VINEET SETH,BENGALURU vs. DCIT, CIRCLE-7(1)(1), BANGALORE

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ITA 2556/BANG/2025Status: DisposedITAT Bangalore07 September 2026AY 2018-198 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal condoned the delay of 308 days, citing sufficient cause and the principle of substantial justice over technicalities. The case was remitted back to the CIT(A) to decide the appeal on merits.

What were the facts?

The assessee filed an appeal before the CIT(A) with a delay of 308 days. The CIT(A) dismissed the appeal without condoning the delay. The assessee contended that the delay was due to circumstances including the COVID-19 pandemic and seeking rectification.

What were the issues?

Whether the delay in filing the appeal before the CIT(A) was sufficiently explained and should be condoned. Whether the additions made under Section 143(1) were valid.

Which sections of the Income-tax Act were involved?

Section 143(1),Section 250,Section 154,Section 36(1)(va),Section 43B,Section 37(1),Section 155BBE,Section 234B,Section 234C

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “B’’BENCH: BANGALORE

Before: SHRI BALAKRISHNAN S. & SHRI KESHAV DUBEY

Hearing: 23.06.2026Pronounced: 07.09.2026

PER KESHAV DUBEY, JUDICIAL MEMBER:

This appeal at the instance of the assessee is directed against the order of the ld. Addl/JCIT(A)-1, Chennai dated 15.10.2025 vide DIN & Order No. ITBA/APL/S/250/2025-26/1081765197(1) passed u/s 250 of the Income Tax Act, 1961 (in short “the Act”) for the assessment year 2018-19.

2.

The assessee has raised the following grounds of appeal:- 1. The orders of the authorities below in so far as they are against the appellant are opposed to law, equity, weight of evidence, probabilities, facts and circumstances of the case.

2.

The learned Addl/Joint Commissioner of Income tax [Appeals] - 1, CHENNAI is not justified in refusing to condone the delay in filing the appeal without appreciating that the delay in filing

ITA No.2556/Bang/2025 Sri Vineet Seth, Bengaluru Page 2 of 8 the appeal was due to sufficient cause under the facts and in the circumstances of the appellant's case.

3.

The learned Addl/Joint Commissioner of Income-tax [Appeals]-l, Chennai is not justified in upholding the determination of total income of appellant in the Intimation u/s. 143[1] of the Act, at Rs. 78,56,890/- as against the returned income of Rs. 42,57,010/- and thereby making a disallowance of Rs. 20,15,145/- u/s.36[1][va] of the Act, relying upon the erroneous details in the Audit Report of the Chartered Accountant and making an addition of Rs. 15,84,732/- as "Income chargeable to tax at special rate u/s 155BBE", under the facts and in the circumstances of the appellant's case. 4. The learned Addl/Joint Commissioner of Income- tax[Appeals] — I , Chennai ought to have appreciated that there was no disallowance u/s 36(1)(va) of the Act indicated in the Tax Audit Report as mere details of the payments made were set-out and therefore, the impugned addition made u/s. 143[1] of the Act is outside the scope of the adjustments capable of being made u/s 143(1)(a)(v) of the Act and therefore, the same deserves to be deleted.

5.

The learned Addl/Joint Commissioner of Income tax [Appeals] — 1, Chennai failed to appreciate that the due date for making payment of the employee's contribution, would fall in the month, following the actual disbursal of the salary and the due date as per the Provident fund Act, was not the 15thday, of each calendar month as indicated in the audit report and therefore, the addition made was misconceived, under the facts and in the circumstances of the case. 6. The learned Addl/Joint Commissioner of Income tax [Appeals] — 1, Chennai failed to appreciate that the intimation issued by the learned Assessing Officer under section 143[1] of the Act was bad in law, since the adjustment made was beyond the scope of the act, under the facts and in the circumstances of the case. 7. The learned Addl/Joint Commissioner of Income tax [Appeals] — 1, Chennai ought to have appreciated that the disallowance of Rs. 20,15,145/- made u/s.36(1)(va) of the Act comprised of the reported belated payment of the Employer's share of PF and ESI to the extent of Rs. 10,65,472/-, which was allowable in terms of section 43B of the Act since the same has been paid before the of the financial year or before the due date for filing the return of income and hence, the disallowance to the extent of Rs. 10,65,472/- deserves to be deleted.

