PRAFULLA ANANT KUKDE,MUMBAI vs. DCIT 42(3)(1), KAUTILYA BHAVAN

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ITA 3522/MUM/2026Status: DisposedITAT Mumbai24 July 2026AY 2016-20178 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal condoned the delay in filing the appeals, stating it was in the interest of substantial justice. Both the quantum and penalty appeals were restored to the CIT(A) for adjudication on merits.

What were the facts?

The assessee filed appeals before the CIT(A) with a significant delay. The CIT(A) dismissed the appeals without adjudicating on merits due to the delay, declining to condone it. The assessee argued for condonation based on lack of awareness of the process and reliance on professional advice only later.

What were the issues?

Whether the delay in filing the appeal before the CIT(A) should be condoned on the grounds of sufficient cause and whether the appeals should be decided on merits.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 147,Section 271(1)(c),Section 144,Section 148A,Section 148,Section 142(1),Section 192,Section 69,Section 194-IA,Section 249(2)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, MUMBAI

Before: SHRI CHALLA NAGENDRA PRASAD & SHRI MAKARAND VASANT MAHADEOKAR

Pronounced: 24/07/2026

Heard together (2 matters)

ITA 3521/MUM/2026
ITA 3522/MUM/2026

Read from the judgment's own cause title. This page is filed under one of them.

PER SHRI CHALLA NAGENDRA PRASAD, JUDICIAL MEMBER: These two appeals are filed by the Assessee against different orders of learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi [“Ld. CIT(A)”] dated 22.01.2026 and 27.01.2026 for the Assessment Year 2016-17 which were arising out of the assessment order passed u/s 143(3) read with section 147 of the Act and the penalty order passed u/s 271(1)(c) of Act.

2.

In spite of issuance of notice, none appeared on behalf of the assessee, nor any adjournment was sought. The appeals of the assessee are disposed of based on the grounds of appeal filed by the assessee and on hearing the Ld. DR.

3.

In Ground No.1 of the grounds of appeal, the assessee has challenged the order of the Ld. CIT(A) in not deciding the issues on merits and dismissed the appeal of the assessee without condoning the delay of 184 days. We have perused the order of the Ld. CIT(A), wherein the petition for condonation of delay filed by the assessee before the Ld. CIT(A) was reproduced, which is as under:

