USHA MARAZBAN PITHAWALLA,MUMBAI V. ASSESSING OFFICER, NAVI MUMBAI

ITA 2095/MUM/2025

AI Insights

The case involves Usha Marazban Pithawalla, who appealed against the order of the National Faceless Assessment Centre (NFAC), which treated her as an assessee in default for the purchase of a flat, leading to a tax demand of Rs. 2,36,12,001. The appellant argued that the flat was purchased jointly with her husband, an NRI, and that substantial payments were made from her husband's accounts. The appellant faced procedural challenges, including a rejection of her appeal by the CIT Appeals due to a delay in filing, which she attributed to her lack of computer literacy and unfamiliarity with legal procedures. The Tribunal considered these circumstances and allowed the appeal partly, remitting the case for a fresh assessment.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 360845 (ITAT-MUMBAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-05-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Assessment Year: 2014-2015
• Laws Referred To: Income-tax Act
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: KAVITHA KAUSHIK
• Assessee Lawyers: MANISH BHOIR
• Keywords: Condonation of delay; Opportunity of being heard; Reasonable cause; Gift
• Section: 147; 144

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL “F” BENCH, MUMBAI BEFORE SMT. BEENA PILLAI (JUDICIAL MEMBER) AND SMT. RENU JAUHRI (ACCOUNTANT MEMBER) I.T.A. No. 2095/Mum/2025 Assessment Year: 2014-15 Usha Marazban Pithawalla A-103 Sea Gull CHSL, Shery Rajan Road, Rizvi Complex, Bandra (W), Mumbai- 400050 PAN:BBNPP9619R Vs. Income Tax Officer 27(3)(1) It-Office, Vasi Railway Station Building, Navi Mumbai-400703 (Appellant) (Respondent) Appellant by Shri Manish Bhoir Respondent by Ms. Kavitha Kaushik, SR. D.R. Date of Hearing 14.05.2025 Date of Pronouncement 21.05.2025 ORDER Per: Smt. Beena Pillai, J.M.: The present appeal filed by the assessee arises out of order dated 03/03/2025 passed by NFAC, Delhi for assessment year 2014-15 on following grounds of appeal : “1. The National Faceless Assessment Centre, Delhi (hereinafter referred to as the AO) bearing DIN number ITBA/AST/S/147/2021-22/1041348792(1) erred in passing an order u/s 147 r.w.s 144 read with section 144B of the Income-tax 2 ITA No. 2095/Mum/2025; A.Y. 2014-15 Usha Marazban Pithawalla Act for A.Y. 2014-15 treating the Appellant as asssessee in default against which Appellant have filed an appeal with the National faceless Appeal Centre (NFAC)-Delhi but appeal was not accepted by CIT Appeals and rejection order passed (DIN ITBA/NFAC/S/250/2024-25/1073926269(1)) for appeal was not file in time after rejection of our condonation of delay. 2. The AO erred in raising a tax demand of Rs. 2,36,12,001/- (including interest of Rs. 1,54,13,368/-) u/s 147 read with sec. 144 of the I.T. Act by stating purchase of Flat made by the assessee is unexplained not genuine. 3. If your honor peruses the said Flat Purchase Agreement, the said flat is purchased by your appellants is in joint name with her husband Mr. Marzban Pithawala who is the first owner and NRI. Even the agreement has mentioned his passport number as he did not have PAN in India at the time of purchase. Appellant's name was second name and kept for security purpose as any Husband will like to do for his wife. All the major payment was done from Husband's account only some money was paid by your appellant by breaking the fixed deposits to the tune of Rs. 50,34,000/= (Rs. Fifty Lakhs Thirty-Four Thousand only). These Fixed deposits were made from the savings which she did from some interest she earned and from the money which she received as gift from her husband. 