DRILLCON (RAJ) PRIVATE LIMITED,UDAIPUR vs. ACIT CIRCLE-1 UDAIPUR, UDAIPUR

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ITA 798/JODH/2025Status: DisposedITAT Jodhpur29 July 2026AY 2014-159 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal condoned the delay in filing the appeal before the CIT(A) due to sufficient cause. The impugned order of the CIT(A) was set aside, and the matter was restored to the CIT(A) for fresh adjudication on merits.

What were the facts?

The assessee's appeal before the CIT(A) was dismissed due to a delay of 5 years and 5 months. The delay was attributed to the death of a key director, subsequent financial and personal difficulties faced by his son who took over, and the COVID-19 pandemic.

What were the issues?

Whether the delay in filing the appeal before the CIT(A) was sufficiently explained and should be condoned. Whether the CIT(A) erred in dismissing the appeal without adjudicating on merits.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 5

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, JODHPUR BENCH, JODHPUR

For Appellant: Shri Ramit Sharma Advocate
For Respondent: Shri Anil Kumar Bhardwaj, CIT

IN THE INCOME TAX APPELLATE TRIBUNAL JODHPUR BENCH, JODHPUR BEFORE DR. MITHA LAL MEENA, HON’BLE ACCOUNTANT MEMBER AND SHRI SUDHIR PAREEK, HON’BLE JUDICIAL MEMBER ITA No. 798/Jodh/2025 (Assessment Year – 2014-15) Drillcon (Raj) Pvt. Ltd. ACIT Circle -1 Udaipur 12A, Opp. IG residence Ambamata Scheme, Udaipur PAN No. AAACD5241R Assessee by Shri Ramit Sharma Advocate (Virtually) Revenue by Shri Anil Kumar Bhardwaj, CIT (Virtual) Date of Hearing 28 / 04 / 2026. Date of Pronouncement 29 / 07 / 2026. ORDER PER: SUDHIR PAREEK, J.M. The aforetitled appeal has been preferred by the assessee/appellant against the order dated 27.05.2025 u/s 143(3) of the Income Tax Act, 1961 (in short referred as ‘the Act’) passed by National Faceless Appeal Centre (NFAC) [for the sake of convenience, hereinafter referred to as CIT(A)] by which appeal filed by the assessee was dismissed.

2.

Facts of the case in chronological manner may be summarised as that the assessee/appellant, a private limited company engaged in dealing of

2 ITA No. 798/Jodh/2025 Asst. Year: 2014-15 Earth Movers, construction, heavy and commercial vehicles and filed its income tax return for the assessment year 2014-15 on 16 December 2016 declaring loss of Rs. 2,39,63,176/- and the assessment was completed under Section 143(3) of the Act was completed on 16 December 2016 at assessed loss of Rs. 1,64,81,705/- by making addition of Rs. 74,81,471/-.

3.

Heard rival submissions and carefully scanned the material available on record.

4.

Reiterating the grounds of appeal, the Ld. AR expressed grievance that the Ld. CIT(A) erroneously denied the admission of his appeal and dismissed the same on condonation of delay by ignoring the sufficient material and evidences on record, being the strong case on merit as well as on legal.

5.

The Ld. AR further submitted that the Ld. CIT(A) dismissed the appeal on the reason of limitation but actually there was no delay if existing facts are being considered, that the reason of late filing was that as the assessee is a company having director namely Late Sh. Praful Mehta, who was the main key person and looking all the matters of the company,

3 ITA No. 798/Jodh/2025 Asst. Year: 2014-15 but unfortunately suddenly expired due to heart arrest on dt.10.05.2013. The other director was Smt. Sadhna Mehta, wife of Late Sh. Praful Mehta but not having much knowledge about the day to day affairs of the company. After the death of director Sh. Praful Mehta there was gradual business closure and losses in the company. After his death, his son namely Sh. Vikram Mehta started looking in the daily affairs of the company. As Sh. Vikram Mehta Got married on dt. 09.12.2012, but unfortunately due to these financial problems, marital issues started between him and his wife from February 2014 and ultimately got divorce on dt. 09.10.2015. As due to loss in the company assessee had to take the loan from market as well as from the Banks and when there was continues loss in the company the staff has also left the company and assessee could not pay them their outstanding payment and also could not pay the unsecured loans and bank loans. Due to this its accounts have become NPA on 31.12.2014 and banks auctioned all the properties Sep. 2015, and the other private parties and employees has also filed various case against the Company or its directors. The residential house also been taken in possession by the bank and later on sold off. So, the directors had disposed from their home/house.

4 ITA No. 798/Jodh/2025 Asst. Year: 2014-15 Employee had also filed the case for gratuities etc. The cases of sales tax were also running. Due to these so many mishappening with Sh. Vikram Mehta and directors could not gave attention to the business and they were in great tension and puzzled. That due to these stressful situation, Sh. Vikram Mehta has also become heavily influenced under intoxication due to alcohol and his health became seriously ill and was later admitted to the emergency in RNT hospital on 29.01.2018 due to seizure. And found it difficult to came out from these miss-happenings for last so many years.