“1. The present appeal is filed against the assessment order dated 22nd January 2024 under Section 147 read with section 144 of the I.T.Act. The appeal is delayed by a period of 185 days l.e. from 21.02.2024 (30 days from order date) to 23.08.2024. 2. During the year under consideration, the Appellant's case was selected for scrutiny by issuing notice under section 148A(b) of the I.T. Act dt. 11.02.2023 followed by order u/s 148A(d) of the I.T.Act and selecting the case by issuing notice u/s 148 of the I.T. Act dt. 23.03.2023 and subsequent notices under section 142(1) of the I.T. Act for seeking information. 3. The Appellant had filed a basic reply to the first notice dt.11.02.2023 on 06.03.2023 stating as under: “I admit that the Income tax returns were not filed then even though I bought Property, I had no income against which taxes were not paid. Salary income, which I earned, the taxes were deducted then, however have missed to file the return to declare the same. However, since TDS was already deducted there would be no tax liability which would be payable except for Late Fee and/or interest if any. Allow me to file the returns so that will do the needful." 4. The Appellant was unable to subsequent notices in response to section 142(1) of the I.T. Act and the department without considering the basic reply of the Appellant as above, proceeded with passing an order u/s 147 r.w.s 144 of the I.T. Act determining total income at Rs.1,02,71,831/- and raising tax liability of Rs.90,26,887/- vide order dt. 22.01.2024. 5. It is submitted that the appellant is a salaried individual, earning a salary of Rs.35,52,614/- from M/s. Tata Power Company Limited, who does not have access to professional chartered accountants. The Appellant also does not seem aware of the tax return filing process as the only tax returns available on the income tax portal are for AY 2013-14, AY 2014-15 & AY 2024-25 and has not filed the tax returns for the other years. This fact gives a clear picture that the Appellant believed that since the employer had deducted tax at source u/s 192 of the I.T. Act, the tax compliance was duly completed as he did not have any other taxable income to be reported. 6. Thus, when the Appellant received the notice u/s 148A(b) of the I.T.Act dt. 11.02.2023, he filed a very generic reply accepting the house property purchase (refer para no 3 above) wherein he also genuinely requested the income tax department to allow him to file the income tax return. It is submitted that in case the Appellant would have been able to upload the tax return for the year under consideration, the case would not have been taken up for reassessment as the current year salary was Rs.35,52,614/-and the value of the property purchased was Rs.67,14,560/- which Is fairly explainable considering that the Appellant had earned almost 50% of the value of the new house in the same year through salary. 7. The initial reply of the Appellant itself speaks aloud that the Appellant did not consult any professional expert but genuinely accepted the fact of the house purchase and innocently requested to enable him to be able to file the tax return and awaited for a positive confirmation. 8. It is also submitted that the Appellant was not aware of the further course of action pursuant to the notices sent u/s 148 & u/s 142(1) of the I.T. Act as well as final order passed u/s 147 r.w.s 144 of the I.T. Act. It was only when he approached a professional Chartered Accountant to file his tax return for AY 2024-25, which was filed on 31.07.2024, that the Chartered Accountant pointed out the order and demand outstanding and after understanding the case in detail suggested the Appeal to file the Appeal against such order. 9. Further, the Appellant's salaries for past years were always subject to tax deducted at source and duly reflected on the income tax portal under Form 26AS which itself was evidence of the income earned from salary. 10. Further, the Appellant had also filed Form 26QB for deduction of tax at source u/s 194-IA of the I.T. Act which directly proves that the investment in property was a genuine transaction and not some unexplained investment to be taxed u/s 69 of the I.T. Act. 11. The Appellant was made aware of all these processes and repercussions now during the return filing process of AY 2024-25 due to which there is a delay of _ days from the due date to file the appeal as envisaged u/s 249(2) of the I.T. Act. This delay was totally on account of the fact that the Appellant was under the impression that his initial reply dt. 06.03.2023 against the notice u/s 148A(b) of the I.T. Act would suffice and that since he has already filed Form 26QB while deducting tax at source u/s 194- IA of the I.T. Act and that the property purchased is duly explain via such Form 26QB and salary income duly explained via Form 16 whose details were already available with the income tax department. 12. The Appellant respectfully submits that under the circumstances and on the facts narrated hereinabove the Appellant was prevented from filing the said appeal in time by sufficient cause. The Appellant therefore request your Honour to condone the delay in filing this appeal and consider the plea on merits in the interest of natural justice. 13. In support of the above contention the Appellant rely on following judgments: Collector of land acquisition vs Mst. Katiji & Others [167 ITR 471 SC] "The legislature has conferred the power to condone delay by enacting Section 51 of the Indian Limitation Act of 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 for 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. And such a liberal approach is adopted on principle as it is realized that:- "Any appeal or any application, other than an application under any of the provisions of Order XXI of the Code of Civil Procedure, 1908. may be admitted after the prescribed period if the appellant or the applicant satisfies the court that he had sufficient cause for not preferring the appeal or making the application within such period." 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 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. 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? The doctrine must be applied in a rational common sense pragmatic manner. 4. 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.

