ABHIJIT ANIL KSHIRSAGAR,MUMBAI vs. INCOME TAX OFFICER CIRCLE 27 (1) MUMBAI, NAVI MUMBAI

आदेश / ORDER PER BEENA PILLAI, JUDICIAL MEMBER:

Present appeal filed by the assessee arises out of the order dated 28/01/2026 passed by NFAC, Delhi [hereinafter referred to

ITA 3278/MUM/2026 ABHIJIT ANIL KSHIRSAGAR as “Ld.CIT(A)”] for A.Y. 2020-21, on the following grounds of appeal:-

“Ground No. 1

On the facts and circumstances of the case and in law, the learned Commissioner of Income-tax (Appeals) erred in confirming the penalty of 25,39,910 levied under section 270A of the Income-tax Act, 1961, which is arbitrary, unjustified and contrary to the provisions of the Act.

Ground No. 2

The learned CIT(A) erred in holding that the case of the Appellant falls under "misreporting of income" within the meaning of section 270A(9) without appreciating that none of the conditions prescribed under the said provision were satisfied.

Ground No. 3

The learned CIT(A) failed to appreciate that the additions made during the assessment proceedings were based merely on disallowance of certain deductions and exemptions and do not constitute suppression of income or furnishing of inaccurate particulars.

Ground No. 4

The learned CIT(A) erred in law in confirming the penalty without establishing the existence of any deliberate act of concealment, suppression of facts, or furnishing of false particulars by the Appellant.

Ground No. 5

The learned CIT(A) failed to appreciate that the claims made in the return of income were made under a bona fide belief and based on information available with the Appellant at the time of filing the revised return.

Ground No. 6

The learned CIT(A) erred in ignoring the settled legal principle that penalty proceedings are separate and distinct from assessment proceedings and that confirmation of additions does not automatically lead to imposition of penalty.

Ground No. 7

The learned CIT(A) erred in not appreciating that acceptance of additions during assessment proceedings to avoid litigation cannot be construed as admission of concealment or misreporting of income.

ITA 3278/MUM/2026 ABHIJIT ANIL KSHIRSAGAR Ground No. 8 The learned CIT(A) erred in law and on facts in confirming penalty by relying upon judicial precedents which are distinguishable on facts and not applicable to the present case. Ground No. 9 The learned authorities below failed to appreciate that the provisions of section 270A are penal in nature and must be strictly construed and the burden lies upon the Revenue to prove the existence of circumstances constituting misreporting. Ground No. 10 The Appellant craves leave to add, amend, alter, or withdraw any of the above grounds of appeal at or before the time of hearing.” 2. At the outset, we find that there was a delay of 1053 days in filing of the appeal before Ld.CIT(A). The assessee has filed an application seeking condonation of the aforesaid delay supported by affidavit explaining the reasons which prevented him from filing the appeal within the prescribed period of limitation. However, the Ld.CIT(A) did not consider the same. It is submitted that the assessee had entrusted all his income-tax matters, including filing of returns and compliance with notices issued by the Department, to his tax consultant, Shri Nitin Chavan of CJK Associates. The assessee had furnished all the requisite documents and was under a bona fide belief that the consultant would take all necessary steps, including filing of appeal against the impugned order, if required.

2.1. It has further explained that the notices dated 24/09/2022 and 22/12/2022 as well as the penalty order dated 15/02/2023 were not brought to the notice of the assessee due to oversight and personnel changes in the office of the tax consultant. According to the assessee, he became aware of the impugned

ITA 3278/MUM/2026 ABHIJIT ANIL KSHIRSAGAR penalty order only around 23/12/2025 while reviewing his financial affairs and upon making enquiries regarding the status of the proceedings. Immediately thereafter, he procured the relevant documents and took prompt steps for filing the present appeal.

2.1.1. Having regard to the submissions by the assessee, we refer to the decision of Hon’ble Cochin Bench of this Tribunal in the case of Midas Polymer Compounds Pvt. Ltd. in ITA No. 288/Coch/2017 dated 25.6.2018, wherein the Tribunal condoned the delay of 2819 days by observing as follows: “6. We have heard the rival submissions and perused the record. There was a delay of 2819 days in filing the appeal before the Tribunal. The assessee has stated the reasons in the condonation petition accompanied by an affidavit which has been cited in the earlier para. The assessee filed an affidavit explaining the reasons and prayed for condonation of delay. The reason stated by the assessee is due to inadvertent omission on the part of Shri Unnikrishnan Nair N, CA in taking appropriate action to file the appeal. He had a mistaken belief that the appeal for this year was filed by the assessee as there was separate Counsel to take steps to file this appeal before the ITAT. Therefore, we have to consider whether the Counsel’s failure is sufficient cause for condoning the delay. The Madras High Court considered an identical issue in the case of Sreenivas Charitable Trust v. Dy. CIT (280 ITR 357) and held that mixing up of papers with other papers are sufficient cause for not filing the appeal in time. The Madras High Court further observed that the expression "sufficient cause" should be interpreted to advance substantial justice. Therefore, advancement of substantial justice is the prime factor while considering the reasons for condoning the delay. 6.1 On merit the issue is in favour of the assessee. But there is a technical defect in the appeal since the appeal was not filed within the period of limitation. The assessee filed an affidavit saying that the appeal was not filed because of the Counsel’s inability to file the appeal. The Revenue has not filed any counter affidavit to deny the allegation made by the assessee. While considering a similar issue the Apex Court in the case of Collector, Land

