SHRI JAMANLAL N GULATI HUF ,MUMBAI vs. ACIT, 20(2), MUMBAI

PER RAJ KUMAR CHAUHAN (J.M.): 1. This appeal is filed by the appellant/assessee against the order dated 16.07.2025 of National Faceless Appeal Centre (NFAC), Delhi[hereinafter referred to as the “CIT(A)”],passed under section 250 of the Income Tax Act, 1961 [hereinafter referred to as “the Act”] for the A.Y. 2013-14, wherein the appeal of the assessee was dismissedby the Ld. CIT(A) on the ground that the appeal wasbarred by limitation. Shri Jamanlal N Gulati HUF 2. The brief facts as culled out from the proceedings of authorities below are that the assessee is an HUF deriving income from business and income from other sources. The return of income for the assessment year under appeal was e-filed on 20.09.2013 showing total income at Rs 1,71,91,860/-. Statutory notice u/s 143(2) of the Act was issued on 02.09.2014 and served upon the assessee. Subsequently, a notice u/s 142(1) of the Act was issued and in response, the Chartered Accountant of the assessee filed the details and attended the assessment proceedings. In the assessment order, the AO made expenditure on account of telephone expenses of Rs. 7,661/-, Motor car expenses of Rs. 28,789/- and addition on account of disallowance claimed u/s 54F at Rs. 2,42,29,458/-, thus the total income assessed at Rs. 4,14,77,770/-. 3. Aggrieved by the order of AO, assessee preferred the appeal before Ld. Ld. CIT(A) who did not admit the appeal and dismissed the appeal of the assessee being barred by limitation. 4. Aggrieved by the said impugned order, the assessee is in appeal before us and has raised the following grounds of appeal:- 1. The orders passed by the learned lower authorities are bad in law and bad in facts. Shri Jamanlal N Gulati HUF 2. The learned Commissioner of Income Tax (Appeals) (for short CIT(A)) has grossly erred in holding that the appeal filed by the appellant on 26.04.2016 in physical Form 35 was not a valid filing of appeal and has further erred in dismissing the appeal as time barred. 3. The learned CIT (A) has grossly erred in holding that there was a delay of 125 days in filing of appeal in E- form 35 and - has further erred in not considering the explanation of the appellant, even through no objection was raised for filing of form 35 in physical form. 4. The assessment order passed by the Assessing Officer is ab initio void, inasmuch as, no notice u/s 143(2) of the I. T. Act, - 1961 was isued by the Juri ictional Assessing Officer competent to exercise juri iction in appellant's case in accordance with Board's Circular. 5. The Learned Assessing Officer has grossly erred in rejecting appellants’ claim of exemption u/s 54 F at Rs.2,42,49,458/-even though all the conditions prescribed vide the said section were duly satisfied. 6. The learned Assessing officer has grossly erred in disallowing exemption claimed u/s 54F of the I. T. Act, 1961, in respect of capital gain arising on transfer of immovable properties (Land) by holding that the appellant was owning multiple residential houses on the date of purchase of a " residential house" even though appellant never owned any residential house, the income where of, either notional or real was chargeable to tax under chapter IV C of the Act. Reasons assigned for the impunged disallowance are wrong and contrary to the provisions of law. 7. The learned Assessing Officer has grossly erred in not allowing credit for TDS at Rs.1, 10, 164/- No reason has been assigned for the same. 8. Having regard to the facts of the case, provisions of law & judicial proposition, impugned additions are wholly untenable in law. Shri Jamanlal N Gulati HUF 9. The appellant may please be permitted to raise any additional or alternative ground on or before the hearing of appeal for impugned disallowance. 5. We have heard Ld. AR and Ld. DR and examined the record. At the outset, Ld. AR submitted that the Ld. CIT(A) has wrongly dismissed the appeal as there was no delay in filing the appeal because the assessment order dated 22.03.2016 was communicated on 28.03.2016 and the assessee has filed the appeal in physical form on 26.04.2016 within the prescribed time limit of 30 days from the date of receipt of the assessment order dated 28.03.2016. It is therefore submitted that mandatory e-filing of the appeal before the Ld. CIT(A) was made necessary vide notification no. 11/2016 dated 01.03.2016 issued by the CBDT. It is further submitted that the CBDT vide its circular no. 11/2016 has extended the periodi.e. 01.03.2016 to 15.06.2016. It is further argued that since the appeal filed in physical form due to ignorance of mandatory e-filing of the appeal, as it was transition period for change of procedure, therefore there was no delay in filing the appeal and the filing of appeal in physical form in the given facts and circumstances should have been considered. It is further argued that once the assessee became aware of mandatory e-filing, he filed the same without wasting of time on 30.08.2016. Ld. AR further submitted that assessee was not aware of Shri Jamanlal N Gulati HUF the fate of the appeal as no communication was received and necessary receipt was issued on 26th April 2016 which has been filed in the form of proof as part of paper book. In these circumstances, Ld. AR sought time to file affidavit and paper book as per the provision of law. Ld. AR further relied on the decision of Coordinate Bench of Mumbai Tribunal in ITA No. 426/Mum/2018 order dated 16.05.2018 wherein similar issue of filing appeal in physical form has been decided in favour of the assessee and the delay in fling of appeal was condoned and appeal was ordered to be decided on merit. 6. On the other hand, Ld. DR has relied upon the order of the Ld. CIT(A) stating that there was no sufficient cause for condonation of delay and the order passed by Ld. CIT(A) is legally perfect. Therefore, Ld. DR requested for dismissal of the appeal filed by the assessee. 7. We have considered the rival submissions and perused the record. The contents of the affidavit of the assessee claiming condonation of delay are extracted below:- I Rajkumar Gulati s/o Shri Jamanlal Gulati aged about 67 years old, residing at Mumbai take oath and state on solemn affirmation as under: 01. I am Karta of Shri Jamanlal N. Gulati HUF of Mumbai, assessed to Income Tax vide PAN: AAAHJ3195F. Shri Jamanlal N Gulati HUF 02. Return of Income for the A.Y 2013-14 was filed by the HUF on 20.09.2013. 03. Assessment order u/s 143(3) of the I.T Act 1961, was passed on 22.03.2016 and served on 28.03.2016. 04. An appeal against the aforesaid order was filed on 26.04.2016 in manual form No-35 dated 25.04.2016. 05. I was not aware about the change of rules for filing appeal in faceless form at National Faceless Appeal Centre, so appeal came to be filed manually within 30 days time. 06. After filing of manual appeal, a notice dated 16.08.2017 bearing appeal No. IT- 200 was issued by the office of the CIT (A) 32 fixing the date of hearing on 23.08.2017. On 23.08.2017 hearing was adjourned to 30.08.2017. On 30.08.2017 due to very heavy rains on 29.08.2017 in Mumbai, none of the staff in the office of CIT (A) 32, Mumbai was available hence no further proceedings could take place. 07. Thereafter, no notice of hearing was received from learned CIT(A) 32 and matter was eventually transferred to National Faceless Appeal Centre without intimation to the appellant. 08. From the date of filing of appeal in manual form on 26.04.2016 till the date of fixing of the hearing on 23.08.2017 by the juri ictional CIT(A), no defect / mistake of any nature was communicated. The appellant in the meanwhile filed new Memorandum of Appeal in electronic form (faceless manner) on 30.08.2016 vide ACK No: 428762851300816 which has been disposed off vide impugned order. 09. A notice fixing the date of hearing on 05.06.2025 was issued by National Faceless Appeal Centre, At the request of the appellant, hearing was adjourned to 30.06.2025, when detailed submission were filed vide letter dated 30.06.2025. 10. Vide the aforesaid submissions, an explanation with regard to filing of appeal in manual form was also given. Shri Jamanlal N Gulati HUF 11. Delay in filing appeal in faceless manner is not attributable to deliberate default and I was always under an honest and Bonafide belief that filing appeal in manual form in time was sufficient compliance of statutory provisions. 8. Since no counter affidavit has been filed by the AO /revenue to contradict the contents of the affidavit, we have no reason to disbelieve the contents of the affidavit as the same has been considered as true. We have also considered the case of the Coordinate Bench of ITAT in ITA No. 426/Mum/2018, wherein on similar facts, identical issue has been decided by the Coordinate Bench in favour of the assessee. The relevant extracts of the said decision is reproduced below:-

