REX STRAUT CLOTHING,MUMBAI vs. ITO 31(3)(2) AS PER ORDER/ ITO 41(4)(3) PRESENT, MUMBAI

IN THE INCOME-TAX APPELLATE TRIBUNAL, MUMBAI “D” BENCH, MUMBAI BEFORE SHRI SANDEEP GOSAIN, JUDICIAL MEMBER AND SHRI BIJAYANANDA PRUSETH, ACCOUNTANT MEMBER ITA No.7103/Mum/2025 (A.Y. 2012-13) Rex Straut Clothing, vs. ITO 31(3)(2) as per Order/ITO 41(4)(3) B1008, Symphony CHS, New Present, Kautilya Bhavan BKC, Link Road, Kandivali West, Mumbai-400051. Mumbai-400067. PAN/GIR No: AALFR0732P (Appellant) (Respondent)

Assessee by Mr. Nirav Shah (CA) Revenue by Shri Annavaram Kosuri, SR AR Date of Hearing 14.05.2026 Date of Pronouncement 08.06.2026

O R D E R PER BIJYANANDA PRUSETH, AM:

The appeal filed by the assessee is directed against the order passed by Ld.

Commissioner of Income Tax (Appeals), National Faceless Appeal Centre [in short,

‘CIT(A)] under section 250 of the Income Tax Act, 1961 (in short, ‘Act’) dated

18.01.2025 for assessment year (in short, A.Y.) 2012-13.

“1. On the facts and circumstances of the case and in law, the Learned Commissioner of Income Tax (Appeals) erred in not deleting the addition made u/s 68 of the Income Tax Act, 1961 ('the Act') of Rs. 1,05,00,000/- being unsecured loan received during the year under consideration from three parties.

for the AY 2012-13 on 18.09.2012 declaring total income of Rs.9,43,451/-.

Assessment order u/s 143(3) was made on 30.03.2015 by adding Rs.1,05,00,000/-

u/s 68 of the Act, being the bogus loans from entities of Bhawarlal Jain group. The

AO also disallowed interest expenses of Rs.1,73,885/-. Aggrieved by the order of

AO, the assessee filed appeal before the CIT(A) who dismissed the appeal vide

order dated 28.06.2017. The assessee had not complied with the notices of

hearing issued to it by the CIT(A).

Tribunal after a delay of 2891 days. The assessee has filed an application for

condonation of delay and submitted as under:

“We have submitted this appeal against order of CIT Appeal dated 28/06/2017 which is delayed by 2891 days. The facts and circumstances and cause for unintentional and inadvertent delay are as under :-

1) Inappropriate, untimely and incorrect course of action by Consultant Mr Harshad M Sukhiva, Chartered Accountant The Appellant had appointed consultant, Mr Harshad M Sukhiya proprietor of H M Sukhiya & co, Chartered Accountants to handle the appeal related work after the first appeal order was passed by CIT appeal dated 28/06/2017. In this regard we had submitted an Affidavit by Mr Harshad M Sukhiya duly notarized dated 20/04/2026. Copy of affidavit is attached for your Honour's ready reference. As per the said affidavit it has been submitted that the consultant was engaged to handle the scrutiny and appeal related work. The consultant has agreed that the appeal was supposed to be submitted to Hon'ble ITAT against the order of CIT Appeal dated 28/01/2017. However, the consultant being a senior citizen and having health issues, he had delegated the work to his junior staff and who has inadvertently and by oversight submitted the appeal once again to GIT appeal instead on ITAT, with delay and was eventually submitted on 04/02/2018. Further he has mentioned that due to change in staff and their pre- occupation with other assignments, the error remained uncorrected and no timely appeal could be submitted. Hence the appeal to Hon'ble ITAT was not filed at that time as they have submitted the appeal to CIT Appeal once again and that was also delay on account of above reason which are mentioned in the affidavit.

In the above circumstances, the appellant relied upon the professional chartered accountant to take proper and timely course of action, which was not carried out. Hence the inadvertent and unintentional delay occurred in submission of present appeal.

2) Closure of the business and the firm due to resignation by partner

The Appellant is a partnership firm having two partners Mr Vinod Patel and Mr Kalpesh Patel. It is pertinent to note that Mr. Kalpesh Patel resigned from the firm wef dated 30/01/2014 and the business of the appellant firm was thereby closed. In the said circumstances the surviving partner could not pay attention to the pending dispute and he had relied upon the consultant to take necessary action in the litigation/ dispute matters.

