Missed an income tax notice because you changed your address? ITAT ruling offers relief on ₹11 lakh tax addition
A taxpayer who did not respond to income-tax notices sent to his old address has received relief from the Delhi Income Tax Appellate Tribunal (ITAT), which condoned a 2,073-day delay in filing his appeal and deleted an ₹11 lakh addition relating to cash deposited in a joint bank account.
The case involved Hira Ballabh Khulbe, whose assessment for assessment year (AY) 2012-13 was reopened after tax authorities received information about an ₹11 lakh cash deposit in a joint account held by Khulbe and his wife. The reassessment notices were sent to his old address in Faridabad.
Khulbe told the tribunal that he had shifted from Faridabad in December 2010 and that no member of his family was living at the old address. As a result, he said he never received the notices and was unaware of the reassessment proceedings.
The ITAT’s order was pronounced on 4 August 2026 by Judicial Member Madhumita Roy in ITA No. 3272/Del/2026.
Tax demand surfaced years later
The Assessing Officer completed the assessment ex parte under sections 147 and 144 of the Income-tax Act, treating the entire ₹11 lakh cash deposit as income. This resulted in a tax demand of ₹5.06 lakh.
According to the tribunal order, Khulbe said he came to know about the demand only in AY 2023-24 through his chartered accountant. He subsequently filed an appeal before the National Faceless Appeal Centre (NFAC) on 9 September 2025, along with an application seeking condonation of the 2,073-day delay.
The delay was supported by an affidavit. Khulbe also cited his relocation and age-related health issues.The CIT(A), however, dismissed the appeal on the ground that it was filed beyond the prescribed limitation period, without examining the case on merits.
The matter then reached the Delhi ITAT.
ITAT accepts explanation for 2,073-day delay
The tribunal took a different view.
It held that Khulbe had shown sufficient cause for the delay and condoned the 2,073-day delay in filing the appeal before the first appellate authority. The tribunal also noted the taxpayer’s old age and the relatively small tax demand while deciding to dispose of the matter.
This is important because the tribunal did not treat the long delay alone as sufficient reason to shut the door on the taxpayer. It considered the explanation that the taxpayer had moved away from the address to which the notices were sent and that he had not been aware of the proceedings.
Why did ITAT delete the ₹11 lakh addition?
The second issue concerned the source of the cash deposit.Khulbe maintained that the ₹11 lakh deposited in the joint bank account was not unexplained income.
According to his explanation, ₹8 lakh represented proceeds from the sale of a residential property, while the remaining ₹3 lakh came from past savings. The tribunal noted that this explanation was supported by an affidavit and other relevant documents.
After considering the material, the tribunal held that the ₹11 lakh addition made by the Assessing Officer was not sustainable and directed that it be deleted.
The taxpayer’s appeal was consequently allowed.
What does this mean for taxpayers?
The ruling does not mean that every cash deposit will automatically be accepted as explained or that taxpayers can routinely file appeals years after the deadline.
The case turned on its own facts. The taxpayer was able to explain why he had not received the notices and supported his explanation with an affidavit. He also provided documents supporting the source of the cash.
The case therefore highlights two practical points for taxpayers. First, an old address can create serious problems if income-tax notices are sent there. Second, documentation showing the source of a large cash deposit can become crucial if the tax department later questions it.
