A1265 PANNAIKADU PACCS,DINDIGUAL vs. ITO, WARD-1,, DINDIGUL

At the outset, it is noticed that the present appeal has been filed with a delay of 206 days beyond the period of limitation prescribed under the Act. In support of the prayer for condonation of delay, the assessee has filed an affidavit explaining the circumstances which occasioned the delay in preferring the appeal. The reasons assigned in the affidavit have been carefully perused and considered. It is well settled that while considering an application for condonation of delay, a liberal and justice-oriented approach is required to be adopted where the delay is neither deliberate nor attributable to negligence or mala fides, and where sufficient cause is shown for not presenting the appeal within the prescribed period.

Upon an overall consideration of the facts and circumstances brought on record, we are satisfied that the assessee was prevented by sufficient and reasonable cause from filing the appeal within the period of limitation. We do not find any material to suggest that the delay was intentional, wilful or occasioned by any lack of bona fides on the part of the assessee. On the contrary, the explanation furnished appears to be plausible and deserves acceptance. Since technical considerations should not be allowed to defeat substantial justice, particularly when no prejudice is caused to the Revenue by condonation of the delay, we deem it appropriate to exercise the discretion vested in us in favour of the assessee. Accordingly, the delay of 206 days in filing the present appeal is condoned. The appeal is, therefore, admitted for adjudication and is proceeded with on the merits of the issues raised therein.

The brief facts, as borne out from the assessment records, are that the assessee is a co-operative society. It is an admitted position that the assessee did not furnish its return of income for the year under consideration within the time prescribed u/s.139(1) of the Act. Information available with the Department revealed that during the relevant previous year, the assessee had deposited

In response to the said notice, the assessee filed its return of income on 03.11.2023 declaring NIL income. During the course of reassessment proceedings, the AO issued statutory notices calling upon the assessee to furnish the details and explanations in support of the transactions reflected in its bank accounts. However, the assessee did not respond to the notices issued by the AO nor did it place any material on record to substantiate the nature and source of the deposits. Consequently, in order to verify the financial transactions independently, the AO exercised the powers conferred u/s.133(6) of the Act and called for the bank account statements directly from DCC Bank. On examination of the information so received, the AO noticed that the aggregate credits in the various bank accounts maintained by the assessee with the said bank amounted to Rs.2,20,31,977/- during the relevant previous year. Since the assessee had failed to explain the nature and source of the aforesaid credits despite adequate opportunity, the AO proposed to treat the entire sum of Rs.2,20,31,977/- as unexplained money u/s.69A of the Act and to subject the same to tax in accordance with the provisions of section 115BBE of the Act.

As the assessee failed to furnish any satisfactory explanation or supporting evidence to establish the identity, nature and source of the credits appearing in its bank accounts, the AO treated the aggregate bank credits of Rs.2,20,31,977/- as unexplained money u/s.69A r.w.s 115BBE of the Act. Accordingly, the reassessment was completed u/s.147 of the Act on 27.02.2024 by determining the total income of the assessee at Rs.2,20,31,977/-.

Aggrieved by the assessment order so passed, the assessee preferred an appeal before the Ld.CIT(A). The Ld.CIT(A), however, vide the impugned

The assessee, in the course of the appellate proceedings before the Ld.CIT(A), filed a petition seeking condonation of the delay in presenting the appeal, explaining the circumstances which, according to it, had occasioned the belated filing. It was submitted that the assessee is a co-operative credit society and that its affairs are managed by its staff, who were not conversant with the provisions of the Income-tax Act and the procedural requirements governing appellate proceedings. On the strength of the said explanation, the assessee pleaded that the delay was neither deliberate nor attributable to any mala fide intention, and therefore prayed that the same be condoned in the interest of substantial justice.

The Ld.CIT(A), however, was not convinced with the explanation offered by the assessee. According to the Ld.CIT(A), the reasons assigned did not constitute "sufficient cause" within the meaning of law so as to warrant condonation of the delay in filing the appeal. Consequently, the Ld.CIT(A) declined to exercise the discretion vested under the Act to condone the delay and dismissed the appeal in limine as being barred by limitation, without adjudicating the issues raised on merits.

