ITAT Grants Second Opportunity to NRI Assessee, Remands Rs 10.53 Crore Unexplained Income Addition Case to AO

The ITAT Ahmedabad in the case of Prashantkumar Chimanlal Patel Vs. ITO found it fair to grant the assessee a second opportunity, as he was not granted a fair opportunity of hearing during the tax proceedings before the CIT(A) and AO as well. The case is sent back to the AO for fresh consideration.

The present appeal was filed 89 days late before the Income Tax Appellate Tribunal (ITAT) Ahmedabad. Hence, the assessee, Prashantkumar Chimanlal Patel, filed an application seeking the condonation of delay along with an affidavit explaining the reason that he is an overseas citizen of India and a resident of Australia since 2008. He had hired a tax professional to handle his tax matters in India.

The lower appellate authority had dismissed the assessee’s appeal via an order dated November 20, 2025, on the grounds of delay in filing the appeal, and the case was decided ex parte without granting a sufficient opportunity of hearing. The assessee claims that he was not aware of the CIT(A)’s ex parte order. He only got to know about the final CIT(A) order in the first week of April 2026, while reviewing his pending tax matters in India. Thereafter, he immediately contacted his tax consultant and filed the present appeal, which led to an 89-day delay.

When the tribunal examined the explanation given by the assessee, it found it sufficient to condone the delay. When the case was heard on its merits. It was noted that the assessee had not filed any income tax return (ITR) for the year under consideration, i.e., Assessment Year 2018-19. The assessee’s case was reopened based on the information that the assessee had made certain investments in term/time deposits and received interest, on which TDS was made. Considering the non-compliance from the assessee’s side, the Assessing Officer (AO) made an addition of the entire gross receipts of Rs 10.53 crore to the assessee’s income, treating the same as unexplained income.

During the personal hearing before the ITAT, the assessee explained that the investments in question were made out of a foreign remittance credited to the NRI account of the assessee with HDFC Bank; hence, the AO was not fair in treating the investment of Rs 4.40 crores in the fixed deposits as unexplained. On the remaining addition of Rs 6.11 crore, the assessee claimed that information reported to the department under Section 285BA of the Act was not reported to him. Moreover, the AO had not specified the exact nature of the addition made.

The tribunal noted that the assessee was not properly heard during the appeal before the CIT(A) and the AO; the appeal was dismissed without condoning the delay. Meaning, the case was never heard on the merits. Consequently, relying on the Gujarat High Court ruling in the case of Vareli Textile Industries Limited Vs. CIT, the tribunal found it fair to set aside the matter. The case is remanded to the AO again for fresh consideration. The assessee has been directed to explain the source of fixed deposits and other credits/transactions, as reported to the department.