ALIBAG MACHIMAR SAHAKARI SOCIETY LTD,RAIGAD vs. INCOME TAX OFFICER WARD 3 PANVEL, PANVEL

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ITA 938/PUN/2026Status: DisposedITAT Pune31 July 2026AY 2013-145 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that substantial justice should be preferred over technical considerations, especially when the delay is not deliberate. The CIT(A)'s order was set aside, and the matter was remanded to condone the delay and decide the appeal on merits.

What were the facts?

The assessee, a fishermen's co-operative society, failed to file its income tax return for AY 2013-14. The AO made an ex-parte addition of Rs. 31,54,990/- as unexplained cash credits. The assessee's appeal before the CIT(A) was dismissed due to a 391-day delay.

What were the issues?

Whether the delay in filing the appeal before the CIT(A) should be condoned to decide the case on merits, considering the reasons provided by the assessee.

Which sections of the Income-tax Act were involved?

Section 69A,Section 147,Section 148,Section 142(1),Section 133(6),Section 144,Section 144B,Section 250,Section 249(3),Section 80P(2)(vii)

AI-generated summary — verify with the full judgment below

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

Before: SHRI RAMA KANTA PANDA & Ms. ASTHA CHANDRA

For Appellant: Shri Sushant N Alme
For Respondent: Shri Pawan Bharti

PER ASTHA CHANDRA, J.M.:

The appeal filed by the assessee is directed against the order dated 05-12-2025 of the Ld. Commissioner of Income Tax (Appeals), NFAC, Delhi [“CIT(A)/NFAC”], u/s. 250 of the Income Tax Act, 1961 (the “Act”), pertaining to Assessment Year (“AY”) 2013-14. 2. Although several grounds of appeal have been raised by the assessee, all these relate to an ex-parte order of the Ld.CIT(A)/NFAC whereby he has confirmed the addition of Rs. 31,54,990/- made by the Ld. Assessing Officer (“AO”) as unexplained cash credits u/s. 69Aof the Act.

3.

Briefly stated, the facts of the case are that the assessee is a Fishermen‟s Co-operative Society registered under Maharashtra State Co-operative Societies Act, 1960. The assessee is engaged mainly in the activity of buying and selling of fish products, and diesel to its members

2 required for fishing boats and other allied activities beneficial for business of the members. For AY. 2013-14, the assessee did not file its return of income. Based on the information available with the Department, it was found that the assessee had deposited cash of Rs. 31,54,990/- in its bank account maintained with Alibagh Co-operative Urban Bank Ltd., during the relevant AY. As no return was filed by the assessee, the source of such cash deposits remained unexplained pursuant to which the case of the assessee was reopened u/s. 147 of the Act by issuance of notice u/s. 148 of the Act on 09-05-2020. The assessee did not furnish its return in response to the notice u/s. 148 of the Act. Statutory notices issued u/s. 142(1) of the Act from time to time also remain un-complied by the assessee. The Ld.AO, therefore, after calling for information from the concerned bank u/s. 133(6) of the Act proceeded to complete the assessment ex-parte u/s. 144 of the Act, assessing the total income of the assessee at Rs. 31,54,990/- thereby making the addition of the said cash deposit of Rs. 31,54,990/- as unexplained credit u/s. 69A of the Act, vide his order dt. 09-03-2022 passed u/s. 147 r.w.s. 144 r.w.s. 144B of the Act.

4.

Aggrieved, the assessee filed an appeal before the Ld. CIT(A)/NFAC. Before the Ld. CIT(A)/NFAC the appeal was filed with a delay of 391 days. Since, according to the Ld.CIT(A)/NFAC, 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.

5.

The Ld.AR submitted that the delay in filing of the appeal was not intentional, but occurred due to bonafide reasons beyond the control of the assessee. He referred to the affidavit of the Secretary of the Society filed

3 along with application for condonation of delay before the Ld.CIT(A)/NFAC stating therein the reasons for such delay which are as under:

“3. I further state and declare that the affairs of the Society are managed by the elected Committee Members, who are themselves directly engaged in deep-sea fishing activities. As such, these members are frequently on sea voyages for continuous periods of 6-7 days for fishing operations. Further, the Committee Members, who are mostly illiterate and serve in an honorary capacity, are not involved in the day-to-day administration of the Society. The routine affairs and daily operations of the Society are therefore carried out by the Secretary along with 2-3 clerical staff members who are not conversant with tax compliances.

4.

I further state and declare that the income of the Society is fully exempt under Section 80P(2) (vii) of the Income Tax Act, and therefore, the Society had not engaged the services of a Chartered Accountant for handling its taxation matters. Upon receipt of the Assessment Order, the Society initiated efforts to engage a Chartered Accountant/Advocate experienced in handling appellate proceedings under the Income Tax Act. It is respectfully submitted that Alibaug is a small town, and identifying a competent professional with expertise in appellate taxation matters proved to be a difficult and time-consuming process. Consequently, there was an unintentional delay of 391 days in filing the Quantum Appeal and a delay of 188 days in filing the Penalty Appeal before the Commissioner of Income Tax (Appeals).”

5.1.

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)/ NFAC 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)/NFAC.

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 ex-parte u/s. 147 r.w.s. 144 of the Act at an assessed income of Rs. 31,54,990/- thereby making an addition of the said amount to the total income of the assessee, treating the same as unexplained cash credits u/s. 69A of the Act. The Ld.CIT(A)/NFAC 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. Before us, the Ld. Counsel for the assessee has submitted that the delay in filing of the appeal was not 4 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)/NFAC 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 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)/NFAC and make its submissions on the appointed date without seeking any adjournment under any pretext, unless required for the sufficient cause, failing which the Ld.CIT(A)/NFAC shall be at liberty to pass appropriate order as per law. We hold and direct accordingly. The 5 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 31-07-2026 (RAMA KANTA PANDA) (ASTHA CHANDRA) VICE PRESIDENT JUDICIAL MEMBER Tadepalli Naga पुणे/Pune; Naga Murali Mohan Murali Mohan Date: 2026.08.03 10:42:09 दिन ांक/Dated : 31-07-2026 +05'30' TNMM

आदेश की प्रतितिति अग्रेतिि/Copy of the Order is forwarded to: 1. अपील र्थी / The Appellant 2. प्रत्यर्थी / The Respondent

3.

The concerned Pr.CIT, Pune

4.

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

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