3) Lack of knowledge, unintentional, inadvertent delay The partners of the firm are not qualified professionals nor they have any higher educational qualification. Mr Kalpesh Patel is a 10th Pass out and Mr Vinod Patel is a 12th Passout. They do not have any further education or qualification. Further they are a normal traders/ businessman and does not possess skill or knowledge regarding the handling of Tax disputes, it process, timelines and technical aspects thereof. In the said circumstances, the partner was under genuine belief that the matter was duly being contested in appeal through authorized representative and was not aware about duplicate and incorrect appeal filed with CIT Appeal instead of ITAT. There was no intention or deliberate delay by the appellant. In view of the same we pray before your Honour to condone the delay. 4) Appellant does not stand to benefit by lodging a delayed appeal

The Appellant submit that the delay in filing of appeal of totally unintentional, inadvertent and by oversight due to lack of knowledge and error on the part of professional consultant. The Appellant submit that it does not gain anything by delaying the filing of appeal. Delay only causes more trouble to Appellant than anyone else. Further the Appellant always wanted to take the matter in appeal which is reflected in his efforts in engaging consultants and filling appeals.

5) Request to condone the delay in the interest of Justice

In the above circumstances, the Appellant prays one Last opportunity to present his case and pray to condone delay considering the above facts as sufficient cause for condonation of delay. The Appellant prays before Your Honour to provide one last opportunity in the interest of Justice. The Appellant do agree to deposit the cost on account the delay and non-compliance of the timelines and inconvenience cause in this matter.”

The appellant has relied on the decisions in cases of Concord of India 4.1

Insurance Co. Ltd. V. Smt. Nirmala Devi and Others, 118 ITR 507(SC), Subhkaran &

Sons v. N.A. Kazi, 5th ITO and Others [1985] 152 ITR 231 (Bom.), Vijay Vishin

Meghani vs DCIT 23(2), Mumbai [2017] 86 taxmann.com 98 (Bombay) and Shree

Swamy Samarth Vs ITO, ITA No. 237/Mum/2023 (ITAT Mumbai).

of the CIT(A) and submitted that there was inordinate delay of 2891 days in filing

the appeal before the Tribunal. The assessee was also non-complaint before the

CIT(A). The assessee has put all the blame on the tax consultant, which cannot

absolve assessee from its statutory obligation of filing appeal within the permitted

time. The assessee has not given any explanation that there was “sufficient cause”

for not presenting the appeal within 2 months from the date of the appellate

order of the CIT(A). He submitted that the inordinate delay of nearly 8 years in

filing the appeal should not be condoned.

delay. There is no dispute that there was delay of 2891 days in filing the appeal

before the ITAT. The assessee was also non-compliant before the CIT(A). Hence, it

is clear that the appellant was not active and was also negligent before different

appellate authorities. The Ld. AR submitted that the delay was not intentional.

The appellant has filed an application for condonation of the delay, which has

been reproduced above. The reason given before the Tribunal is that the

authorized counsel did not take appropriate, timely and correct action. There was

closer of business due to resignation by the partner. The partner was also not

knowledgeable and the appellant does not stand to benefit by filing a delayed

appeal. The Ld. AR requested that the delay may be condoned in the interest of

justice. The above reasons could not be treated as a “sufficient cause” in terms of

provisions of section 253(5) of the Act for the inordinate delay of 2891 days. The

appellant has put all the blame on the Charted Accountant and the reasons given

are general in nature. The Ld. AR has relied on various decisions without

explaining as to how the facts of the appellant are similar to those of the decisions

on which reliance has been placed. The Hon’ble Supreme Court in case of Padmasundara Rao vs. State of Tamil Nadu [2002] 255 ITR 147 (SC) held that the

courts should not place reliance on decisions without discussing how the factual

situation fits into the factual situation of the decision on which reliance is placed.

There is always peril in treating the words of a speech or a judgment as though

they were words in a legislative enactment. Judicial utterances are made in the

setting of facts of the particular case. Circumstantial flexibility, one additional or

different fact may make a world of difference between conclusions in two cases.

