AI Insights
The case involves Shafiq Ahmed, the appellant, who contested the additions made to his income by the Assessing Officer (AO) under Section 148 of the Income Tax Act, 1961, for the assessment year 2017-18. The AO had made additions aggregating to Rs 14,84,700, believing that income chargeable to tax had escaped assessment. The appellant did not file a regular return of income and failed to respond to multiple notices. The CIT(A) dismissed the appeal for non-prosecution. The Tribunal found that the CIT(A) should have decided the appeal on merits despite the non-compliance and remitted the case back to the CIT(A) for a fresh decision on merits.
Appeal Details
Counselvise Citation
[2025] 140 COUNSELVISE.COM (IT) 712202 (ITAT-MUMBAI)
Assessee PAN
Bench
Appeal Number
CRN Number
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
24-07-2025
Appeal Filed By
Assessee
Order Result
Partly Allowed
Assessment Year
2017-2018
Judgement Text
"IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “H (SMC)” MUMBAI BEFORE SHRI OM PRAKASH KANT (ACCOUNTANT MEMBER) AND SHRI RAHUL CHAUDHARY (JUDICIAL MEMBER) ITA No. 3008/MUM/2025 Assessment Year: 2017-18 Shafiq Ahmed, Flat No. 322, 3rd Floor, Building No. 1 Om Sai Ekta (SRA), Society, CTS No. 216, Gillbert Hill Road, Andheri (W), Mumbai-400058. Vs. Dy. CIT Circle-41(1)(1), Kautilya Bhavan, BKC, Bandra (East), Mumbai-400051. PAN NO. AOWPA 3264 Q Appellant Respondent Assessee by : Mr. Hasan Khan, Virtually Present Revenue by : Mr. Pravin Salunkhe, Sr. DR Date of Hearing : 16/07/2025 Date of pronouncement : 24/07/2025 ORDER PER OM PRAKASH KANT, AM This appeal by the assessee is directed against order dated 28.02.2025 passed by the Ld. Commissioner of Income-tax (Appeals) – National Faceless Appeal Centre, Delhi [in short ‘the Ld. CIT(A)’] for assessment year 2017-18, raising following grounds: 1. On the facts and circumstances, The learned NFAC has erred in confirming the order of Assessing Officer by making addition of Rs 14,84,700/-. Printed from counselvise.com 2. The learned NFAC has erred in confirming the order of Assessing Officer making addition of Rs 14,84,700/ considering the adjournment sought by the appellant on adjournment dated... 3. That appellant's email inbox's memory get full and failed to receive the last email from the income tax depar the erastwhile consultant failed to submit the written submission. 2. The brief facts giving rise to the controversy are that the assessee had not filed any regular return of income for the assessment year in question. Upon receipt of information indicating that the assessee had acquired an immovable property for a consideration of ₹28,00,000, whereas the value adopted by the stamp duty authority for the said transaction was Assessing Officer (AO) recorded reason to believe that income chargeable to tax to the extent of assessment. Accordingly, a notice under Section 148 of the Income tax Act,1961( in short the invoking the pre-amendment provisions as extended by the Taxation and Other Laws (Relaxation and Amendment o Provisions) Act, 2020 (TOLA). 2.1 In light of the decision of India v. Ashish Agarwal under Section 148A(b) affording the assessee an opportunity of being heard. However, no response was furnished by the assessee. Consequently, an order under Section 148A(d) was passed, and a fresh notice under Section ITA No. 3008/MUM/2025 The learned NFAC has erred in confirming the order of Assessing Officer making addition of Rs 14,84,700/ considering the adjournment sought by the appellant on urnment dated... That appellant's email inbox's memory get full and failed to receive the last email from the income tax department. Further, the erastwhile consultant failed to submit the submission. The brief facts giving rise to the controversy are that the assessee had not filed any regular return of income for the assessment year in question. Upon receipt of information indicating that the assessee had acquired an immovable property for a 28,00,000, whereas the value adopted by the stamp duty authority for the said transaction was Assessing Officer (AO) recorded reason to believe that income chargeable to tax to the extent of ₹6,63,500 had escaped assessment. Accordingly, a notice under Section 148 of the Income tax Act,1961( in short the ‘Act’) was issued on 29.06.2021, amendment provisions as extended by the Taxation and Other Laws (Relaxation and Amendment o Provisions) Act, 2020 (TOLA). In light of the decision of Hon’ble Supreme Court in India v. Ashish Agarwal [(2022) SCC OnLine SC 543], a fresh notice under Section 