RUPALBAHEN SANKETKUMAR SHAH,MUMBAI V. ITO-1(5), AURANGABAD

ITA 3186/PUN/2025

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The case involves Rupalbahen Sanketkumar Shah, the appellant, who contested a penalty of Rs.15,12,221 levied by the Assessing Officer under section 271AAC(1) of the Income Tax Act, 1961, for the Assessment Year 2018-19. The penalty was based on an addition made under section 69 read with section 115BBE, treating a substantial payment for immovable property as unexplained investment. The appellant argued that the penalty was unjust as the property was purchased by her spouse, and she was unaware of the tax proceedings due to not being registered on the ITBA portal and the notices being sent to an outdated address in Aurangabad. The CIT(A) dismissed her appeal due to a 199-day delay in filing, which she attributed to her lack of familiarity with tax proceedings and the ITBA portal, as well as the involvement of her Chartered Accountant who managed her tax filings. The Tribunal found merit in the appellant's reasons for the delay and directed the CIT(A) to reconsider the case post the decision on the pending quantum appeal.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 840025 (ITAT-PUNE)
• Duration Of Justice: 2 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-02-2026
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2018-2019
• Appeal Filed On: 23-12-2025
• Other Referred Cases: Collector, Land Acquisition vs. Mst. Katiji & Ors. (1987) 167 ITR 471 (SC), Inder Singh Vs. The State of Madhya Pradesh reported in 2025 Live Law (SC) 339
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SHILPA N C
• Assessee Lawyers: SUCHEK ANCHALIYA VIRTUAL
• Keywords: Set aside; Reasonable cause; Unexplained investment
• Section: 147; 144; 69

