ITAT Mumbai on Condonation of Delay and Foreign Travel via Spouse’s Credit Card: Key Takeaways from Chirag Anil Shah Vs ACIT
The Mumbai Bench of the ITAT in Chirag Anil Shah Vs ACIT (ITA No. 8745/Mum/2025, order dated 31/08/2026) dealt with two core issues for AY 2013‑14:
- Whether a delay of 690 days in filing an appeal could be condoned under
Section 253(5)of theIncome Tax Act 1961; and - Whether foreign travel expenses incurred for business through the assessee’s wife’s credit/debit card, and later reimbursed, could be disallowed, including ad hoc disallowances on travel and other expenses.
The Tribunal not only condoned the delay but also deleted disallowances relating to foreign travel, including sums routed through the spouse’s card and ad hoc percentage-based disallowances. The alleged Form 26AS mismatch was remitted to the Assessing Officer (AO) for verification.
Background of the Appeal
The assessee, Chirag Anil Shah, approached the ITAT against an appellate order passed by the learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi (CIT(A), NFAC) under Section 250 for AY 2013‑14.
However, the appeal reached the Tribunal with a delay of 690 days. Alongside the substantive grounds on additions and disallowances, the assessee moved a separate petition for condonation of this delay, supported by an affidavit dated 18.12.2025.
Reason for Delay: Pending Rectification Application
The sequence of events was as follows:
- The
CIT(A)passed an order dated 29.11.2023. - According to the assessee, this order did not deal with a ground concerning an addition made due to a mismatch between income reflected in Form 26AS and income as per the books.
- Treating this as a mistake apparent from record, the assessee filed a rectification application under
Section 154on 26.12.2023, requesting theCIT(A)to address the omitted ground. - The assessee believed, in good faith, that an appeal before the ITAT could be filed only after disposal of this
Section 154application. - No communication was received from the
CIT(A)on the rectification request. - Subsequently, the AO passed a penalty order under
Section 271(1)(c), which prompted the assessee to seek professional advice from a Chartered Accountant. - Only then did the assessee come to understand that an appeal to the ITAT was maintainable even while the
Section 154application remained pending. The appeal was then filed on 18.12.2025, leading to a delay of 690 days from the limitation cut‑off of 28.01.2024.
Revenue’s Objection
The Departmental Representative argued against condonation, contending that the assessee was required to be vigilant and to file the appeal within the statutory time-frame. According to the Revenue, the explanation furnished did not justify such a long delay.
Tribunal’s View on Condonation of Delay
After evaluating the affidavit and submissions of both sides, the ITAT held that the explanation constituted “reasonable and sufficient cause” for the purpose of Section 253(5).
Key aspects of the Tribunal’s reasoning:
- The assessee’s belief that an appeal should wait until the
Section 154application was disposed of was considered bona fide, not an afterthought. - The very fact that a specific ground remained unadjudicated in the
CIT(A)order, and a rectification application was filed to cure that omission, lent credibility to the explanation. - There was no finding or indication of deliberate inaction, lack of diligence, or mala fide intent.
On this basis, the ITAT:
- Condoned the 690‑day delay in filing the appeal; and
- Admitted the appeal for adjudication on merits.
The decision reinforces the principle that procedural limitations should not override substantive justice where the assessee’s conduct is satisfactorily explained and free from intentional default.