Case Law Details
Pradip Nathalal Shah Vs ITO (ITAT Mumbai)
The assessee appealed against the order of the National Faceless Appeal Centre (NFAC) passed under Section 250 of the Income Tax Act for AY 2009-10. The assessment had originally been completed under Section 143(3), and a subsequent order was passed under Sections 143(3) read with 147 and 254. The Assessing Officer made additions of Rs. 41,33,870 on account of client code modification, Rs. 17,51,27,632 as unexplained money, and Rs. 82,677 as commission income.
Before the Tribunal, the assessee contended that the CIT(A) had passed an ex parte order without granting a proper opportunity of hearing. It was submitted that although the correct email address had been provided in Form No. 35, notices were repeatedly sent to a different email address not belonging to the assessee. An affidavit filed by the assessee stated that he became aware of multiple notices only after appointing new consultants in November 2025. Adjournment requests were thereafter made, including one seeking 30 days’ time due to health issues. The assessee believed the adjournment request had been accepted because no rejection was communicated. However, while attempting to upload submissions and documentary evidence on 27.12.2025, he discovered that the appeal had already been dismissed ex parte on 18.12.2025.
The assessee further argued that the Assessing Officer had improperly passed a combined order dealing with reassessment proceedings under Section 147 and an order giving effect to directions of the ITAT under Section 254. Reliance was placed on a decision of the ITAT Bengaluru Bench, which held that separate and distinct orders must be passed in such circumstances.
The Departmental Representative supported the orders of the lower authorities but did not provide any contrary decision regarding the validity of the combined assessment order.
After considering the material on record, the Tribunal observed that the original assessment had been completed under Section 143(3), the matter had subsequently been restored by the ITAT, and reassessment proceedings had also been initiated under Section 148. The Assessing Officer had ultimately passed a combined order covering both the reassessment proceedings and the order giving effect to the ITAT’s directions. The Tribunal held that such a combined order was not sustainable in law.
The Tribunal also noted that the assessee had specifically mentioned the correct email address in Form No. 35, but the same was not used by the CIT(A) for issuing notices. It further found that the assessee had sought reasonable time to furnish voluminous documentary evidence and that there was no deliberate non-compliance with notices issued under Section 250. The Tribunal accepted that the ex parte disposal had occurred despite the assessee’s efforts to prosecute the appeal.
Accordingly, the Tribunal restored the matter to the file of the Assessing Officer with directions to pass distinct and separate orders after considering the submissions and evidences furnished by the assessee. It refrained from adjudicating the remaining grounds of appeal. The Tribunal also directed that the assessee be provided a reasonable opportunity of hearing and that any evidence submitted be considered in accordance with law. The appeal was allowed for statistical purposes.
FULL TEXT OF THE ORDER OF ITAT MUMBAI
The instant appeal of the assessee filed against the order of the NFAC, Delhi [for brevity the “Ld. CIT(A)”], order passed under section 250 of the Income Tax Act 1961 (for brevity ‘the Act’) for Assessment Year 2009-10, date of order 18.12.2025. The impugned order emanated from the order of the Ld. Income Tax Officer-20(2)(5), Mumbai (for brevity the ‘Ld. AO’) order passed under section 143(3) r.w.s. 147 r.w.s. 254 of the Act date of order 26.12.2016.
2. The brief facts of the case are that the assessee filed the return of income declaring a total income of Rs.7,67,880/-. The Ld. AO passed a combined order u/sec. 143(3) r.w.s. 147 and 254 of the Act, making additions of Rs.41,33,870/- on account of client code modification, Rs.17,51,27,632/- as unexplained money, and commission income of Rs.82,677/-. Being aggrieved, the assessee preferred an appeal before the Ld. CIT(A). However, the Ld. CIT(A) passed an ex parte order and upheld the impugned assessment order. Aggrieved by the same, the assessee has filed the present appeal before us.
3. The Ld. AR filed a paper book comprising pages 1 to 404, which has been taken on record. The Ld. AR contended that, while filing the appeal before the Ld. CIT(A) in Form No.35, the assessee had specifically stated that no communication should be made through email. However, the assessee had mentioned his own email address as parth9977@gmail.com. Despite this, the Ld. CIT(A) repeatedly issued notices to a different email address, namely bbshah99@hotmail.com, which did not belong to the assessee. Consequently, the assessee was unable to comply with the notices issued by the Ld. CIT(A). It was further submitted that the assessee ultimately received the last notice and filed an adjournment application on 04.12.2025 seeking 30 days’ time for submission of the appeal documents. However, without considering the said request, the Ld. CIT(A) proceeded to pass the impugned order on 18.12.2025.
4. The Ld. AR further filed an affidavit executed by the assessee himself on 11.05.2026. The relevant extract of the said affidavit is reproduced herein below:
“6. I say that only two notices have been issued on the correct email address i.e. “parth9977@gmail.com“. I further say that during the relevant period, the registered email address on the income tax portal had already been changed to “parth9167@gmail.com” sometime around the year 2024 since the earlier email address was no longer operational. Consequently, the said notices also did not come to my knowledge.
7. I say that only in November 2025, upon appointment of new consultants namely M/s. Shaishav Shah & Co., Chartered Accountants, I became aware through the income tax portal that multiple notices had been issued by the Ld. CIT(A). 1 further say that immediately thereafter, adjournment was sought and a request was made that the matter be refixed after 10.12.2025 as the newly appointed consultants required time to collate records and prepare submissions.
8. I say that thereafter another notice dated 19.11.2025 was issued against which, on 04.12.2025, an adjournment of 30 days was sought since I was suffering from health issues.
