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IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH, MUMBAI

BEFORE SHRI OM PRAKASH KANT, AM

AND

MS. KAVITHA RAJAGOPAL, JM

ITA Nos.5529 & 5530/Mum/2025

(Assessment Year: 2020-21)

Mr. Nayan Rajendra Kshatriya, Income Tax Officer,

404 Hinal Residency, C41-43, g Block BKC,

Dahanukar Wadi, Vs. Gilban Area,

Kandivali West, Bandra Kurla Complex,

Mumbai - 400067 Bandra, Mumbai – 400 051

PAN:AWQPK9318M

(Appellant) : (Respondent

Assessee by : None

Respondent by : Shri Leyaqat Ali Aafaqui, Sr. AR

Date of Hearing : 23.12.2025

Date of Pronouncement : 30.01.2026

O R D E R

Per Kavitha Rajagopal, JM:

The captioned appeals have been filed by the assessee, challenging the order of the

Learned Commissioner of Income Tax (Appeals) [‘Ld. CIT(A)’ for short], National

Faceless Appeal Centre (‘NFAC’ for short) passed u/s. 250 of the Income Tax Act, 1961

(‘the Act'), pertaining to the Assessment Year (‘A.Y.’ for short) 2020-21. In both the

appeals, the assessee has challenged the penalty levied by the Learned Assessing Officer

(“Ld. AO” for short) and upheld by the Ld. CIT(A) u/s 271AAC(1) and 270A of the Act.

As the facts are identical in both these appeals, we hereby pass a consolidated order by

taking ITA No.5529/M/2025 as the lead case.

2. The assessee has raised the following grounds of appeal:

ITA Nos.5529 & 5530/Mum/2025

Mr. Nayan Rajendra Kshatriya

“1. The CIT Appeal, National E-Assessment Center Delhi, erred in not considering the

contents laid down in grounds of appeal and confirmed the penalty order passed by the

learned Assessing Officer who has not proved the purchase of securities to the tune of

Rs.1163000/- being security purchase in F.Y. 2019-20 and Levied Penalty U/s. 271AAC(1)

Without giving proper opportunity and levied penalty of Rs.90,714/- Being 10% of the Tax

on the purchase of securities.

2. Cognizance was not given to the Documents and evidences submitted alongwith the

written submissions. An Opportunity of being heard was also not given after submission

of all required documents along with written submission and evidences. Your Appellant

therefore submits that the relief sought in the aforesaid grounds of appeal may please be

allowed in full. Your appellant craves leave to add, to amend and / or to alter the Grounds

of Appeal.”

3. Brief facts of the case are that the assessee is an individual and had filed his return

of income for the year under consideration declaring total income at Rs.28,78,640/- and

the same was processed u/s. 143(1) of the Act. Subsequently, the assessee filed a revised

return dated 31.03.2021 declaring total income at Rs.20,96,060/- and had claimed refund

of Rs.2,44,170/-. The assessee’s case was selected for complete scrutiny under CASS for

verifying the reason for the reduced taxable income in the revised return. Notices u/s.

143(2) and 142(1) of the Act were duly issued and served upon the assessee. The assessee

had not complied with the assessment proceedings completely and on the basis of the

partial submission made by the assessee the Ld. AO passed the assessment order dated

30.08.2022 u/s 143(3) r.w.s. 144B of the Act determining the total income at

Rs.50,34,946/- after making various additions/disallowances. The Ld. AO also initiated

penalty proceedings u/s 270A and 271AAC(1) of the Act. The Ld. AO then passed the

penalty order u/s 271AAC(1) of the Act dated 09.03.2023 on the ground that the assessee

has been non-compliant to the show cause notices issued u/s 271AAC of the Act thereby

levying a penalty amounting to Rs.90,714/-.

2

ITA Nos.5529 & 5530/Mum/2025

Mr. Nayan Rajendra Kshatriya

4. Aggrieved, the assessee was in appeal before the first appellate authority, who vide

an ex-parte order dated 04.07.2025 upheld the penalty levied by the Ld. AO.

5. Aggrieved, the assessee is in appeal before us, challenging the order of the Ld.

CIT(A).

6. We have heard the Learned Departmental Representative (“Ld. D.R.” for short) and

perused the materials available on record. It is observed that the Ld. AO during the

assessment proceedings