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Facts
The assessee purchased a property for Rs. 67,41,750/-. The Assessing Officer initiated proceedings under Section 147 and issued notices which were not complied with. Consequently, an ex-parte assessment order was passed under Section 144. The assessee filed a first appeal before the CIT(A), which was dismissed in limine due to a delay of 540 days in filing.
Held
The Tribunal condoned the delay of 540 days in filing the first appeal before the CIT(A), citing a liberal interpretation of 'sufficient cause' based on Supreme Court pronouncements. The matter was remitted back to the CIT(A) for a fresh adjudication on its merits.
Key Issues
Whether the delay in filing the first appeal before the CIT(A) was caused by a 'sufficient cause' warranting condonation, and if so, whether the appeal should be adjudicated on merits.
Sections Cited
147, 148, 142(1), 144, 249, 5
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Income Tax Appellate Tribunal, “C” BENCH MUMBAI
Before: SHRI SANDEEP GOSAIN & SHRI GIRISH AGRAWAL
Present for: Assessee : Ms. Rutuja N. Pawar and Ms. Sneha More, Advocates Revenue : Mr. Virabhadra S. Mahajan, Sr. DR (Virtually appeared) Date of Hearing : 30.09.2025 Date of Pronouncement : 13.10.2025 O R D E R
PER GIRISH AGRAWAL, ACCOUNTANT MEMBER:
This appeal filed by the assessee is against the order of Ld. CIT(A), National Faceless Appeal Centre (NFAC), Delhi, vide order no. ITBA/NFAC/S/250/2024-25/1071721122(1), dated 31.12.2024 passed against the assessment order by Income-tax Officer, Ward – 35(2)(5), Mumbai, u/s. 144 of the Income-tax Act, 1961 (hereinafter referred to as the “Act”), dated 28.12.2017 for Assessment Year 2010- 11.
Prince Jain AY 2010-11 2. Grounds taken by the assessee are reproduced as under: 1) That on the facts and in the circumstances of the case of the appellant and in law Ld. NFAC has failed to consider the ground of the appellant of non-production of reasons recorded u/s. 147 of the Act by the Assessing Officer. 2) That on the facts and in the circumstances of the case of the appellant and in law Ld. NFAC has erred in not following the principles laid down by Hon'ble Supreme Court in the case of M/s. GKN Driveshaft (India) Ltd. v/s Income Tax Officer and Ors 259 ITR 19 (SC). 3) That on the facts and in the circumstances of the case of the appellant and in law Ld. NFAC has erred in upholding the entire addition of Rs. 67,41,750/- on account of purchase of immovable property in the hands of the appellant being a co-owner. 4) That on the facts and in the circumstances of the case of the appellant and in law Ld. NFAC has erred in upholding the assessment order that fails to specify the section under which the erroneous addition is sustained. 5) That on the facts and in the circumstances of the case of the appellant and in law Ld. NFAC has failed to consider the housing loan sanctioned by IDBI bank of Rs. 56,85,000/- for purchase of the immovable property in question. 6) That on the facts and in the circumstances of the case of the appellant and in law Ld. NFAC has erred in ignoring the submission of the appellant on the ground of delay in filing the appeal. 7) That on the facts and in the circumstances of the case of the appellant and in law Ld. NFAC has failed to state the section under which the addition is considered that is amounting to Rs. 2,70,972/-. 8) That on the facts and in the circumstances of the case of the appellant and in law Ld. NFAC has failed in considering the TDS as the income of the appellant which in fact is reflected in Form No. 26AS. 9) That on the facts and in the circumstances of the case of the appellant and in law Ld. NFAC has erred in ignoring all the facts placed by the appellant and dismissed the appeal on the basis of delay which was due to a bona-fide mistake. 10) That the impugned order being contrary to law, evidence and facts of the case may kindly be set aside, amended and modified in the light of the grounds of appeal enumerated above and the appellant be granted such relief as is called for on the facts and in the circumstances of the case of the appellant and in law.
