VINITA, CHANDIGARH,CHANDIGARH vs. INCOME TAX OFFICER WARD 2(1), CHANDIGARH, CHANDIGARH

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ITA 848/CHANDI/2026Status: DisposedITAT Chandigarh20 April 2026AY 2017-188 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal condoned the delay, citing the liberal interpretation of 'sufficient cause' to advance substantial justice. The issue of an addition for unexplained investment in a house property was set aside and restored to the AO for fresh adjudication, considering the daughter's potential financial contribution.

What were the facts?

The assessee's appeal was filed 122 days late due to a mistaken belief that a writ petition filed before the High Court was the correct recourse. The assessee sought condonation of delay, arguing it was a bonafide error.

What were the issues?

Whether the delay in filing the appeal should be condoned, and whether the addition for unexplained investment in property warrants a remand to the AO for fresh verification.

Which sections of the Income-tax Act were involved?

Section 253(5),Section 249(3),Section 5

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DIVISION BENCH, ‘B’ CHANDIGARH

Before: SHRI RAJPAL YADAV & SHRI MANOJ KUMAR AGGARWAL

For Appellant: Shri Rishab Gupta, CA
For Respondent: Dr. Ranjit Kaur, Addl. CIT Sr.DR
Hearing: 15.04.2026Pronounced: 20.04.2026

आयकर अपील�य अ�धकरण,च�डीगढ़ �यायपीठ, च�डीगढ़ IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, ‘B’ CHANDIGARH BEFORE SHRI RAJPAL YADAV, VICE PRESIDENT AND SHRI MANOJ KUMAR AGGARWAL, ACCOUNTANT MEMBER आयकर अपील सं./ ITA No. 848/CHD/2026 �नधा�रण वष� / Assessment Year: 2017-18 Vinita, The ITO, C/o M.K.Aggarwal & Associates Vs Ward 2(1), SCO 1, 1st Floor, Sector 11, Chandigarh. Panchkula. �थायी लेखा सं./PAN NO: BDAPV3224P अपीलाथ�/Appellant ��यथ�/Respondent Assessee by : Shri Rishab Gupta, CA Revenue by : Dr. Ranjit Kaur, Addl. CIT Sr.DR Date of Hearing : 15.04.2026 Date of Pronouncement : 20.04.2026 PHYSICAL HEARING O R D E R PER RAJPAL YADAV, VP

The assessee is in appeal before the Tribunal against the order of the ld. Commissioner of Income Tax (Appeals) [in short ‘the CIT (A)’] dated 05.02.2025 passed for assessment year 2017-18.

2.

The Registry has pointed out that appeal is time barred by 122 days. In order to explain the delay in filing the appeal, assessee has filed an application pleading therein that against

ITA No.848/CHD/2026 A.Y.2017-18 2

the order of the CIT (Appeals), assessee has approached Hon'ble Punjab & Haryana High Court by way of a writ petition, however, later on the writ petition was withdrawn with a liberty to file the appeal. The ld. counsel for the assessee has submitted that assessee had approached the wrong forum under mistaken belief and that has made the appeal time barred.

2.1 The ld. DR, on the other hand contended that assessee should be more vigilant in prosecuting the litigation with Revenue.

3.

Sub-section 5 of Section 253 contemplates that the Tribunal may admit an appeal or permit filing of memorandum of cross- objections after expiry of relevant period, if it is satisfied that there was a sufficient cause for not presenting it within that period. This expression sufficient cause employed in the section has also been used identically in sub- section 3 of section 249 of Income Tax Act, which provides powers to the ld. Commissioner to condone the delay in filing the appeal before the Commissioner. Similarly, it has been used in section 5 of Indian Limitation Act, 1963. Whenever

ITA No.848/CHD/2026 A.Y.2017-18 3

interpretation and construction of this expression has fallen for consideration before Hon’ble High Court as well as before the Hon’ble Supreme Court, then, Hon’ble Court were unanimous in their conclusion that this expression is to be used liberally. We may make reference to the following observations of the Hon’ble Supreme court from the decision in the case of Collector Land Acquisition Vs. Mst. Katiji & Others, 1987 AIR 1353:

1.

Ordinarily a litigant does not stand to benefit by lodging an appeal late.

2.

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.

3.

"Every day’s delay must be explained" does not mean that a pedantic approach should be made. Why not every hour's delay, every second's delay? The doctrine must be applied in a rational common sense pragmatic manner.

4.

When substantial justice and technical considerations

ITA No.848/CHD/2026 A.Y.2017-18 4 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.

5.

There is no presumption that delay is occasioned deliberately, or on account of culpable negligence, or on account of mala fides. A litigant does not stand to benefit by resorting to delay. In fact, he runs a serious risk. 6. It must be grasped that judiciary is respected not on account of its power to legalize injustice on technical grounds but because it is capable of removing injustice and is expected to do so.

4.

