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Facts
The assessee's appeal was filed late by 1444 days. The delay was attributed to a misunderstanding of legal procedures and reliance on incorrect advice regarding which authority to appeal to after an order under section 263. The CIT(A) dismissed the appeal solely on the grounds of delay, without adjudicating on the merits.
Held
The Tribunal condoned the delay of 1444 days, finding a 'sufficient cause' for the late filing due to the assessee's lack of expertise in taxation laws and reliance on professional guidance. The Tribunal held that principles of natural justice require granting an opportunity to be heard.
Key Issues
Whether the delay in filing the appeal before the CIT(A) was justifiable and if the appeal should be admitted on merits despite the delay, considering principles of natural justice.
Sections Cited
263, 250, 253(5), 80P, 56, 271(1)(c)
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Income Tax Appellate Tribunal, RAJKOT BENCH, RAJKOT
Before: DR. ARJUN LAL SAINI & DR. DINESH MOHAN SINHA
आयकर अपील�य अ�धकरण, राजकोट �यायपीठ, राजकोट। IN THE INCOME TAX APPELLATE TRIBUNAL, RAJKOT BENCH, RAJKOT BEFORE DR. ARJUN LAL SAINI, ACCOUNTANT MEMBER AND DR. DINESH MOHAN SINHA, JUDICIAL MEMBER
आयकरअपीलसं./ITA No.18/RJT/2026 Assessment Year: (2014-15) Shri Bhaktinagar Co. Op. Housing Vs. Commissioner of Income Tax Society Ltd., (Appeals) C/O. A D Vyas & Co. Kotechanagar Delhi – 110001 Main Road, Opp. Kotecha Girl School, Off Kalawad Road, Rajkot – 360001 �थायीलेखासं./जीआइआरसं./PAN/GIR No.: AAAAS2363M (Appellant) (Respondent)
: Shri Gautam Achary, Ld. A.R. Appellant by : Shri Abhimanyu Singh Yadav. Ld. Sr. DR Respondent by Date of Hearing : 16/03/2026 Date of Pronouncement : 17/04/2026 आदेश/ ORDER Per Dr. Dinesh Mohan Sinha, JM : Captioned appeal filed by the assessee, pertaining to Assessment Year (AY)-2014-15, is directed against the order under section 250 passed by the National Faceless Appeal Centre [(in short “NFAC/Ld. CIT(A)”] vide order dated 08.12.2025, which in turn assessment order passed by Income Tax Department/Assessing Officer under section 143(3) r.w.s. 263 of the Income Tax Act, 1961 (in short “the Act”), vide order dated 10.06.2019 2. Grounds of appeal raised by the assessee are as follows: “1. Because the impugned order is contrary to the settled principles of law that matters should be decided on merits rather than on technical grounds, and that a liberal approach is required while considering applications for condonation of delay.
ITA No. 18/RJT/2025 Bhaktinagar Co. Op. Housing So. Ltd.
Because the Learned Authority failed to exercise jurisdiction vested in it, as it did not properly consider the explanation offered by the Appellant for the delay, which was reasonable, sufficient, and supported by material facts. 3. Because the Learned Authority adopted a hyper technical and pedantic approach, ignoring the fact that refusal to condone the delay has resulted in grave miscarriage of justice to the Appellant. 4. Because the Learned Authority failed to appreciate that no prejudice would have been caused to the Respondent if the delay had been condoned, whereas the Appellant has suffered irreparable loss due to dismissal of the appeal at the threshold. 5. Because the Learned Authority failed to consider that the Appellant had acted with due diligence and had no intention to gain any unfair advantage by filing the appeal belatedly. 6. Because the Learned Authority ignored binding judicial precedents which hold that the expression sufficient cause should receive a liberal construction so as to advance substantial justice. 7. Because the impugned order defeats the ends of justice, as the Appellant has been denied the statutory right of appeal without adjudication on merits. 8. Because the impugned order is arbitrary, unjust, and unsustainable in the eyes of law, and is liable to be set aside. 9. On the facts and in the circumstances of the case, the order passed by the learned Ld.CITA u/s. 250 of the I.T. Act is ab initio void being bad in law. 10. Because the Learned Appellate Authority has erred in law and on facts in rejecting the application for condonation of delay without appreciating that the delay was neither willful nor deliberate but occurred due to bona fide and unavoidable circumstances.”
