BABASAHEB KISAN GORE,JALNA vs. ITO JALNA WARD, JALNA

Briefly stated the facts are that the assessee is an individual carrying on business as a commission agent i.e. “Kaccha Adatya”. For AY 2023-24, the assessee filed his return of income on 17.07.2023 declaring total income of Rs.4,83,510/-. The case of the assessee was selected for scrutiny under CASS to verify the nature of cash withdrawals and correctness of turnover and PBIT disclosed by the assessee for the relevant AY 2023-24. Accordingly, statutory notice(s) u/s 143(2) and 142(1) of the Income Tax Act, 1961 (the “Act”) along with questionnaire were issued and served upon the assessee followed by issue of show cause notice(s). However, there was no response from the side of the assessee to any of the notices issued by the Ld. Assessing Officer (“AO”) which constrained him to complete the assessment ex-parte u/s 144 of the Act based on the information available with the Department and the bank statement received from the assessee‟s bank account maintained with Motiram Agarwal

Before the Ld. CIT(A)/NFAC the appeal was filed with a delay of 109 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 said reason provided by the assessee for delay in filing of the appeal 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 as not admitted on account of non-condonation of delay.

Aggrieved, the assessee is in appeal before the Tribunal raising the following grounds of appeal : “General Ground 1. The Ld. AO has erred in assessing the total income at Rs. 5,90,29,826 as against the returned income at Rs. 4,83,510. Action of Ld. CIT (A) to dismiss the appeal due to delay in filing: 2. The Ld. CIT (A) has erred in law and on facts in dismissing the appeal solely on the ground of delay in filing the appeal. The Ld. CIT (A) failed to appreciate that there was sufficient cause for delay in filing the appeal as explained by appellant. 3. The Ld. CIT (A) failed to appreciate that the delay in appeal is unintentional and not deliberate, so the right of appeal cannot be denied merely on the ground of delay in filing. The appellant relies upon the Supreme Court decision in the case of Collector, Land Acquisition vs. Mst. Katiji & Ors. (1987) 167 ITR 471 (SC) and several other decisions to request your honour to condone the delay. 4. The appellant prays that the delay may kindly be condoned and impugned order be set aside. Also, the matter be restored to the file of the Ld. CIT(A) and direct Ld. CIT(A) to adjudicate the appeal on merits, as a principle of natural justice. Ld. CIT (A) decision about the appeal: 5. The Ld. CIT (A) failed to adjudicate the appeal on merits and also, violated section 250(6) where he is required to give reasons for not disposing off other grounds of appeal. Ground on merits 6. The Ld. AO erred in considering the turnover of Rs. 18,44,47,521 and applying the profit percentage @ 32.5% on the said credits. The Ld. AO failed to appreciate that the assessee has declared the receipts of Rs. 17,75,521. The Ld. AO failed to appreciate that the credit in the bank

The Ld. AR submitted that the assessee had no malafide intention behind not filing the appeal within the prescribed time limit. The Ld. AR submitted an affidavit of the assessee before the Tribunal citing therein the reason for the delay in filing of the appeal as the assessee could not submit the affidavit earlier before the Ld. CIT(A)/ NFAC. Relying on the decision of the Hon'ble Supreme Court in the case of Collector, Land Acquisition vs. Mst. Katiji & Ors. reported in 167 ITR 471 (SC), 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 of hearing issued by him thereby treating the total bank credits of Rs. 18,44,47,521/- in the current account of the assessee as turnover and estimated net profit @32.05%, resulting in an addition of Rs. 5,85,46,316/. The Ld. CIT(A)/NFAC has dismissed the appeal of the assessee as not admitted on account of delay of 109 days in filing of the appeal without considering the assessee‟s submissions on merits of the case. 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 affidavit of the assessee filed before the Tribunal. In his affidavit, the assessee has stated the reason for such delay to be his illiteracy and total dependency on consultant, lack of proper guidance and lack of knowledge about the law of limitation. 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.

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.