148A(b) of the Act was issued on 25.05.2022, thereby ssessee an opportunity of being heard. However, no response was furnished by the assessee. Consequently, an order under Section 148A(d) was passed, and a fresh notice under Section Shafiq Ahmed 2 ITA No. 3008/MUM/2025 The learned NFAC has erred in confirming the order of Assessing Officer making addition of Rs 14,84,700/- without considering the adjournment sought by the appellant on That appellant's email inbox's memory get full and failed to ment. Further, the erastwhile consultant failed to submit the The brief facts giving rise to the controversy are that the assessee had not filed any regular return of income for the assessment year in question. Upon receipt of information indicating that the assessee had acquired an immovable property for a 28,00,000, whereas the value adopted by the stamp duty authority for the said transaction was ₹34,63,500, the Assessing Officer (AO) recorded reason to believe that income 6,63,500 had escaped assessment. Accordingly, a notice under Section 148 of the Income- ) was issued on 29.06.2021, amendment provisions as extended by the Taxation and Other Laws (Relaxation and Amendment of Certain Court in Union of [(2022) SCC OnLine SC 543], a fresh notice was issued on 25.05.2022, thereby ssessee an opportunity of being heard. However, no response was furnished by the assessee. Consequently, an order under Section 148A(d) was passed, and a fresh notice under Section Printed from counselvise.com 148 was issued on 07.07.2022, after obtaining due approval from the competent authority. 2.2 During the reassessment proceedings, multiple statutory notices were issued between 08.07.2022 and 06.05.2023, which also remained unresponded. 16.05.2023 was likewise ignored. In the absence of any compli the AO proceeded to complete the reassessment ex parte and made additions aggregating to 2.3 The assessee carried the matter in appeal before the Ld. CIT(A). However, there was no effective representation despite repeated opportunities. T recorded that notices were issued on 05.02.2025, 13.02.2025 and 20.02.2025, granting sufficient time for the assessee to respond. Despite such indulgence, no substantive reply was submitted. Consequently, the appeal wa finding of the Ld. CIT(A) is reproduced as under: “4. Observations & Findings of Appellate Authority: 4.1 During the appellate proceedings, the appellant was issued notice on05.02.2025 and 13.02.2025requiring submission of a response. and adjournment the interest of natural justice, adjournment granted through notice dated 20.02.2025 issued to appellant with compliance date26.02.2025 t stated:\"You are requested to furnish your detailed replies on the points (mentioned in the notice) within the specified time frame mentioned in the notice. Non ITA No. 3008/MUM/2025 148 was issued on 07.07.2022, after obtaining due approval from nt authority. During the reassessment proceedings, multiple statutory notices were issued between 08.07.2022 and 06.05.2023, which also remained unresponded. A final show-cause notice dated 16.05.2023 was likewise ignored. In the absence of any compli the AO proceeded to complete the reassessment ex parte and made additions aggregating to ₹14,84,700. The assessee carried the matter in appeal before the Ld. CIT(A). However, there was no effective representation despite repeated opportunities. The appellate authority, in its order, recorded that notices were issued on 05.02.2025, 13.02.2025 and 20.02.2025, granting sufficient time for the assessee to respond. Despite such indulgence, no substantive reply was submitted. Consequently, the appeal was dismissed for non-prosecution. finding of the Ld. CIT(A) is reproduced as under: 4. Observations & Findings of Appellate Authority: 4.1 During the appellate proceedings, the appellant was issued notice on05.02.2025 and 13.02.2025requiring submission of a response. In the response no reply submitted and adjournment sought by the appellant. Subsequently, in the interest of natural justice, adjournment granted through notice dated 20.02.2025 issued to appellant with compliance date26.02.2025 to submit the reply. The notice explicitly stated:\"You are requested to furnish your detailed replies on the points (mentioned in the notice) within the specified time frame mentioned in the notice. Non-compliance may result in Shafiq Ahmed 3 ITA No. 3008/MUM/2025 148 was issued on 07.07.2022, after obtaining due approval from During the reassessment proceedings, multiple statutory notices were issued between 08.07.2022 and 06.05.2023, which