At the outset, that the appeal filed late by 1444 days. The Ld. AR of the assessee has filed an application for condonation of delay, supported by Affidavit. The relevant para of the application for delay is as under; “When we received order of Pr CIT, Rajkot-3 u/s 263 of the Income Tax Act, 1961 Dated: 18/02/2019. We were under bona fide belief that the Order Passed by Ld Pr CIT cannot be challenged before CIT(A) being same cadre, Therefore, Assessee challenged order of Ld Pr CIT u/s 263 of the IT Act, before Hon'ble ITAT, Rajkot vide appeal No. ITA/89/RJT/2019, Dated: 18/04/2019. We received order of Ld ITO u/s 143(3) r.w.s. 263 of the I T Act, on 10/06/2019. We were under bona fide belief that we have already challenged the order of Pr CIT before Hon'ble ITAT, Therefore, we do not required to challenge the Order of Ld ITO. Therefore, your honour's assessee was under impression that they need not to challenge the order of ITO before Hon'ble CIT(A) being already challenged order of Pr CIT before Hon'ble ITAT. On pointing out by the current consultant that there is misconception of Assessee in preferring appeal, and we need to challenge the Order of Page 2 of 6
ITA No. 18/RJT/2025 Bhaktinagar Co. Op. Housing So. Ltd.
Ld ITO also before competent authority in order to claim relief against the addition made by Ld. ITO.”
During the course of the hearing, the Ld. AR submitted that the assessee misleading and wrong legal advices of the Counsel. That the Ld. AR requested that the delay may kindly be condone and appeal prayed for one more opportunity to the assessee to explain this case.
On the contrary, the Ld. DR for the revenue has no objected to the prayer of the Ld. AR , however the Ld. DR requested that the assessee must be directed to present his case before the Ld. AO, and do not seek unnecessary adjournments.
We have heard both the parties. We note that delay of filing before this Tribunal That deponent was not being well-versed in the intricate provisions of taxation and legal procedures, relied entirely on professional guidance for compliance with the appeal filing requirements. we have considered the submission advance by the AR the assessee is found to have a "sufficient cause" for delay in filing present appeal. We find that section 253(5) of the Act empowers the ITAT to admit an appeal after expiry of prescribed time, if there is a "sufficient cause" for not presenting appeal within prescribed time. In the interest of justice, we take a judicious view and we condoned the delay in filing appeal by 1444 days.
Brief facts of the case are that the assessee had e-filed return of Income on 30-03-2016 showing NIL income. The case was selected for Limited Scrutiny and the assessment was completed by the AO and remaining income after claim of deduction u/s. 80P of the IT Act, the subsequent case was reopened u/s. 263 of the Act and assessment was revised by the Ld.PCIT and directed to make a reassessment after verified claim of deduction u/s. 80P of the Act. Hence, the assessment was against the claim of deduction u/s. 80P of the Act should not be denied. The issue was examined by the AO and the assessment order completed.
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ITA No. 18/RJT/2025 Bhaktinagar Co. Op. Housing So. Ltd.
