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Facts
The assessee filed an appeal against the order of the CIT(A) with a delay of 268 days. The assessee sought condonation of delay citing reasons such as partners being under medication, no staff to look after appeal matters, and non-receipt of notices. The assessee was ex-parte before the lower authorities, leading to additions.
Held
The Tribunal condoned the delay in filing the appeal, following the liberal approach mandated by the Supreme Court in the case of Collector, Land Acquisition Vs. Mst. Katiji. The Tribunal found that substantial justice would be preferred over technicalities and restored the matter to the AO for denovo assessment.
Key Issues
Whether the delay in filing the appeal can be condoned on the grounds presented by the assessee? Whether a denovo assessment is required given the assessee was ex-parte before the lower authorities?
Sections Cited
250, 69A, 5
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “SMC” BENCH MUMBAI
Before: HON’BLE SHRI SANDEEP GOSAIN
Date of Hearing 28.10.2025 Date of Pronouncement 28.11.2025 आदेश / ORDER
PER SANDEEP GOSAIN, JM:
The present appeal has been filed by the assessee challenging the impugned order dated 29.08.2024 passed u/s. 250 of the Income Tax Act, 1961 (‘the Act’), by the National Faceless Appeal Centre, Delhi (NFAC) for the assessment year 2017-18. At the very outset, I noticed that there is delay of 268 2. days in filing present appeal and in this regard an 2 K.P. Enterprise, Mumbai. application for seeking condonation of delay has been filed by the assessee, wherein it has been mentioned as under: We refer to the order dated 29.08.2024 of the CIT(A) in the case of our abovenamed clients for income-tax assessment year 2017-18. In this connection, we would like inform you that the order of the CIT(A) came to the knowledge of our clients on 10 ^ (th) , 2025 and as such, the date of receipt of the order of the CIT(A) is considered as 10 ^ (th) May, 2025. Accordingly, the appeal is filed within the time allowed. However, in case, if the date of receipt of CIT(A) order is considered to be 29 ^ (th) August, 2024, being the date of the order of the CIT(A), then the appeal against the order of the CIT(A) was due to be filed on 27 ^ (1h) October, 2024, however, the appeal is now being filed on 22 ^ (nd) July, 2025, that is, delay of 268 days.. The delay has occurred for the reasons that our clients are not engaged in business activity and as such, there is no staff to look after the appeal matter. Further, our clients have not received any notice through courier informing the date of fixing the hearing. Further, the partners of the Firm are under regular medication and inadvertently, failed to regularly check the notice(s) issued by the CIT(A). Thereafter, somewhere in the month of May, 2025, one of the partner, Mr Kishore Shah, received call from the department for recovery of outstanding demand. Immediately, he communicated to the consultant and the consultant after going through the income-tax portal informed the passing of the impugned order of the CIT(A) and advised to file appeal to the Honourable Tribunal, though belatedly.
Further, it would not be out of place to mention that there is absolutely no mala fide intention on the part of our clients for the aforesaid delay. No benefit would accrue to them on account of not filing of appeal within the due date. As such, you will appreciate that the error in not filing of appeal is, on facts, bona fide.
In view of the above, we on behalf of our clients urge you to condone the delay in filing the appeal under reference and 3 K.P. Enterprise, Mumbai. admit the same for disposal on merits. Please find enclosed an Affidavit of the Mr Kishore Shah, partner of the Firm, in original, narrating the abovementioned facts. condone the delay must be exercised liberally. It is further held that in considering the We, in this regard, submit that Courts have held time and again that the jurisdiction to condonation petition, it is to be remembered that statutes conferring a right of appeal must be construed in furtherance of justice and the provision limiting the time for an appeal must be liberally interpreted Chamanlal Bros. Ltd. Vs The construction so as to advance substantial justice Sandhya Rani Sarkar Vs Sudha Punjab State 12 SCT 643. The word "sufficient cause" should receive liberal Rani Debi AIR SC 537. It is held that when substantial justice and technical considerations are pitted against each other, the cause of substantial justice deserves to be preferred - 167 ITR 471 (SC).
Further, it is held in the case of Ashok Automobile (Ranchi) Pvt. Ltd. Vs State of Bihar (1988) 174 ITR 566, 567 (Pat) that the jurisdiction to condone delay should be exercised liberally and matter relating to condonation of delay should be judged broadly and not in a pedantic manner.