The Hon’ble Bombay High Court in case of Ashish Gandhi Builder & Developers

vs. ITAT (2017-TIOL-137-HC-Mum-IT) has held that mere filing of paper book is not

indicative of the fact that case laws referred to therein has been relied upon by

the assessee and submissions have been made with regard to them.

of decisions, namely, (i) P. K. Ramachandran vs State of Kerala & Anr. (1997) 7 SCC

556, (ii) Pundik Jalam Patil vs. Executive Engineers, Jalgaon Medium Project,

(2008) 17 SCC 448 and (iii) Basawaraj and Anr vs. Special Land Acquisition Officer,

(2013) 14 SCC 81, (iv) Pathapati Subba Reddy (dies) By L. Rs. & Ors. Vs The Special

Deputy Collector (LA), SLP(C) No.31248 of 2018 (SC), dated 08.04.2024 held that

condonation of delay should not be granted only on the ground that ordinarily a

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

the law on the subject issue by stating that where a case has been presented in

the Court beyond limitation of time, the applicant has to explain as to what was

the “sufficient cause” which means an adequate and enough reason, which

prevented him to approach the Court within the limitation. In case a party is found

to be negligent, or for want of bonafide on his part in the facts and circumstances

of the case, or found to have not acted diligently or remained inactive, there

cannot be a justified ground to condone the delay.

the case of Pathapati Subba Reddy (dies) & Ors. vs. The Special Deputy Collector

(LA), in SLP (Civil) No. 31248 of 2018 (SC), the Hon'ble Supreme Court referred to

and discussed various decisions of Hon'ble Supreme Court and held as under:

“7. The law of limitation is founded on public policy. It is enshrined in the legal maxim “interest reipublicae ut sit finis litium” i.e. it is for the general welfare that a period of limitation be put to litigation. The object is to put an end to every legal remedy and to have a fixed period of life for every litigation as it is futile to keep any litigation or dispute pending indefinitely. Even public policy requires that there should be an end to the litigation otherwise it would be a dichotomy if the litigation is made immortal vis-a-vis the litigating parties i.e. human beings, who are mortals.”

Ors. vs. A. Krishnaiah Since Deceased by LRS., in Civil Appeal No. 317 of 2025,

dated 08.01.2025, has set aside the order of Hon’ble High Court of Karnataka in WP No.7220 of 2014 wherein the Hon’ble High Court allowed the Writ Petition by

condoning the delay. The Hon’ble Supreme Court at para 13 observed as under:

‘13. We are at our wits end to understand why the High Court overlooked all the aforesaid aspects. What was the good reason for the High Court to ignore all this? Time and again, the Supreme Court has reminded the District judiciary as well the High courts that the concepts such as “liberal approach”, “Justice oriented approach”, “substantial justice” should not be employed to frustrate or jettison the substantial law of limitation.’

Ltd. vs. PCIT, (2025) 178 taxmann.com 257 (SC) dismissed the SLP against the

order of High Court that where the assessee contented that the delay was due to

negligence of the counsel to file appeal. The Madhya Pradesh High Court had

dismissed the appeal of the assessee. It was otherwise the duty of the assessee

to watch its affairs and there was gross negligence in the attitude to the assessee

in filing appeal and the assessee has not exercised any care to enquire about the

status of second appeal and tried to shift the responsibility towards his counsel.

The facts of the instant appeal are similar and the appellant has put all the blames

on the counsel without admitting the gross negligence on his part. In view of the

facts of the case discussed above and respectfully following the authoritative

precedents cited supra, we find no reason to condone the inordinate delay of

2891 days in filing appeal before the Tribunal in absence of any “sufficient cause”.

The appeal of the assessee is, accordingly, dismissed.

has been dismissed, the grounds on merit become academic in nature and do not

require adjudication.

Order is pronounced on 08.06.2026.

Sd/- Sd/-

(SANDEEP GOSAIN) (BIJYANANDA PRUSETH) JUDICIAL MEMBER ACCOUNTANT MEMBER

*Aniket Chand; Sr. PS MUMBAI Date: 08.06.2026 Copy of the Order forwarded to: 1. The Assessee 2. The Respondent 3. The CIT(A) 4. CIT 5. DR/AR, ITAT, MUMBAI 6. Guard File

By Order

Assistant Registrar ITAT, MUMBAI