MANISHA DEVNANI,MUMBAI V. INT TAX WARD2(1)(1) MUMBAI, MUMBAI

ITA 344/MUM/2025

AI Insights

The case involves Manisha Devnani, who appealed against an assessment order for the assessment year 2018-19, which included additions for unexplained investments and discrepancies in property valuation. The Income Tax Officer had made these additions under sections 69 and 56(2)(x) of the Income Tax Act, 1961, and applied a special tax rate under section 115BBE. The appellant contested the assessment order, arguing that the additions were unjustified and that the order violated principles of natural justice. However, the Tribunal dismissed the appeal on procedural grounds, noting the absence of objections filed before the DRP within the statutory period.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 831677 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-01-2026
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: I
• Assessment Year: misc
• Appeal Filed On: 17-01-2025
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: KRISHNA KUMAR
• Assessee Lawyers: VARIS ISANI VIRTUALLY APPEARED
• Keywords: Set aside; Unexplained investment; Sale consideration of property below Jantri Value; Principle of natural justice; Initiation of penalty proceedings
• Section: 147; 143(3); 69

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “I” MUMBAI BEFORE SHRI OM PRAKASH KANT (ACCOUNTANT MEMBER) AND SHRI SANDEEP SINGH KARHAIL (JUDICIAL MEMBER) ITA No. 344/MUM/2025 Assessment Year: 2018-19 Manisha Devnani, 74, Sindhi Society Chembur, Mumbai-400071. Vs. INT Tax Ward 2(1)(1), Kautilya Bhavan, BKC, Mumbai-400051. PAN NO. BDJPD 1576 P Appellant Respondent Assessee by : Mr. Varis Isani (Virtually appeared) Revenue by : Mr. Krishna Kumar, Sr. DR Date of Hearing : 19/01/2026 Date of pronouncement : 23/01/2026 ORDER PER OM PRAKASH KANT, AM This appeal has been preferred by the assessee against the assessment order dated 18.04.2024 passed by the learned Income- tax Officer (International Taxation), Ward 1(1), Mumbai, under section 147 read with section 144C(3) of the Income-tax Act, 1961 (hereinafter referred to as “the Act”), for the assessment year 2018– 19, raising following grounds: Printed from counselvise.com 1. The Ld. Income Tax Officer, Ward 2(1)(1) Mumbai Assessing Authority) has erred in law in passing the assessment order u/s. 147 r.w.s 144C(3) of th 19 on 18/04/2024 wherein total income is assessed to Rs. 33,03,570/-. The assessment order passed by the Assessing Authority deserves to be quashed and set aside. 3. The Lrd. Assessing Officer has made addition u/s. 69 for unexplained investment of Rs. 10,66,000/ consideration in the assessment order and charged tax at special rate u/s. 115BBE of the Income Tax Act. 4. The Lrd. Assessing Officer has made addition of Rs. 22,37,572/- the differential and stamp duty value of the purchase property without verifying documents and details and erroneously and without application of independent mind. 5. The Lrd. Assessing Officer has erred in law in applying the provision of purchase price and stamp duty value of Rs. 22,37,572/ the entire transection and is not executed by payment by the appellant.. Therefore, applying provision of section 56(2)(x) & 115BBE is high 6. The Lrd. Assessing officer has erred in law in applying the provision of 69 for unexplained investment. The A.O. not verified all payment to the saller and also not verified the actual source of the investment and added Rs unexplained investment is highly unjustifiable and unlawful. 7. The Lrd. Assessing Officer has erred in law in charging interest u/s. 234A-B- demand raised in the assessment order. 8. The Lrd. Assessing Officer has erred in law in initiating penalty proceedings u/s. 270A of the Income Tax Act. 9. The Lrd. Assessing Officer has grievously erred in law in applying the provision of section 115BBE of the Income Tax Act which was not in fo necessary intendment, the provisions of a statute which affect a right in existence at the time of the passing of that enactment are not to be applied retrospectively. ITA No. 344/MUM/2025 d. Income Tax Officer, Ward 2(1)(1) Mumbai Assessing Authority) has erred in law in passing the assessment order u/s. 147 r.w.s 144C(3) of the Income Tax Act for A.Y. 2018 19 on 18/04/2024 wherein total income is assessed to Rs. . The assessment order passed by the Assessing Authority deserves to be quashed and set aside. 3. The Lrd. Assessing Officer has made addition u/s. 69 for explained investment of Rs. 10,66,000/- during the year under consideration in the assessment order and charged tax at special rate u/s. 115BBE of the Income Tax Act. 4. The Lrd. Assessing Officer has made addition of Rs. the differential amount between the purchase price and stamp duty value of the purchase property without verifying documents and details and erroneously and without application of independent mind. 5. The Lrd. Assessing Officer has erred in law in applying the section 56(2)(x) for differential value between the purchase price and stamp duty value of Rs. 22,37,572/ the entire transection and is not executed by payment by the appellant.. Therefore, applying provision of section 56(2)(x) & 115BBE is highly unjustifiable and unlawful. 