VIPULBHAI DHIRUBHAI ROKAD,RAJKOT vs. INCOME TAX OFFICER, WARD 1(1)(1), RAJKOT, RAJKOT

ITA No. 310/RJT/2026 arises out of CIT (A) 05.01.2026 and emanates from the assessment order framed under Sections 147 read with Section 144 of the Income Tax Act, 1961 (“the Act”), dated 28.02.2023. ITA No. 326/RJT/2026 arises out of

The brief facts of the case are that the assessee had not filed any return of income for the relevant assessment year. Consequently, the case of the assessee was reopened under Section 147 of the Act and notice under Section 148 of the Act was issued. During the course of assessment proceedings, it was observed that there was cash transaction amounting to ₹1,57,69,000 during the relevant year. Since the assessee failed to offer any satisfactory explanation regarding the source of such amount reflected in the bank account, the Assessing Officer treated the same as unexplained money under Section 69A of the Act and applied the provisions of Section 115BBE of the Act. Accordingly, an addition of ₹1,57,69,000 was made to the income of the assessee.

Aggrieved by the assessment order, the assessee preferred an appeal before the CIT(A) with a delay of 889 days. The CIT(A), observing that no proper explanation was furnished for such delay, dismissed the appeal without examining the issues on merits.

Before us, the learned Authorised Representative submitted that due to an incorrect mention of the email address, the assessee could not effectively participate in the proceedings before the Assessing Officer. It was further submitted that though there was a substantial delay in filing the appeal before the CIT(A), another opportunity may be granted by condoning the delay and directing adjudication of the issues on merits.

We have heard the rival submissions and perused the material available on record. We find that there was a delay of 889 days in filing the appeal before the CIT(A). The assessee had filed an application seeking condonation of delay. However, the CIT(A), without considering the request in detail and without examining the merits of the matter, dismissed the appeal.

It is a settled principle that substantial justice should prevail over technical considerations and that, wherever possible, matters should be decided on merits rather than dismissed on procedural grounds. In the interest of natural justice, we consider it appropriate that the assessee be afforded another opportunity for proper adjudication of the issues involved.

Accordingly, the delay in filing the appeal before the CIT(A) is condoned and the matter is restored to the file of the CIT(A) with a direction to re-examine and adjudicate the issues afresh in accordance with law after providing adequate opportunity of hearing to the assessee.

However, while passing this order, we also take note of the conduct of the assessee, who remained indifferent during the course of proceedings and failed to properly participate in the matter. Therefore, in the interest of justice and fair play, we impose a cost of ₹10,000 upon the assessee, which shall be deposited in the Prime

Since ITA No. 326/RJT/2026 relating to penalty proceedings under Section 271AAC(1) arises from the same set of facts and is consequential to the quantum proceedings, the same is also restored to the file of the CIT(A) for fresh adjudication in accordance with law.

In the result, both appeals of the assessee are allowed for statistical purposes.