HAJIMOHMADSAFI ABDULREHMAN SHAIKH,VADODARA vs. DEPUTY COMISSIONER OF INCOME TAX, CIRCLE 2(1)(1), VADODARA

The brief facts of the case are that the assessee, an individual engaged in the business of real estate as a builder and developer, had filed his return of income for A.Y. 2012-13 declaring total income of Rs. 56,70,880/-. The case was selected for scrutiny and the assessment was completed under section 143(3) of the Act on 31.03.2015 wherein the Assessing Officer made various additions including addition on account of alleged bogus purchases. In the first round of appellate proceedings, partial relief was granted by the CIT(A) and thereafter the matter travelled to the Hon’ble ITAT, Ahmedabad, which restored the issue of bogus purchases to the file of the Assessing Officer for fresh adjudication with specific directions to verify the transactions by issuing summons to the concerned parties.

Pursuant to the directions of the Hon’ble ITAT, the Assessing Officer carried out set-aside assessment proceedings under section 254 read with section 143(3) of the Act. During these proceedings, the Assessing Officer issued summons under sections 131/133(6) of the Act to 12 parties from whom the assessee had claimed to have made purchases. Based on the responses received and the lack of satisfactory evidences in most cases, the Assessing Officer held that the assessee had failed to establish the genuineness of such purchases. While allowing purchases from two parties where confirmations and details were found satisfactory, the Assessing Officer treated the remaining transactions as non-genuine and made an addition of Rs. 1,42,03,168/- on account of bogus purchases and unexplained credits, thereby completing the assessment at an enhanced income.

Aggrieved by the set-aside assessment order, the assessee preferred an appeal before the CIT(Appeals) raising multiple grounds. The primary

During the appellate proceedings before the CIT(Appeals), several notices under section 250 of the Act were issued to the assessee granting opportunities to substantiate the grounds of appeal. However, the assessee failed to respond to any of the notices and did not furnish any submissions or evidences in support of its claims. In view of such non-compliance, the CIT(Appeals) proceeded to adjudicate the appeal based on the material available on record and also observed that the assessee was not interested in pursuing the appeal.

While adjudicating Ground No. 1 relating to addition of Rs. 1,42,03,168/- on account of bogus purchases, the CIT(Appeals) upheld the action of the Assessing Officer by observing that the Assessing Officer had carried out detailed verification in accordance with the directions of the Hon’ble ITAT and had given sufficient opportunities to the assessee to substantiate the genuineness of transactions. It was held that in absence of ITA Nos. 2339,2412,2413&2420/Ahd/2025 Asst. Years –2012-13 to 2015-16 - 5– any supporting evidence from the assessee, the addition was justified and the ground was dismissed.

With regard to Ground No. 2, wherein the assessee alleged denial of proper opportunity and violation of principles of natural justice, the CIT(Appeals) rejected the contention by holding that adequate opportunities had been granted both during assessment as well as appellate proceedings. It was noted that the assessee failed to avail such opportunities and therefore could not claim violation of natural justice. Accordingly, this ground was also dismissed.

In respect of Ground No. 3 concerning addition without furnishing material and without allowing cross-examination, the CIT(Appeals) reiterated that the burden of proof was on the assessee to substantiate its claims and that the Assessing Officer had conducted detailed enquiries and given sufficient opportunities. In the absence of any compliance or rebuttal by the assessee, the addition was held to be justified and the ground was dismissed.

Regarding Ground No. 4, wherein the assessee contended that addition of Rs. 73,98,000/- had already been deleted in earlier appellate proceedings, the CIT(Appeals) held that the issue of bogus purchases had been set aside in entirety by the Hon’ble ITAT for fresh adjudication and therefore the earlier relief granted by the CIT(A) stood merged with the order of the Tribunal. It was observed that the Assessing Officer had rightly re-examined the entire issue in accordance with the directions of the ITAT and hence the contention of the assessee was devoid of merit. This ground was accordingly dismissed.

As regards Ground No. 5 relating to initiation of penalty proceedings under section 271(1)(c), the CIT(Appeals) held that the same was premature and did not call for adjudication at this stage. The remaining ground being general in nature was also dismissed.

