JINENDRA KALIDAS VADAGAVE,SANGLI vs. ITO, WARD-1, SANGLI, SANGLI

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ITA 2633/PUN/2025Status: DisposedITAT Pune25 May 2026AY 2016-176 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 dismissing the appeal due to delay was set aside.

What were the facts?

The assessee, engaged in agriculture and sale of produce, failed to file his return of income for AY 2016-17. The Assessing Officer made an addition of Rs. 1,11,53,985/- as unexplained cash deposits. The assessee's appeal before the CIT(A) was filed with a significant delay.

What were the issues?

Whether the delay in filing the appeal before the CIT(A) should be condoned, and if so, the appeal should be decided on merits.

Which sections of the Income-tax Act were involved?

Section 147,Section 148,Section 142(1),Section 144,Section 144B,Section 69A,Section 115BBE,Section 249(3)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “A” BENCH, PUNE

Before: MS. ASTHA CHANDRA & SHRI DR. DIPAK P. RIPOTE

For Appellant: Smt. Deepa Khare
For Respondent: Smt. Sonal L Sonkavde

आदेश / ORDER PER ASTHA CHANDRA, JM : The appeal filed by the assessee is directed against the order dated 27.09.2025 of the Ld. Commissioner of Income Tax (Appeals)/NFAC, Delhi [“CIT(A)/NFAC”] pertaining to Assessment Year (“AY”) 2016-17.

2.

Briefly stated the facts are that the assessee is an individual and engaged in agriculture activities as well as sale of agricultural produce. He did not file his return of income for AY 2016-17. Based on the available information through INSIGHT Portal, it was found that the assessee had done the following transactions during the FY 2015-16 relevant to AY 2016-17 totaling to Rs.1,11,53,985/- :

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2.1 The case of the assessee was reopened u/s 147 of the Income Tax Act, 1961 (the “Act”) by way of issue of notice u/s 148 of the Act. In response to the notice u/s 148, the assessee failed to file return of income. Accordingly, statutory notice(s) u/s 142(1) of the Act followed by show cause notice(s)/letters were issued and duly served upon the assessee, however, there was no response from the side of the assessee. The Ld. Assessing Officer (“AO”) therefore proceeded to complete the assessment ex-parte by making an addition of Rs.1,11,53,985/- treating the said amount as unexplained cash deposits u/s 69A r.w.s. 115BBE of the Act, vide his order dated 27.02.2024 passed u/s 147 r.w.s. 144 r.w.s. 144B of the Act.

3.

Before the Ld. CIT(A)/NFAC, the appeal was filed with a delay of 279 days. In Form 35, the assessee stated that he was unaware of the facts and due date for filing of appeal before the authority. The reason(s) provided by the assessee for delay in filing of the appeal (which is reproduced in para 2.7 of his impugned order) was not found to be constituting „sufficient/reasonable cause‟ by the Ld. CIT(A)/NFAC for condoning the delay. He, therefore, dismissed the appeal of the assessee by observing as under : “2.7 In this case the appellant has given the following reason for delay in filing of the appeal : 1. The Jinendra Kalidas Vadagave is small person residing at Arag a small village having population of 15000 approximately. To get his livelihood he is doing the sale of vegetables and food grains. The same activity is carried on various bazar. To have a security he has habit of depositing the cash in bank and withdrawing the same. 2. The appellant has received the notice under section 148A(b) on 03-02-2023. As he was not aware of the income tax proceedings, he has handed over the same to local person who is semi qualified known as accountant. The said person is neither qualified as Tax Consultant nor CA. 3. The said local person i.e. accountant has prepared the books of account in hurry and submitted it JAO. He has submitted the all statements and bank accounts in response to said notice to Jurisdictional Assessing Officer. He thought that now work is over. 4. The JAO or FAO has never cross verified the information from submitted the bank statements and made the addition at cash deposit reported by bank in SFT. 5. As there was huge demand and call received from local officer in December 2024, the appellant approached to another consultant. 6. After the verification of data, it is come to notice that the cash deposits are reported by Kallappa Awade Ichalkaranji Janata Sahakari Bank Ltd by submitting SFT three times. 7. Hence, appellant have gone to bank and asked clarification to Kallappa Awade Janata Sahakari Bank. The bank has confirmed vide their letter that in my name

