Rajesh Babulal Shah Vs DCIT (ITAT Mumbai)
Income Tax Appellate Tribunal (ITAT), Mumbai Bench, has iantervened in the case of Rajesh Babulal Shah, setting aside orders from the National Faceless Appeal Centre (NFAC), Delhi, and remanding all three appeals back for fresh adjudication. The decision, pronounced on June 12, 2025, addresses significant delays in filing appeals and consequential penalty proceedings, emphasizing the judiciary’s role in preventing injustice on technical grounds.
The appeals for Assessment Year 2018-19 originated from an ex-parte assessment order passed under Section 144 read with Section 144B of the Income Tax Act, 1961, by the National e-Assessment Centre, Delhi. This was followed by penalty orders under Section 272A(1)(d) and Section 271AAC(1) of the Act.
Background of the Case:
The assessee’s case was selected for limited scrutiny under the e-Assessment Scheme, 2019, primarily due to concerns related to unsecured loans and import/export data. During the assessment proceedings, the Assessing Officer (AO) identified an unsecured loan amounting to Rs. 1,26,61,834. Despite notices issued under Section 142(1) of the Act, the assessee reportedly failed to explain the source of these borrowings. Consequently, the AO passed an ex-parte order, adding the entire unsecured loan amount as unexplained cash credit under Section 68 of the Act and computing tax under Section 115BBE. Penalties under Section 271AAC(1) and Section 272A(1)(d) were subsequently imposed.