Accordingly, the CIT(Appeals) held that the assessee had failed to discharge the burden of proof and had also not cooperated during appellate proceedings. Relying on judicial principles regarding dismissal for non- prosecution and considering the merits of the case, the CIT(Appeals) found no reason to interfere with the findings of the Assessing Officer and accordingly dismissed the appeal of the assessee in entirety.

The assessee is in appeal before us against the order passed by CIT(Appeals) dismissing the appeal of the assessee.

Before us, the ld. counsel for the assessee submitted that that the assessee was a senior citizen and was suffering from multiple diseases and had also been hospitalized on several occasions. The ld. counsel for the assessee placed on record various medical certificates issued by various Doctors to demonstrate that the assessee had been suffering from various ailments and was prevented by genuine medical conditions which did not allow the assessee to properly represent the matter before Tax Authorities. The ld. counsel for the assessee submitted that that the assessee is willing to cooperate before Tax Authorities and if given an opportunity of hearing in the interests of justice and looking into the substantial quantum of additions made, the assessee may be granted one opportunity of hearing to contest the matter on merits. The ld. counsel for the assessee submitted that that the ITA Nos. 2339,2412,2413&2420/Ahd/2025 Asst. Years –2012-13 to 2015-16 - 7– assessee would diligently produce all material evidences before us Tax Authorities with respect to additions made. The ld. counsel for the assessee also placed reliance on Affidavit of concerned Chartered Accountant representing the matter before Tax Authorities in support of the medical condition of the assessee.

In response, Ld. DR placed reliance on the observations made by CIT(Appeals) in the appellate order.

It is observed that the additions in the present case have been sustained primarily on account of non-compliance and failure on the part of the assessee to furnish necessary evidences both during the course of assessment as well as appellate proceedings. At the same time, the assessee has now placed on record medical evidence and affidavit explaining the circumstances under which effective representation could not be made before the lower authorities. Considering the submissions of the assessee and the material placed on record, we are of the view that the assessee was prevented by reasonable cause from properly prosecuting the matter before the lower authorities.

It is a settled legal position that matters should ordinarily be decided on merits rather than on technicalities. The Hon’ble Supreme Court in the case of Collector, Land Acquisition vs. Mst. Katiji & Others (1987) 167 ITR 471 (SC) has held that substantial justice should prevail over technical considerations and a liberal approach should be adopted where sufficient

In the present case, considering the substantial additions involved, the explanation furnished by the assessee regarding medical hardship, and in the interest of principles of natural justice, we deem it appropriate to grant one more opportunity to the assessee to substantiate his case on merits before the Assessing Officer. We are of the considered view that denying such opportunity would result in miscarriage of justice.

Accordingly, we set aside the impugned order passed by the CIT(Appeals) and restore the entire matter to the file of the Assessing Officer for fresh adjudication de novo. The Assessing Officer shall provide adequate opportunity of being heard to the assessee and the assessee is directed to fully cooperate and furnish all necessary evidences and explanations in support of his claim. It is also made clear that the assessee shall not seek unnecessary adjournments and shall diligently participate in the proceedings.

At the same time, considering the conduct of the assessee in not complying with notices earlier, we deem it appropriate to impose a cost of Rs. 10,000/- which shall be deposited by the assessee with the PM Relief

Subject to the above directions, the appeal of the assessee is allowed for statistical purposes.

The assessee has raised the following grounds of appeal:

This is the assessee’s appeal against order passed CIT(Appeals) confirming levy of penalty u/s 271(1)(c) of the Act for assessment year 2013-

At the outset, we observe that the present appeal is time barred by 2074 days. The assessee has filed Affidavit before us seeking condonation of delay and giving reasons for the delay in filing of appeal for the impugned assessment year.

In the said Affidavit filed by the assessee, ha has submitted that the assessee is a senior citizen aged about 63 years and that the delay occurred due to circumstances beyond his control. The assessee has explained that he had been suffering from serious and prolonged medical conditions from the year 2016 to 2022, including chronic illness, multiple spinal surgeries, a heart attack requiring angioplasty with stent placement, and a severe COVID-19 infection involving substantial lung damage, requiring prolonged hospitalization and ventilator support. Due to these grave health issues and continuous medical treatment, the assessee remained incapacitated and was unable to attend to his affairs or take cognizance of the appellate proceedings.