Judgement Text

" आयकर अपीलीय अधिकरण “बी” न्यायपीठ पुणे में । IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH, PUNE BEFORE SHRI R.K. PANDA, VICE PRESIDENT AND MS. ASTHA CHANDRA, JUDICIAL MEMBER आयकर अपील सं. / ITA No.3186/PUN/2025 धििाारण वर्ा / Assessment Year : 2018-19 Rupalbahen Sanketkumar Shah, B1905 Oberoi Esquire Oberoi Gardencity, Goregaon East, Goregaon East S.O., Mumbari-400063 PAN : BJNPS9255G Vs. ITO, Ward-1(5), Aurangabad अपीलार्थी / Appellant प्रत्यर्थी / Respondent Assessee by : Shri Suchek Anchaliya (Virtual) Department by : Smt. Shilpa NC Date of hearing : 18-02-2026 Date of Pronouncement : 24-02-2026 आदेश / ORDER PER ASTHA CHANDRA, JM : The appeal filed by the assessee is directed against the order dated 08.12.2025 of the Ld. Commissioner of Income Tax (Appeals)/NFAC, Delhi [“CIT(A)”] wherein he confirmed the penalty of Rs.15,12,221/- levied by the Ld. Assessing Officer (“AO”) u/s 271AAC(1) of the Income Tax Act, 1961 (the “Act”) pertaining to Assessment Year (“AY”) 2018-19. 2. The assessee has raised the following grounds of appeal :- “1. On the facts and in the circumstances of the case and in law the Ld. NFAC/CIT(A) erred in dismissing the appeal and in refusing to condone the delay in filing the said appeal, without appreciating the fact that the appellant had a reasonable and sufficient cause for such delay. 2. On the facts and in the circumstances of the case and in law the Ld. NFAC/CIT(A) erred in dismissing the appeal of penalty, without appreciating the fact that the appellant had filed the appeal against the quantum addition and the said appeal is still pending for decision, before Ld. CIT(A). 3. On the facts and in the circumstances of the case and in law, the Ld. NFAC/CIT(A) erred in dismissing the appellant's appeal without appreciating that the Ld. AO levied penalty u/s 271AAC(1) of the Income-tax Act, 1961 was on an addition made u/s 69 r.w.s. 115BBE of the Act, treating the amount as consideration for acquisition of immovable property, without properly considering the fact that the Printed from counselvise.com 2 ITA No. 3186/PUN/2025, AY 2018-19 consideration for purchase of the said property was paid by the appellant's spouse and, therefore, no addition was warranted. 4. The appellant craves to add, alter, classify, reclassify, delete or modify any of the above grounds of appeal and requests to consider each of the above grounds without prejudice to one another.” 3. At the outset, the Ld. AR submitted that the quantum appeal of the assessee for the relevant AY under consideration i.e. AY 2018-19 is pending for adjudication before the Ld. CIT(A)/NFAC. He submitted that the penalty appeal before the Ld. CIT(A)/NFAC was filed with a delay of 199 days. The Ld. CIT(A)/NFAC has dismissed the appeal of the assessee without expressing any opinion on merits of the case owing to the reason that there is no sufficient cause shown by the assessee for condoning the said delay. He submitted that the assessee had filed an application for condonation before the Ld. CIT(A)/NFAC stating therein the reasons for the delay in filing of the appeal which according to him constituted „sufficient cause‟ for the said delay. 4. Reiterating the reasons cited before the Ld. CIT(A)/NFAC (reproduced below) which have been incorporated by the Ld. CIT(A)/NFAC in para 2 of his impugned appellate order, the Ld. AR submitted that the assessee had sufficient/reasonable cause and the Ld. CIT(A)/NFAC should have condoned the delay in filing of the appeal and adjudicated the issues on merits. \"The appellant is a homemaker, and shifted to Mumbai in the year 2019, residing at B-1905, Oberoi Esquire Oberoi Gardencity, Goregaon East, Mumbai 400 063 permanently. 2. The appellant is Individual and a homemaker which had no income in the said assessment year, therefore she has not registered herself on the ITBA portal. Further, The Ld. AO has reopened the assessment and issued notices and order at the address of Aurangabad. Hence the appellant was not aware of any Income tax proceeding and assessment order. 3. For AY 2024-25, the appellant filed her Income Tax Return for the first time and registered herself on the ITBA portal. However, since the return was filed by her Chartered Accountant (CA), the login credentials were with the CA, who did not check for any pending e-proceedings against the appellant on the ITBA portal. 4. Since the appellant do not have any regular source of income and have not been filing Income Tax Returns regularly, the appellant was not familiar with the income tax proceedings and have never accessed the ITBA Portal. 5. The appellant received an email on 23.04.2025 regarding the payment of outstanding demand and, on the same day, became aware of the impugned assessment order. Subsequently, the appellant appointed a tax consultant to handle the assessment proceedings in the matter. Printed from counselvise.com 3 ITA No. 3186/PUN/2025, AY 2018-19 6. So the appellant came to know about the said order on 23.04.2025 and coming through facts he is filing the appeal. You are kindly requested to consider the above facts and condonation of the delay if any observed by your honour.\" 5. The Ld. AR therefore, urged that since the assessee has a strong case on merits and the quantum appeal of the assessee is pending for adjudication before the Ld. CIT(A)/NFAC the matter may be sent back to the file of the Ld. CIT(A)/NFAC for adjudication once the quantum appeal of the assessee is decided by him. 6. The Ld. DR had no objection to the above proposition of the Ld. AR. 7. We have heard the Ld. Representatives of the parties and perused the material available on record. We find that the Ld. AO completed the assessment ex-parte qua the assessee for AY 2018-19 u/s 147 r.w.s. 144 of the Act vide his order dated 06.03.2024 thereby making an addition of Rs.2,52,03,681/- u/s 69 of the Act in respect of payment made by the assessee of the said amount of Rs.2,52,03,681/- towards purchase of immovable property from Ekta Ejverglade Homes Pvt. Ltd. treating the same as unexplained investments. Thereafter, the Ld. AO initiated penalty proceedings u/s 271AAC(1) of the Act. During the penalty proceedings, the assessee failed to respond to various notices issued by the Ld. AO from time to time which resulted in levy of penalty of Rs.15,12,221/- by the Ld. AO vide his ex-parte order dated 18.09.2024 for want of any plausible explanation offered by the assessee in respect of the above transaction of purchase of immovable property. The Ld. CIT(A)/NFAC has dismissed the appeal of the assessee without dwelling into the merits of the case on account of delay in filing of the appeal observing that the reasons cited by the assessee for such delay in his opinion do not constitute “sufficient cause” for not presenting the appeal within the specified period of time. Before us, reiterating the reasons stated before the Ld. CIT(A)/NFAC, the Ld. AR submitted that the delay in filing of the appeal was not intentional but resulted due to the reasons stated above. It is the submission of the Ld. Counsel for the assessee that since the assessee has a strong case on merits and the quantum appeal of the assessee is pending for adjudication before the Ld. CIT(A)/NFAC, the Ld. CIT(A)/NFAC may be directed to condone the delay in filing of the appeal and admit the same for decision afresh after the quantum appeal of the assessee is decided. Printed from counselvise.com 4 ITA No. 3186/PUN/2025, AY 2018-19 8. Considering the totality of the facts and in the light of the decision of the Hon'ble Supreme Court in the case of Collector, Land Acquisition vs. Mst. Katiji & Ors. (1987) 167 ITR 471 (SC) and in the case of Inder Singh Vs. The State of Madhya Pradesh reported in 2025 Live Law (SC) 339, we deem it fit, in the interest of justice, to set aside the impugned order of the Ld. CIT(A)/NFAC and restore the matter back to his file with a direction to condone the delay in filing of the appeal before him by the assessee and adjudicate the same afresh as per fact and law once the quantum appeal is decided by him after affording reasonable opportunity of hearing to the assessee. Needless to say, the assessee shall remain vigilant in receiving the notices of hearing and comply with the notices issued by the Ld. CIT(A)/NFAC and make the requisite submissions before him on the appointed date without seeking any adjournment under any pretext unless required for the sufficient cause failing which the Ld. CIT(A)/NFAC shall be at liberty to pass appropriate order as per law. We hold and direct accordingly. The grounds raised by the assessee are accordingly allowed for statistical purposes. 9. In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open court on 24th February, 2026. Sd/- Sd/- (R.K. Panda) (Astha Chandra) VICE PRESIDENT JUDICIAL MEMBER पुणे / Pune; दिन ांक / Dated : 24th February, 2026. रदि आदेश की प्रधिधलधप अग्रेधर्ि / Copy of the Order forwarded to : 1. अपील र्थी / The Appellant. 2. प्रत्यर्थी / The Respondent. 3. The Pr. CIT concerned. 4. दिभ गीय प्रदिदनदि, आयकर अपीलीय अदिकरण, “बी” बेंच, पुणे / DR, ITAT, “B” Bench, Pune. 5. ग र्ड फ़ इल / Guard File. //सत्य दपि प्रदि// True Copy// आिेश नुस र / BY ORDER, सहायक पंजीकार/ Assistant Registrar आयकर अपीलीय अदिकरण ,पुणे / ITAT, Pune Printed from counselvise.com "