While dealing with the condonation of delay under section 5 of the Limitation Act, 1963, the Supreme Court, in Collector, Land Acquisition Vis. Mst. Katiji [(1987) 167 ITR 471, 472-73 (SC)], has held as under :-
"The Legislature has conferred the power to condone delay by enacting section 5 of the Limitation Act, 1963 in order to enable the courts to do substantial justice to parties by disposing of matters on "merits". The expression 'sufficient cause' in section 5 is adequately elastic to enable the courts to apply the law in a meaningful manner which sub-serves the ends of justice - that being the life purpose of the existence of institution of Courts. It is common knowledge that this court has been making a justifiably liberal approach in matters instituted in this court. But the message does not appear to have percolated down to all 4 K.P. Enterprise, Mumbai. the other courts in the hierarchy. A justifiably liberal approach has to be adopted on principle.
And such a liberal approach is adopted on principle as it is realised that -
(1) Originally, a litigant does not stand to benefit by lodging an appeal late.
(2) Refusing to condone delay can result in a meritorious matter being thrown out at the very threshold and cause of justice being defeated. As against this, when delay is condoned, the highest that can happen is that a cause would be decided on merits after hearing the parties.
(3) 'Every day's delay must be explained' does not mean that a pedantic approach should be made. Why not every hour's delay, every second's delay? The doctrine must be applied in a rational, common sense and pragmatic manner.
(4) When substantial justice and technical considerations 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 a non-deliberate delay. culpable negligence or on account of malafides. A litigant does not stand to benefit by (5) There is no presumption that delay is occasioned deliberately, or on account of resorting to delay. In fact, he runs a serious risk. legalise injustice on technical grounds but because it is capable of removing injustice (6) It must be grasped that the judiciary is respected not on account of its power to and is expected to do so. been prevented by reasonable cause in filing the appeal within 2 months from the end In view of the reasons for the delay mentioned above, we submit that our clients have of the month from the date of receipt of the CIT(A) order and we therefore, on 5 K.P. Enterprise, Mumbai. the basis the facts and the law mentioned above, request you to condone the delay in filing the appeal and admit the same to be disposed of on merits.
On the other hand Ld. DR refuted the contents contained in the application and requested for dismissal of the same.
Considering the entire factual position as explained before us and also keeping in view, the principles laid down by Hon’ble Supreme Court in the case of Land Acquisition Collector Vs. Mst. Katiji& Ors., [1987] AIR 1353 (SC),wherein it has been held that where substantial justice is pitted against technicalities of non-deliberate delay, then in that eventuality substantial justice is to be preferred. In my view the principals of advancing substantial justice is of prime importance. Hence considering the explanation put forth by the Assessee by justifiably and properly explaining the delay which occurred in filing the appeal and construing the expression" sufficient cause" liberally I am inclined to condone the delay in filing the appeal before the Tribunal. Therefore I condone the delay and admit the appeal to be heard on merits.
From the records since the assessee was ex-parte before AO and Ld. CIT(A) and thus additions were made and sustained on account of cash deposit of Rs. 17,30,900/- in the case of assessee. Ld. AR placed on 6 K.P. Enterprise, Mumbai. record documents in the shape of Cash summary statement for the period 1st April, 2016 to 31st March, 2017 explaining the source of cash deposit, Bank statement for the period 1 April, 2016 to 31st March, 2017 Cash book for the period 1 April, 2016 to 31st March, 2017, Annual accounts for the year ended 31st March, 2017, Confirmation of account of the debtor(s).
Since assessee was ex-parte before both the authorities and these documents now produced before us requires verifications and are relevant piece of evidence to counter the allegation of revenue to treat the cash deposit as unexplained money u/s 69A of the Act and therefore I am of the view that one more opportunity be given to the assessee to represent his case before AO.
Considering the overall circumstances of the present case, I deem it proper to restore the matter back to the file of AO for denovo assessment by providing adequate opportunity of hearing to the assessee. The assessee shall be at liberty to place on record the relevant evidences. Since there was non cooperation by the assessee during the proceedings before the revenue authorities therefore a cost of Rs. 5,000/- is imposed which shall be deposited in the Prime Minister Relief Fund and a copy of the receipt shall be placed on file before AO within 30 days from the date of receipt of this order. The assessee shall not seek 7 K.P. Enterprise, Mumbai. any adjournment on frivolous grounds and shall remain cooperative during the course of proceedings.
Before parting, we make it clear that our decision to restore the matter back to the file of the AO shall in no way be construed as having any reflection or expression on the merits of the dispute, which shall be adjudicated by the Ld. AO independently in accordance with law.
In the result, the appeal filed by the assessee is allowed for statistical purposes.