RANJAN DUTTA,SILAPATHAR vs. ITO, WARD - NORTH LAKHIMPUR, NORTH LAKHIMPUR

Brief facts of the case are that the assessee did not file the original return of income for AY 2018-19 u/s 139(1) of the Act. Based on information from the Insight Portal regarding cash deposits of ₹2,43,57,200/- in an IDBI Bank current account, cash withdrawals of ITA No(s). 86/GTY/2026 Assessment Year(s) 2018-19 ₹1,00,000/- from an SBI current account, and commission or brokerage of ₹27,803/- received from M/s. Mahaveer Medicare, the Assessing Officer (hereinafter referred to as Ld. 'AO') initiated reassessment proceedings and issued a notice u/s 148 of the Act on 29.03.2023. In response thereof, the assessee filed the return of income on 04.12.2023 declaring total income of ₹3,00,960/-. During the assessment proceedings, the Ld. AO observed that the assessee was engaged in the business of medical and drug distribution but had not got the books of account audited u/s 44AB of the Act despite the turnover exceeding the prescribed limits. Additionally, the Ld. AO noted discrepancies in the item-wise valuation of stock, absence of a stock register, and abnormally low gross and net profit rates shown by the assessee. Consequently, after rejecting the books of accounts u/s 145(3) of the Act, the Ld. AO estimated the gross profit @25% of the total receipts of ₹3,02,99,632/-, computed gross profit of ₹75,74,908/-, and made an addition of ₹66,88,700/- after deducting the gross profit of ₹8,86,208/- already declared by the assessee. Further, a separate addition of ₹27,803/- was made on account of the commission or brokerage income. Thus, the Ld. AO completed the assessment u/s 147 r.w.s. 144B of the Act on 10.03.2024 at the total income of ₹70,17,463/-. Aggrieved with the assessment order, the assessee filed an appeal before the Ld. CIT(A) with a delay of 49 days. The assessee filed an application for condonation of the delay, citing severe medical health issues and hospitalization during the limitation period. However, the Ld. CIT(A) observed that the medical documents submitted by the assessee were dated 23.02.2024, which represented an out-patient visit prior to the start of the limitation period on 10.03.2024, and no documentary evidence of hospitalization or discharge was provided. Consequently, observing that the assessee that failed to demonstrate sufficient cause to explain the delay, the Ld. CIT(A) declined to condone the delay of 49 days and refused to admit the appeal, and accordingly dismissed the appeal of the assessee in limine.

Aggrieved with the order of the Ld. CIT(A), the assessee has filed the appeal before the Tribunal.

Rival contentions were heard and the submissions made have been examined.

It was submitted by the Ld. AR that the Ld. CIT(A) dismissed the appeal on account of delay which should have been condoned as the assessee was under medical treatment and the appeal should have been decided on merits. It was stated by the assessee before the Ld. CIT(A) that the assessee was suffering from various medical conditions, which severely impacted his physical and mental capabilities. He was hospitalized at that time when the appeal was to be filed and was completely incapacitated. Even after discharge, he required prolonged recovery period due to the severity of his condition, thereby further delaying his ability to prepare and submit the appeal. He had attached medical certificates, treatment records, and the hospital discharge summary to substantiate his condition. It was stated that the delay of 48 days was neither intentional nor due to negligence but was caused by circumstances beyond his control. The assessee was doing business in the name of M/s Rishita Medicos and was running a proprietorship business of Medical & Drug Distributor. The Ld. AO rejected the books of account and applied gross profit @25% as the return of income was not filed although the return was filed in response to the notice u/s 148 of the Act and the Tax Audit Report was also obtained and the required details were filed. The assessee has filed a paper book electronically before us. The Ld. AR submitted before us that the appeal was dismissed by the Ld. CIT(A) on account of delay and requested that the matter may be sent back for deciding the appeal on merits as the assessee had sufficient cause for the delay. It was stated that the assessee has sufficient evidence for the relief claimed and even before the Ld. AO the details filed were not properly considered. It was requested that the appeal may be remanded to the Ld. CIT(A) for adjudication by passing a speaking order on merits of the case. The Ld. DR relied upon the order of the Ld. CIT(A) but did not seriously oppose the request of the assessee for remanding the appeal before the Ld. CIT(A).

We have considered the submissions made, gone through the facts of the case and perused the record and the order of the Ld. CIT(A) and are of the view that the delay ought to have been condoned and in case the Ld. CIT(A) was not satisfied with the reasons, an opportunity ought to have been provided to the assessee for substantiating the claim of medical illness for which documents were available and the appeal ought to have been decided on merits. Since there was no proper representation before the Ld. AO as well, it was considered by the Bench that in the interest of justice and fair play that another opportunity needs to be provided to the assessee to represent his case properly before the Ld. CIT(A). We, therefore, set aside the order of the Ld. CIT(A) and restore the appeal to him to be decided afresh on merits, who shall allow an opportunity of being heard to the assessee and also grant an opportunity of representing the case and be heard to the Ld. AO as per rule 46A of the Income Tax Rules, 1962, if required, and thereby pass an order on merits in accordance with law. Hence, the grounds of appeal are allowed for statistical purposes.

In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open Court on 2nd June, 2026. [Sonjoy Sarma] [Rakesh Mishra] Judicial Member Accountant Member Dated: 02.06.2026 Bidhan (Sr. P.S.)

CIT-

CIT(DR), Guwahati Benches, Guwahati.

Guard File. //// By order