ITAT Holds NRI Status and US Residency Valid Grounds for Delay Condonation in Income Tax Appeal
The assessee, Brijeshkumar Natvarlal Patel, is a non-resident of India. His case was reopened by the Assessing officer for the AY 2015-16. The AO found that the assessee had purchased a property of Rs 66.95 Lakhs and did not file the Income Tax Return (ITR). The AO believed that the investment made in the property by the assessee had escaped the assessment, and the reassessment was started against the assessee. Since the assessee did not cooperate during the assessment proceedings, as he was an NRI living in the USA, the AO passed an ex parte assessment and added this amount as an unexplained investment under Section 69A of the Income Tax Act.
The assessment challenged the addition before the CIT(A) with a delay of 312 days. The assesse requested the authority to condone the delay, saying that he had permanently moved to the USA and is an NRI. He submitted that he did not know about the notices and was notified by his consultant. He said that he did not have his old bank statement and the purchase deeds, as these were in India. Due to his responsibilities running a convenience store, the assessee could not leave immediately to collect the necessary documents. When he visited India in January 2024, he collected the required documents and filed the appeal before the CIT(A). However, the CIT(A) rejected the appeal of the assessee due to the non-participation of the assessee in the proceedings, even after issuing three notices. Aggrieved by the order of CIT(A), the assessee filed an appeal before the Income Tax Appellate Tribunal (ITAT), Ahmedabad.
The assessee submitted that the entire amount was paid in the previous year by the assessee and not in the impugned year. He said he has supporting documents showing the transactions. He said if he is given an opportunity, he is ready to cooperate with the Income Tax Department.
The Tribunal decided to restore the case to the AO, giving the assessee an opportunity to present documents and explain his side. Therefore, the appeal was allowed and the matter was sent for fresh adjudication.