Hence, the interest income received from any bank, not being a co-operative society, by the assessee has to be assessed as Income from Other Sources and it is not eligible for deduction under section 80P(2)(a)(i)/80P(2)(d) of the Act. The issue of taxability of interest earned from surplus funds decided by the Hon'ble Supreme Court 283/188 Taxman 282, wherein it was held that the assessee being co-operative society in the case of Totgars' Co-operative Sale Society Ltd. vis. ITO [20101 322 ITR is engaged in providing credit facilities to its members of marketing agricultural products of its members, interest earned by it by investing surplus funds in short term deposits would fall under the head "income from other sources" taxable u/s. 56 of the 1.T. Act and it cannot be said to be attributable to the activities of the Society and therefore, the interest did not qualify for deduction u/s. 80P(2)(a)(i) of the I.T. Act. Therefore, the assessee is not eligible for claim of deduction and the same is required to be treated as income from other sources. The same is therefore added to the total income of the assessee. Since the assessee has furnished inaccurate particulars of income, penalty proceedings u/s. 271(1)(c) is initiated. The AO assessed the total income of the assessee is reworked out as under:- Income from house property Amount Gross annual value - actual rent received Rs 24,25,613/- Less: Municipal tax paid during the previous year Rs 96,000/- Net annual value Rs 23,29,613/- Less statutory deduction @ 30% Rs 6,98,884/- Income from house property Rs 16,30,729/- Income from other sources Rs 10,02,837/- Total assessed income Rs 26,33,566/-
That the assessee filed an appeal against the order of the AO vide order dated 10.06.2019 in the office of the Ld. CIT(A), which was dismissed by Ld. CIT(A) with following observation: “7. In the instant case, having considered the facts available on record and the judgements mentioned above, the grounds mentioned for inordinate delay of 1444 days Page 4 of 6
ITA No. 18/RJT/2025 Bhaktinagar Co. Op. Housing So. Ltd.
in filing this appeal are found to be not convincing and not sufficient and hence I am not satisfied that the appellant had any sufficient cause for not presenting this appeal for such a long time. Accordingly, the inordinate delay in filing this appeal cannot be condoned. The facts of this case show, that the mistake is not bona fide and the appellant has failed to show sufficient cause to condone the delay. In view of the above decisions and the facts of the case, I do not find merit in the submission to condone the delay of 1444 days and thus the application for seeking condonation of delay stands dismissed and consequently the appeal of the assessee is also dismissed. It is worthwhile to mention here that the appeal filed by the appellant against the order u/s 263 has also been dismissed by the ITAT vide its order dated 08.11.2023 in ITA No. 80/RJT/2019. 7.1 In view of above, delay in presenting appeal in this case is not condoned and appeal is rejected without going in to merits of the appeal. 8. In the result the appeal of the assessee is dismissed in limine.”
That the assessee filed an appeal against the impugned order dated 08.12.2025 passed by the Ld. CIT(A) before this Tribunal.
a. During the course of hearing, the Ld. AR submitted that the assessee prayed for one more opportunity to be given to the assessee to represent the case before the lower authority.
b. On the contrary, the Ld. Sr. DR for the revenue relied on the order of the Ld. CIT(A) and not objected to the prayer of the Ld. AR of the assessee.
We have heard, both the parties and perused the material available on record. We note that due to one reason or the other reason the case was not properly adjudicated by the lower authorities, according to law. Therefore, we are of the view, that one more opportunity should be given to the assessee to plead his case before the lower authority. It is settled law that principles of natural justice and fair play require that the affected party should be granted sufficient opportunity of being heard to contest his case. Keeping in view, in the interest of justice, we
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ITA No. 18/RJT/2025 Bhaktinagar Co. Op. Housing So. Ltd.
set aside the order of the Ld.CIT(A) and remitted the matter back to the file of the Ld.CIT(A) for fresh adjudication after giving due opportunity to the assessee.
In the result, the appeal of the assessee is allowed for statistical purposes.
Order is pronounced in the open court on 17/04/2026.
Sd/- Sd/- (Dr. Arjun Lal Saini) (Dr. Dinesh Mohan Sinha) Accountant Member Judicial Member Rajkot िदनांक/ Date: 17/04/2026 Copy of the Order forwarded to 1. The Assessee 2. The Respondent 3. The CIT(A) 4. Pr. CIT 5. DR/AR, ITAT, Rajkot By Order 6. Guard File //True Copy// //True Copy// Assistant Registrar/Sr. PS/PS ITAT, Rajkot
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