SARDAR MASOOD SHABBIR AHMAD,MALEGAON vs. ITO-(1), MALEGAON

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ITA 1928/PUN/2026Status: DisposedITAT Pune10 July 2026AY 2018-196 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal condoned the delay in filing the appeal before the CIT(A) by applying a liberal and pragmatic approach, citing Supreme Court judgments. The Tribunal set aside the CIT(A)'s order and remitted the issue back for fresh adjudication.

What were the facts?

The assessee failed to file a return of income and did not respond to notices from the Assessing Officer, leading to an ex-parte assessment. The assessee then filed an appeal before the CIT(A) with a delay, which was dismissed due to insufficient explanation.

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 considering the merits.

Which sections of the Income-tax Act were involved?

Section 148,Section 143(2),Section 142(1),Section 144,Section 69A,Section 250

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, PUNE

Before: SHRI PAVAN KUMAR GADALE & DR. DIPAK P. RIPOTE

Hearing: 08.07.2026Pronounced: 10.07.2026

PER PAVAN KUMAR GADALE, JUDICIAL MEMBER The assessee has filed the appeal against the order of CIT(A)/NFAC passed u/sec250 of the Income Tax Act for the Assessment Year 2018-19. The assessee has raised the grounds of appeal challenging the order of the CIT(A) in not condoning the delay in filing the appeal and sustaining the additions made by the Assessing Officer.

2.

At the time of hearing, the Ld.AR of the assessee submitted that there is a delay of 141 days in filing the appeal before Hon'ble Tribunal and the delay was not intentional and filed an affidavit of the assessee for condonation of delay. On consideration of facts and information mentioned in the affidavit, there is a reasonable cause explained and the Ld. DR. has no specific objections. Accordingly, the delay is condoned and the appeal is admitted.

3.

The brief facts of the case are that, Assessing Officer (A.O) has received information that the assessee has entered into crypto currency related transactions in the financial year 2017-18 and the assessee has not filed the return of income for the A.Y. 2018-19. The A.O has reason to believe that the income has escaped assessment and issued notice u/sec148 of the Act but there was no response. Further the AO has issued notice u/secs 143(2) and u/sec142(1) of the Act and there was no compliance. Therefore the A.O considering the information available on record has invoked the provisions of Section 144 of the Income Tax Act and made addition of cost of acquisition of crypto currency as unexplained investment u/sec69A of the Act of Rs. 30,87,365/- and assessed the total income of Rs. 30,87,370/- and passed the order u/sec 147 r.w.s. 144 r.w.s 144B of the Income Tax Act dated 02.03.2023. 4. Aggrieved by the order, the assessee has filed an appeal before the CIT(A). However, the CIT(A) found that there is a delay of 102 days in filing the appeal and the assessee has not explained the sufficient reasons for the delay. He further did not condone the delay and dismissed the assessee’s appeal in limine. Aggrieved by the order of the CIT(A), the assessee has filed the appeal before the Hon'ble Tribunal.

5.

At the time of hearing, the Ld.AR submitted that the CIT(A) has not considered the facts and valid reasons of the assessee and the delay in filling the appeal was neither deliberate nor wanton act, but the circumstances beyond the control of the assessee and supported the submissions with the affidavit of the assessee. The Ld.AR emphasized that the assessee has a good case on merits and prayed for an opportunity to substantiate with material evidences before the lower authorities. Per contra, the Ld. DR supported the order of the CIT(A).

6.

We heard the rival submissions and perused the material on record. Prima-facie, the CIT(A) has passed the order considering the fact that there is no proper compliance by the assessee in spite of providing adequate opportunity of hearing and the delay in filling the appeal was not explained with reasonable cause. Whereas the assessee has raised grounds of appeal challenging addition u/sec69A of the Act made by the Assessing Officer and there could be various reasons for no proper compliance. Whereas the assessee in Form.No.35 made a request for condonation of delay in filling the appeal and filled the affidavit. We considering the facts, provisions and the condonation of delay request, are of the opinion there is a reasonable cause in filing of the appeal with delay and there is no benefit derived in causing delay in filing the appeal before the CIT(A). We find the Hon’ble Supreme Court in case of B. MadhuriGoudv. B. Damodar Reddy (2012) 12 SCC 693, has held that the following principles must be kept in mind while considering the application for condonation of delay; (i) There should be a liberal, pragmatic, justice oriented, non- pedantic approach while dealing with an application for condonation of delay, for the courts are not supposed to legalise injustice but are obliged to remove injustice.

