ITAT Mumbai Condones 150-Day Delay and Remands Additions Under Sections 43CA and 68 for Fresh Adjudication

Key Facts and Tribunal Findings

The Income Tax Appellate Tribunal (ITAT), Mumbai Bench, allowed the appeal of Hameeclass Builders for Assessment Year 2017–18 for statistical purposes, condoning a delay of 150 days and remanding the matter to the Assessing Officer for fresh adjudication.

The delay in filing the appeal was attributed to exceptional circumstances, including the death of a key partner managing tax compliance, serious medical issues of another partner, and lapses by consultants who failed to respond to notices or communicate developments. The Tribunal accepted the explanation, holding that sufficient cause was established in line with the principles laid down by the Supreme Court in Collector Land Acquisition v. MST Katiji, and condoned the delay.

On merits, the assessment had been completed under Sections 147 read with 144 and 144B on a best judgment basis due to non-compliance. The Assessing Officer made multiple additions, including ₹59.37 lakh under Section 43CA, ₹56 lakh under Section 68 towards capital introduced by partners, and ad-hoc disallowance of business expenses.

The Tribunal noted that neither during assessment nor appellate proceedings were relevant documents and explanations furnished, resulting in ex parte adjudication by the CIT(A).

Considering that the assessee subsequently produced supporting documents before the Tribunal, which were not examined by lower authorities, the Tribunal held that principles of natural justice warranted granting one more opportunity.

Accordingly, the Tribunal set aside the orders of lower authorities and restored the entire matter to the Assessing Officer for de novo adjudication after providing adequate opportunity of hearing. All issues were left open, and the appeal was allowed for statistical purposes.