ITA No.2633/PUN/2025, AY 2016-17

there is only one account vide letter Dt. 17-01-2025. So appellant further written to bank as under for clarification. "I am in receipt of your letter Dt. 17-01-2025 certifying that I have only one Saving account bearing no. 017001100003271 is having in your bank during FY 2015- 16. I have also received the statement of my saving account for that period. However, as per SFT information submitted by your bank for the same year the bank has reported three times to the Income Tax Department. The details are given by Income Tax Department vide Notice Dt. 03-02-2023 are as under: - SFT INFORMATION SUBMITTED DETAILS – RRR Number Original RRR Transaction Name of Transaction Transaction Date Sequence Transacting Date Amount Number Party 02214100000071 03-08-2016 65884106 SANGLI 31-03-2016 3137645 82214100000071 03-08-2016 18254095 SANGLI 31-03-2016 2848570 82214100000056 03-08-2016 34900676 SANGLI 31-03-2016 2848570

When I have gone through the said account statement, I have come to across the fact that I have deposited cash at Rs. 31,37,645 which is matching for transaction id 65864106 8. The bank has given written confirmation vide their letter from head office Dt. 23-01-2025 and accepted that fact that first two SFT with Transaction sequence Number 34969676 and 18284695 for amount Rs. 28,48,570/- for both time is wrong and final SFT submitted on 23-01-2017 with Transaction Sequence Number 65884106 for amount Rs. 31,37,645/- is correct and only that much amount is deposited in my saving account. 9. The appellant is also in process of obtaining confirmation of the same from JAO. 10. Due all these facts there is delay in filing of the appeal happened. So, the delay in filing the appeal which may be condoned. 2.8 The appellant, Mr. Jinendra Kalidas Vadagave, has filed an appeal against the order passed u/s 148A(d), wherein additions were made on account of unexplained cash deposits as per the SFT (Statement of Financial Transactions) reported by the bank. The appeal has been filed beyond the prescribed time limit, and the appellant has submitted a petition seeking condonation of delay. It is contended that the delay was due to the appellant being unaware of the proceedings initially and relying on a semi-qualified accountant, followed by an internal error in reporting by Kallappa Awade Ichalkaranji Janata Sahakari Bank Ltd., which allegedly submitted duplicate entries in the SFT for the financial year 2015-16. 2.9 The appellant claims that only one cash deposit of Rs.31,37,645 was made (Transaction ID: 65884106), while two other transactions (Rs.28,48,570 each, with Transaction IDs 18284695 and 34969676) were erroneously reported by the bank. A confirmation from the bank dated 23-01-2025 admitting this reporting error has been placed on record. It is further stated that the delay in approaching a qualified tax consultant and obtaining correct confirmations caused the late filing of the appeal. 2.10 However, the reasons provided do not constitute "sufficient cause" within the meaning of section 249(3) of the Income-tax Act, 1961. It is a settled principle of law that mere inaction, lack of diligence, or negligence on the part of the assessee or their representative does not justify condonation of inordinate delay. The initial

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notice under section 148A(b) was duly served on 03-02-2023, and the appellant failed to exercise reasonable care in responding to such a statutory proceeding. The explanation of a semi-qualified representative's mishandling, and the subsequent discovery of errors after several months, cannot be accepted as reasonable grounds for condonation. The appellant had ample opportunity and time to verify the bank details and respond appropriately within the statutory timeframe. The bank confirmation was obtained only in January 2025, nearly two years after initiation of proceedings, indicating lack of timely diligence. 2.11 In view of all the above, I am of the opinion that the appellant has not demonstrated sufficient cause for the delay. The explanation offered is vague and unsupported, and there is no showing of prompt action once the impediment ceased. Since, the explanation submitted by the appellant does not have substance and that the appellant has not discharged the onus of "sufficient cause" within the meaning of section 249 of the I.T. Act. Hence the delay in filing the appeal after 279 days cannot be accepted. 2.12 Hence in view of these facts and on the strength of the judicial decisions referred on the pre-pages the delay in filing the appeal does not merit condonation and the appeal is treated to be filed late with reference to the provisions of section 249(3) of the Act. The same is accordingly dismissed without going into the merits of the case. 3. Resultantly, the appeal of the assessee is dismissed.”