6. The Lrd. Assessing officer has erred in law in applying the provision of 69 for unexplained investment. The A.O. not verified all payment to the saller and also not verified the actual source of the investment and added Rs. 10,66,000/- treated as a unexplained investment is highly unjustifiable and unlawful. 7. The Lrd. Assessing Officer has erred in law in charging interest -C-D of the Income Tax Act on the consequential demand raised in the assessment order. . The Lrd. Assessing Officer has erred in law in initiating penalty proceedings u/s. 270A of the Income Tax Act. 9. The Lrd. Assessing Officer has grievously erred in law in applying the provision of section 115BBE of the Income Tax Act which was not in force. In absence of express enactment or necessary intendment, the provisions of a statute which affect a right in existence at the time of the passing of that enactment are not to be applied retrospectively. Manisha Devnani 2 ITA No. 344/MUM/2025 d. Income Tax Officer, Ward 2(1)(1) Mumbai- (for short Assessing Authority) has erred in law in passing the assessment e Income Tax Act for A.Y. 2018- 19 on 18/04/2024 wherein total income is assessed to Rs. . The assessment order passed by the Assessing 3. The Lrd. Assessing Officer has made addition u/s. 69 for during the year under consideration in the assessment order and charged tax at special 4. The Lrd. Assessing Officer has made addition of Rs. amount between the purchase price and stamp duty value of the purchase property without verifying documents and details and erroneously and without application of 5. The Lrd. Assessing Officer has erred in law in applying the section 56(2)(x) for differential value between the purchase price and stamp duty value of Rs. 22,37,572/-. In fact the entire transection and is not executed by payment by the appellant.. Therefore, applying provision of section 56(2)(x) & 6. The Lrd. Assessing officer has erred in law in applying the provision of 69 for unexplained investment. The A.O. not verified all payment to the saller and also not verified the actual source of treated as a unexplained investment is highly unjustifiable and unlawful. 7. The Lrd. Assessing Officer has erred in law in charging interest D of the Income Tax Act on the consequential . The Lrd. Assessing Officer has erred in law in initiating penalty 9. The Lrd. Assessing Officer has grievously erred in law in applying the provision of section 115BBE of the Income Tax Act rce. In absence of express enactment or necessary intendment, the provisions of a statute which affect a right in existence at the time of the passing of that enactment are Printed from counselvise.com 10. The appellant craves leave to add, alter or grounds of appeal either before or at the time of hearing of the appeal. Prayer: It is therefore prayed that, 1. The order passed by the appellate authority dismissing the appeal of the appellant on the ground of non please be quashed and set aside and appeal may be heard on merits based on documents and evidences. 2. The assessment order passed u/s. 147 r.w.s. 144C(3) of the Income Tax Act deserves to be quashed and set aside. 3. Addition of Rs. 10,66,000/ provision may kindly be deleted. 4. Addition of Rs. 22,37,572/ provision may kindly be deleted. 5. A special rate of taxation u/s. 115BBE applied for addition made in the assessment order may kindly be deleted as is against the provision of the Act. 6. The assessment order may kindly be considered as passed with gross violation of principle of natural justice. 7. Consequential interest charged u/s. 234 may kindly be reduced / deleted. 8. Initiation of pena dropped. 9. Stay against recovery of demand may please be granted. 10.Delay caused in filing the appeal may please be condoned. 11. Any other relief which may deemed fit and proper may please be given. 2. At the outset, it is noticed that the Registry has pointed out certain defects in the appeal memo, inter alia, that the appeal is time-barred by 201 days, that copies of the draft assessment order ITA No. 344/MUM/2025 10. The appellant craves leave to add, alter or amend any of the grounds of appeal either before or at the time of hearing of the It is therefore prayed that, 1. The order passed by the appellate authority dismissing the appeal of the appellant on the ground of non-compliance may be quashed and set aside and appeal may be heard on merits based on documents and evidences. 2. The assessment order passed u/s. 147 r.w.s. 144C(3) of the Income Tax Act deserves to be quashed and set aside. 3. Addition of Rs. 10,66,000/- made u/s. 69 appl provision may kindly be deleted. 4. Addition of Rs. 22,37,572/- made u/s. 56(2)(x) applying the provision may kindly be deleted. 5. A special rate of taxation u/s. 115BBE applied for addition made in the assessment order may kindly be deleted as is against the provision of the Act. 6. The assessment order may kindly be considered as passed with gross violation of principle of natural justice. 7. Consequential interest charged u/s. 234 may kindly be reduced 8. Initiation of penalty proceedings may kindly be directed to be 9. Stay against recovery of demand may please be granted. 