cause notice dated 16.05.2023 was likewise ignored. In the absence of any compliance, the AO proceeded to complete the reassessment ex parte and made The assessee carried the matter in appeal before the Ld. CIT(A). However, there was no effective representation despite he appellate authority, in its order, recorded that notices were issued on 05.02.2025, 13.02.2025 and 20.02.2025, granting sufficient time for the assessee to respond. Despite such indulgence, no substantive reply was submitted. prosecution. The 4. Observations & Findings of Appellate Authority: - 4.1 During the appellate proceedings, the appellant was issued notice on05.02.2025 and 13.02.2025requiring In the response no reply submitted sought by the appellant. Subsequently, in the interest of natural justice, adjournment granted through notice dated 20.02.2025 issued to appellant with compliance o submit the reply. The notice explicitly stated:\"You are requested to furnish your detailed replies on the points (mentioned in the notice) within the specified time compliance may result in Printed from counselvise.com the case being decided on mer was further highlighted that timely submission of the response would ensure a fair and just examination of the appellant's case. Despite this opportunity, the appellant once again failed to comply with the notice. 4.2 In this context, reference may be made to the ratio of various judicial pronouncements where it has been held that: \"natural justice are not codified nor are they unvarying in all situations, rather they are flexible. It has to be adhered from both ends i.e. fr authority. They may, however, be summarized in one word: 'fairness'. In other words, what they require is fairness by the authority concerned. Of course, what is fair would depend on the situation and the context. Lord E Voinet vs. Barrett (1885) 55 L.J. QB 39, observed: \"Natural justice is the natural sense of what is right and wrong.\" In this context, we may refer to observations of the Hon'ble Justice Krishna lyer J..... opportunity should be real and not ritualistic, effective and not illusory and must be followed by a fair consideration of the explanation offered and the materials available, culminating in an order which discloses reasons for the decision sufficient to show that the mind of the authority h without reliance on facts not furnished to the affected party. Natural justice, must warn, cannot be perverted into anything unnatural or unjust and cannot therefore be treated as a set of dogmatic prescription reference to the circumstances of the case. The question merely is, in all conscience have you been fair in dealing with that man? If you have not been arbitrary, not absent not unreasonable or not unspeaking, you cannot deny t there has been no 'natural justice' breached, rather fullest natural justice has been followed but it is the person who has not availed any chances for the reasons best known to him.\" Despite providing ample opportunities of being heard and following the principle of natural justice, the assessee chose not avail the same by failing to comply with the notices of the appellant authority. ITA No. 3008/MUM/2025 the case being decided on merits or dismissed accordingly.\"It was further highlighted that timely submission of the response would ensure a fair and just examination of the appellant's case. Despite this opportunity, the appellant once again failed to comply with the notice. is context, reference may be made to the ratio of various judicial pronouncements where it has been held that: \"natural justice are not codified nor are they unvarying in all situations, rather they are flexible. It has to be adhered from both ends i.e. from the assessee as well as from the authority. They may, however, be summarized in one word: 'fairness'. In other words, what they require is fairness by the authority concerned. Of course, what is fair would depend on the situation and the context. Lord Esher M.R. in Voinet vs. Barrett (1885) 55 L.J. QB 39, observed: \"Natural justice is the natural sense of what is right and wrong.