FRIDAY ENTERTAINMENT VENTURES PVT LTD,MUMBAI vs. ACIT-16(1), MUMBAI

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ITA 2667/MUM/2026Status: DisposedITAT Mumbai14 July 2026AY 2012-137 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal found that the explanation for the delay, including business travel and internal disputes, warranted a fresh consideration. The matter was restored to the CIT(A) to examine the condonation application and supporting evidence.

What were the facts?

The assessee's appeal before the CIT(A) was dismissed due to a delay of 87 days in filing. The CIT(A) found the assessee's explanation for the delay insufficient and unsupported by evidence.

What were the issues?

Whether the assessee had shown 'sufficient cause' for the delay in filing the appeal before the CIT(A), and if the CIT(A) erred in dismissing the appeal without considering the merits.

Which sections of the Income-tax Act were involved?

Section 249(2),Section 249(3)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, MUMBAI BENCH “J” (SMC

Before: SHRI OM PRAKASH KANT & SHRI ANIKESH BANERJEE

For Appellant: Shri N.K. Lal, CA (Virtually Present), Ms. Jayshree Thakur, SR- DR
Hearing: 14/07/2026

PER OM PRAKASH KANT, AM

This appeal by the assessee is directed against order dated 23/12/2025 passed by the Ld. Commissioner of Income-Tax (Appeals)- National Faceless Appeal Centre, Delhi [in short the Ld. CIT(A)] for assessment year 2012-13, raising following grounds ;-

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i. “For that the impugned order is bad in law as well as in facts. ii. For that the CIT(A) erred in dismissing the appeal on the ground of delay in filing which resulted in denial of substantive justice to the appellant. iii. For that the CIT(A) failed to appreciate that the appellant is entitled to adjustment of carry forward loss against the assessed income. iv. For that the CIT(A) failed to appreciate that denial of adjustment of carry forward loss against the assessed income amounts to denial of well-deserved statutory rights to the appellant. v. For that for any other ground that may be urged at the time of payment.”

2.

The brief facts giving rise to the present appeal are that an assessment under section 144 read with section 147 of the Income- tax Act, 1961 (in short "the Act") was completed on 14.11.2018. According to the assessee, the assessment order was served upon it on 07.12.2018, and consequently the appeal under section 249(2) of the Act was required to be filed on or before 05.01.2019. However, the appeal came to be presented before the learned CIT(A) on 02.04.2019, resulting in a delay of 87 days, for which an application seeking condonation of delay was filed.

2.1 The learned CIT(A), however, did not accept the explanation furnished by the assessee. While doing so, he proceeded on the footing that limitation was to be computed from the date of the assessment order itself, thereby treating the delay as 109 days. The learned CIT(A) observed that the explanation offered by the assessee

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regarding the directors being frequently away on business travel was unsupported by any documentary evidence such as travel itineraries, tickets or other contemporaneous material. Holding that the explanation was vague, self-serving and devoid of supporting evidence, the learned CIT(A) concluded that the assessee had failed to establish "sufficient cause" within the meaning of section 249(3) of the Act and dismissed the appeal in limine as barred by limitation, without examining the issues raised on merits.

3.

Before us, the learned counsel for the assessee has filed an affidavit sworn by one of the directors explaining the circumstances leading to the delay. Besides reiterating that both the directors were frequently travelling in connection with their business engagements, it has also been stated that the affairs of the company were not being effectively managed owing to inadequate staffing and internal disputes amongst the directors concerning the administration of the company. It has been averred that these circumstances cumulatively resulted in the delay in filing the appeal before the learned CIT(A).

4.

We have heard the rival submissions and carefully perused the material available on record. The only issue requiring our consideration at this stage is whether the assessee had shown "sufficient cause" for not presenting the appeal within the prescribed period so as to warrant exercise of the discretionary

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power of condonation under section 249(3) of the Act. It is well settled that the expression "sufficient cause" employed in provisions relating to condonation of delay deserves a liberal and pragmatic construction so as to advance substantial justice, provided the delay is not deliberate, mala fide or attributable to gross negligence. The object of the provision is not to punish a litigant for every lapse, but to ensure that technical considerations do not defeat adjudication on merits where a reasonable explanation is forthcoming.

4.1 In the present case, the affidavit placed before us explains that, during the relevant period, the affairs of the company were adversely affected by inadequate administrative support, extensive business travel undertaken by both directors and internal disputes concerning the management of the company. Though these facts were not elaborately substantiated before the learned CIT(A), the affidavit now filed furnishes a more comprehensive explanation regarding the circumstances which allegedly prevented the assessee from filing the appeal within the prescribed period. The relevant part of the affidavit of the directors are reproduced as under :

“5. That from the record, I find that the appeal has been filed on 02.04.2019 with a delay of 87 days. 7. That in view of the facts stated in para 6 hereinabove the exact reason of delay in filing is not known. But the same could be for the following reasons

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(a) The office of the company was not sufficiently staffed at the material time and the affairs of the company were not attended to properly; (b) Both the directors had other business engagements, in connection of which they used to travel a lot; and (c) There were some disputes among the then directors regarding various issues concerning administration of affairs of the company.” 4.2 In our considered opinion, the explanation cannot be brushed aside at the threshold. Equally, since the learned CIT(A) has not had the occasion to examine the additional explanation and the supporting material, the interests of justice would be better served by restoring the matter to his file for a fresh consideration of the assessee's application for condonation of delay.

4.3 We, accordingly, set aside the impugned order and restore the matter to the file of the learned CIT(A). The assessee shall place on record all documentary evidence that it seeks to rely upon in support of the reasons assigned for the delay, including such material as may substantiate the averments made in the affidavit. The learned CIT(A) shall examine the explanation and the evidence so produced, consider the application for condonation of delay in accordance with law, keeping in view the settled principles governing the expression "sufficient cause", and thereafter pass a speaking order. In the event the delay is condoned, the learned

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CIT(A) shall proceed to adjudicate the appeal on merits after affording the assessee a reasonable opportunity of being heard.

4.4 Since we have restored the issue relating to condonation of delay to the file of the learned CIT(A), we refrain from expressing any opinion on the merits of the additions challenged before us. Consequently, the remaining grounds of appeal are left open and do not call for adjudication at this stage.

5.

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

Order pronounced in the open Court on 14/07/2026.

Sd/- Sd/- (ANIKESH BANERJEE) (OM PRAKASH KANT) JUDICIAL MEMBER ACCOUNTANT MEMBER Mumbai; Dated: 14/07/2026 Z.U., P.S.

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Copy of the Order forwarded to :

1.

The Appellant 2. The Respondent. 3. CIT 4. DR, ITAT, Mumbai 5. Guard file.

BY ORDER,

//True Copy// (Assistant Registrar) ITAT, Mumbai

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