ITA No.2556/Bang/2025 Sri Vineet Seth, Bengaluru Page 3 of 8 8. The learned Addl/Joint Commissioner of Income tax [Appeals] — 1, Chennai ought to have appreciated that the aforesaid disallowance of Rs. 20,15,145/- comprised of the reported administrative charges paid to PF authorities to the extent of Rs. 72,281/-, which was allowable in terms of section 37[1] of the Act and hence, the disallowance to the extent of Rs 72,281/- deserves to be deleted. 9. The learned Addl/Joint Commissioner of Income tax [Appeals] — 1, Chennai ought to have appreciated that the appellant had already declared income received on PF withdrawal of Rs. 15,84,732/- and tax of Rs. 1,58,473/- also been deducted on the same. The appellant had accordingly disclosed the same in his return and claimed the tax credits. Thus, the double addition of Rs.15,84,732/- made to the income of the appellant in the intimation u/s 143(1) is unwarranted and deserves to be deleted.

10.

Without prejudice to the right to seek waiver with the Hon'ble CCIT/DG, the appellant denies itself liable to be charged to interest u/s. 234B and 234C of the Act, as computed in the intimation u/s. 143[1] of the Act, which under the facts and in the circumstances of the appellant's case deserves to be cancelled.

11.

For the above and other grounds that may be urged at the time of hearing of the appeal, your appellant humbly prays that the appeal may be allowed and Justice rendered and the appellant may be awarded costs in prosecuting the appeal and also order for the refund of the institution fees as part of the costs.

3.

At the outset, the ld. AR of the assessee Sri V. Narendra Sharma, Advocate drew our attention to the order of the ld. Addl/JCIT(A) dated 15/10/2025 and vehemently submitted that the ld. Addl/JCIT(A) dismissed the appeal of the assessee solely by not condoning the delay of 308 days in filing the appeal by stating that the assessee had not taken care to demonstrate the genuine reason.

3.1 Before us, the ld. AR of the assessee submitted that the intimation passed u/s 143(1) of the Act dated 3.2.2020 was served on the assessee through e-mail on 3.2.2020 and the appeal against

ITA No.2556/Bang/2025 Sri Vineet Seth, Bengaluru Page 4 of 8 the said intimation ought to have been filed on or before 5.3.2020. Further, it is submitted that soon after the receipt of the intimation u/s 143(1) of the Act, the assessee was advised to file a rectification petition u/s 154 of the Act and accordingly, the same was filed on 30.08.2020. The assessee again on 22.12.2020 received another intimation u/s 143(1) of the Act dated 03.02.2020 and thereafter the assessee immediately forwarded it to his counsel M/s. S. Venkatesan & Co., CA for further instructions in the matter. The assessee’s counsel after going through the above intimation u/s 143(1) of the Act advised the assessee to file an appeal immediately by seeking condonation of delay in filing the appeal since the period of 30 days had already expired. Thereafter, the appeal was filed immediately before the ld. Addl/JCIT(A). Hence, the ld. A.R. of the assessee contended that the delay was not intentional or deliberate and arose due to the aforementioned circumstances and accordingly prayed to condone the delay & admit the appeal for adjudication on merits.

3.2 The ld. D.R. on the other hand, vehemently submitted that the reason cited for condonation of delay is not at all a sufficient cause as rightly held by the ld. Addl/JCIT(A). Further, the ld. DR submitted that the delay of 308 days was only for the utter negligence on the part of the assessee & accordingly prayed that the delay before the ld. Addl/JCIT(A) may not be condoned.

4.

We have heard the rival submissions and perused the materials available on record on condonation of delay. The contention of the AR of the assessee is that the assessee was engaged in the business of providing security services, which is an essential service during the Covid-19 pandemic as a result of which, he had to face a lot of pressure and challenges in securing

ITA No.2556/Bang/2025 Sri Vineet Seth, Bengaluru Page 5 of 8 manpower etc., for running his business. Further, it is submitted that soon after the receipt of the intimation u/s 143(1) of the Act, the assessee was advised to file a rectification petition u/s 154 of the Act and accordingly, the same was filed on 30.08.2020. The assessee again on 22.12.2020 received another intimation u/s 143(1) of the Act dated 03.02.2020 and thereafter the assessee immediately forwarded it to his counsel M/s. S. Venkatesan & Co., CA for further instructions in the matter. The assessee’s counsel after going through the above intimation u/s 143(1) of the Act advised the assessee to file an appeal immediately by seeking condonation of delay in filing the appeal since the period of 30 days had already expired. Thereafter, the appeal was filed immediately before the ld. Addl/JCIT(A). Therefore, in our opinion, considering the covid-19 pandemic lockdown through the country as well as explanation offered, the assessee has demonstrated the sufficient cause for filing the appeal belatedly by 308 days before the ld. Addl/JCIT(A).

