THE HUNDUND TALUKA AGRICULTURAL PRODUCE CO-OP MARKETING SOCIETY,HUNGUND vs. INCOME TAX OFFICER, WARD-1,, BAGALKOT

PER KESHAV DUBEY, JUDICIAL MEMBER:

These appeals at the instance of the assessee are directed against the separate orders of ld. CIT(A)/NFAC both dated 8.7.2025 vide DIN & Order No. ITBA/NFAC/S/250/2025-26/1078297110(1) for the assessment year 2015-16 & vide DIN & Order No. ITBA/NFAC/S/250/2025-26/1078297427(1) for the assessment years 2016-17 passed u/s 250 of the Income Tax Act, 1961 (in short “The Act”). Since the issue involved in both these appeals is common in nature, these are clubbed together, heard together and disposed of by this common order for the sake of convenience and brevity.

ITA No.1868 & 1869/Bang/2025 The Hungund Taluka Agricultural Produce Co-Op Marketing Society Limited, Hungund Page 2 of 7

4.1 Before us, the ld. AR of the assessee submitted that the assessee co-operative society is situated at small Taluka & the

ITA No.1868 & 1869/Bang/2025 The Hungund Taluka Agricultural Produce Co-Op Marketing Society Limited, Hungund Page 3 of 7 email id mentioned in the income tax portal was that of the Chartered Accountant of the assessee. The assessee was completely unaware of any of the notices issued during the course of assessment proceedings & due to the non response by the CA, the AO had passed the ex-parte order u/s 144 of the Act. It is also submitted that the assessee was in a state of shock and confusion and after due deliberation, the management decided to file an appeal as there was no alternative remedy. The ld. A.R. further contended that the delay was not intentional or deliberate and arose due to the aforementioned circumstances.

4.2 The ld. D.R. on the other hand, vehemently submitted that the reason cited for condonation of delay is not at all a sufficient cause as rightly held by the ld. CIT(A)/NFAC. Further the ld. DR submitted that it is only for the negligence on the part of the assessee & accordingly prayed that the delay before the ld. CIT(A)/NFAC may not be condoned.

ITA No.1868 & 1869/Bang/2025 The Hungund Taluka Agricultural Produce Co-Op Marketing Society Limited, Hungund Page 4 of 7

5.1 While considering a similar issue the Apex Court in the case of Collector, Land Acquisition v. Mst. Katiji and Ors. (167 ITR 471) laid down six principles. For the purpose of convenience, the principles laid down by the Apex Court are reproduced hereunder:

(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 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, commonsense and pragmatic manner.

(4) When substantial justice and technical consideration are pitted against each other, the 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 nondeliberate 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 the judiciary is respected not on account of its power to legalise injustice on technical grounds but because it is capable of removing injustice and is expected to do so.

5.2 When substantial justice and technical consideration are pitted against each other, the cause of substantial justice deserves to be preferred, for the other side cannot claim to have vested right for injustice being done because of non deliberate delay. Therefore, we have to prefer substantial justice rather than technicality in deciding the issue. As observed by Apex Court, if the application of the assessee for condoning the delay is rejected, it would amount to legalize injustice on technical ground when the Tribunal is capable of removing injustice and to do justice. Therefore, this Tribunal is bound to remove the injustice by condoning the delay

ITA No.1868 & 1869/Bang/2025 The Hungund Taluka Agricultural Produce Co-Op Marketing Society Limited, Hungund Page 5 of 7 on technicalities. If the delay is not condoned, it would amount to legalizing an illegal order which would result in unjust enrichment on the part of the State by retaining the tax relatable thereto. Under the scheme of Constitution, the Government cannot retain even a single pie of the individual citizen as tax, when it is not authorized by an authority of law. Therefore, if we refuse to condone the delay, that would amount to legalize an illegal and unconstitutional order passed by the lower authority.

5.3 Further, in the case of People Education & Economic Development Society Vs/ ITO reported in 100 ITD 87 (TM) (Chen), wherein held that “when substantial justice and technical consultation are pitted against each other, the cause of substantial justice deserves to be preferred for the other side cannot claim to have vested right in injustice being done because of non-deliberate delay”.

5.4 The next question may arise whether delay was excessive or inordinate. There is no question of any excessive or inordinate when the reason stated by the assessee was a reasonable cause for not filing the appeal. We have to see the cause for the delay. When there was a reasonable cause, the period of delay may not be relevant factor. In fact, the Madras High Court in the case of CIT vs. K.S.P. Shanmugavel Nadai and Ors. (153 ITR 596) considered the condonation of delay and held that there was sufficient and reasonable cause on the part of the assessee for not filing the appeal within the period of limitation. Accordingly, the Madras High Court condoned nearly 21 years of delay in filing the appeal. When compared to 21 years, 93 days & 53 days cannot be considered to be inordinate or excessive. Furthermore, the Chennai Tribunal by majority opinion in the case of People Education and Economic Development Society (PEEDS) v. ITO (100 ITD 87) (Chennai) (TM)

ITA No.1868 & 1869/Bang/2025 The Hungund Taluka Agricultural Produce Co-Op Marketing Society Limited, Hungund Page 6 of 7 condoned more than six hundred days delay. Therefore, in our opinion, by preferring the substantial justice, the delay of 93 days for the AY 2015-16 & 53 days for AY 2016-17 has to be condoned and accordingly we condone the delay in filing the appeals before the ld. CIT(A)/NFAC and admit the appeals for adjudication for both these years under consideration.

5.5. Now having condoned the delay in filing the appeal before the ld. CIT(A)/NFAC for the AY 2015-16 & AY 2016-17, we take note of the fact that the assessment orders for both these AY are ex-parte & the AO had passed the assessment orders u/s 147 r.w.s 144 of the Act. This being so, in the interest of justice, equity & fair play and as requested by the AR of the assessee, we deem it fit and proper to remit the entire issues in dispute for both these appeals to the file of ld. AO to decide afresh on the merits of the case in accordance with law. Needless to say, a reasonable opportunity of being heard must be granted to the assessee. The assessee is also directed to produce all the documents/record/information/evidences /explanation/accounts to substantiate its claim or as may be required by the ld. AO for the proper adjudication of the case. We make it clear that in case of further default, the assessee shall not be entitled for any leniency. It is ordered accordingly.

Sd/- Sd/- (Prashant Maharishi) (Keshav Dubey) Vice President Judicial Member

Bangalore, Dated 19th June, 2026. VG/SPS

ITA No.1868 & 1869/Bang/2025 The Hungund Taluka Agricultural Produce Co-Op Marketing Society Limited, Hungund Page 7 of 7

Copy to:

Asst. Registrar, ITAT, Bangalore.