Similarly, we would like to make reference to authoritative pronouncement of Hon’ble Supreme Court in the case of N. Balakrishnan Vs. M. Krishnamurthy (1998) 7 SCC 123 dated 03.09.1998. It reads as under:

“Rule of limitation are not meant to destroy the right of parties. They are meant to see that parties do not resort to dilatory tactics, but seek their remedy promptly. The object of providing a legal remedy is to repair the damage caused by reason of legal injury. Law of limitation fixes a life-span for such legal remedy for the redress of the legal injury so suffered. Time is precious and the wasted time would never revisit. During efflux of time newer causes would sprout up necessitating newer persons to seek legal remedy by approaching the courts. So a life span must be fixed for each remedy. Unending period for launching the remedy may lead to unending

ITA No.848/CHD/2026 A.Y.2017-18 5 uncertainty and consequential anarchy. Law of limitation is thus founded on public policy. It is enshrined in the maxim Interest reipublicae up sit finislitium (it is for the general welfare that a period be putt to litigation). Rules of limitation are not meant to destroy the right of the parties. They are meant to see that parties do not resort to dilatory tactics but seek their remedy promptly. The idea is that every legal remedy must be kept alive for a legislatively fixed period of time. A court knows that refusal to condone delay would result foreclosing a suitor from putting forth his cause. There is no presumption that delay in approaching the court is always deliberate. This Court has held that the words "sufficient cause" under Section 5 of the Limitation Act should receive a liberal construction so as to advance substantial justice vide Shakuntala Devi lain Vs. Kuntal Kumari [AIR 1969 SC 575] and State of West Bengal Vs. The Administrator, Howrah Municipality [AIR 1972 SC 749]. It must be remembered that in every case of delay there can be some lapse on the part of the litigant concerned. That alone is not enough to turn down his plea and to shut the door against him. If the explanation does not smack of mala fides or it is not put forth as part of a dilatory strategy the court must show utmost consideration to the suitor. But when there is reasonable ground to think that the delay was occasioned by the party deliberately to gain time then the court should lean against acceptance of the explanation. While condoning delay the Could should not forget the opposite party altogether. It must be borne in mind that he is a looser and he too would have incurred quiet a large litigation expenses. It would be a salutary guideline that when courts condone the delay due to laches on the part of the applicant the court shall compensate the opposite party for his loss”.

5.

In the light of above, if we peruse the record then it would reveal that an addition of Rs.2,35,00,000/- on account of unexplained investment in purchase of house property has been made which would give rise to huge tax demand, namely,

ITA No.848/CHD/2026 A.Y.2017-18 6

Rs.1,81,53,750/-. The assessee might have approached the Hon'ble High Court under an impression that assessment order is ex-parte, it would be quashed but Hon'ble High Court has relegated the assessee on the normal appeal platform. To our mind, it was a bonafide error at the end of the assessee while prosecuting the litigation with the Department. The assessee has not made its appeal time barred intentionally because assessee would not gain anything by making the appeal time barred. Therefore, we condone the delay and proceed to decide the appeal on merit.

6.

The assessee has taken five grounds of appeal, however, her grievances revolve around two issues, namely ; a) The CIT (Appeals) has erred in upholding the re- opening of assessment;

b) The CIT (Appeals) has erred in dismissing the appeal for want of prosecution and thereby confirming the addition of Rs.2,35,00,000/-.

7.

The assessee has filed an application for adducing additional evidence. The stand of the assessee is that house property was purchased for a consideration of Rs.4,70,00,000/- by her daughter and she has made the whole

ITA No.848/CHD/2026 A.Y.2017-18 7 contribution including bank finance. Her name has been included only out of love and affection. The assessee has filed copy of a certificate from Developer, ledger account, copy of loan Agreement with the Bank etc.

7.1 The ld. DR, on the other hand contended that both the orders are ex-parte orders. The assessee did not produce anything before the lower authorities. Therefore, additional evidence, if entertained, then issue be remitted before the AO for verification of such evidence.

8.

We have duly considered the rival contentions and gone through the record carefully. The stand of the assessee is that house property has been purchased by her daughter and her name is included in the Sale Deed out of love and affection. The daughter has every source of this alleged unexplained investment which could not be produced at the time of assessment proceedings because it was an ex-parte proceeding. The assessee is an old lady of 67 years. It is pertinent to note that if the daughter is in a position to explain the total investment of Rs.4,70,00,000/-, then at the most it could be concluded that she has gifted Rs.2,35,00,000/- to her mother by inclusion of her name in the Sale Deed but

ITA No.848/CHD/2026 A.Y.2017-18 8 being a gift in the first blood relation, it cannot be taxed. Therefore, we set aside both the impugned orders and relegate this issue to the file of AO who will re-verify and if it is demonstrated that the daughter of the assessee has sufficient source for purchase of the house property, then no addition ought to be made in the hands of the assessee because being a daughter, she can give gift of a house property to the assessee. Accordingly, we allow this appeal for statistical purposes and restore this issue to the file of AO for fresh adjudication. The ld. AO is directed to provide due opportunity of hearing to the assessee.

9.

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

Order pronounced on 20.04.2026.

Sd/- Sd/- (MANOJ KUMAR AGGARWAL) (RAJPAL YADAV) ACCOUNTANT MEMBER VICE PRESIDENT “Poonam” आदेश की �ितिलिप अ�ेिषत/ Copy of the order forwarded to : अपीलाथ�/ The Appellant 1. ��थ�/ The Respondent 2. आयकर आयु�/ CIT 3. िवभागीय �ितिनिध, आयकर अपीलीय आिधकरण, च�ीगढ़/ DR, ITAT, CHANDIGARH 4. गाड� फाईल/ Guard File 5.

सहायक पंजीकार/ Assistant Registrar

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