Prince Jain AY 2010-11 11) That each of the grounds of appeal enumerated above is without prejudice to and independent of one another. 12) That the appellant craves leave to reserve to himself the right to add, to alter or amend any of the grounds of appeal before or at the end of the hearing and to produce such further evidence, documents and papers as may be necessary.
3. Assessee has raised as many as 12 grounds in the present appeal, however, from the perusal of the order of the ld. CIT(A), we find that ground No.9 is relevant for our adjudication which deals with dismissal of appeal by the ld. CIT(A) on account of delay in filing the first appeal without explaining the sufficient cause for the said delay. From para-5.16 of the order of ld. CIT(A), we note that the first appeal was dismissed in limine as the delay in filing the appeal was not condoned. According to him, assessee had failed to give sufficient reason with material evidence for the delay of filing of appeal.
Brief facts of the case are that assessee had not filed the return of income for the year. Based on the information received, ld. Assessing Officer noted that assessee had purchased a property for a consideration of Rs. 67,41,750/-. This information led to the invocation of proceedings u/s. 147 for which notice u/s.148 was issued on 30.03.2017. There was no response by the assessee against the notice so issued. Further notices u/s.142(1) was issued which also remained non-complied. In view of non-compliance by the assessee, assessment was completed ex parte u/s.144 whereby total income was assessed at Rs. 70,12,732/- which included amount of Rs. 67,41,750/- towards purchase of house property and an amount of Rs. 2,70,972/- for amount reflected in Form 26AS. The ex parte order was passed on 28.12.2017. Assessee filed the first appeal in Form No.35, dated 16.07.2019. At Row No.14 in Form No.35, assessee submitted that there is no delay in filing the said appeal. However, in 4.1. Assessee moved an application before ld. Assessing Officer dated 21.06.2019, requesting for certified copy of assessment order passed u/s.144 along with notice of demand, copy of which is placed in appeal folder which bears acknowledgement stamped with date from the office of the ld. Assessing Officer. Assessee also sought inspection of the documents and the assessment folder vide letter dated 01.07.2019 and to obtain true copies of the assessment records. The said letter is also placed in the appeal folder with acknowledgement date stamp from the office of the ld. Assessing Officer.
4.2. From these submissions made before the ld. Assessing Officer post assessment, assessee claims that he was under an employment and during the previous year, i.e., 2010-11, he was sent abroad for overseas project. He continued to live in United States on H1B visa. It was only on 13.06.2019 that he came to know of his saving account with ICICI bank account vide 004801545732 was kept on lien by the Department, as there was a demand of Rs.43,55,500/- and a penalty of Rs.21,66,930/- by logging into the Income-tax website. Based on this information, he made all the required request before the ld. Assessing Officer for obtaining the copy of assessment order and notice of demand as well as assessment records. Upon receipt of copies of assessment orders and notice of demand, assessee took all the necessary actions for filing the first appeal which was made on 16.07.2019. Thus, assessee explained his bonafide for the delay caused in filing the first appeal but negated by ld. CIT(A) to dismiss the appeal in limine.
5. To address the issue in hand before us, we need to delve into the understanding of the expression “sufficient cause”. Sub-section 3 of Section 249 contemplates that the CIT(A) may admit an appeal after expiry of relevant period, if he is satisfied that there was a “sufficient cause” for not presenting it within that period. Similarly, it has been used in section 5 of Indian Limitation Act, 1963. Whenever interpretation and construction of this expression has fallen for consideration before Hon'ble High Court as well as before the Hon'ble Supreme Court, then, Hon'ble Court were unanimous in their conclusion that this expression is to be used liberally.
5.1. We may make reference to the following observations of the Hon'ble Supreme Court from the decision in the case of Collector Land Acquisition Vs. Mst. Katiji & Others, 1987 AIR 1353:
"1. Ordinarily a litigant does not stand to benefit by lodging an appeal late.
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 pragmatic manner.