\" In this context, we may refer to observations of the Hon'ble Justice Krishna lyer J..... opportunity should be real and not itualistic, effective and not illusory and must be followed by a fair consideration of the explanation offered and the materials available, culminating in an order which discloses reasons for the decision sufficient to show that the mind of the authority has been applied relevantly and rationally and without reliance on facts not furnished to the affected party. Natural justice, must warn, cannot be perverted into anything unnatural or unjust and cannot therefore be treated as a set of dogmatic prescriptions applicable without reference to the circumstances of the case. The question merely is, in all conscience have you been fair in dealing with that man? If you have not been arbitrary, not absent not unreasonable or not unspeaking, you cannot deny t there has been no 'natural justice' breached, rather fullest natural justice has been followed but it is the person who has not availed any chances for the reasons best known to Despite providing ample opportunities of being heard and he principle of natural justice, the assessee chose not avail the same by failing to comply with the notices of the appellant authority. Shafiq Ahmed 4 ITA No. 3008/MUM/2025 its or dismissed accordingly.\"It was further highlighted that timely submission of the response would ensure a fair and just examination of the appellant's case. Despite this opportunity, the appellant once is context, reference may be made to the ratio of various judicial pronouncements where it has been held that: \"natural justice are not codified nor are they unvarying in all situations, rather they are flexible. It has to be adhered from om the assessee as well as from the authority. They may, however, be summarized in one word: 'fairness'. In other words, what they require is fairness by the authority concerned. Of course, what is fair would sher M.R. in Voinet vs. Barrett (1885) 55 L.J. QB 39, observed: \"Natural justice is the natural sense of what is right and wrong.\" In this context, we may refer to observations of the Hon'ble Justice Krishna lyer J..... opportunity should be real and not itualistic, effective and not illusory and must be followed by a fair consideration of the explanation offered and the materials available, culminating in an order which discloses reasons for the decision sufficient to show that the mind of as been applied relevantly and rationally and without reliance on facts not furnished to the affected party. Natural justice, must warn, cannot be perverted into anything unnatural or unjust and cannot therefore be treated s applicable without reference to the circumstances of the case. The question merely is, in all conscience have you been fair in dealing with that man? If you have not been arbitrary, not absent-minded, not unreasonable or not unspeaking, you cannot deny that there has been no 'natural justice' breached, rather fullest natural justice has been followed but it is the person who has not availed any chances for the reasons best known to Despite providing ample opportunities of being heard and he principle of natural justice, the assessee chose not avail the same by failing to comply with the notices of the Printed from counselvise.com 4.3 interested non show that the appellant is not in pursuing its appeal. The maxim 'vigilantibus dormientibusjurasubvenunť i.e. the law assists those who are vigilant and not those who sleep over their right, is applicable in this case. The Hon'ble ITAT in ITA No. 1025 AY 2002-03 in the case of M/s Chhabra Land Ltd. after following the decision of Hon'ble Supreme Court in the case of B.N. Bhattacharjee & other 118 ITR 461 [SC] held that the appeal does not mean merely filing of the appeal but effectively pursuing the same. Considering the above facts an that the Assessing Officer has made the addition on merits after thoroughly analyzing the facts of the case. No infirmity or error is observed in the order passed by the Assessing Officer. Consequently, the appeal filed by merit and is hereby dismissed. In the result, the appeal of the assessee stands 3. Before us, the learned counsel for the assessee submitted that the non-compliance before the Ld. CIT(A) was not deliberate but occasioned due to bona fide reasons. In respect of the first notice dated 05.02.2025, it was submitted that the assessee’s consultant failed to submit the requisite reply. As regards the second notice dated 13.02.2025, it was argued that an adjournment was indeed sought, though not acknowledged in the impugned appellate order. In respect of the third notice dated 20.02.2025, it was submitted that the same could not be retrieved from the registered e mail) due to the account having exceeded its storage capacity. 