Krishna Hanumant Medankar Vs ITO (ITAT Pune)
Summary: ITAT Pune condoned substantial delays of 1189 days and 1377 days in appeals filed by Krishna Hanumant Medankar and restored the quantum assessment as well as the consequential penalty proceedings to the Jurisdictional Assessing Officer for fresh adjudication. The Tribunal noted that notices issued by the Assessing Officer had been sent to the email ID of the assessee’s erstwhile tax consultant, who failed to communicate them to the assessee. Considering this to constitute a “reasonable cause”, and finding that the delay was neither deliberate nor intentional and that the assessee had gained nothing by delaying the appeals, the Tribunal adopted a justice-oriented approach to condonation.
The quantum dispute involved an addition of Rs.1,07,48,750/-, while the connected penalty of Rs.37,11,836/- had been levied under section 271(1)(c) of the Income Tax Act. The assessee’s grounds stated, inter alia, that the CIT(A) had dismissed the appeals as time-barred without condoning the delay and without deciding the controversy on merits. The assessee also challenged the use of stamp duty valuation provisions and contended that the declared consideration was higher than the stamp duty value attributable to his share.
For condoning the delay, ITAT Pune relied upon the Supreme Court decisions in Collector, Land Acquisition v. Master Katiji and Others, (1987) 167 ITR 471 and Inder Singh Vs State of Madhya Pradesh, judgment dated 21.03.2025 (2025 INSC 382). Since the CIT(A) had not adjudicated the controversy on merits and the assessee had not made submissions on merits before the CIT(A), the Tribunal considered it appropriate to provide one more opportunity. It also specifically noticed that the assessment itself was ex parte and that the AO’s notices had been issued during the Covid-19 pandemic period.
Accordingly, the issue on merits was restored to the Jurisdictional Assessing Officer for fresh decision in accordance with law. As the penalty under section 271(1)(c) was dependent upon the quantum addition, the penalty issue was also restored to the JAO, to be taken up only after adjudication of the quantum proceedings. Both appeals were consequently allowed for statistical purposes.
Cases Discussed
- Collector, Land Acquisition vs. Master Katiji and Others (1987) 167 ITR 471 (Supreme Court) — Relied upon while condoning the delays of 1189 days and 1377 days, the Tribunal having found reasonable cause and that the delay was neither deliberate nor intentional.
- Inder Singh Vs State of Madhya Pradesh, judgment dated 21.03.2025 (2025 INSC 382) (Supreme Court) — Relied upon along with Collector, Land Acquisition while condoning the delay in the interest of justice.
FULL TEXT OF THE ITAT ORDER
These two appeals at the instance of the assessee are directed against the order passed by Ld. CIT(A) NFAC, Delhi dated 18.02.2026 framed u/s 250 of the Income Tax Act 1961 which are arising out of respective assessment /penalty order passed u/s.271(1)(c) and u/s 147 r.w.s 144 of the Act, dated 23.09.2022 &19.03.2022.
2. Assessee has raised following grounds of appeal in ITA No.1995/PUN/2026:-
“1. The learned Commissioner of Income Tax (Appeals) erred in dismissing the appeal as time-barred without condoning the delay and in not adjudicating the appeal on merits, despite the Appellant being prevented by sufficient cause due to non-receipt of notices, thereby violating the principles of natural justice.
2. The learned Assessing Officer erred in levying penalty under section 271(1)(c) amounting to Rs.37,11,836/- without appreciating that there was neither concealment of income nor furnishing of inaccurate particulars, as the Appellant had correctly disclosed the transaction and the declared consideration was higher than the stamp duty value.
3. The learned authorities below failed to appreciate that where the underlying addition itself is unsustainable in law, the consequential penalty levied under section 271(1)(c) is liable to be deleted.
4. The appellant craves leave to add and/or alter any of the grounds of appeal before or at the time of hearing.”
2.1 Assessee has raised following grounds of appeal in ITA No. 1994/PUN/2026:
“1. The learned Commissioner of Income Tax (Appeals) erred in dismissing the appeal as time-barred without condoning the delay, despite the appellant being prevented by sufficient cause due to non-receipt of notices and lack of knowledge of the proceedings.
2. The learned Commissioner of Income Tax (Appeals) erred in dismissing the appeal without adjudicating the matter on merits, thereby violating the principles of natural justice and denying the appellant a reasonable opportunity of being heard.
3. Without prejudice to the above, the learned Assessing Officer erred in making additions by invoking stamp duty valuation provisions without appreciating that the appellant had correctly disclosed the full value of consideration and that the consideration declared was higher than the stamp duty value attributable to the appellant’s share.
4. The learned Assessing Officer erred in levying penalty under sections 271(1)(c) and 271(1)(b) in absence of concealment or furnishing of inaccurate particulars, and despite the existence of reasonable cause.
5. The appellant craves leave to add and/or alter any of the grounds of appeal before or at the time of hearing.”
3. We have heard rival contentions and perused the record placed before us. ITA No.1195/PUN/2026 is against the quantum addition of Rs.1,07,48,750/- and ITA No. 1194/PUN/2026 is against the levy of penalty of Rs. 37,11,836/- levied u/s 271(1)(c) of the Act. It is not in dispute that there is inordinate delay of 1189 days and 1377 days in filing of the appeals before ld. CIT(A) against the quantum addition and penalty. On going through the reasons for delay provided by the assessee before Ld. CIT(A), it appears that the notices by ld. Assessing Officer (AO) were sent on the e-mail Id of the erstwhile tax consultant who failed to communicate the assessee. Considering it to be a ‘reasonable cause’ and the delay being neither deliberate nor intentional and that the assessee had not gained from delaying the appeal, we therefore in the natural interest of justice and placing reliance on the judgement of the Hon’ble Apex Court in the case of Collector, Land Acquisition vs. Master Katiji and Others(1987) 167 ITR 471 Supreme Court (SC) & in the case of Inder Singh Vs State of Madhya Pradesh judgement dated 21.03.2025 (2025 INSC 382) condone the delay of 1189 days and 1377 days.
4. Since there is no adjudication on merits of the case by ld.CIT(A) and neither any submissions on merits of the case were made by the assessee before Ld. CIT(A), therefore we deem it appropriate to afford one more opportunity to the assessee. We also note that the assessment order is also ex-parte and all the notices were sent by Ld. Assessing Officer (AO) during the Covid-19 Pandemic period and therefore the assessee had sufficient reason for not appearing before Ld. AO. We are therefore of the considered view that the issue on merits deserves to be restored to the file of Ld. Jurisdictional Assessing Officer (JAO) who shall decide the issue afresh in accordance with law.
5. Since quantum addition is restored to the file of Ld. AO and the penalty u/s 271(1)(c) of the Act being dependent on the quantum addition, therefore, the issue raised against the levy of penalty also restored to the file of Ld. JAO to be taken up only after the adjudication of the issues relating to quantum addition. Effective grounds of appeal raised in the instant two appeals are allowed for statistical purposes.
5. In the result, both the appeals of the assessee are allowed for statistical purposes.
Order pronounced on 18th day of August, 2026.