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 judiciary is respected not on account of its power to legalize injustice on technical grounds but because it is capable of removing injustice and is expected to do so. Making a justice-oriented approach from this perspective, there was sufficient cause for condoning the delay in the institution of the appeal. The fact that it was the 'State' which was seeking condonation and not a private party was altogether irrelevant. The doctrine of equality before law demands that all litigants, including the State as a litigant, are accorded the same treatment and the law is administered in an even handed manner. There is no warrant for according a step motherly treatment when the 'State' is the applicant praying for condonation of delay. In fact experience shows that on account of an impersonal machinery (no one in charge of the matter is directly hit or hurt by the judgment sought to be subjected to appeal) and the inherited bureaucratic methodology imbued with the note-making, file pushing, and passing-on-the-buck ethos, delay on its part is less difficult to understand though more difficult to approve. In any event, the State which represents the collective cause of the community, does not deserve a litigant-non-grata status. The Courts therefore have to be informed with the spirit and philosophy of the provision in the course of the interpretation of the expression "sufficient cause". So also the same approach has to be evidenced in its application to matters at hand with the end in view to do even handed justice on mertis in preference to the approach which scuttles a decision on merits. Turning to the facts of the matter giving rise to the present appeal, we are satisfied that sufficient cause exists for the delay. The order of the High Court dismissing the appeal before it as time barred, is therefore. set aside. Delay is condoned. And the matter is remitted to the High Court. The High Court will now dispose of the appeal on merits after affording reasonable opportunity of hearing to both the sides. Appeal is allowed accordingly. No costs. "Vedabai Alias Vaijayantbai Baburao Patil vs. Shantaram Baburao Patil & ORS [253 ITR 0798 SC] The Court has to exercise the discretion on the facts of each case keeping in mind that in construing the expression "sufficient cause", the principle of advancing substantial justice is of prime importance." N. Balakrishnan vs M. Krishnamuthy [(1998) 7 SSC 123] "Rule of limitation are not meant to destroy the right of parties. They are meant to see that parties do not resort to dilatory tactics, but seek their remedy promptly. The object of providing a legal remedy is to repair the damage caused by reason of legal injury. Law of limitation fixes a life-span for such legal remedy for the redress of the legal injury so suffered. Time is precious and the wasted time would never revisit. During efflux of time newer causes would sprout up necessitating newer persons to seek legal remedy by approaching the courts. So a life span must be fixed for each remedy. Unending period for launching the remedy may lead to unending uncertainty and consequential anarchy. Law of limitation is thus founded on public policy. It is enshrined in the maxim Interest republicae up sit finis litium (it is for the general welfare that a period be putt to litigation). Rules of limitation are not meant to destroy the right of the parties. They are meant to see that parties do not resort to dilatory tactics but seek their remedy promptly. The idea is that every legal remedy must be kept alive for a legislatively fixed period of time. A court knows that refusal to condone delay would result foreclosing a suitor from putting forth his cause. There is no presumption that delay in approaching the court is always deliberate. This Court has held that the words "sufficient cause" under Section 5 of the Limitation Act should receive a liberal construction so as to advance substantial justice vide Shakuntala ITA No.3786/Mum/2012 M/s Lahoti Overseas Ltd. 8 Devi lain Vs. Kuntal Kumari [AIR 1969 SC 575] and State of West Bengal Vs. The Administrator, Howrah Municipality [AIR 1972 SC 749]. It must be remembered that in every case of delay there can be some lapse on the partof the litigant concerned. That alone is not enough to turn down his plea and to shut the door against him. If the explanation does not smack of mala fides or it is not put forth as part of a dilatory strategy the court must show utmost consideration to the suitor. But when there is reasonable ground to think that the delay was occasioned by the party deliberately to gain time then the court should lean against acceptance of the explanation. While condoning delay the Could should not forget the opposite party altogether. It must be borne in mind that he is a looser and he too would have incurred quiet a large litigation expenses. It would be a salutary guideline that when courts condone the delay due to laches on the part of the applicant the court shall compensate the opposite party for his loss." Similar view has been taken in the following judicial pronouncements: Y.P. Trivedi vs JCIT (2014) 059 (II) ITC 0450 - - Ratiq vs Munsilal (AIR 1981 (SC) 1400) - Mahaveer Prasad Jain vs CIT (1988) 172 ITR 331 (MP) - Artis Tree Pvt. Ld. vs CBDT & Ors. (2015) 273 CTR 0014(Bom.) In the light of above peculiar facts of the case and principle settled by the Hon'ble Supreme Court, the Appellant submits that delay in filing the appeal may be condoned and oblige. It is submitted that the delay in filing this appeal was not intentional and no prejudice would be caused if the impugned appeal is admitted. At the most, the admission of the appeal would result in adjudication of the issues on merits. The appellant, therefore, prays that the delay in filing the appeal be condoned and the appeal be admitted.”

4.

Heard Ld. DR and perused the orders of the authorities below. We observe that the Ld. CIT(A) dismissed both the quantum appeal as well as the penalty appeal solely on the ground that there was a delay of 169 days in filing the appeals before him and declined to condone the delay. Consequently, the Ld. CIT(A) did not adjudicate the grounds raised by the assessee on merits.

5.

Considering the facts and circumstances of the case and in the interest of substantial justice, the delay in filing the appeal by the assessee is hereby condoned. As the quantum appeal as well the penalty appeal of the assessee was dismissed in limine and without going into the merits of the grounds legal as well as factual by the Ld. CIT(A), we deem it appropriate to restore both the appeals to the file of the Ld. CIT(A) who shall decided all the grounds raised by the assessee on merits after providing adequate opportunity of hearing to the assessee.

6.

In the result, both the appeals of the assessee are allowed for statistical purposes.

Order pronounced in the open court on 24/07/2026

Sd/- Sd/- MAKARAND VASANT MAHADEOKAR CHALLA NAGENDRA PRASAD ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai, Dated: 24/07/2026 Prabhat Copy to: PRAFULLA ANANT KUKDE, TYPE 3/9B, TATA POWER HSG COLONY, 1 AZIZ BAUG, CHEMBUR, MUMBAI-400074, MAHARASHTRA DCIT 42(3)(1), C41-C43, AVENUE 3, G BLOCK BKC, 2 BANDRA KURLA COMPLEX, BANDRA EAST, MUMBAI-400051, MAHARASHTRA 3 THE PCIT / CIT, 4 THE D.R., ITAT, MUMBAI BENCH 5 GUARD FILE

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