ITA 3278/MUM/2026 ABHIJIT ANIL KSHIRSAGAR 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. 6.2 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 nondeliberate delay. In the case on our hand, the issue on merit regarding allowability of deduction u/s. 80IB of the Act was covered in favour of the assessee by the binding Judgment of the jurisdictional High Court. Moreover, no counter-affidavit was filed by the Revenue denying the allegation made by the assessee. It is not the case of the Revenue that the appeal was not filed deliberately. 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 legalise 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 on technicalities. If the delay is not condoned, it would amount to legalising an illegal order which would result in unjust enrichment on the part of the State by retaining the tax

ITA 3278/MUM/2026 ABHIJIT ANIL KSHIRSAGAR 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 authorised by an authority of law. Therefore, if we refuse to condone the delay, that would amount to legalise an illegal and unconstitutional order passed by the lower authority. Therefore, in our opinion, by preferring the substantial justice, the delay of 2819 days has to be condoned.” 2.2. In the present facts, on examining whether the reason stated by the assessee to seek condonation of delay before Ld.CIT(A) is sufficient to condone the delay and whether, there exists sufficient cause for not presenting the appeal before Ld.CIT(A) within the period of limitation under the statute, the assessee must show that, it was diligent in taking appropriate steps and the delay was caused notwithstanding with its due diligence. It is for the party concerned to explain the reasons for delay and it is not the function of concerned authorities often to find cause for delay. The Court/authority has to examine whether the sufficient cause has been shown by the party for condoning the delay, and whether such cause is reasonable or not. 2.3. In any case, the assessee is not benefitted with the delay caused in filing appeal before this tribunal, the lapse that occurred on behalf of the representative cannot be attributed to the assessee for which assessee could be punished. In case of People Education & Economic Development Society Vs. ITO reported in 100 ITD 87 (TM) (Chen), it was 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”. 2.4. The next question that arises is whether delay was excessive or inordinate. There is no question of any excessive or inordinate

ITA 3278/MUM/2026 ABHIJIT ANIL KSHIRSAGAR when the reason stated by the assessee was a reasonable cause for not able to file the appeals within the period of limitation. The cause for the delay therefore deserves to be considered, when there exist a reasonable cause, and therefore the period of delay may not be relevant factor. In support, we rely on the decision of Hon’ble 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. Hon’ble Madras High Court thus condoned nearly 21 years of delay in filing the appeal. As compared to 21 years, delay of about 1000 to 2000 days cannot be considered to be inordinate or excessive. 2.5. Hon’ble Madras High Court in the case of Sreenivas Charitable Trust reported in 280 ITR 357 held that, no hard and fast rule can be laid down in the matter of condonation of delay and the Court should adopt a pragmatic approach and the Court should exercise their discretion on the facts of each case keeping in mind that in construing the expression "sufficient cause" the principle of advancing substantial justice is of prime importance and the expression "sufficient cause" should receive a liberal construction. Therefore, this Judgment of the Hon’ble Madras High Court (supra) clearly says that in order to advance substantial justice which is of prime importance, the expression "sufficient cause" should receive a liberal construction. Therefore, for the purpose of advancing substantial justice which is of prime importance in the administration of justice, the expression "sufficient cause" should receive a liberal construction. In opinion of this Tribunal, this decision of