It is further stated that the assessee, being not well-versed with tax procedures, was entirely dependent upon his then Chartered Accountant, who failed to inform him about the appellate order and did not take steps to file the appeal within the prescribed time. The assessee became aware of the lapse only upon receipt of recovery notice dated 24.09.2025, after which he sought a second opinion from a new Chartered Accountant firm, who informed him about the non-filing of appeal. Immediately thereafter, the assessee took prompt steps to file the appeal along with the present application for condonation of delay. The assessee has affirmed that the delay is neither intentional nor due to negligence but is attributable to genuine hardship and lack of proper professional guidance. It has also been stated that the assessee has a good case on merits and denial of condonation would result in grave injustice.

We have carefully considered the application for condonation of delay, the affidavit filed by the assessee, and the material placed on record. The ITA Nos. 2339,2412,2413&2420/Ahd/2025 Asst. Years –2012-13 to 2015-16 - 11– delay of 2074 days in filing the present appeal is undoubtedly substantial; however, the length of delay is not decisive, and what is material is the sufficiency and genuineness of the cause shown.

The Hon’ble Supreme Court in the case of Collector, Land Acquisition v. Mst. Katiji & Ors. (1987) 167 ITR 471 (SC) has held that a liberal approach should be adopted while considering applications for condonation of delay so as to advance substantial justice, and that technical considerations should not come in the way of adjudication on merits. Similarly, in N. Balakrishnan v. M. Krishnamurthy (1998) 7 SCC 123, the Hon’ble Supreme Court held that length of delay is immaterial so long as the explanation is satisfactory and the delay is not attributable to mala fide intention.

In the present case, the assessee has demonstrated that he was suffering from serious and life-threatening medical conditions over a prolonged period, which significantly impaired his ability to attend to his legal and financial affairs. The medical events narrated in the affidavit, including surgeries, cardiac complications, and severe COVID-19 infection, constitute sufficient and reasonable cause preventing the assessee from taking timely action. Further, the assessee’s reliance on his Chartered Accountant and the latter’s failure to act diligently has also been recognized by courts as a valid ground in appropriate circumstances. In this regard, reliance may also be placed on the decision of the Hon’ble Supreme Court in Concord of India Insurance Co. Ltd. v. Nirmala Devi (1979) 118 ITR 507 (SC), wherein it was held that a party should not suffer for the inaction or lapse of its counsel.

We further note that immediately upon becoming aware of the lapse, the assessee acted with due diligence and filed the appeal without any further delay. There is nothing on record to suggest that the delay was deliberate or motivated by any mala fide intention. On the contrary, the explanation furnished appears to be bona fide and supported by reasonable cause.

It is also a settled principle that when substantial justice and technical considerations are pitted against each other, the cause of substantial justice deserves to be preferred, as held in Collector, Land Acquisition v. Mst. Katiji & Ors. (supra). Denial of condonation in the present case would result in depriving the assessee of an opportunity to contest the matter on merits, which would be contrary to the principles of natural justice.

In view of the foregoing facts and judicial precedents, and considering the totality of circumstances, we are satisfied that the assessee was prevented by sufficient cause from filing the appeal within the prescribed time. Accordingly, in the interest of justice, equity and fair play, the delay of 2074 days in filing the appeal is condoned and the appeal is admitted for adjudication on merits.

On merits, the counsel for the assessee submitted that for the aforesaid reasons, the assessee could not cause appearance before CIT(Appeals) who passed the order on ex-parte basis. The counsel for the assessee sought an opportunity of hearing in the interest of justice and submitted that the assessee shall diligently comply before us Tax Authorities. The counsel for the assessee further submitted that in the present case while the appeal against quantum additions are pending adjudication before CIT(Appeals), however,

We have heard the rival contentions and perused the material on record. In the interest of justice, we hereby restore the matter to the file of CIT(Appeals) for de-novo consideration and he may take up the appeal of the assessee against the penalty order along-with the assessee’s appeal against the additions on merits. The Assessing Officer shall provide adequate opportunity of being heard to the assessee and the assessee is directed to fully cooperate and furnish all necessary evidences and explanations in support of his claim. It is also made clear that the assessee shall not seek unnecessary adjournments and shall diligently participate in the proceedings.