4. When substantial justice and technical considerations are pitted against each other, 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.
There is no presumption that delay is occasioned deliberately, or on account of culpable negligence, or on account of mala fides. A litigant does not stand to benefit by resorting to delay. In fact he runs a serious risk.
Prince Jain AY 2010-11 6. It must be grasped that judiciary is respected not on account of its power to legalize injustice on technical grounds but because it is capable of removing injustice and is expected to do so."
5.2. Similarly, we would like to make reference to authoritative pronouncement of Hon'ble Supreme Court in the case of N. Balakrishnan Vs. M. Krishnamurthy (supra). It reads as under: "Rule of limitation are not meant to destroy the right of parties. They are meant to see that parties do not resort to dilatory tactics, but seek their remedy promptly. The object of providing a legal remedy is to repair the damage caused by reason of legal injury. Law of limitation fixes a life- span for such legal remedy for the redress of the legal injury so suffered. Time is precious and the wasted time would never revisit. During efflux of time newer causes would sprout up necessitating newer persons to seek legal remedy by approaching the courts. So a life span must be fixed for each remedy. Unending period for launching the remedy may lead to unending uncertainty and consequential anarchy. Law of limitation is thus founded on public policy. It is enshrined in the maxim Interest reipublicae up sit finis litium (it is for the general welfare that a period be putt to litigation). Rules of limitation are not meant to destroy the right of the parties. They are meant to see that parties do not resort to dilatory tactics but seek their remedy promptly. The idea is that every legal remedy must be kept alive for a legislatively fixed period of time. A court knows that refusal to condone delay would result foreclosing a suitor from putting forth his cause. There is no presumption that delay in approaching the court is always deliberate. This Court has held that the words "sufficient cause" under Section 5 of the Limitation Act should receive a liberal construction so as to advance substantial justice vide Shakuntala Devi lain Vs. Kuntal Kumari [AIR 1969 SC 575] and State of West Bengal Vs. The Administrator, Howrah Municipality [AIR 1972 SC 749]. It must be remembered that in every case of delay there can be some lapse on the part of the litigant concerned. That alone is not enough to turn down his plea and to shut the door against him. If the explanation does not smack of mala fides or it is not put forth as part of a dilatory strategy the court must show utmost consideration to the suitor. But when there is reasonable ground to think that the delay was occasioned by the party deliberately to gain time then the court should lean against acceptance of the explanation. While condoning delay the Could should not forget the opposite party altogether. It must be borne in mind that he is a looser and he too would have incurred quiet a large Prince Jain AY 2010-11 litigation expenses. It would be a salutary guideline that when courts condone the delay due to laches on the part of the applicant the court shall compensate the opposite party for his loss."
We do not deem it necessary to re-cite or recapitulate the proposition laid down in other decisions. It is suffice to say that the Hon'ble Courts are unanimous in their approach to propound that whenever the reasons assigned by an applicant for explaining the delay, then such reasons are to be construed with a justice oriented approach.
In light of the above, if we examine the facts, then it would reveal that there is a delay of 540 days in filing of the first appeal by the assessee before the ld. CIT(A). In his submissions as reproduced in the order of ld. CIT(A), assessee has explained the reasons which prevented it in filing the appeal withing the prescribed limitation. Therefore, for the just decision of the controversy, it is incumbent upon us to condone the delay. Considering the said explanation of the assessee, we condone the same.
Accordingly, in the given set of facts, by condoning the delay in filing the first appeal before ld. CIT(A), we remit the matter back to the file of ld. CIT(A) for meritorious adjudication of the grounds raised by the assessee at the first appellate stage by passing a speaking order. Needless to say, assessee be given reasonable opportunity of being heard and to make all the relevant submissions as required to substantiate the claim made by it.
Since, we have remitted the matter back to the file of ld. CIT(A) based on ground no.9, which is allowed, all other grounds are not
In the result, appeal of the assessee is partly allowed for statistical purposes.