9. I say that I was under a bona fide impression that the adjournment request of 30 days i.e. upto 03.01.2026 would be granted as no communication rejecting the adjournment request was received thereafter. I further say that in the meantime detailed written submissions, additional grounds and documentary evidences in the form of a paper book running into 234 pages were prepared and were ready to be uploaded.
10. I say that while attempting to upload the aforesaid submissions on the income tax portal on 27.12.2025. I realized that the Ld. CIT(A) had already passed the impugned order dated 18.12.2025 rejecting the adjournment request and disposing of the appeal ex-parte.
11. I say that the alleged non-compliance with the notices issued by the Ld. CIT(A) was purely due to bona fide and unavoidable circumstances and not on account of any mala fide intention or negligence on my part.
12. I say that the Ld. CIT(A) has not decided the appeal on merits though the same was required to be done. I further say that I have a strong case on merits and all relevant evidences had already been furnished before the Ld. AO during the assessment proceedings, however the same were not properly considered while making the additions.
13. I say that subsequent to passing the impugned order by Ld. CIT(A), identical issue has been decided by the Ld. CIT(A) in my favour for A.Y. 2008-09 and Α.Υ. 2010-11.
14. I say that I have always been desirous of prosecuting the appeal on merits and contesting the additions made by the Ld. AO. However, due to the aforesaid circumstances, the appeal came to be dismissed ex-parte resulting in grave prejudice to me as the issues raised in appeal have remained un-adjudicated on merits.”
5. The Ld. AR contended that the Ld. AO had passed a combined order pertaining to the reopening proceedings u/sec. 148 as well as the assessment framed u/sec. 147 of the Act, along with the order giving effect to the directions of the Coordinate Bench of the ITAT, Mumbai. According to the Ld. AR, such a combined order is itself invalid and bad in law. In support of the aforesaid contention, the Ld. AR respectfully relied upon the order of the Coordinate Bench of the ITAT Bengaluru “B” Bench in the case of NXP India Pvt. Ltd. vs. ACIT, ITA No.847/Bang/2018, dated 03.2021. The relevant observations contained in paragraph No.15 of the said order are reproduced hereinbelow:
“15. After going through the records, we are of the opinion that the AO passed a combined order giving effect to earlier orders of Tribunal with regard to original assessment and also reassessment order u/s. 143(3) r.w.s. 147 of the Act which is incorrect. The AO must have passed distinct and separate orders giving effect to the Tribunal’s orders which is emanating from the assessment order passed u/s. 143(3) and fresh reassessment order which is emanating from reassessment notice dated 23.3.2016. As such, we vacate the combined assessment order dated 29.12.2016 passed u/s. 143(3) r.w.s. 147 r.w.s. 254 of the Act and direct the AO to pass distinct and separate assessment orders one in respect of order giving effect to the Tribunal’s orders emanating from the assessment order u/s. 143(3) and another in respect of reassessment order u/s. 143(3) r.w.s. 147 of the Act. Accordingly, the issue in dispute is remitted in its entirety to the file of Assessing Officer to pass separate assessment orders as directed above, after giving opportunity of being heard to the assessee.
16. Since we have remitted the issue in its entirety to the file of Assessing Officer for passing distinct and separate orders as above, we refrain from going into grounds of appeal raised by the assessee before us.”
6. The Ld. DR argued stands in favor of the orders of revenue authorities. But related to the framing of assessment order in Section 147 r.w.s. 143(3) r.w.s. 254, the Ld. DR remained silent and had not submitted any contrary judgment against the submission of the Ld. AR.
7. We heard the rival submissions and considered the documents available on record. The assessee had originally filed the return of income u/sec. 139(1) of the Act, and the assessment was completed u/sec. 143(3) of the Act. Subsequently, the matter was restored to the file of the Ld. AO by the Coordinate Bench of the ITAT, Mumbai. In the meantime, the assessment was reopened by issuance of notice u/sec. 148 of the Act. During the reassessment proceedings, the Ld. AO passed a combined order incorporating both the reassessment proceedings as well as the OGE to the directions of the Coordinate Bench of the ITAT. In our considered opinion, such a combined order is not sustainable in the eyes of law. On perusal of the impugned appellate order, we find that the assessee had specifically mentioned the correct email address in Form No.35. However, the said email address was not considered by the Ld. CIT(A) for issuance of notices and communications. It is further observed that the assessee had ultimately filed an adjournment application seeking reasonable time for furnishing voluminous documentary evidences before the Ld. CIT(A), and the same was uploaded on 27.12.2025. However, prior thereto, the impugned appellate order had already been passed ex parte. Accordingly, we find that there was no deliberate noncooperation on the part of the assessee in complying with the notices issued u/sec. 250 of the Act. On the contrary, the combined assessment order itself appears to be void in light of the decision of the Coordinate Bench of the ITAT Bengaluru in the case relied upon by the assessee
8. In view of the aforesaid facts and circumstances, we restore the matter to the file of the Ld. AO with a direction to pass distinct and separate orders after duly considering the submissions and evidences furnished by the assessee. We refrain from adjudicating upon the other grounds raised by the assessee at this stage. Needless to say, the assessee shall be afforded a reasonable opportunity of being heard in the set-aside proceedings, and any evidences filed by the assessee shall be considered in accordance with law.
9. In the result, the appeal of the assessee bearing ITA No.938/Mum/2026 is
allowed for statistical purpose.
Order pronounced in the open court on 15th day of May 2026.
Author Bio
