TAHERALI ZABUAWALA,VADODARA V. DCIT, CIRCLE-2(1)(1), VADODARA

ITA 2439/AHD/2025

AI Insights

The case involves Taherali Zabuawala, who appealed against the order of the Commissioner of Income-tax (Appeals) at the National Faceless Appeal Centre, which had dismissed his appeal due to a delay in filing. The original dispute arose from an assessment order that added Rs.2,00,00,000 as undisclosed income based on documents found during a survey at a company where Zabuawala was a director. The Tribunal found that the Commissioner of Income-tax (Appeals) had not adequately considered the merits of the case and had dismissed the appeal solely on technical grounds without considering the substantive issues raised.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 838015 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-02-2026
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2013-2014
• Appeal Filed On: 08-12-2025
• Other Referred Cases: Collector, Land Acquisition v. Mst. Katiji, N. Balakrishnan v. M. Krishnamurthy
• Laws Referred To: Income-tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: YOGESH M ISHRA
• Assessee Lawyers: ANIL BRAHMAKSHATRIYA
• Keywords: Condonation of delay; Set aside; Opportunity of being heard; Ignorance of law
• Section: 133A

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL “C” BENCH, AHMEDABAD BEFORE SHRI SIDDHARTHA NAUTIYAL, JUDICIAL MEMBER & SHRI NARENDRA PRASAD SINHA, ACCOUNTANT MEMBER I.T.A. No.2439/Ahd/2025 (Assessment Year: 2013-14) Taherali Zabuawala, C-250, Sabina Park, B/h. Bahar Colony, Ajwa Road, Vadodara, Gujarat-390019 Vs. Deputy Commissioner of Income Tax, Circle-2(1)(1), Vadodara [PAN No.AABPZ4631R] (Appellant) .. (Respondent) Appellant by : Shri Anil Brahmakshatriya, AR Respondent by: Shri Yogesh Mishra, Sr. DR Date of Hearing 18.02.2026 Date of Pronouncement 20.02.2026 O R D E R PER SIDDHARTHA NAUTIYAL - JUDICIAL MEMBER: This appeal has been filed by the Assessee against the order passed by the Ld. Commissioner of Income Tax (Appeals), (in short “Ld. CIT(A)”), National Faceless Appeal Centre (in short “NFAC”), Delhi vide order dated 22.07.2025 passed for A.Y. 2013-14. 2. The assessee has taken the following grounds of appeal: “1. In law and on the facts of the case, the ld. CIT(A) has grossly erred in passing the appellant order on which he has no jurisdiction in pursuance of Circular No. 279/Misc./M-17/2022-ITJ dtd. 06.10.2022. Therefore, the impugned appellate order passed is bad in law and deserves to be cancelled. The appellant order may please be annulled. 2. On the facts and in law, the ld. CIT(A) has grossly erred in passing ex-parte order, appeal dismissed in limine without giving further opportunity of being heard. Therefore, alternatively, the appellate order passed may please be restored back to the file of jurisdictional ld. CIT(A), Ahmedabad having central charge for fresh Printed from counselvise.com ITA No. 2439/Ahd/2025 Taherali Zabuawala vs. DCIT Asst. Year –2013-14 - 2– adjudication with direction to condone the delay in filing the appeal in the prescribed form 35.” 3. The brief facts of the case are that the assessee is an individual who filed his return of income for Assessment Year 2013-14 on 20.03.2014 declaring a total income of Rs.5,60,890/-. During the course of assessment proceedings, the Assessing Officer took note of a survey conducted under section 133A of the Act on 16.10.2012 at the business premises of M/s Space Age Infracon Pvt. Ltd., in which the assessee was a Director. The Assessing Officer observed that certain documents indicating receipt of on-money were found and impounded during the said survey. On the basis of the said material, the Assessing Officer held that the assessee had made an undisclosed investment and accordingly made an addition of Rs.2,00,00,000/- as undisclosed income, thereby assessing the total income at Rs.2,05,60,890/-. 4. Aggrieved by the assessment order, the assessee preferred an appeal before the Commissioner of Income-tax (Appeals). In the grounds of appeal, the assessee challenged the addition of Rs.2 crores on the ground that the documents found during the survey only indicated receipt and utilization of on-money and that no declaration or admission of income was ever made by the assessee. It was further contended that the alleged on-money receipts of Rs.10.50 crores had already been taxed on a gross basis in the hands of M/s Space Age Infracon Pvt. Ltd. and, therefore, only a telescoped amount, if any, could be considered in the hands of the assessee. The assessee also challenged the addition as being contrary to the material on record and settled principles of law. Printed from counselvise.com ITA No. 2439/Ahd/2025 Taherali Zabuawala vs. DCIT Asst. Year –2013-14 - 3– 5. While adjudicating the appeal, the Commissioner of Income-tax (Appeals) first examined the issue of limitation. It was noted that the assessment order was dated 30.03.2016 and that the appeal was filed on 07.06.2016, resulting in a delay of 70 days beyond the statutory period of thirty days prescribed under section 249(2) of the Act. The CIT(Appeals) observed that the assessee had not sought condonation of delay in Form No.35 and had also failed to demonstrate any sufficient cause for the delay. After referring to the provisions of section 249(3) of the Act and the principles governing condonation of delay as laid down by the Hon’ble Supreme Court and various High Courts, the CIT(Appeals) held that ignorance of law is no excuse and that the reasons put forth by the assessee were vague, unsubstantiated and reflected lack of due diligence. On this basis, the CIT(Appeals) declined to condone the delay of 70 days and dismissed the appeal in limine without adjudicating the grounds raised on merits. 