4. Furthermore, we are also submitting the balance payment of the flat from your appellant's Husband's account to prove the genuinity of our case. 5. The AO erred in treating the Appellant as 'asssessee in default for the purchase of the Flat so made. 6. CIT-Appeal also not considered our delay condonation that the appellant is a housewife and resides alone in Mumbai, as her husband works outside India. Due to her limited knowledge of computers and lack of familiarity with legal and procedural matters related to Income Tax, she was unaware of the notices issued against her and, consequently, could not engage an appropriate representative to manage her case effectively. It was only recently that the appellant appointed Mr. Deven Dholakia, a Chartered Accountant, to handle her Income Tax Return matters. Upon forwarding the SMS communication regarding the notices to her CA, she was made aware of the serious implications of the Income Tax Orders passed against her PAN. Upon reviewing the 3 ITA No. 2095/Mum/2025; A.Y. 2014-15 Usha Marazban Pithawalla relevant records, the appellant discovered that she and her husband had purchased a flat in Bandra during the period from 01-04-2013 to 31-03-2014 (relevant Assessment Year 2014-15). Upon further investigation into the details of the Income Tax Orders and the financial transactions involved, it was revealed that the property was purchased in joint names, with the major payment being made by her husband from his NRE and NRO accounts. We request that you kindly consider these facts in the context of the delay and condone the delay, taking into account the appellant's personal circumstances and the lack of awareness regarding the proceedings.” 2. At the outset the Ld.AR submitted that, the assessee was not issued any notice by the Ld.CIT(A)/NFAC and thus could not represent its case. He submitted that, due to such reason assessee was unaware of the order having passed by the Ld.CIT(A) and thus caused delay of about 1 and 1/2 years in filing the present appeal before this Tribunal. The Ld.AR filed an application seeking condonation of delay on behalf of the assessee stating under : “IN THE INCOME TAX TRIBUNAL CONDONATION OF DELAY APPLICATION In the matter of: Mrs. Usha Marazban Pithawalla Appellant Versus Assessing Officer (Income tax Faceless Assessment Unit) Respondent To, Respected Sir, Subject: Request for CondonaƟon of Delay in Filing Appeal Respectfully Showeth: 1.That the abovenamed appellant, Mrs. Usha Marazban Pithawalla, haspreferred thisapplication for condonation of delay in filing the present appeal 2.That the appellant is a person who is not computer literate andresides alone in Mumbai, as her husband is employed outside of India. Due to 4 ITA No. 2095/Mum/2025; A.Y. 2014-15 Usha Marazban Pithawalla this she was unable to stay informed of the ongoing proceedings and consequently failed to recognize the notices and other correspondences related to the matter. 3.It is humbly submitted that the appellant could not engage a proper representative or legal advisor to pursue her case. The notice issued in this matted went unnoticed due to her lack of familiarity with electronic communication systems and the digital nat ure of the process under the Faceless Assessment Scheme. 4.Recently, the appellant appointed Mr. Deven Dholakia, a Chartered Ac countant, to look overher Income Tax Return work. It was through this engagement that the appellantrealized theseriousness of the matter. Up on forwarding the SMS noticeto her Chartered Accountant, shewas made aware of the Income Tax Order passed against her PAN. 5.Further, upon reviewing the records and documents, the appellant ca meto understand thatshe and her husband had purchased a flat in Ban dra during the period 01‐04‐2013 to 31‐03‐2014, relevant to the Assess ment Year 2014‐15. It was observed that the flat was registeredin both her name and her husband's name, with the majority of the payment being made by her husband from his NRE and NRO accounts. 6.The appellant acknowledges that due to her lack of computer knowled ge and ignorance ofthe Faceless Assessment Scheme, she failed to file the appeal within the prescribed timelimit. However, the appellant has acted promptly upon realizing the issue and is now filing the appeal. 