At the same time, considering the conduct of the assessee in not complying with notices earlier, we deem it appropriate to impose a cost of Rs. 5,000/- which shall be deposited by the assessee with the PM Relief Fund and proof of such payment shall be furnished before the Assessing Officer at the time of set aside proceedings.

Subject to the above directions, the appeal of the assessee is allowed for statistical purposes.

The assessee has raised the following grounds of appeal:

This is an appeal filed by the assessee for various years under consideration against order passed by CIT(Appeals) for assessment year 2014-15. 40. At the outset, we observe that the present appeal is time barred by 460 days. The assessee has filed Affidavit before us seeking condonation of delay and giving reasons for the delay in filing of appeal for the impugned assessment year. In the Affidavit along-with application for condonation of delay, the assessee has cited medical reasons for not being able to file appeal in time. Further, the counsel for the assessee has also requested that since the assessee could not present matter on merits, the matter may be restored to file of the Assessing Officer for de-novo consideration.

We have considered the submissions and perused the material on record. The appeal is delayed by 460 days. In view of the affidavit filed by the assessee explaining the delay on account of medical reasons, and being satisfied that there existed sufficient cause, the delay in filing the appeal is condoned.

On merits, considering that the assessee could not properly present its case before the lower authorities, in the interest of justice, we restore the matter to the file of the Assessing Officer for de-novo adjudication after providing adequate opportunity of being heard to the assessee.

However, the assessee is directed to deposit a cost of Rs. 5,000/- with the Prime Minister’s Relief Fund and furnish proof of the same before the Assessing Officer.

In the result, the appeal of the assessee is allowed for statistical purposes.

The assessee has raised the following grounds of appeal:

This is an appeal filed by the assessee for various years under consideration against order passed by CIT(Appeals) for assessment year 2015-16. 47. At the outset, we observe that the present appeal is time barred by 461 days. The assessee has filed Affidavit before us seeking condonation of delay and giving reasons for the delay in filing of appeal for the impugned assessment year. In the Affidavit along-with application for condonation of delay, the assessee has cited medical reasons for not being able to file appeal in time. Further, the counsel for the assessee has also requested that since the assessee could not present matter on merits, the matter may be restored to file of the Assessing Officer for de-novo consideration.

We have considered the submissions and perused the material on record. The appeal is delayed by 461 days. In view of the affidavit filed by the assessee explaining the delay on account of medical reasons, and being

On merits, considering that the assessee could not properly present its case before the lower authorities, in the interest of justice, we restore the matter to the file of the Assessing Officer for de-novo adjudication after providing adequate opportunity of being heard to the assessee.

However, the assessee is directed to deposit a cost of Rs. 5,000/- with the Prime Minister’s Relief Fund and furnish proof of the same before the Assessing Officer.

In the result, the appeal of the assessee is allowed for statistical purposes.

In combined result, all the appeals of the assessee are allowed for statistical purposes subject to payment of cost of Rs. 10,000/- for A.Y. 2012- 13 and Rs. 5,000/- for the A.Ys. 2013-14, 2014-15 & 2015-16 to be deposited with the Prime Minister’s Relief Fund. This Order is pronounced in the Open Court on 27/03/2026 (ANNAPURNA GUPTA) JUDICIAL MEMBER Ahmedabad; Dated 27/03/2026 TANMAY, Sr. PSITA Nos. 2339,2412,2413&2420/Ahd/2025 Asst. Years –2012-13 to 2015-16 - 18–

""थ" / The Respondent. संबंिधत आयकर आयु" / Concerned CIT 3. 4. आयकर आयु"(अपील) / The CIT(A)- 5. िवभागीय "ितिनिध, आयकर अपीलीय अिधकरण, अहमदाबाद / DR, ITAT, Ahmedabad गाड" फाईल / Guard file. 6. आदेशानुसार/ BY ORDER,