MUKADAM BUILDERS AND DEVELOPERS,RATNAGIRI vs. THE DCIT CIRCLE 1, KOLHAPUR

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ITA 1819/PUN/2026Status: DisposedITAT Pune06 August 2026AY 2019-205 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that the delay in filing the appeal was not intentional and was caused by floods and the COVID-19 pandemic. Citing Supreme Court judgments, the Tribunal directed the CIT(A) to condone the delay and decide the appeal on merits.

What were the facts?

Following a survey, the assessee offered additional income of Rs. 73,70,500/- due to a difference in closing work in progress. The Assessing Officer made an addition of this amount. The assessee's appeal before the CIT(A) was dismissed due to a delay of 494 days.

What were the issues?

Whether the delay in filing the appeal before the CIT(A) should be condoned due to reasons beyond the assessee's control. Whether the addition made by the AO on account of work in progress difference is justified.

Which sections of the Income-tax Act were involved?

Section 249(3),Section 143(3),Section 68

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, PUNE BENCH “B”, PUNE

Before: Ms. ASTHA CHANDRA & SHRI DR. DIPAK P. RIPOTE

For Appellant: CA Anup Shaha
For Respondent: Ms. Bhavya I.V. Jt.CIT

PER ASTHA CHANDRA, J.M.:

The appeal filed by the assessee is directed against the order dated 10-02-2026 of the Ld. Commissioner of Income Tax (Appeals), Pune-11 [“CIT(A)”], u/s. 250 of the Income Tax Act, 1961 (the “Act”), pertaining to Assessment Year (“AY”) 2019-20. 2. Briefly stated, the facts of the case are that the assessee is a partnership firm having two partners and engaged in the business of Builders and Developers. Consequent to the survey action conducted in the business premises of the assessee on 07-02-2019, it was found that there was difference in closing work in progress of Rs. 73,70,500/-. The assessee was asked to clarify the reasons for the said difference, in response to which one of the partners of the assessee submitted that the difference in closing work in progress will be admitted as unaccounted income over and above the regular income for relevant AY. 2019-20 and the assessee will pay the tax on that additional income. Subsequently, the 2 case of the assessee was selected for scrutiny under compulsory category. Accordingly, statutory notices u/s. 143(2) and 142(1) of the Act as well as show cause notice were issued and served upon the assessee. The assessee was asked to produce full details of flats sold and expenditure made during the two months i.e. after survey was conducted and the item- wise breakup for the additional income offered to tax of Rs. 73,70,500/-. However, the assessee failed to produce any documentary evidence and, therefore, the Ld. Assessing Officer (“AO”) completed the assessment on the basis of details/documents available on record, u/s. 143(3) of the Act, vide his order dt. 23-09-2021 at the assessed income of Rs. 1,69,27,650/- by making an addition of Rs. 73,70,500/- to the income of Rs. 95,57,150/- returned by the assessee.

3.

Aggrieved, the assessee filed an appeal before the Ld. CIT(A). Before the Ld. CIT(A) the appeal was filed with a delay of 494 days. Since, according to the Ld.CIT(A), the assessee failed to provide any sufficient cause as per the provisions of section 249(3) of the Act for delay in filing of the appeal, he dismissed the appeal of the assessee without deciding the issue on merits.

4.

Dissatisfied, the assessee is in appeal before the Tribunal raising the following Grounds of Appeal:

“1. On the facts and circumstances of the case and in law, the Ld. CIT(A) held that the delay in filing appeal cannot be condoned. The appellant prays that the delay be condoned and appeal should be taken up for hearing.

2.

On facts and circumstances of the case, it be held that addition under section 68 made by the Ld. AO is erroneous and is made without appreciating the working made by the appellant. The addition so made be deleted and just and proper relief be given to the appellant.

3.

The appellant craves to add, amend, alter or leave any of the above grounds of appeal.”

3

5.