4.1 While considering a similar issue the Apex Court in the case of Collector, Land Acquisition v. Mst. Katiji and Ors. (167 ITR 471) laid down six principles. For the purpose of convenience, the principles laid down by the Apex Court are reproduced hereunder: (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 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?

ITA No.2556/Bang/2025 Sri Vineet Seth, Bengaluru Page 6 of 8 The doctrine must be applied in a rational, commonsense and pragmatic manner. (4) When substantial justice and technical consideration 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 nondeliberate delay. (5) 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. (6) It must be grasped that the judiciary is respected not on account of its power to legalise injustice on technical grounds but because it is capable of removing injustice and is expected to do so.

4.2 When substantial justice and technical consideration are pitted against each other, the cause of substantial justice deserves to be preferred, for the other side cannot claim to have vested right for injustice being done because of non deliberate delay. Therefore, we have to prefer substantial justice rather than technicality in deciding the issue. As observed by Apex Court, if the application of the assessee for condoning the delay is rejected, it would amount to legalize injustice on technical ground when the Tribunal is capable of removing injustice and to do justice. Therefore, this Tribunal is bound to remove the injustice by condoning the delay on technicalities. If the delay is not condoned, it would amount to legalizing an illegal order which would result in unjust enrichment on the part of the State by retaining the tax relatable thereto. Under the scheme of Constitution, the Government cannot retain even a single pie of the individual citizen as tax, when it is not authorized by an authority of law. Therefore, if we refuse to condone the delay, that would amount to legalize an illegal and unconstitutional order passed by the lower authority.

ITA No.2556/Bang/2025 Sri Vineet Seth, Bengaluru Page 7 of 8

4.3 Further, in the case of People Education & Economic Development Society Vs/ ITO reported in 100 ITD 87 (TM) (Chen), wherein 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”.

4.4 The next question may arise whether delay was excessive or inordinate. There is no question of any excessive or inordinate when the reason stated by the assessee was a reasonable cause for not filing the appeal. We have to see the cause for the delay. When there was a reasonable cause, the period of delay may not be relevant factor. In fact, the Madras High Court in the case of CIT vs. K.S.P. Shanmugavel Nadai and Ors. (153 ITR 596) considered the condonation of delay and held that there was sufficient and reasonable cause on the part of the assessee for not filing the appeal within the period of limitation. Accordingly, the Madras High Court condoned nearly 21 years of delay in filing the appeal. When compared to 21 years, 308 days cannot be considered to be inordinate or excessive. Furthermore, the Chennai Tribunal by majority opinion in the case of People Education and Economic Development Society (PEEDS) v. ITO (100 ITD 87) (Chennai) (TM) condoned more than six hundred days delay. Therefore, in our opinion, by preferring the substantial justice, the delay of 308 days for the AY 2018-19 has to be condoned and accordingly we condone the delay in filing the appeal before the ld. Addl/JCIT(A) and admit the appeal for adjudication for the year under consideration.

5.

Now having condoned the delay, we are of the considered opinion that as the ld. Addl/JCIT(A) did not consider on merits of

ITA No.2556/Bang/2025 Sri Vineet Seth, Bengaluru Page 8 of 8 the case at all & dismissed as barred by limitation, we deem it fit & proper to remit the entire issue in dispute to the file of ld. Addl/JCIT(A) to decide a fresh on the merits of the case in accordance with law. Needless to say, a reasonable opportunity of being heard must be granted to the assessee. It is ordered accordingly.

6.

In the result, the appeal filed by the assessee is partly allowed for statistical purposes.

Order pronounced in the open court on 7th Sept, 2026

Sd/- Sd/- (Balakrishnan S.) (Keshav Dubey) Accountant Member Judicial Member

Bangalore, Dated 7th Sept, 2026. VG/SPS

Copy to:

1.

The Applicant 2. The Respondent 3. The CIT 4. The DR, ITAT, Bangalore. 5 Guard file By order

Asst. Registrar, ITAT, Bangalore.

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