MANOJ ARJUN NASTA,MUMBAI - CURRENTLY RESIDENT IN UAE V. THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE 42(2)(1), MUMBAI

ITA 5807/MUM/2025

AI Insights

The case involves Manoj Arjun Nasta, a Non-Resident Indian, who faced a quantum assessment and subsequent penalties from the Income Tax Department for the Assessment Year 2016-17. The primary issue was an addition of 62,00,000 to his income, alleged to be unexplained investment in immovable property. The assessee argued that due to his non-resident status and lack of awareness of statutory notices, he could not comply with the notices or attend hearings. The Tribunal acknowledged the assessee's circumstances and decided to set aside the assessments and penalties, directing a fresh assessment while ensuring the assessee is given a fair opportunity to present his case.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 789310 (ITAT-MUMBAI)
• Duration Of Justice: 2 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-11-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: misc
• Appeal Filed On: 22-09-2025
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANNAVARAN KOSURI
• Assessee Lawyers: SHAILESH B SETHIA
• Keywords: Set aside; Reasonable cause; Unexplained investment
• Section: 147; 271(1)(c)

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL, ‘D’ BENCH MUMBAI BEFORE: SHRI AMIT SHUKLA, JUDICIAL MEMBER & SMT RENU JAUHRI, ACCOUNTANT MEMBER ITA No.5807/Mum/2025 to 5809/Mum/2025 (Assessment Year :2016-17) Manoj Arjun Nasta 2A/201, NG Suncity Phase 1, Thakur Village Kandivali East Mumbai- 400 101 Vs. The Assistant Commissioner of Income Tax Mumbai PAN/GIR No.AEPPN7409H (Appellant) .. (Respondent) Assessee by Shri Shailesh B Sethia Revenue by Shri Annavaran Kosuri Date of Hearing 26/11/2025 Date of Pronouncement 27/11/2025 आदेश / O R D E R PER AMIT SHUKLA (J.M): These three appeals, being ITA Nos. 5807/Mum/2025 to 5809/Mum/2025, have been preferred by the assessee against the order dated 27/08/2025 passed for A.Y. 2016-17- one arising from the quantum assessment framed under Section 147 r.w.s. 144 of the Income-tax Act, 1961, and the remaining two emanating from the penalty orders passed separately under Sections 271(1)(c) and 271(1)(b) of the Act. Since all the matters are interconnected and arise from the Printed from counselvise.com ITA No.5807-5809/Mum/2025 Manoj Arjun Nasta 2 same set of facts, they were heard together and are being disposed of by this consolidated order. 2. The primary dispute relates to the addition of ₹ 62,00,000/- made by the Assessing Officer towards the alleged unexplained investment in the purchase of immovable property. The learned counsel submitted that the assessee has been a Non-Resident Indian for several decades, permanently employed abroad and earning income outside India. Being a non-resident, he was not filing his return of income in India and therefore was not aware that any statutory notices would be issued to him in India by the tax department. Owing to his continued stay outside India, he did not receive the notices issued by the Assessing Officer during reassessment or those issued by the learned CIT(A), and therefore could not attend or make representations before either authority. For the same reason, two separate penalties eventually came to be levied - one under Section 271(1)(b) for non-compliance with notices and another under Section 271(1)(c) consequent to the confirmation of the addition. It has been emphasised that the investment in the property was made through legitimate banking channels from foreign earnings and not from any undisclosed source. 3. On a close examination of the facts and circumstances, we find considerable force in the explanation furnished. The assessee, being a long-standing non-resident, was not filing a return in India and therefore had no occasion or expectation to monitor communications from the Income-tax Department Printed from counselvise.com ITA No.5807-5809/Mum/2025 Manoj Arjun Nasta 3 or e-filing portal, resulting in his not receiving any of the notices. It has been pointed out that he first became aware of the assessment orders only upon his visit to India after the sad demise of his father. These facts clearly establish a reasonable cause behind the assessee’s inability to appear before the Assessing Officer as well as the learned CIT(A). In the larger interest of justice and so that no assessee is prejudiced without being heard, we consider it appropriate to restore the entire matter to the file of the Assessing Officer, who shall adjudicate the issues afresh strictly in accordance with law after granting due and effective opportunity of hearing to the assessee. The assessee shall in turn cooperate fully and ensure that notices are duly complied with. 4. Coming to the penalty proceedings under Sections 271(1)(c) and 271(1)(b), once the quantum assessment has been set aside for a denovo adjudication, and coupled with the fact that reasonable cause behind non-compliance has been accepted, the very basis for the levy of penalties does not survive. It is a well-recognised legal principle that penalty cannot stand when the foundation assessment is restored for fresh determination, and especially so where non-appearance is attributable to a reasonable cause. Accordingly, the penalties levied under Sections 271(1)(c) and 271(1)(b) are hereby deleted. 5. In the result, the appeal of the assessee in ITA No. 5807/Mum/2025 (quantum) stands allowed for statistical purposes, whereas the appeals in ITA Nos. Printed from counselvise.com ITA No.5807-5809/Mum/2025 Manoj Arjun Nasta 4 5808/Mum/2025 and 5809/Mum/2025 (penalty matters) stand allowed. Order pronounced on 27th November, 2025. Sd/- (RENU JAUHRI) Sd/- (AMIT SHUKLA) ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai; Dated 27/11/2025 KARUNA, sr.ps Copy of the Order forwarded to : BY ORDER, (Asstt. Registrar) ITAT, Mumbai 1. The Appellant 2. The Respondent. 3. CIT 4. DR, ITAT, Mumbai 5. Guard file. //True Copy// Printed from counselvise.com "