7.In light of the above facts, it is humbly requested that this appellate Authority may kindlyconsider the circumstances under which the delay occurred and condone the delay in filingthe appeal, as the appellant was genuinely unaware of the proceedings and is not in apositon to keep track of such matters due to her limited computer literacy. Prayer: In view of the above, it is respecƞully prayed that this Appellate Authorit y may kindly be pleased to: a) Condone the delay in filing the appeal. b) Pass such other order(s) as may be deemed fit and proper in the inte rest of justice. For this, your appellant, as in duty bound, shall ever pray. Mumbai, Dated: 27/03/2025 Mrs Usha Marazban Pithawalla Bandra, Mumbai. ” 5 ITA No. 2095/Mum/2025; A.Y. 2014-15 Usha Marazban Pithawalla 2.1 He thus submitted that, assessee may be granted an opportunity of being heard and sought permission to file evidence in support of the claim disallowed by the authorities below. 2.2 On the contrary the Ld.DR submitted that, assessee with has appeared before the Ld.AO nor before Ld.CIT(A). She submitted that the assessment order was passed u/s.144 of the Act, and para 4 of the assessment order, it is recorded that, assessee was sent hard copy of the notice by speed post, which was delivered to the assessee but the assessee choose not to respond. The Ld.DR submitted that, the assessee wilfully decided not to represent her case and therefore no justification or reasonable cause has been made out by the assessee for non- appearance before the authorities below. We have perused the submissions advance by both sides in the light of record placed before us. 3. It is noted that, the assessee admittedly ignored the notices received during the assessment proceedings that was even sent by speed post. It is also noted that, the Ld.CIT(A) therefore did not issue any notice intimating the date of hearing considering the casual approach adopted by the assessee during assessment proceedings. It’s also a fact that the Ld.CIT(A) did not give an opportunity to assessee to verify the claim of assessee in the light of evidences in respect of same. 3.1 The assessee has not made out reasonable cause for not able to appear before the Ld.AO however, as the assessee was not aware of the proceedings being culminated before the Ld.CIT(A) due to which the order passed by the Ld. CIT(A) was not in 6 ITA No. 2095/Mum/2025; A.Y. 2014-15 Usha Marazban Pithawalla assessee’s knowledge. Considering these factual circumstances the delay in filing present appeal before this Tribunal deserves consideration. 3.2 The assessee at the outset undertook that, she would not behave in such casual approach henceforth and shall take cognizance of the notices issued by the revenue within time she has prayed that, the appeal may be remitted to the Ld.AO for denovo consideration subject to payment of cost. The assessee has herself offered a cost of Rs. 50,000/- before this Tribunal to be paid to the Prime Minister Relief Fund, Subject to which the appeal may be remained by denovo consideration. 4. This Tribunal after considering the totality of facts and the undertaking by the assessee is of the opinion the same deserves to be considered. The assessee is thus directed to deposit the admitted amount of Rs. 50,000/- with the Prime Minister Relief Fund by 31st May, 2025. She shall furnished the copy of the challan before the Ld.AO as proof of deposits made to the Prime Ministers Relief Fund. We accordingly remit the issue back to the Ld.AO for denovo consideration. The assessee is also granted liberty to furnish all evidences in respect of the claim, and the Ld.AO shall verify the documents and considered the claim of assessee in accordance with law. Needless to say that proper opportunity of being heard must be granted to the assessee. Accordingly the grounds raised by the assessee stands partly allowed for statistical purposes. 7 ITA No. 2095/Mum/2025; A.Y. 2014-15 Usha Marazban Pithawalla In the result the appeal filed by the assessee stands partly allowed for statistical purposes. Order pronounced in the open court on 21/05/2025 Sd/- Sd/- (RENU JAUHRI) (BEENA PILLAI) Accountant Member Judicial Member Mumbai: Dated: 21/05/2025 Poonam Mirashi, Stenographer Copy of the order forwarded to: (1)The Appellant (2) The Respondent (3) The CIT (4) The CIT (Appeals) (5) The DR, I.T.A.T. True Copy By order (Asstt. Registrar) ITAT, Mumbai "