appeal as not admitted. I further note that the assessee had also not properly complied during the assessment proceedings before the Assessing Officer. Before us, the Ld. Counsel for the assessee submitted that the assessee, being a Non-Resident Indian permanently residing in the United Kingdom, was unaware of the assessment proceedings and the passing of the assessment order. The assessee came to know about the assessment order only when recovery proceedings were initiated by the AO. It was further submitted that the email address of the assessee’s brother was on record with the Income- tax Department, and therefore communications from the Department might have been sent to the said email ID. In these circumstances, the delay was neither intentional nor deliberate, but occurred due to circumstances beyond the reasonable control of the assessee. The Ld. Counsel further prayed that given an opportunity due compliance will be made, the assessee would fully cooperate and furnish all necessary details, explanations, and evidences before the Revenue authorities. Considering the facts and circumstances of the case, and in the interest of justice, I deem it appropriate to remand the matter to the file of the Assessing Officer for fresh adjudication after verifying the details to be furnished by the assessee. However, a cost of Rs. 5,000/- is imposed on Printed from counselvise.com ITA No.240/Ahd/2026 (Assessment Year: 2020-21) Dipakkumar R. Patel Vs. The ITO - 7– the assessee. The assessee shall deposit the said amount to the Prime Minister’s Relief Fund within two weeks from the date of receipt of this order. Needless to say, the assessee shall be afforded reasonable opportunity of being heard in accordance with the principles of natural justice. Accordingly, the appeal of the assessee is allowed for statistical purposes. 8. In the result, the appeal filed by the assessee is allowed for statistical purposes. The order is pronounced in the open Court on 26.03.2026. Sd/- Sd/- (TR SENTHIL KUMAR) (SUCHITRA KAMBLE) JUDICIAL MEMBER JUDICIAL MEMBER (True Copy) Ahmedabad; Dated 26.03.2026 MV आदेश की Ůितिलिप अŤेिषत/Copy of the Order forwarded to : 1. अपीलाथŎ / The Appellant 2. ŮȑथŎ / The Respondent. 3. संबंिधत आयकर आयुƅ / Concerned CIT 4. आयकर आयुƅ(अपील) / The CIT(A)- 5. िवभागीय Ůितिनिध, आयकर अपीलीय अिधकरण, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाडŊ फाईल / Guard file. आदेशानुसार/ BY ORDER, True Copy सहायक पंजीकार (Dy./Asstt. Registrar) आयकर अपीलीय अिधकरण, अहमदाबाद / ITAT, Ahmedabad Printed from counselvise.com "