ITA 3278/MUM/2026 ABHIJIT ANIL KSHIRSAGAR Hon’ble Madras High Court is applicable to the present facts of the case. A similar view was taken by Hon’ble Madras High Court in the case of Venkatadri Traders Ltd. v. CIT (2001) 168 CTR (Mad) 81 : (2001) 118 Taxman 622 (Mad). 2.6. Reliance is also placed on the decision of Hon’ble Mumbai Bench of this Tribunal in the case of Bajaj Hindusthan Ltd. v. Jt. CIT (AT) reported in 277 ITR 1 condoned the delay of 180 days when, the appeal was filed after the pronouncement of the Judgment of the Hon’ble Supreme Court. It is also to be noted that the Revenue has not filed any counter-affidavit opposing the application of the assessee for condonation of delay. Hon’ble Supreme Court in the case of Mrs. Sandhya Rani Sarkar vs. Smt. Sudha Rani Debi reported in AIR 1978 SC 537 held that, non- filing of affidavit in opposition to an application for condonation of delay may be a sufficient cause for condonation of delay. In this case, the Revenue has not filed any counter-affidavit opposing the application of the assessee, therefore, as held by Hon’ble Supreme Court, there is sufficient cause for condonation of delay. Hon’ble Supreme Court also observed that; “It does not mean that when the delay was for longer period, the delay should not be condoned even though there was sufficient cause. Condonation of delay is the discretion of the Court/Tribunal. Therefore, it would depend upon the facts of each case. In our opinion, when there is sufficient cause for not filing the appeal within the period of limitation, the delay deserves to be condoned, irrespective of the duration/period.”

2.7. After considering the contents of the affidavit and the petition for condonation of delay, we are satisfied that the delay was caused due to circumstances beyond the control of the

ITA 3278/MUM/2026 ABHIJIT ANIL KSHIRSAGAR Assessee and that there was a reasonable and bona fide cause for not filing the appeal within the stipulated period. There is nothing on record to suggest that the delay was deliberate or attributable to any mala fide intention. We, therefore, feel that the reasons assigned by the assessee for the inability to present the appeal within time before Ld.CIT(A) deserves consideration based on the principles laid down by Hon'ble Supreme Court in case of Collector Land Acquisition Vs. Mst. Katiji & Ors., reported in (1987) 167 ITR 471. The relevant observation of Hon’ble Supreme Court in case of Collector Land Acquisition Vs. Mst. Katiji & Ors.,(supra) is as under:- “The Legislature has conferred the power to condone delay by enacting section 51 of the Limitation Act of 1963 in order to enable the courts to do substantial justice to parties by disposing of matters on de merits". The expression “sufficient cause” employed by the Legislature is adequately elastic to enable the courts to apply the law in a meaningful manner which subserves the ends of justice that being the life-purpose of the existence of the institution of courts. It is common knowledge that this court has been making a justifiably liberal approach in matters instituted in this court. But the message does not appear to have percolated down to all the other courts in the hierarchy.

And such a liberal approach is adopted on principle as it is realized that :

ITA 3278/MUM/2026 ABHIJIT ANIL KSHIRSAGAR may be admitted after the prescribed period if the appellant or the applicant satisfies the court that he had sufficient cause for not preferring the appeal or making the application within such period.” Accordingly, the delay in filing of the appeal is condoned and the appeal is admitted. 3. Coming to the merits of the case, we find that the impugned order passed by the Ld. CIT(A) is essentially an ex-parte order. The Ld.AR submitted that, the assessee could not effectively represent his case before the Ld. CIT(A) and, consequently, the issues raised in appeal were decided without the benefit of adequate submissions and supporting evidences from the assessee.

3.1. Considering the facts and circumstances of the case, and in the interest of natural justice, we are of the view that the assessee deserves one more opportunity to substantiate his case before the first appellate authority. The principles of natural justice require that a reasonable and effective opportunity of hearing be afforded before an adverse decision is taken.

3.2. Accordingly, without expressing any opinion on the merits of the case, we deem it fit to set aside the impugned order and restore the matter to the file of the Ld. CIT(A) for fresh adjudication. The Ld. CIT(A) is directed to decide the appeal afresh on merits after affording reasonable and effective opportunity of being heard to the assessee and after considering such material as may be placed on record.

3.3. The assessee is also directed to promptly comply with the notices and furnish the requisite details before the Ld. CIT(A).

ITA 3278/MUM/2026 ABHIJIT ANIL KSHIRSAGAR Accordingly, the grounds raised by the assessee are allowed for statistical purposes.

In the result, appeal filed by assessee stands allowed for statistical purposes.

Order pronounced in the open court on 18/06/2026

Sd/- Sd/- JAGADISH BEENA PILLAI ACCOUNTANT MEMBER JUDICIAL MEMBER

Mumbai Dated: 18/06/2026 SC. Sr. P.S. Copy to: ABHIJIT ANIL KSHIRSAGAR, C-103 SAMARTH GARDEN CHS LTD L B 1 S MARG BHANDUP WEST MUMBAI, MUMBAI-400078, MAHARASHTRA INCOME TAX OFFICER CIRCLE 27 (1) MUMBAI, INCOME TAX OFFICER CIRCLE 27 (1) 2 MUMBAI - IT -OFFICE VASHI RALWAY STATION BUILDING NAVI MUMBAI, NAVI MUMBAI-400703, MAHARASHTRA 3 THE PCIT / CIT, 4 THE D.R., ITAT, MUMBAI BENCH 5 GUARD FILE