The Ld.AR submitted that the delay in filing of the appeal was not intentional, but occurred due to the reasons beyond the control of the assessee. The delay occurred due to floods and Covid-19 pandemic. The Ld.AR placed the affidavit of the one of the partners of the assessee firm on record, stating therein the reasons for such delay which are as under:

“5. That the reasons for the delay are set out hereunder: (a) That the place of business of the Appellant at Khed, Ratnagiri, was affected by corona pandemic and floods as a consequence of which the books of account, vouchers, and connected records of the firm relevant to the assessment proceedings were destroyed. (b) That on account of the said calamity, the Appellant was constrained to reconstruct and collate the relevant records and documents from various third-party sources, namely which process consumed considerable time and effort. (c) That the aforesaid period also coincided with the disruption, and hardship caused by the outbreak of the COVID-19 pandemic and the restrictions consequent thereto, which further impeded the Appellant's ability to assemble the records and obtain professional assistance for institution of the appeal.”

5.1.

The Ld.AR also filed news report dt. 23-07-2021 from PIB for floods in Khed towns of Ratnagiri Dist. Maharashtra during the relevant period in support of his above contention. The Ld. AR further submitted that the assessee has a strong case on merits and therefore humbly urged that, in the interest of justice, the Ld. CIT(A) may be directed to condone the delay in filing of the appeal and decide the case on merits, after affording due opportunity of hearing to the assessee.

6.

The Ld.DR supported the order of the Ld.AO and Ld.CIT(A).

7.

We have heard the Ld. Representatives of the Parties and perused the material available on record. We find that the Ld.AO has completed the assessment u/s. 143(3) of the Act at an assessed income of Rs. 1,69,27,650/-thereby making an addition to the income of the assessee, of Rs. 73,70,500/-on account of difference in closing work in progress. The Ld.CIT(A) has dismissed the appeal of the assessee in limine on account of delay in filing of the appeal without dealing with the issue on merits.

4 Before us, the Ld. Counsel for the assessee has submitted that the delay in filing of the appeal was not intentional, but occurred due to the reasons stated above and humbly prayed for condonation of delay and adjudication on merits of the case.

8.

We find the Hon'ble Supreme Court in the case of Collector, Land Acquisition vs. Mst. Katiji & Ors. reported in 167 ITR 471 (SC) has held that 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. 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.

9.

We find recently the Hon'ble Supreme Court in the case of Inder has held as under:

"

14.

There can be no quarrel on the settled principle of law that delay cannot be condoned without sufficient cause, but a major aspect which has to be kept in mind is that, if in a particular case, the merits have to be examined, it should not be scuttled merely on the basis of limitation."

10.

In the light of the decision(s) of the Hon'ble Supreme Court (supra), we hereby set aside the impugned order of the Ld.CIT(A) and restore the matter back to his file with a direction to condone the delay in filing of the appeal before him by the assessee and decide the appeal on merits and as per fact and law after giving due opportunity of being heard to the parties. Needless to say, the assessee shall comply with the notices issued by the Ld.CIT(A) and make its submissions on the appointed date without seeking

5 any adjournment under any pretext, unless required for the sufficient cause, failing which the Ld.CIT(A) shall be at liberty to pass appropriate order as per law. We hold and direct accordingly. The grounds raised by the assessee are accordingly allowed for statistical purposes.

11.

In the result, the appeal of the assessee is treated as allowed for statistical purposes.

Order pronounced in the open Court on 06-08-2026 (DR. DIPAK P. RIPOTE) (ASTHA CHANDRA) ACCOUNTANT MEMBER JUDICIAL MEMBER Tadepalli Naga पुणे/Pune; Naga Murali Mohan Murali Mohan Date: 2026.08.07 10:43:44 +05'30' दिन ांक/Dated : 06-08-2026 TNMM

आदेश की प्रतितिति अग्रेतिि/Copy of the Order is forwarded to: l. अपील र्थी / The Appellant 2. प्रत्यर्थी / The Respondent

3.

The concerned Pr.CIT, Pune

4.

DR, ITAT, „B‟ Bench, Pune 5. ग र्ड फ ईल / Guard file. आदेशानुसार/ BY ORDER, ////

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