SANTOSH KUMAR RAMLAXMAN YADAV,MUMBAI vs. INCOME TAX OFFICER WARD 42(3)(3), MUMBAI

Per Smt. Beena Pillai, JM: Present penalty appeal filed by assessee arises out of order dated 20/06/2025 passed by NFAC, Delhi [hereinafter “the Ld. CIT(A)”] for assessment year 2016-17, on the following grounds of appeal:-

The Learned NFAC failed to appreciate that the Assessing Officer who issued reopening notice and Assessing Officer who passed the assessment order did not have jurisdiction over the Assessee.

3. The Learned NFAC erred in conforming the order of ld AO without appreciating that reopening in the facts and circumstances of the case is bad in law.

5. The Learned NFAC erred in confirming order of AO making the addition of unexplained investment in immovable property u/s 69 amounting to Rs. 2,64,30,442/- without appreciating that the investment in immovable property was only Rs 1,35,00,000/- and TDS was deducted on 1,29,30,442/- and further the property was purchased by securing loan from State Bank of India and hence the addition of Rs. 2,64,30,442/- may be deleted.

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2. At the outset, the Ld.AR submitted that, there was delay of 182 days in filing appeal before the Ld.CIT(A). It is submitted that, the assessee is a non-resident and did not have any income that accrued in India. Assessee was, therefore, not aware about any proceedings that was initiated against him.

2.1. It is submitted that, assessee purchased a property during the financial year relevant to assessment year under consideration against which, TDS was deducted. Based on these, the assessment for the year under consideration was reopened by issuing notice u/s 148 of the Act. He submitted that, assessee was absolutely not aware regarding the assessment proceedings and the assessment order passed by Ld.AO was ex-parte u/s 144 of the Act.

It is submitted that, subsequently when assessee came to know about assessment order having passed, he immediately filed appeal before Ld.CIT(A) with a delay of 182 days which was unintentional.

2.1. The Ld.CIT(A) without considering the circumstances in which the appeal was belatedly filed, dismissed the appeal of assessee in limine.

Aggrieved by the order of Ld.CIT(A), assessee is in appeal before this Tribunal.

***This space is left blank intentionally, P.T.O*** We have perused the submission advance by both sides in light of the records placed before us.

4. Admittedly, the Ld.DR could not controvert the submissions filed by assessee and the arguments advanced by Ld.AR to substantiate the delay caused in filing the appeal before Ld.CIT(A). It is noted that assessee, under genuine circumstances, could not respond to the notices issued by revenue during the assessment proceedings.

4.1. It is noted that there is no malafide intention on behalf of assessee in not filing the present appeal before the Ld.CIT(A), within the period of limitation. Nothing to establish any such intention has been filed by the revenue before this Tribunal. In our opinion there was sufficient cause for condoning the delay as observed by Hon’ble Supreme Court in case of Collector Land Acquisition Vs. Mst. Katiji & Ors., reported in (1987) 167 ITR 471 in support of his contentions. 4.2. We refer to the Third Member decision of Hon’ble Chennai, ITAT in the case of People Education & Economic Development Society Vs/ ITO reported in 100 ITD 87 (TM) (Chen), wherein it was held that "when substantial justice and technical consultation are pitted against each other, the cause of substantial justice deserves to be preferred for the other side cannot claim to have vested right in injustice being done because of non-deliberate delay".

It is also necessary to ascertain whether there was excessive or inordinate delay in the present facts of the case. Hon’ble Madras High Court in the case of CIT vs. K.S.P. Shanmugavel Nadai and Ors. (153 ITR 596) considered a situation of condonation of delay and held that where there exists a reasonable cause, period of delay may not be a relevant factor. Hon’ble Madras High Court relying on this principle had condoned the delay of nearly 21 years.

4.4. We also refer to the decision of Co-ordinate Bench of this Tribunal in the case of Bajaj Hindusthan Ltd. v. Jt. CIT (AT) (277 ITR 1) wherein this Tribunal has condoned the delay of 180 days when the appeal was filed after the pronouncement of the Judgment of the Hon’ble Supreme Court. It was noted that, the revenue had not file any counter-affidavit opposing the application of the assessee for condonation of delay. The Hon’ble Supreme Court under similar circumstances had noted in case of Mrs. Sandhya Rani Sarkar vs. Smt. Sudha Rani Debi (AIR 1978 SC 537) held that non-filing of affidavit in opposition to an application for condonation of delay may be a sufficient cause to condone the delay.

4.5. In the present facts of the case, we note that no such affidavit has been furnished by the revenue countering the condonation application of the assessee. At this juncture, we also take assistance and support from the observation of Justice Krishna Iyer wherein he has quoted at various occasion while dealing with technicalities that "any interpretation that alludes substantive justice is not to be followed and that substantive justice must always prevail over procedural technicalities". Similar is the observation by Hon’ble Supreme Court in the case of Collector Land Acquisition Vs. Mst. Katiji & Ors., reported in (1987) 167 ITR 471.

5.1. In the interest of justice, we remit this issue back to Ld.CIT(A) to consider and decide all the grounds raised by assessee in accordance with law. Needless to say that proper opportunity of being heard must be granted to assessee.

Accordingly, grounds raised by assessee are allowed for statistical purposes. In the result, appeal filed by assessee is allowed for statistical purposes. Order pronounced in the open court on 31/12/2025