Manish Hansraj Wadhwa Vs Assessment unit of Income tax Department (ITAT Mumbai)
In this case, the assessee challenged an order of the National Faceless Appeal Centre (NFAC) relating to Assessment Year 2020-21. The assessee had originally declared a total income of ₹12,89,600 and carried forward a loss from house property of ₹17,41,996 arising from interest on borrowed capital. During assessment proceedings, the Assessing Officer restricted the carry-forward loss to ₹9,64,387 by disallowing 50% of the interest expenditure on the assumption that the property and loan were jointly held, despite the assessee’s contention that he alone had borne the entire loan repayment and interest burden. As a result, a loss of ₹7,77,609 was disallowed. The assessee filed an appeal before the Commissioner of Income Tax (Appeals) with a delay of 524 days. The appeal was dismissed solely on the ground of limitation without examining the merits of the case.
Before the Income Tax Appellate Tribunal (ITAT), the assessee submitted a detailed notarized affidavit explaining that he relied entirely on his Chartered Accountant for tax compliance and that all communications from the Income Tax Department had been sent to the consultant’s email address and contact details. According to the affidavit, he remained unaware of the assessment proceedings and the adverse assessment order until January 2024, when another Chartered Accountant reviewed his tax records after he sought clarification regarding the non-receipt of an expected refund. Upon learning of the assessment order and resulting demand, he promptly took steps to file an appeal.