10.Delay caused in filing the appeal may please be condoned. 11. Any other relief which may deemed fit and proper may please outset, it is noticed that the Registry has pointed out certain defects in the appeal memo, inter alia, that the appeal is barred by 201 days, that copies of the draft assessment order Manisha Devnani 3 ITA No. 344/MUM/2025 amend any of the grounds of appeal either before or at the time of hearing of the 1. The order passed by the appellate authority dismissing the compliance may be quashed and set aside and appeal may be heard on 2. The assessment order passed u/s. 147 r.w.s. 144C(3) of the made u/s. 69 applying the made u/s. 56(2)(x) applying the 5. A special rate of taxation u/s. 115BBE applied for addition made in the assessment order may kindly be deleted as the same 6. The assessment order may kindly be considered as passed 7. Consequential interest charged u/s. 234 may kindly be reduced lty proceedings may kindly be directed to be 9. Stay against recovery of demand may please be granted. 10.Delay caused in filing the appeal may please be condoned. 11. Any other relief which may deemed fit and proper may please outset, it is noticed that the Registry has pointed out certain defects in the appeal memo, inter alia, that the appeal is barred by 201 days, that copies of the draft assessment order Printed from counselvise.com and directions of the Dispute Resolution Panel (DRP) have not bee filed, and that objections before the DRP under section 144C(2) were not placed on record. It is noted that the assessee has rectified the defect relating to payment of appeal fee. However, in respect of the defect concerning non submitted that no objections were filed before the DRP and that submissions were made only before the Assessing Officer. 2.1 In this regard, the Assessing Officer has categorically recorded in the assessment order that the assessee, being an assessee under section 144C(15)(b) of the Act, was served with a draft assessment order dated 11.03.2024 in accordance with section 144C(1) of the Act. The assessee was required, within 30 days, either to accept the proposed variations or to file before the DRP with a copy to the Assessing Officer, as mandated under section 144C(2) of the Act. It is an admitted position that the assessee did not file any objections before the DRP within the statutory period. The submissions filed only b Officer were treated as non est in the eye of law, and consequently, the Assessing Officer proceeded to pass the final assessment order under section 144C(3) of the Act. Assessing Officer is reproduced as und “The assessee being an eligible assessee u/s. 144C(15)(b)(ii) of the IT Act, 1961, the draft assessment order was passed on 11.03.2024 in his case as per the provisions of section 144C(1) of the I. T. Act, 1961 and delivered to the assessee on income tax e filing portal as well as e ITA No. 344/MUM/2025 and directions of the Dispute Resolution Panel (DRP) have not bee filed, and that objections before the DRP under section 144C(2) were not placed on record. It is noted that the assessee has rectified the defect relating to payment of appeal fee. However, in respect of the defect concerning non-filing of DRP directions submitted that no objections were filed before the DRP and that submissions were made only before the Assessing Officer. In this regard, the Assessing Officer has categorically recorded in the assessment order that the assessee, being an assessee under section 144C(15)(b) of the Act, was served with a draft assessment order dated 11.03.2024 in accordance with section 144C(1) of the Act. The assessee was required, within 30 days, either to accept the proposed variations or to file before the DRP with a copy to the Assessing Officer, as mandated under section 144C(2) of the Act. It is an admitted position that the assessee did not file any objections before the DRP within the statutory period. The submissions filed only before the Assessing Officer were treated as non est in the eye of law, and consequently, the Assessing Officer proceeded to pass the final assessment order under section 144C(3) of the Act. The relevant finding of the Assessing Officer is reproduced as under: The assessee being an eligible assessee u/s. 144C(15)(b)(ii) of the IT Act, 1961, the draft assessment order was passed on 11.03.2024 in his case as per the provisions of section 144C(1) of the I. T. Act, 1961 and delivered to the assessee on income tax e filing portal as well as e-mail on 11.03.2024 for exercise of option Manisha Devnani 4 ITA No. 344/MUM/2025 and directions of the Dispute Resolution Panel (DRP) have not been filed, and that objections before the DRP under section 144C(2) were not placed on record. It is noted that the assessee has rectified the defect relating to payment of appeal fee. However, in respect of filing of DRP directions, the assessee submitted that no objections were filed before the DRP and that submissions were made only before the Assessing Officer. In this regard, the Assessing Officer has categorically recorded in the assessment order that the assessee, being an eligible assessee under section 144C(15)(b) of