A US-Based NRI Was Taxed on His Whole Ahmedabad Flat Without a Hearing. The Tribunal Has Sent It Back.

An NRI settled in the United States since 2007 bought a flat in Sanathal, Ahmedabad with his father and brother. The tax officer reopened the year, sent every notice to an email address, heard nothing back, and added the full Rs 1,00,05,118 to his income as unexplained investment. On 30 September 2026 the Income Tax Appellate Tribunal at Ahmedabad set aside the appeals commissioner's orders and sent the year back to the tax officer for a fresh assessment. It did not delete the addition.

The case

The order is in ITA Nos. 2529 and 2530/AHD/2026, Japan Rajnikant Gandhi v. Ward 1, International Taxation, Ahmedabad, both for assessment year 2016-17. The bench was Dr. B.R.R. Kumar, Vice President, and Sanjay Kumar, Judicial Member, who wrote the order. The hearing ended on 15 September 2026 and the order was pronounced on 30 September 2026. It runs to 9 pages and decides both appeals together, taking the facts from ITA No. 2529 (paragraph 2).

The tribunal notes, repeating the taxpayer's statement of facts, that he "is a non-resident Indian, permanently settled in the United States of America since 2007, having an aggregate physical presence in India of merely 289 days over the preceding thirteen years" (paragraph 6).

The NRI's account

Most of the facts come from the NRI's own statement of facts, which the order quotes in full (paragraph 4). The tax officer has not yet tested them.

• The flat. In 2015-16 he, his late father and his brother bought Flat No. 252, "The Meadows", Gokuldham, Sanathal, Ahmedabad, for about Rs 1,00,05,000, registered with the Sub-Registrar, Sanand.
• The money, as he tells it. Rs 41,01,000 from his father's SBI accounts, paid between 19 July 2013 and 10 December 2015. Rs 11,80,000 from his own Bank of Baroda account in September and November 2013. Rs 51,49,717 from an SBI home loan in his name, sanctioned on 22 January 2014 and paid straight to the builder in tranches up to 31 May 2016.
• No return. He filed no return for 2016-17, believing he had no taxable income in India.
• The reopening. The tax officer acted on information about the purchase from the department's Insight Portal, ran the Section 148A procedure, and issued a Section 148 notice dated 25 March 2023.
• Where the notices went. Four Section 142(1) notices, dated 25 September 2023 to 25 January 2024, and a Section 144 show-cause notice of 19 February 2024 went only to an email address that he says a consultant hired by his father entered when the PAN was taken in 2013. He says he never used it. The landline on the PAN was surrendered in May 2015, and the Paldi postal address stopped receiving mail after a redevelopment agreement of 3 July 2022.
• The order. On 18 March 2024 the tax officer passed an ex parte order under Section 147 read with Section 144, treating the whole Rs 1,00,05,118 as unexplained investment under Section 69. Assessed income was Rs 1,00,05,120 and the demand Rs 88,87,869.
• How he found out. He sold gold ornaments in India, asked a chartered accountant about the tax, was told to register on the e-filing portal, and saw the order on 19 March 2026. He had never created an e-filing account before March 2026. He appealed on 26 March 2026, 709 days late, with a notarised and apostilled affidavit.

His written submission to the appeals commissioner put his taxable income for the year at Rs 628 (paragraph 4, item 2.1). On 22 June 2026 the Commissioner (Appeals) refused to condone the delay and dismissed the appeal, recording that "the case is not decided on merits" (paragraph 4, item 2.2).

The second appeal, ITA No. 2530, was 537 days late before the appeals commissioner (paragraph 3). The order does not give its facts on their own.

What the tribunal held

The tribunal relied on the Supreme Court in Collector, Land Acquisition, Anantnag v. Mst. Katiji [167 ITR 471 (SC)], quoting that "Refusing to condone delay can result in a meritorious matter being thrown out at the very threshold" and that "substantial justice deserves to be preferred" (paragraph 5).

It noted that both assessments were ex parte, that the appeals commissioner had rejected both on delay alone, and that the taxpayer is an NRI. His representative told the bench that, given the chance, every detail would be provided. The tribunal set aside the appeals commissioner's orders and sent both matters back to the tax officer "to pass fresh assessment orders" (paragraph 6).

It attached a condition. The taxpayer must file all supporting documents and "comply with the notices issued by the Revenue Authorities without seeking unnecessary adjournments" (paragraph 6). Both appeals were "allowed for statistical purposes" (paragraph 7).

What it means for an NRI owner

This is not a win on the merits. The tribunal said nothing on Section 69, on the reopening, or on whether money from a father, a brother and a bank loan explains the flat. All of that goes back to the tax officer.

What the order shows is how the case got here. A flat purchase registered in India reached the department through the Insight Portal. By his account, the notices went to the contact details on the PAN, and with no e-filing login he saw none of them for two years. The demand was Rs 88,87,869. He got a hearing back only because the tribunal applied the Supreme Court's test for condoning delay to a gap of 709 days.

The contact details on a PAN taken years ago, sometimes by a relative or a consultant, are where the department writes. Our guide on PAN for NRI property transactions covers what the PAN does in a purchase or sale. Our ITR filing note for AY 2026-27 covers this year's return, and our capital gains guide covers the sale side.

FAQ

What did ITAT Ahmedabad decide on 30 September 2026? Applying the Supreme Court's test for condoning delay, it set aside the appeals commissioner's orders, and sent both appeals for assessment year 2016-17 back to the tax officer for fresh assessments. It did not delete the Rs 1,00,05,118 addition.

Was the taxpayer an NRI? Yes. The tribunal notes, repeating his statement of facts, that he is a non-resident Indian settled in the United States since 2007, with 289 days in India over the preceding thirteen years.

Why was he assessed without a hearing? By his account, every notice went to an email address entered by a consultant in 2013 that he never used, his PAN landline was surrendered in 2015, and his postal address stopped receiving mail in 2022. The tax officer passed an ex parte order on 18 March 2024.

How was the flat said to be paid for? By his account, Rs 41,01,000 came from his late father, Rs 11,80,000 from his own account, and Rs 51,49,717 from an SBI home loan. The tribunal did not rule on this. The tax officer will examine it afresh.

Does the order cover the second appeal? Yes. ITA No. 2530/AHD/2026, for the same year, was 537 days late before the appeals commissioner and was decided in the same order with the same result: sent back for a fresh assessment.

66 MG Road newsdesk

Sources

• Japan Rajnikant Gandhi v. Ward 1, International Taxation, Ahmedabad, ITA Nos. 2529 and 2530/AHD/2026, AY 2016-17, Income Tax Appellate Tribunal, Ahmedabad Bench D, Dr. B.R.R. Kumar (VP) and Sanjay Kumar (JM), hearing concluded 15 September 2026, pronounced 30 September 2026, 9 pages. Full text, carrying the tribunal's page header and page numbers, read on 5 October 2026: https://indiankanoon.org/doc/63634431/
• The order has two paragraphs numbered 3: the grounds of appeal, then the tribunal's opening note. The facts in paragraph 4 are the taxpayer's statement of facts as quoted by the tribunal. The three funding sums total Rs 1,04,30,717, above the stated price of about Rs 1,00,05,000; the order does not explain the gap.