SANGHVI TARACHAND POONAMCHAND,PUNE vs. INCOME TAX OFFICER WARD 6(3), PUNE

Briefly stated, the facts are that the assessee is HUF. For AY 2020- 21, the assessee filed its revised return of income u/s 139(5) of the Income Tax Act, 1961 (the “Act”) on 31.03.2021 declaring a total income of Rs.9,71,000/-. Based on the information available on Insight Portal under the e-Verification Scheme, 2021 notified by the CBDT, the case of the assessee was reopened u/s 147 of the Act by the Ld. Assessing Officer (“AO”). In response to notice issued u/s 148, the assessee did not file return of income. During the reassessment proceedings, the Ld. AO issued various notices calling upon the assessee to explain the amount of Rs.12,53,827/- on account of interest income other than interest on securities. In response to the said notices, the assessee submitted that the said interest income of Rs.12,53,827/- had already been considered and included in the returned income filed for the AY 2020-21 under consideration. However, rejecting the submissions of the assessee, the Ld.

Aggrieved, the assessee filed an appeal before the Ld. CIT(A)/NFAC. Before the Ld. CIT(A)/NFAC, the appeal was filed with a delay of almost six months. Since, the assessee failed to provide the reason for delay in filing of the appeal in Form No. 35, the Ld. CIT(A)/NFAC dismissed the appeal of the assessee on account of delay in filing the appeal without deciding the issue on merits of the case by observing as under : “5 Findings: Upon consideration of the submissions and facts on record, I find that:  The appellant has failed to show any reasonable and sufficient cause for the delay in filing the appeal.  All the notices duly served on E-filling portal providing sufficient opportunity to the Appellant.  The cause advanced is neither specific nor supported by any documentary evidence. Thus, it is trite in law that the appellant must show that he was diligent in taking proper steps and the delay was caused not withstanding his due diligent. It is for the appellant to explain the reason for the delay and it is not the function of authorities to find the cause for delay. The Appellate authority has to examine whether the sufficient cause has been shown by the appellant for condoning the delay and whether such cause is acceptable or not. Even though substantial justice should not be defeated by technicalities but that does not mean that any plea without any possible or acceptable basis and even without hearing, semblance or rationality has to be accepted and delay has to be accepted and prescribed for filing the appeal will become meaningless in such an event. Merely because substantial justice is to be done law of limitation cannot be ignored and that also when there is no sufficient and reasonable cause for such inordinate delay. The appellant, in the present case appears to be guilty of latches or negligence and does not take appropriate steps to peruse the remedy till about six months and thus does not take appropriate action in filing the appeal within the prescribed time. In the light of the above discussion and considering the facts and position of the law on this issue, delay is not condoned. Since the appeal is being dismissed on account of being filed beyond the period prescribed under the Act, therefore, I am not expressing any opinion on merit of the case.”

Dissatisfied, the assessee is in appeal before the Tribunal raising the following grounds of appeal : “1. On facts and circumstances prevailing in the case and as per provisions of law and scheme of the Act it be held that the has red as making an addition of Rs.12,53,827/- for reasons which are justified

The Ld. AR submitted that admittedly the assessee did not mention the reason in Form No. 35 for delay in filing of the appeal. He submitted that Mr. Tarachand Sanghvi, the karta of the HUF, who was looking after the tax matters of the HUF expired 10 days before the passing of the assessment order by the Ld. AO. All the notices were issued to Mr. Tarachand Sanghvi, the karta of the HUF through the ITBA portal and therefore remained un-complied. He submitted that the other family members were under the bonafide belief that the previous Tax Consultant would have taken the appropriate action, however, he failed to do so. He, therefore, submitted that due to these unavoidable circumstances, there was a delay of 191 days in filing of the appeal before the Ld. CIT(A)/NFAC. The Ld. AR submitted an affidavit of the authorized signatory of the assessee HUF in support thereof stating therein the reasons for the delay as mentioned above. The Ld. AR submitted that the assessee has a strong case on merits and therefore urged that, in the interest of justice, the Ld. CIT(A)/ NFAC may be directed to condone the delay in filing of the appeal and decide the case on merits, after affording due opportunity of hearing to the assessee to represent his case before him by filing the requisite details.

The Ld. DR, on the other hand, supported the order of the Ld. CIT(A)/NFAC.

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

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.

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."

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 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 assessee. Needless to 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.

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