6. The assessee is in appeal before us against the order passed by the Commissioner of Income-tax (Appeals) dismissing the appeal of the assessee. 7. During the course of hearing before us, the learned counsel for the assessee submitted that the Commissioner of Income-tax (Appeals) passed the impugned order without considering the merits of the case and without properly appreciating the cause for the delay of 70 days in filing the appeal before the first appellate authority. It was contended that the approach of the CIT(Appeals) was hyper-technical and contrary to the settled legal position that matters should ordinarily be decided on merits and that delay, if properly explained, ought to be condoned in the interest of substantial justice. Printed from counselvise.com ITA No. 2439/Ahd/2025 Taherali Zabuawala vs. DCIT Asst. Year –2013-14 - 4– 8. In response, the learned Departmental Representative placed reliance on the observations made by the Commissioner of Income-tax (Appeals) in the appellate order and supported the conclusion that the assessee had failed to show sufficient cause for the delay. 9. We have heard the rival contentions and perused the material available on record. It is an undisputed fact that the appeal before the Commissioner of Income-tax (Appeals) was filed with a delay of 70 days. The power to condone delay under section 249(3) of the Income-tax Act is a discretionary power which is required to be exercised in a judicious and liberal manner so as to advance the cause of substantial justice. The Hon’ble Supreme Court in Collector, Land Acquisition v. Mst. Katiji (1987) 167 ITR 471 (SC) has held that a pragmatic and justice-oriented approach should be adopted while dealing with matters relating to condonation of delay and that ordinarily a litigant does not stand to benefit by lodging an appeal late. Similarly, in N. Balakrishnan v. M. Krishnamurthy (1998) 7 SCC 123, the Hon’ble Supreme Court has held that the length of delay is not material and what is material is the acceptability of the explanation, and that refusal to condone delay can result in a meritorious matter being thrown out at the threshold. 10. In the present case, the delay is of 70 days, which cannot be said to be inordinate. The Commissioner of Income-tax (Appeals), in our considered view, ought to have adopted a liberal approach and condoned the delay so as to adjudicate the appeal on merits, particularly when the assessee had raised substantive grounds challenging an addition of Rs.2 crores. The dismissal of the appeal in limine has resulted in denial of an effective appellate remedy to the assessee. It is well settled that the appellate authority should, as far as Printed from counselvise.com ITA No. 2439/Ahd/2025 Taherali Zabuawala vs. DCIT Asst. Year –2013-14 - 5– possible, decide the matter on merits rather than on technicalities, unless the conduct of the assessee is contumacious or mala fide, which is not apparent on the facts of the present case. 11. In view of the above discussion and in the interest of substantial justice, we set aside the order passed by the Commissioner of Income-tax (Appeals) dismissing the appeal in limine. We hold that the delay of 70 days in filing the appeal before the CIT(Appeals) deserves to be condoned especially looking into the quantum of additions made, no mala-fide intention on part of the assessee and in the interests of justice. Accordingly, the matter is restored to the file of the Commissioner of Income-tax (Appeals) for fresh adjudication of the appeal on merits, in accordance with law, after affording adequate opportunity of being heard to the assessee. 12. The appeal of the assessee is allowed for statistical purposes. This Order is pronounced in the Open Court on 20/02/2026 Sd/- Sd/- (NARENDRA P. SINHA) (SIDDHARTHA NAUTIYAL) ACCOUNTANT MEMBER JUDICIAL MEMBER Ahmedabad; Dated 20/02/2026 TANMAY, Sr. PS TRUE COPY आदेश की Ůितिलिप अŤेिषत/Copy of the Order forwarded to : 1. अपीलाथŎ / The Appellant 2. ŮȑथŎ / The Respondent. 3. संबंिधत आयकर आयुƅ / Concerned CIT 4. आयकर आयुƅ(अपील) / The CIT(A)- 5. िवभागीय Ůितिनिध, आयकर अपीलीय अिधकरण, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाडŊ फाईल / Guard file. आदेशानुसार/ BY ORDER, उप/सहायक पंजीकार (Dy./Asstt.Registrar) आयकर अपीलीय अिधकरण, अहमदाबाद / ITAT, Ahmedabad Printed from counselvise.com "