the Act, was served with a draft assessment order dated 11.03.2024 in accordance with section 144C(1) of the Act. The assessee was required, within 30 days, either to accept the proposed variations or to file objections before the DRP with a copy to the Assessing Officer, as mandated under section 144C(2) of the Act. It is an admitted position that the assessee did not file any objections before the DRP within the efore the Assessing Officer were treated as non est in the eye of law, and consequently, the Assessing Officer proceeded to pass the final assessment order The relevant finding of the The assessee being an eligible assessee u/s. 144C(15)(b)(ii) of the IT Act, 1961, the draft assessment order was passed on 11.03.2024 in his case as per the provisions of section 144C(1) of the I. T. Act, 1961 and delivered to the assessee on income tax e- mail on 11.03.2024 for exercise of option Printed from counselvise.com as provided in sec. 144C(2) of the Act. As per the provisions of section 144C(2) of the Income Tax Act, 1961 the assessee was required to, either file acceptance of the variations to the its objections before the Dispute Resolution Panel (DRP) and the Assessing officer, within 30 days from receipt of the draft assessment order. The assessee has uploaded its submission on the e-filing portal on 06.04.2024 in response to the draft assessment order passed u/s. 143(3) rws 147 rws 144C(1) of the Income Tax Act, 1961. The assessee has furnished submissions against the Draft Order. The assessee has neither stated that he has filed any objections before DRP nor furnished any proof of fil objection before DRP. The assessee has made a request to refer the matter to DRP. As per the Act, there is no provision to refer the matter to the DRP by the assessing officer. The objections have to be filed by the assessee before DRP with a copy mark Also, the assessee has not stated or informed anything later about raising objections before DRP. No evidence is furnished in respect of filing of any objections before DRP. Since 30 days time has been elapsed in this case from the date of re order, the assessee now cannot file its objections before the DRP. The filing of submissions/objections only before AO is akin to no objections as per provisions of section 144C(3)(b) of the Act. The submissions made by the assess assessment order, cannot be considered by the assessing officer at this stage and therefore, the assessment order is hereby finalized under the provisions of section 144C(3) of the Income Tax Act, 1961, which is reproduced as The assessee has not filed return of income for Year under consideration. 3. We have heard the rival submissions on the preliminary issue and have carefully examined the statutory scheme governing the remedy of appeal. Under section 253 of the Act the Income-tax Appellate Tribunal lies only against a final assessment order passed pursuant to the directions of the Dispute Resolution Panel under section 144C(5) of the Act. Where no objections are filed before the DRP and the final passed by the Assessing Officer under section 144C(3), the ITA No. 344/MUM/2025 as provided in sec. 144C(2) of the Act. As per the provisions of section 144C(2) of the Income Tax Act, 1961 the assessee was required to, either file acceptance of the variations to the its objections before the Dispute Resolution Panel (DRP) and the Assessing officer, within 30 days from receipt of the draft assessment order. The assessee has uploaded its submission on filing portal on 06.04.2024 in response to the draft assessment order passed u/s. 143(3) rws 147 rws 144C(1) of the Income Tax Act, 1961. The assessee has furnished submissions against the Draft Order. The assessee has neither stated that he has filed any objections before DRP nor furnished any proof of fil objection before DRP. The assessee has made a request to refer the matter to DRP. As per the Act, there is no provision to refer the matter to the DRP by the assessing officer. The objections have to be filed by the assessee before DRP with a copy marked to the AO. Also, the assessee has not stated or informed anything later about raising objections before DRP. No evidence is furnished in respect of filing of any objections before DRP. Since 30 days time has been elapsed in this case from the date of receipt of draft assessment order, the assessee now cannot file its objections before the DRP. The filing of submissions/objections only before AO is akin to no objections as per provisions of section 144C(3)(b) of the Act. The submissions made by the assessee after passing of the draft assessment order, cannot be considered by the assessing officer at this stage and therefore, the assessment order is hereby finalized under the provisions of section 144C(3) of the Income Tax Act, 1961, which is reproduced as under:- The assessee has not filed return of income for Year under consideration.” We have heard the rival submissions on the preliminary issue and have carefully examined the statutory scheme governing the remedy of appeal. Under section 253 of the Act, a direct appeal to tax Appellate Tribunal lies only against a final assessment order passed pursuant to the directions