3.1 Having regard to the facts on record, and upon hearing learned counsel for the parties, we are of the considered opinion ITA No. 3008/MUM/2025 4.3 interested non- The aforesaid mentioned circumstances show that the appellant is not in pursuing its appeal. The xim 'vigilantibus dormientibusjurasubvenunť i.e. the law assists those who are vigilant and not those who sleep over their right, is applicable in this case. The Hon'ble ITAT in ITA No. 1025-1027/CHD/2005 for the 03 in the case of M/s Chhabra Land Ltd. after following the decision of Hon'ble Supreme Court in the case of B.N. Bhattacharjee & other 118 ITR 461 [SC] held that the appeal does not mean merely filing of the appeal but effectively pursuing the same. Considering the above facts and material on record, it is held that the Assessing Officer has made the addition on merits after thoroughly analyzing the facts of the case. No infirmity or error is observed in the order passed by the Assessing Officer. Consequently, the appeal filed by the assessee lacks merit and is hereby dismissed. In the result, the appeal of the assessee stands dismissed. Before us, the learned counsel for the assessee submitted that compliance before the Ld. CIT(A) was not deliberate but to bona fide reasons. In respect of the first notice dated 05.02.2025, it was submitted that the assessee’s consultant failed to submit the requisite reply. As regards the second notice dated 13.02.2025, it was argued that an adjournment was indeed though not acknowledged in the impugned appellate order. In respect of the third notice dated 20.02.2025, it was submitted that the same could not be retrieved from the registered e mail) due to the account having exceeded its storage capacity. Having regard to the facts on record, and upon hearing learned counsel for the parties, we are of the considered opinion Shafiq Ahmed 5 ITA No. 3008/MUM/2025 The aforesaid mentioned circumstances show that the appellant is not in pursuing its appeal. The xim 'vigilantibus dormientibusjurasubvenunť i.e. the law assists those who are vigilant and not those who sleep over 1027/CHD/2005 for the 03 in the case of M/s Chhabra Land & Housing Ltd. after following the decision of Hon'ble Supreme Court in the case of B.N. Bhattacharjee & other 118 ITR 461 [SC] held that the appeal does not mean merely filing of the appeal but d material on record, it is held that the Assessing Officer has made the addition on merits after thoroughly analyzing the facts of the case. No infirmity or error is observed in the order passed by the Assessing the assessee lacks dismissed.” Before us, the learned counsel for the assessee submitted that compliance before the Ld. CIT(A) was not deliberate but to bona fide reasons. In respect of the first notice dated 05.02.2025, it was submitted that the assessee’s consultant failed to submit the requisite reply. As regards the second notice dated 13.02.2025, it was argued that an adjournment was indeed though not acknowledged in the impugned appellate order. In respect of the third notice dated 20.02.2025, it was submitted that the same could not be retrieved from the registered e-mail ( g- mail) due to the account having exceeded its storage capacity. Having regard to the facts on record, and upon hearing learned counsel for the parties, we are of the considered opinion Printed from counselvise.com that the ld First appellate authority ought to have decided the appeal on merits. The powers of the ld. CIT(A), as delineated under Section 250(6) of the Act, obligate the authority to pass a speaking and reasoned order, even in the absence of participation by the assessee. The dismissal of the appeal solely on account of non compliance, without dealing with the merits of the addition cannot be countenanced in law. 3.2 It is well settled that the principles of natural justice are not mere technical formalities but are intended to ensure substantive fairness in quasi-judicial proceedings. While the assessee is expected to be vigilant in pursuing its remedies, it is equally incumbent upon the appellate authority to adjudicate the matter in accordance with law, particularly where additions have been made in ex parte reassessment proceedings. 3.3 We also notice that the three notices were within short intervals of time, and that there exists a plausible explanation for the assessee’s failure to respond. In such circumstances, we are of the view that the ends of justice would be met if one more opportunity is a the matter on merits before the ld first appellate authority. 