ITAT Indore Condones 13-Year Delay, Sets Aside Ex-Parte Assessment Against Commercial Pilot for Fresh Hearing
Pranav B Prem
The Indore Bench of the Income Tax Appellate Tribunal (ITAT) has granted relief to commercial pilot Jay Krishnan Nair by setting aside a 13-year-old ex-parte assessment order and the corresponding penalty order, remanding the matter back to the Assessing Officer (AO) for a fresh decision on a de novo basis.
The bench comprising Paresh M. Joshi (Judicial Member) and Bhagirath Mal Biyani (Accountant Member) observed that the assessee’s income “is required to be computed and assessed according to law by following due process,” which had not been done at either the assessment or first appellate stage. The lapse, the Tribunal noted, was primarily due to the default of the assessee’s earlier Chartered Accountant, who admitted fault in a sworn affidavit.
Background of the case
For Assessment Year (AY) 2010–11, the assessee’s total income was assessed at ₹99,45,430 under Section 144 of the Income Tax Act, 1961, against a returned income of nil. The assessment order, passed on 4 December 2017 by the Commissioner of Customs (Seaport–Import), Chennai, reclassified the assessee’s transactions as unexplained investments, leading to the tax demand.
Nair, who worked internationally as a commercial pilot, including with Nigeria Airways, contended that he was unaware of the assessment proceedings or the ex-parte order due to his overseas assignments and change of address. The appeal against the assessment order was filed only on 3 July 2023—after a delay of 2,037 days—along with an application for condonation of delay.
In his condonation petition, Nair explained that he had relocated to Mumbai and was stationed abroad during the relevant period, making it difficult to receive physical notices or check the income tax e-filing portal regularly. He claimed he became aware of the assessment order only through the portal, following which he applied for a copy on 31 May 2023, received it on 8 June 2023, and filed the appeal on 3 July 2023.
CIT(A)’s refusal and affidavit from previous counsel
The National Faceless Appeal Centre (NFAC) rejected the condonation plea, holding that the delay was not supported by sufficient documentary evidence and noting that the assessee had earlier filed a timely appeal against a related penalty order in July 2018, indicating he was aware of the proceedings. The NFAC concluded that there was no “sufficient cause” under Section 249(3) of the Act read with Section 5 of the Limitation Act.
Before the Tribunal, Nair produced an affidavit dated 14 June 2025 from his former Chartered Accountant, Raju Jayantilal Shah, who accepted lapses in handling the matter and failing to inform the assessee about the assessment order. Email correspondence between Nair and his counsel was also placed on record, corroborating the claim of professional negligence.
Tribunal’s findings
The Tribunal noted that both the assessment and the first appellate orders lacked any adjudication on the merits and were in violation of the principles of natural justice. Given the admitted lapse by the previous counsel, supported by documentary evidence, the Bench held that the assessee had been seriously prejudiced.
Accordingly, the ITAT set aside the CIT(A)’s order and remanded the matter to the AO to pass a fresh, reasoned assessment order within six months of receiving the Tribunal’s order. The penalty proceedings under Section 271(1)(c), being consequential, were also remanded for de novo adjudication. The appeal was allowed for statistical purposes, with both the assessment and penalty matters reopened for fresh consideration.
Appearance
Counsel For Petitioner: Gagan Tiwari, AR
Counsel For Respondent: Ashish Porwal, Sr. DR
Cause Title: Jay Krishnan Nair V. NFAC
Case No: ITA Nos. 538 &732/Ind/2024
Coram: Paresh M. Joshi [Judicial Member], Bhagirath Mal Biyani [Accountant Member]