6.

It is also submitted that in support of submission as mentioned hereinbefore, the assessee/appellant furnished relevant documents which was ignored by the first appellate authority. It is also submitted that thereafter the COVID-19 Pandemic was started from March 2020 to March 2022 worldwide and also countrywide where the Hon’ble Supreme Court has extended the due date of appeal filing and many other matters. That after getting some normal life from the above so mishappening and incidents, started to see all the pending matters and case and has come to know that there was also assessment and penalty orders have been passed

5 ITA No. 798/Jodh/2025 Asst. Year: 2014-15 against the assessee's company for A.Y. 2014-15 and to collect the information's and papers of the same.

7.

The Ld. AR further submitted that the Hon’ble Supreme Court in the case of Collector, Land and Acquisition V. Mst. Katiji and Others (1987) 167 ITR 471 (SC) led down the principle that very liberal approach while considering a case for condonation of delay must be adopted as the legislature has conferred the power to condone delay by enacting section 5 of the Limitation Act 1963 in order to enable the courts to do substantial justice to parties by disposing of matters on '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 been making a 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."

6 ITA No. 798/Jodh/2025 Asst. Year: 2014-15 8. Per contra, the Ld. DR relied upon the impugned order passed by the Ld. CIT(A).

9.

The Ld. AR submitted that the Director namely Late Shri Praful Mehta, who was the main key person and looking all the matters of the company, but unfortunately suddenly expired due to heart arrest on dated 10.05.2013 and after his death his son Shri Vikram Mehta started looking after and managing all the responsibilities of day today affairs of the company. As Sh. Vikram Mehta Got married on dt. 09.12.2012, but unfortunately due to these financial problems, marital issues started between him and his wife from February 2014 and ultimately got divorce on dt. 09.10.2015. As due to loss in the company assessee had to take the loan from market as well as from the Banks and when there was continues loss in the company the staff has also left the company and assessee could not pay them their outstanding payment and also could not pay the unsecured loans and bank loans. Due to this its accounts have become NPA on 31.12.2014 and banks auctioned all the properties Sep. 2015, and the other private parties and employees has also filed various case against the Company or its directors. The residential house also been taken in

7 ITA No. 798/Jodh/2025 Asst. Year: 2014-15 possession by the bank and later on sold off. So, the directors had disposed from their home/house. Employee had also filed the case for gratuities etc. The cases of sales tax were also running. Due to these so many mishappening with Sh. Vikram Mehta and directors could not gave attention to the business and they were in great tension and puzzled. That due to these stressful situation, Sh. Vikram Mehta has also become heavily influenced under intoxication due to alcohol and his health became seriously ill and was later admitted to the emergency in RNT hospital on 29.01.2018 due to seizure. And found it difficult to came out from these miss-happenings for last so many years.

10.

The AR also submitted that the appeal against the order under Section 271(1)(C), the coordinate bench of this tribunal, vide order in ITA No. 430/Jodh/2025 dated 20 August 2025 allowed the delay of condonation and sent the matter back to the fild of Ld. CIT(A) for fresh adjudication and for deciding on merits.

11.

After hearing the rival submissions and carefully scanned the material available on record it is noted that the appeal preferred by the

8 ITA No. 798/Jodh/2025 Asst. Year: 2014-15 assessee/appellant before the Ld. CIT(A) was delayed by 5 years and 5 months and reason for such delay has been explained by way of notorized affidavit dated 20 June 2026, wherein it has been stated that the Director of the company Shri Praful Mehta had expired and thereafter his son Shri Vikram Mehta assumed charge of the day today affairs of the company was himself facing serious problem and financial difficulties including divorce and mental depression and also earlier the appeal against penalty was restored back to Ld. CIT(A) and Ld. AR pleaded that the delay was neither deliberate nor intentional but occurred due to bonafide reasons beyond the control of assessee/appellant.

12.

Hence, in totality of the circumstances mentioned hereinbefore we inclined to grant the assessee/appellant an opportunity of being heard before the first appellate authority and for this purpose we set aside the impugned order and restored it back to the file of Ld. CIT(A) with a direction to condone the delay in filing the appeal and adjudicate the same afresh on merits after affording effective and meaningful opportunity of hearing to the assessee/ appellant. On the other hand, we direct the assessee/appellant to cooperate in the proceedings.

9 ITA No. 798/Jodh/2025 Asst. Year: 2014-15 13. In the result, appeal of assessee is allowed for statistical purpose.

Order pronounced on 29 / 07 / 2026 under Rule 34(4) of the Income Tax Appellate Tribunal Rules,1963.

Sd/- Sd/- (DR. MITHA LAL MEENA) (SUDHIR PAREEK) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated : 29 / 07 / 2026. Pritesh Vaishnav PS

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