3.4 Accordingly, the impugned order passed by the Ld. CIT(A) is set aside. The matter is remitted to the file of the CIT(A) with a direction to decide the appe ITA No. 3008/MUM/2025 that the ld First appellate authority ought to have decided the appeal on merits. The powers of the ld. CIT(A), as delineated under Section 250(6) of the Act, obligate the authority to pass a speaking and reasoned order, even in the absence of participation by the assessee. The dismissal of the appeal solely on account of non compliance, without dealing with the merits of the addition cannot be countenanced in law. It is well settled that the principles of natural justice are not mere technical formalities but are intended to ensure substantive judicial proceedings. While the assessee is lant in pursuing its remedies, it is equally incumbent upon the appellate authority to adjudicate the matter in accordance with law, particularly where additions have been made in ex parte reassessment proceedings. We also notice that the three notices issued by the Ld. CIT(A) were within short intervals of time, and that there exists a plausible explanation for the assessee’s failure to respond. In such circumstances, we are of the view that the ends of justice would be met if one more opportunity is afforded to the assessee to contest the matter on merits before the ld first appellate authority. Accordingly, the impugned order passed by the Ld. CIT(A) is set aside. The matter is remitted to the file of the CIT(A) with a direction to decide the appeal afresh on merits, after affording the Shafiq Ahmed 6 ITA No. 3008/MUM/2025 that the ld First appellate authority ought to have decided the appeal on merits. The powers of the ld. CIT(A), as delineated under Section 250(6) of the Act, obligate the authority to pass a speaking and reasoned order, even in the absence of participation by the assessee. The dismissal of the appeal solely on account of non- compliance, without dealing with the merits of the additions made, It is well settled that the principles of natural justice are not mere technical formalities but are intended to ensure substantive judicial proceedings. While the assessee is lant in pursuing its remedies, it is equally incumbent upon the appellate authority to adjudicate the matter in accordance with law, particularly where additions have been made issued by the Ld. CIT(A) were within short intervals of time, and that there exists a plausible explanation for the assessee’s failure to respond. In such circumstances, we are of the view that the ends of justice would be fforded to the assessee to contest the matter on merits before the ld first appellate authority. Accordingly, the impugned order passed by the Ld. CIT(A) is set aside. The matter is remitted to the file of the CIT(A) with a al afresh on merits, after affording the Printed from counselvise.com assessee a reasonable opportunity of being heard. It is clarified that the assessee shall extend full cooperation in the appellate proceedings and shall not seek unnecessary adjournments. In the event of continued non at liberty to proceed in accordance with law. 3.5 The ground Nos ground No. 2 and 3 have adjudicate upon ground No. 1 of the appeal. 4. In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open Court on Sd/ (RAHUL CHAUDHARY JUDICIAL MEMBER Mumbai; Dated: 24/07/2025 Rahul Sharma, Sr. P.S. 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. 3008/MUM/2025 assessee a reasonable opportunity of being heard. It is clarified that the assessee shall extend full cooperation in the appellate proceedings and shall not seek unnecessary adjournments. In the on-compliance, the appellate authority shall be at liberty to proceed in accordance with law. s. 2 and 3 of the appeal are allowed. ground No. 2 and 3 have been allowed, we are not required to adjudicate upon ground No. 1 of the appeal. In the result, the appeal of the assessee is allowed for purposes. nounced in the open Court on 24/07/2025. Sd/- Sd/ (RAHUL CHAUDHARY) (OM PRAKASH KANT MEMBER ACCOUNTANT MEMBER Copy of the Order forwarded to : BY ORDER, (Assistant Registrar) ITAT, Mumbai Shafiq Ahmed 7 ITA No. 3008/MUM/2025 assessee a reasonable opportunity of being heard. It is clarified that the assessee shall extend full cooperation in the appellate proceedings and shall not seek unnecessary adjournments. In the compliance, the appellate authority shall be are allowed. Since the we are not required to In the result, the appeal of the assessee is allowed for /07/2025. Sd/- OM PRAKASH KANT) ACCOUNTANT MEMBER BY ORDER, Registrar) ITAT, Mumbai Printed from counselvise.com "
Other Referred Cases
India v. Ashish Agarwal, Union of India v. Ashish Agarwal, Voinet vs. Barrett, B.N. Bhattacharjee & other 118 ITR 461 [SC]
Laws Referred To
Income Tax Act, 1961
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