Being aggrieved by the aforesaid order of the Ld. CIT(A), the assessee is now in further appeal before this Tribunal.

We have heard the rival submissions, perused the orders of the authorities below and carefully examined the material available on record. It is an undisputed fact that the appeal before the Ld.CIT(A) was filed with a delay. We have given our thoughtful consideration to the explanation tendered by the assessee in support of the petition for condonation of delay. Upon an overall appreciation of the facts and circumstances of the case, we find that the delay cannot be said to have arisen on account of any deliberate inaction, wilful

It is now well-settled that the expression “sufficient cause” employed in limitation provisions is required to receive a liberal and justice-oriented interpretation so as to advance substantial justice. The Hon’ble Supreme Court, in a catena of decisions, has consistently held that where the explanation for delay does not smack of mala fides and is otherwise plausible, the approach of the adjudicating authority should be pragmatic and not hyper-technical. A litigant ordinarily does not stand to gain by delaying the institution of proceedings and, therefore, unless the delay is attributable to gross negligence, deliberate inaction or want of bona fides, the same deserves to be condoned in the interest of justice.

In this regard, we derive support from the celebrated judgment of the Hon’ble Supreme Court in Collector, Land Acquisition v. Mst. Katiji & Others (167 ITR 471), wherein the Hon’ble Supreme Court emphasized that a liberal approach should be adopted while considering applications for condonation of delay and that substantial justice should prevail over technical considerations. Similar principles have been reiterated by the Hon’ble Supreme Court in Ram Nath Sao @ Ram Nath Sahu & Others v. Gobardhan Sao & Others [AIR 2002 SC 1201], wherein it was held that courts should avoid rejecting matters on technical grounds where no mala fides or deliberate negligence can be attributed to the litigant.

We further note that the Hon’ble Supreme Court in Vidya Shankar Jaiswal v. Income Tax Officer, Ward-2, Ambikapur (SLP (Civil) Nos. 26310–26311 of 2024, order dated 31.01.2025) has once again reiterated that applications seeking condonation of delay are required to be considered in a liberal manner

Having regard to the totality of the facts and circumstances of the case, and respectfully following the aforesaid binding judicial precedents, we are of the considered view that the assessee has shown a reasonable and sufficient cause for the delay in filing the appeal before the Ld.CIT(A). In our opinion, the Ld.CIT(A) was not justified in dismissing the appeal in limine without affording an opportunity for adjudication of the issues on merits. We, therefore, condone the delay in filing the appeal before the first appellate authority, set aside the impugned order of the Ld.CIT(A).

Since the issue involved requires factual verification, instead of restoring the matter to the file of the Ld.CIT(A), we deem it appropriate, in the peculiar facts of the case, to remit the matter to the file of the AO. The AO shall examine the assessee's contention and decide the issue in accordance with law. The assessee is also directed to extend full cooperation and furnish all requisite details and evidences as may be called for by the AO.

However, while granting the aforesaid indulgence, we cannot lose sight of the fact that the assessee failed to respond to the statutory notices issued during the reassessment proceedings and thereafter also failed to effectively prosecute the appeal before the Ld.CIT(A), resulting in avoidable litigation and unnecessary consumption of judicial time. The restoration of the matter is, therefore, considered appropriate only on terms. Accordingly, the assessee is directed to pay costs of Rs.10,000/- (Rupees Ten Thousand only) to the Tamil Nadu State Legal Services Authority, Hon'ble High Court of Madras within a period of one month from the date of receipt of this order and produce proof of such payment before the AO at the commencement of the remand proceedings. Subject to compliance with the aforesaid condition, the AO shall proceed to decide the matter afresh uninfluenced by any observations contained either in the assessment order, the order of the Ld.CIT(A), or in the present order. In the

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