“The Legislature has conferred the power to condone delay by enacting section 51 of the Limitation Act of 1963 in order to enable the courts to do substantial justice to parties by disposing of matters on de merits”. The expression “sufficient cause”
employed by the Legislature is adequately elastic to enable the courts to apply the law in a meaningful manner which subserves the ends of justice that being the life-purpose of the existence of the institution of courts. It is common knowledge that this court has Shri Jamanlal N Gulati HUF been making of justifiably liberal approach in matters instituted in this court. But the message does not appear to have percolated down to all the other courts in the hierarchy.
And such a liberal approach is adopted on principle as it is realized that:
1. Ordinarily, 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.”
10. It is to be noticed that Ld. CIT(A) has taken a hyper technical view while dismissing the appeal being barred by limitation and refused to admit the same on merit. Since it was the transition period of e-filing the appeal before the revenue authorities, therefore the physical form of filing the appeal need to be considered and more holistic view was required to be adopted by the concerned authorities. The reason for filing appeal in physical form as well as not in electronic form has been duly explained by filing the affidavit of the assessee. The Hon’ble Apex
Court in its various judgments has stressed that mere technicalities should not come in the way of doing substantial justice, emphasizing that substantive rights and justice should prevail over procedural defects, especially if they are curable.
Shri Jamanlal N Gulati HUF
11. Under these facts and circumstances, dismissal of the appeal as being barred by limitation resulted into miscarriage of justice and the assessee has sufficient cause for condonation of delay.For the above reasons, the impugned order of the Ld. CIT(A) is not sustainable in the eyes of law as resulted into miscarriage of justice. Accordingly, we set aside the impugned order and direct to admit the appeal and decide the same on merit. Therefore, werestore the case to the file of Ld. CIT(A) who shall dispose the same on merit after giving effective opportunity of hearing to the assessee. The appellant/assessee shall present its case before the Ld.
CIT(A) within 90 days of this order.
12. In the result, appeal filed by the assessee is allowed for statistical purposes.
Order pronounced in the open court on 23.09.2025 (OM PRAKASH KANT)
(RAJ KUMAR CHAUHAN)
(ACCOUNTANT MEMBER)
(JUDICIAL MEMBER)
Mumbai / Dated 23.09.2025
Dhananjay (Sr. PS)

Copy of the Order forwarded to:

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BY ORDER

(Asstt.