Ad-hoc disallowance invalid without rejecting audited books under S.145(3); no S.40(a)(ia) disallowance if TDS deposited before return due date.

आदेश/ORDER

PER MAKARAND VASANT MAHADEOKAR, AM:

The present appeal is filed by the assessee against the order passed by the learned Commissioner of Income Tax (Appeals)-57, Mumbai [hereinafter referred to as "CIT(A)"]dated 20.03.2018 under section 250 of the Income-tax Act, 1961[hereinafter referred to as "the Act"], arising out of the assessment order passed by the Income Tax Officer, Ward 13(2)(2), Mumbai [hereinafter referred to as "Assessing Officer or AO"]under section 143(3) of the Act dated 20.11.2007 for the Assessment Year 2005-06.

Condonation of Delay

2. At the outset, it is observed that there is a substantial delay in filing the present appeal before the Tribunal. The Registry has pointed out that the appeal has been filed with a delay of 2747 days. The assessee has filed an application for condonation of delay supported by a duly sworn affidavit explaining the reasons for such delay. The contents of the affidavit reveal that the order of the learned Commissioner of Income Tax (Appeals)-57, Mumbai dated 20.03.2018 was not received by the assessee within the prescribed time. It has been specifically stated that the said appellate order was received by the assessee only on 26.09.2025 from the office of the Income Tax Officer, Ward-25(1), Mumbai along with the demand notice dated 23.09.2025.The assessee has further affirmed in the affidavit that prior to 26.09.2025, neither the order of the CIT(A) nor any communication in this regard was received either from the office of the CIT(A) or from the Assessing Officer. Consequently, the assessee was prevented by sufficient cause from filing the appeal within the prescribed period of limitation. It has also been stated that immediately upon receipt of the appellate order, the assessee filed the present appeal before the Tribunal on 18.11.2025.In support of the above contention, the assessee has placed on record a copy of the email dated 26.09.2025 issued by the Income Tax Department (ITBA system), whereby the intimation letter along with the appellate order was communicated to the assessee. The said email evidences that the order giving effect to the CIT(A)’s order was transmitted electronically only on the aforesaid date.

3. The learned Departmental Representative (DR) objected to the condonation of delay and submitted that the notices as well as the appellate order were duly served upon the assessee through the registered e-mail address and, therefore, the assessee cannot plead non-receipt of the order.

4. We have given our thoughtful consideration to the objection raised by the learned DR. However, on a careful perusal of the record, certain material facts emerge which have a direct bearing on the issue.

5. Firstly, it is noticed that the appeal before the learned CIT(A) was filed in physical Form No. 35. On examination of the said Form No. 35, it is observed that no e-mail ID of the assessee is mentioned therein. In absence of any e-mail ID furnished by the assessee in the statutory form of appeal, the contention of the Revenue that the order was served through electronic mode on a registered e-mail address remains unsupported by any cogent material on record.

6. Secondly, it is an admitted position that the appellate order has been passed by the CIT(A)-57, Mumbai and not by the National Faceless Appeal Centre (NFAC). Therefore, the proceedings are not governed by the faceless regime where electronic mode of communication is the prescribed and mandatory method of se