4.

Aggrieved, the assessee is in appeal before the Tribunal raising the following grounds of appeal :

“1. The ld CIT(A) erred in law and on facts in dismissing the appeal by not condoning the delay without appreciating the facts and circumstances of the case. 2. Whether the impugned notice u/s 148 issued in violation of section 151A by Jurisdictional AO is valid in law. 3. Without prejudice to the above ground, the Id CIT(A) erred in law and on facts in confirming addition for cash under section 69A of Rs. 1,11,53,985/- without considering the details used submitted before JAO. The actual cash deposits are much lower at Rs.54,56,845/-. 4. Without prejudice to the above, the Id CIT(A) erred in law and on facts in not appreciating that the addition @ 8% on the turnover of Rs.54,56,845/- at Rs.4,36,548/- be restricted as business income. 5. The appellant craves leave to add, alter, modify or substitute any ground of appeal at the time of hearing.”

5.

The Ld. AR submitted that the assessee is a small person and he was not aware of the Income Tax proceedings. He reiterated the reasons cited before the Ld. CIT(A)/NFAC reproduced above for such delay. The Ld. AR submitted that the assessee has a strong case on merits and therefore humbly urged that, in the interest of justice, an opportunity may be granted to the assessee to represent his case before the Ld. CIT(A)/NFAC by filing the requisite details.

5 ITA No.2633/PUN/2025, AY 2016-17

6.

The Ld. DR, on the other hand, supported the order of the 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 exparte qua the assessee due to non-compliance of notices of hearing issued by him. The Ld. CIT(A)/NFAC has dismissed the appeal of the assessee as not admitted on account of delay of 279 days in filing of the appeal without considering the assessee‟s case on merits. The Ld. AR has submitted that the delay in filing of the appeal was not intentional but resulted due to the reasons cited in the preceding paragraphs. Before us, the Ld. AR has therefore humbly prayed that as the assessee has a strong case on merits, in the interest of justice, the Ld. CIT(A)/NFAC may be directed to admit the assessee‟s appeal and decide the case on merits.

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 Singh Vs. The State of Madhya Pradesh reported in 2025 LiveLaw (SC) 339 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

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say, the assessee shall comply with the notices issued by the Ld. CIT(A)/NFAC and make his submissions before him 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 effective grounds raised by the assessee are accordingly allowed for statistical purposes.

11.

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

Order pronounced in the open court on 25th May, 2026.

Sd/- Sd/- (Dr. Dipak P. Ripote) (Astha Chandra) JUDICIAL MEMBER ACCOUNTANT MEMBER पुणे / Pune; दिन ांक / Dated : 25th May, 2026. रदि Ravi Kumar Digitally signed by Ravi Kumar Date: 2026.05.27 11:41:47 +05'30' आदेश की प्रधिधलधप अग्रेधर्ि / Copy of the Order forwarded to : अपील र्थी / The Appellant. 1. प्रत्यर्थी / The Respondent. 2. 3. The Pr. CIT concerned. दिभ गीय प्रदिदनदि, आयकर अपीलीय अदिकरण, “ए” बेंच, 4. पुणे / DR, ITAT, “A” Bench, Pune. ग र्ड फ़ इल / Guard File. 5. //सत्य दपि प्रदि// True Copy// आिेश नुस र / BY ORDER,

सहायक पंजीकार/ Assistant Registrar आयकर अपीलीय अदिकरण ,पुणे / ITAT, Pune

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