of the Dispute Resolution Panel under section 144C(5) of the Act. Where no objections are filed before the DRP and the final assessment order is passed by the Assessing Officer under section 144C(3), the Manisha Devnani 5 ITA No. 344/MUM/2025 as provided in sec. 144C(2) of the Act. As per the provisions of section 144C(2) of the Income Tax Act, 1961 the assessee was required to, either file acceptance of the variations to the AO or file its objections before the Dispute Resolution Panel (DRP) and the Assessing officer, within 30 days from receipt of the draft assessment order. The assessee has uploaded its submission on filing portal on 06.04.2024 in response to the draft assessment order passed u/s. 143(3) rws 147 rws 144C(1) of the Income Tax Act, 1961. The assessee has furnished submissions against the Draft Order. The assessee has neither stated that he has filed any objections before DRP nor furnished any proof of filing objection before DRP. The assessee has made a request to refer the matter to DRP. As per the Act, there is no provision to refer the matter to the DRP by the assessing officer. The objections have to be filed by the assessee before DRP with a copy marked to the AO. Also, the assessee has not stated or informed anything later about raising objections before DRP. No evidence is furnished in respect of filing of any objections before DRP. Since 30 days time has been ceipt of draft assessment order, the assessee now cannot file its objections before the DRP. The filing of submissions/objections only before AO is akin to no objections as per provisions of section 144C(3)(b) of the Act. The ee after passing of the draft assessment order, cannot be considered by the assessing officer at this stage and therefore, the assessment order is hereby finalized under the provisions of section 144C(3) of the Income Tax Act, 1961, The assessee has not filed return of income for Year under We have heard the rival submissions on the preliminary issue and have carefully examined the statutory scheme governing the , a direct appeal to tax Appellate Tribunal lies only against a final assessment order passed pursuant to the directions of the Dispute Resolution Panel under section 144C(5) of the Act. Where no assessment order is passed by the Assessing Officer under section 144C(3), the Printed from counselvise.com statutory remedy available to the assessee is to file an appeal before the learned Commissioner of Income before the Tribunal. 3.1 In the present case, it is undisputed that no objections were filed before the DRP and that the impugned assessment order is not an order passed pursuant to any directions of the DRP. Consequently, the appeal filed directly before the Tribunal is not maintainable in law. This defect goes to the root of the jurisdiction of the Tribunal and cannot be cured. 3.2 In view of the above statutory position, we hold that the present appeal is not maintainable before this Tribunal. Accordingly, without going into the merits of the the other defects pointed out by the Registry, the appeal is dismissed at the threshold as non 4. In the result, the appeal is rejected as non Order pronounced in the open Court on Sd/- (SANDEEP SINGH KARHAIL JUDICIAL MEMBER Mumbai; Dated: 23/01/2026 Rahul Sharma, Sr. P.S. ITA No. 344/MUM/2025 statutory remedy available to the assessee is to file an appeal before the learned Commissioner of Income-tax (Appeals) and not directly case, it is undisputed that no objections were filed before the DRP and that the impugned assessment order is not an order passed pursuant to any directions of the DRP. Consequently, the appeal filed directly before the Tribunal is not . This defect goes to the root of the jurisdiction of the Tribunal and cannot be cured. In view of the above statutory position, we hold that the present appeal is not maintainable before this Tribunal. Accordingly, without going into the merits of the grounds raised or the other defects pointed out by the Registry, the appeal is dismissed at the threshold as non-maintainable. In the result, the appeal is rejected as non-maintainable. ounced in the open Court on 23/01/2026. - Sd/ SINGH KARHAIL) (OM PRAKASH KANT JUDICIAL MEMBER ACCOUNTANT MEMBER Manisha Devnani 6 ITA No. 344/MUM/2025 statutory remedy available to the assessee is to file an appeal before tax (Appeals) and not directly case, it is undisputed that no objections were filed before the DRP and that the impugned assessment order is not an order passed pursuant to any directions of the DRP. Consequently, the appeal filed directly before the Tribunal is not . This defect goes to the root of the jurisdiction In view of the above statutory position, we hold that the present appeal is not maintainable before this Tribunal. grounds raised or the other defects pointed out by the Registry, the appeal is maintainable. /01/2026. Sd/- OM PRAKASH KANT) ACCOUNTANT MEMBER Printed from counselvise.com 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. 344/MUM/2025 Copy of the Order forwarded to : BY ORDER, (Assistant Registrar) ITAT, Mumbai Manisha Devnani 7 ITA No. 344/MUM/2025 BY ORDER, (Assistant Registrar) ITAT, Mumbai Printed from counselvise.com "