ACIT CIRCLE-7, SIDDHNATH BHAWAN vs. DEEPAK KHANNA, JAIPUR

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ITA 111/JPR/2026Status: DisposedITAT Jaipur17 August 2026AY 2016-175 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal condoned the delay in filing the appeal, finding sufficient cause due to administrative procedures. It upheld the CIT(A)'s decision that the assessment order was infructuous because the underlying Section 263 order was quashed.

What were the facts?

The Revenue's appeal was filed with a delay of 142 days. The delay was attributed to administrative processing and obtaining approvals. The CIT(A) had previously held the consequential assessment order to be infructuous as the basis for it (an order under Section 263) was quashed by the ITAT.

What were the issues?

Whether the delay in filing the appeal by the Revenue is condonable. Whether the consequential assessment order is valid when the order passed under Section 263, which formed its basis, has been quashed.

Which sections of the Income-tax Act were involved?

Section 250,Section 143(3),Section 263

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, JAIPUR BENCHES, “A” BENCH, JAIPUR

Before: SMT. ANNAPURNA GUPTA & SHRI KULDIP SINGH

Hearing: 12.08.2026Pronounced: 17.08.2026

IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, “A” BENCH, JAIPUR BEFORE SMT. ANNAPURNA GUPTA, ACCOUNTANT MEMBER & SHRI KULDIP SINGH, JUDICIAL MEMBER ITA No.111/JPR/2026 (Assessment Year:2016-17)

ACIT Vs. Deepak Khanna Circle 7 F-198, Sitapura Industrieal Jaipur Area Jaipur �थायीलेखासं./जीआइआरसं./PAN/GIR No:AFXPK 5933 N Appellant .. Respondent

Appellant by : Sh. Anand Swaroop, CIT Respondent by : Sh. P.C. Parwal, CA

Date of Hearing 12.08.2026 Date of Pronouncement 17.08.2026 O R D E R Per Annapurna Gupta, Accountant Member: The present appeal has been filed by the Revenue, against the order passed by the National Faceless Appeal Centre (NFAC), Delhi (hereinafter referred to as “Ld. CIT(A)”),dated 03.11.2025under

2 ITA No. 111/JPR/2026 Deepak Khanna Section 250 of the Income Tax Act, 1961, (hereinafter referred to “Act”).

2.

This appeal by the Revenue is delayed for filing by142 days. The learned Departmental Representative submitted that the delay occurred due to administrative processing of the file, obtaining approvals from the competent authorities and movement of records through different official levels. It was contended that the delay was neither deliberate nor intentional but was occasioned by bona fide official procedures and that sufficient cause has been shown for not presenting the appeal within the prescribed period. 3. We have carefully considered the explanation offered by the Revenue and the material placed on record. 4. The law governing condonation of delay is now well settledthat the expression "sufficient cause" occurring in the Limitation Act should receive a liberal construction so as to advance substantial justice; that a liberal and justice-oriented approach should be adopted, the explanation must be bona fide, reasonable and free from negligence or lack of due diligence.Reference decision of the Hon’ble apex court in the case of Collector, Land Acquisition, Anantnag &Anr. v. Mst. Katiji&Ors.(1987) 167 ITR 471 (SC), N. Balakrishnan v. M. Krishnamurthy(1998) 7 SCC 123, 5. Applying the aforesaid principles to the facts of the present case, we find that the delay involved is of 142 days. The explanation furnished by the Revenue indicates that the delay occurred during the

3 ITA No. 111/JPR/2026 Deepak Khanna course of administrative processing and obtaining the requisite approvals. Nothing has been brought on record to suggest that the delay was deliberate, mala fide or attributable to gross negligence. Refusing to condone such a short delay would result in the matter being rejected at the threshold without adjudication on merits. 6. In State of Nagaland v. Lipok AO &Ors.(2005) 3 SCC 752, the Hon'ble Supreme Court recognised that governmental decision-making necessarily involves procedural formalities and movement of files through different departments. It was held that while the Government is not entitled to any special privilege, a pragmatic approach keeping in view the realities of governmental functioning is permissible while considering whether sufficient cause has been made out. 7. Having regard to the totality of the facts and respectfully following the ratio laid down by the Hon'ble Supreme Court in Collector, Land Acquisition, Anantnag v. Mst. Katiji (167 ITR 471), N. Balakrishnan v. M. Krishnamurthy (1998) 7 SCC 123, State of Nagaland v. Lipok AO (2005) 3 SCC 752, we are satisfied that the Revenue has established sufficient cause for the delay in filing the appeal. 8. Accordingly, the delay of 142 days in filing the present appeal is condoned. The appeal is admitted for adjudication on merits. Ordered accordingly. 9. Order of the Ld. CIT(A) reveals that the order was passed in appeal filed by the assessee against the order passed u/s 143(3) r.w.s.

4 ITA No. 111/JPR/2026 Deepak Khanna 263 of the Act dated 29th March 2022. Initially assessment u/s 143(3) of the Act was completed for the impugned year in the case of the assessee on 05.12.2018 accepting the income returned by the assessee to Rs.1,81,46,430/- .Subsequently the assessment was set aside by the Ld. PCIT Jaipur 02 exercising his power u/s 263 of the Act vide order dated 31.03.2021. The consequential order of the AO giving effect to the order of Ld. PCIT was passed by the AO assessing the total income of the assessee at Rs.8,09,95,696/-. 10. The assessee carried the matter in appeal before the Ld. CIT(A), whose attention was drawn to the fact that the assessee’s appeal against the order passed by Ld. PCIT u/s 263 of the Act was allowed by the ITAT vide its order dated 07.09.2022 in ITA No.19/JP/2021. Ld. CIT(A) accordingly held that since the order passed by the Ld. PCIT u/s 263 of the Act had been quashed, the basis of the present assessment proceedings did not survive and the assessment order passed accordingly had become infructuous. 11. Ld. DR before us, fairly submitted that the order passed u/s 263 of the Act had been rightly noted by the Ld. CIT(A) to have been quashed by the ITAT. He however, stated that the Department had filed an appeal against the order of the ITAT quashing the order passed by the Ld. PCIT u/s 263 of the Act. 12. Considering the above facts, we do not find any infirmity in the order of Ld. CIT(A) holding the consequential proceedings before the AO to be infructuous and without any basis since, the very basis for the

5 ITA No. 111/JPR/2026 Deepak Khanna same, being the order passed by the Ld. PCIT u/s 263 of the Act ,did not survive, having been quashed by the ITAT in the appeal filed by the assessee against the said order in ITA No.19/JP/2021 dated 07.09.2022. The appeal of the Revenue is found to be devoid of any merits and is accordingly dismissed. 13. In effect, the appeal of the Revenue is dismissed.

Order pronounced in the open court on 17.08.2026

Sd/- Sd/- (Kuldip Singh) (Annapurna Gupta) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated 17.08.2026 Mittali, Sr. PS Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT By Order, Asst. Registrar ITAT, Jaipur

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