(ii) The terms “sufficient cause” should be understood in their proper spirit, philosophy and purpose regard being had to the fact that these terms are basically elastic and are to be applied in proper perspective to the obtaining fact-situation. (iii) Substantial justice being paramount and pivotal the technical considerations should not be given undue and uncalled for emphasis. (iv) No presumption can be attached to deliberate cause of delay but, gross negligence on the part of the counsel or litigant is to be taken note of. (v) Lack of bona fides imputable to a party seeking condonation of delay is a significant and relevant fact. (vi) It is to be kept in mind that adherence to strict proof should not affect public justice and cause public mischief because the courts are required to be vigilant so that in the ultimate eventuate there is no real failure of justice. (vii) The concept of liberal approach has to encapsulate the conception of reasonableness and it cannot be allowed a totally unfettered free play. (viii)There is a distinction between inordinate delay and a delay of short duration or few days, for to the former doctrine of prejudice is attracted whereas to the latter it may not be attracted. That apart, the first one warrants strict approach whereas the second calls for a liberal delineation. (ix) The conduct, behaviour and attitude of a party relating to its inaction or negligence are relevant factors to be taken into consideration. It is so as the fundamental principle is that the courts are required to weigh the scale of balance of justice in respect of both parties and the said principle cannot be given a total go by in the name of liberal approach. (x) If the explanation offered is concocted or the grounds urged in the application are fanciful, the courts should be vigilant not to expose the other side unnecessarily to face such litigation. (xi) It is to be borne in mind that no one gets away with fraud, is representation or interpolation by taking recourse to the technicalities of law of limitation. (xii) The entire gamut of facts are to be carefully scrutinized and the approach should be based on the paradigm of judicial discretion which is founded on objective reasoning and not on individual perception. (xiii) The State or a public body or an entity representing a collective cause should be given some acceptable latitude.”

7.

The Hon'ble supreme court in the case of Collector, Land Acquisition Vs. MST Katiji& others (167 ITR 471) (SC) has observed as under :

“ The legislature has conferred the power to condone delay by enacting s. 5 of the 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 of the existence of the institution of Courts. 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 inherent 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 of 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 merits in preference to the approach which scuttles a decision on merits.”

8.

We respectfully follow the observations and ratio of the decisions of Hon’ble Supreme Court cited(supra) and find that the delay in filing the appeal before the CIT (Appeals) by the assessee is supported with sufficient cause and therefore pragmatic approach should have been considered and we condone the delay. Further considering the principles of natural justice, the assessee shall be provided with one more opportunity of hearing to substantiate the case along with the evidences and explanations. Accordingly, we set aside the order of the CIT(A) and remit the disputed issue to the file of the CIT(A) to adjudicate afresh and the assessee should be provided adequate opportunity of hearing and shall cooperate in submitting the information for early disposal of appeal. And the grounds of appeal of the assessee are allowed for statistical purposes.

9.

In the result, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced in the open Court on 10th July, 2026. DIPAK P. RIPOTE PAVAN KUMAR GADALE (ACCOUNTANT MEMBER) (JUDICIAL MEMBER) Pune, Dated:10th July, 2026 Abhishek Mohan Abhishek Mohan Mohan Date: 2026.07.10 17:02:27 +05'30' आदेशकीप्रतितितिअग्रेतिि / Copy of the Order forwarded to : अिीिार्थी / The Appellant. 1. प्रत्यर्थी / The Respondent.

2.3.

The Pr. CIT concerned. 4. तिभागीय प्रतितिति, आयकर अिीिीय अतिकरण, “SMC” बेंच, पुणे/ DR, ITAT, “SMC” Bench, Pune. गार्डफ़ाइि / Guard File. 5. ////

आदेशािुसार / BY ORDER,

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