SANJAY RAMNATHAN,MUMBAI V. DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE 26(1), MUMBAI

ITA 605/MUM/2025

AI Insights

The case involves Sanjay Ramnathan, a non-resident Indian residing in Singapore, who appealed against the order of the CIT(A) - National Faceless Appeal Centre, Delhi, concerning the assessment year 2011-12. The primary contention arose from the reassessment made by the Assessing Officer (AO) under sections 144 and 148 of the Income Tax Act, 1961, due to the non-filing of income tax returns by the assessee, despite having purchased immovable property and received rental income during the relevant assessment year. The CIT(A) had dismissed the assessee's appeal in limine due to a significant delay in filing, which the assessee attributed to his non-resident status and lack of awareness of the notices issued by the AO. The Tribunal found merit in the assessee's reasons for the delay and set aside the CIT(A)'s decision, restoring the matter for a fresh hearing on merits.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 471324 (ITAT-MUMBAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-03-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2011-2012
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: LEYAQAT ALI AAFAQUI
• Assessee Lawyers: RAJESH S. SHAH
• Keywords: Set aside; Opportunity of being heard; Reasonable cause

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI “B” BENCH : MUMBAI BEFORE SHRI B.R. BASKARAN, ACCOUNTANT MEMBER AND SHRI SANDEEP GOSAIN, JUDICIAL MEMBER ITA No. 605/Mum/2025 Assessment Year : 2011-12 Sanjay Ramnathan, 401, Bldg. No.13, Indra Darshan Phase II, Oshiwara, Mumbai-400 053. PAN :AACPR7701B vs. DCIT, Circle-26(1), Kautilya Bhavan, Mumbai-400 051. (Appellant) (Respondent) Assessee by : Shri Rajesh S. Shah Revenue by : Shri Leyaqat Ali Aafaqui Date of Hearing : 12-03-2025 Date of Pronouncement : 13-03-2025 ORDER PER B.R. BASKARAN, A.M : The assessee has filed this appeal challenging the order dt.04-12-2024 passed by the Ld. Commissioner of Income Tax (Appeals)-National Faceless Appeal Centre (NFAC), Delhi [„Ld.CIT(A)‟] and it relates to AY. 2011-12. 2. The Ld.AR submitted that the assessee is a non-resident, staying in Singapore. During the year under consideration, the assessee had purchased an immoveable property for a sum of Rs. 1.21 crores. It was noticed that the assessee did not file any return of income and hence, the AO reopened the assessment by issuing notice u/s.148 of the Act. The assessee did not respond to any of the notices issued by the AO. 2 ITA No. 605/Mum/2025 Hence, the AO completed the assessment to be best of his judgment u/s 144 of the Act adding the value of immoveable property as unexplained investment. The AO also noticed that the assessee has received rent of Rs. 1.59 lakhs shown from the data available with the Income Tax Department. The AO added the said income also in the hands of the assessee. 3. The assessee challenged the assessment order by filing an appeal before the Ld.CIT(A), after a delay of 1461 days. Since the explanation given by the assessee for the delay was not convincing, the Ld.CIT(A) dismissed the appeal in limine. Aggrieved, the assessee filed this appeal before the Tribunal. 4. The Ld.AR submitted that the assessee is non-resident and he had shifted to Singapore long back in the year 2000 itself. The Ld.AR further submitted that the assessee has mostly stayed in Singapore only and has visited India for less than twenty days in a year. Prior to shifting to Singapore, the assessee had obtained Permanent Account Number [PAN]. At that point of time, there was no necessity to register e-mail ID and phone number with the IT portal. Hence, the assessee was not aware of any of the notices issued by the AO. The Ld.AR submitted that the assessee is having sufficient sources to explain the cost of purchases. For the same reasons, the assessee was not aware of the assessment order passed by the AO. The assessee sold certain shares in December, 2022 and when he applied for Lower Deduction Certificate to the AO, he came to know of the demand raised by the AO for the AY. 2011-12. Immediately thereafter, the assessee obtained copy of the assessment order and filed the appeal before the Ld.CIT(A), wherein the assessee has explained above said reasons and requested the Ld.CIT(A) to condone the delay. However, the Ld.CIT(A) took the view that there was no reasonable cause for condoning the delay and accordingly dismissed the appeal of the assessee. 3 ITA No. 605/Mum/2025 5. The Ld.AR submitted that the impugned addition made by the AO itself is not sustainable, since the assessee had sufficient sources for making the investment. The Ld.AR further submitted that the assessee was under genuine belief that no action shall be taken by the Income tax department in the hands of non-resident. Accordingly, he submitted that there was reasonable cause for the assessee in not filing appeal before the Ld.CIT(A) in time. Accordingly, the Ld.AR prayed that the delay in filing appeal before Ld CIT(A) may be condoned. 6. We heard the Ld.DR and perused the record. Having regard to the submissions made by the assessee, we are of the view that there was reasonable cause for the assessee in not filing appeal before the Ld.CIT(A) within the time. Accordingly, we condone the delay in filing the appeal before the Ld.CIT(A). We notice that the Ld.CIT(A) has not adjudicated the grounds urged by the assessee on merits. Accordingly, we set aside the order passed by the Ld.CIT(A) and restore all the issues to the file of the Ld.CIT(A) for adjudicating them afresh. We also direct the assessee to fully co-operate with the Ld.CIT(A) by furnishing all the information/explanations in support of his contentions. After affording adequate opportunity of being heard to the assessee, the Ld.CIT(A) may take appropriate decision in accordance with law. 7. In the result, the appeal filed by the assessee is treated as allowed. Order pronounced in the open court on 13-03-2025 Sd/- Sd/- [SANDEEP GOSAIN] [B.R. BASKARAN] JUDICIAL MEMBER ACCOUNTANT MEMBER Mumbai, Dated: 13-03-2025 TNMM 4 ITA No. 605/Mum/2025 Copy to : 1) The Appellant 2) The Respondent 3) The CIT concerned 4) The D.R, ITAT, Mumbai 5) Guard file By Order Dy./Asst. Registrar I.T.A.T, Mumbai "