PUNAMBHAI MERAJBHAI RABARI,AHMEDABAD vs. ITO WARD 3(2)(4), AHMEDABAD

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ITA 2178/AHD/2025Status: DisposedITAT Ahmedabad23 April 2026AY 2017-185 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that the CIT(A) was not justified in refusing to condone the delay. It found that the assessee's conduct did not show deliberate negligence and that substantial justice should be preferred over technical considerations. The Tribunal directed the CIT(A) to condone the delay and adjudicate the appeal on merits.

What were the facts?

The assessee filed an appeal before the CIT(A) with a significant delay of 989 days. The assessee cited confusion regarding legal remedies, reliance on an accountant, and lack of proper communication as reasons for the delay. The CIT(A) refused to condone the delay, deeming the reasons insufficient.

What were the issues?

Whether the CIT(A) erred in not condoning the inordinate delay in filing the appeal and dismissing it without adjudicating on merits. Whether the addition made by the AO on account of estimated gross profit without rejecting books of accounts was justified.

Which sections of the Income-tax Act were involved?

Section 145,Section 143(3),Section 264

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “SMC” BENCH, AHMEDABAD

Before: SMT. ANNAPURNA GUPTA & SHRI SIDDHARTHA NAUTIYAL

For Appellant: Shri Pritesh Shah, CA
For Respondent: Shri Girish Parihar, Sr. DR
Hearing: 24.03.2026

IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH, AHMEDABAD BEFORE SMT. ANNAPURNA GUPTA, ACCOUNTANT MEMBER & SHRI SIDDHARTHA NAUTIYAL, JUDICIAL MEMBER I.T.A. No.2178/Ahd/2025 (Assessment Year: 2017-18) Punambhai Merajbhai Rabari, Vs. Income Tax Officer, Prop. of Chehar Enterprise, A/13, Ward-3(2)(4), Alok City, Archi Farm Road, Ahmedabad Bavla, Ahmedabad-382220 [PAN No.BIHPR9780E] (Appellant) .. (Respondent) Appellant by : Shri Pritesh Shah, CA Respondent by: Shri Girish Parihar, Sr. DR Date of Hearing 24.03.2026 23.04.2026 Date of Pronouncement O R D E R PER SIDDHARTHA NAUTIYAL - JUDICIAL MEMBER: This appeal has been filed by the Assessee against the order passed by the Ld. Commissioner of Income Tax (Appeals), (in short “Ld. CIT(A)”), ADDL/JCIT(A)-2, Pune vide order dated 28.07.2025 passed for A.Y. 2017-18.

2.

The assessee has raised the following grounds of appeal:

“1. The learned CIT(A) erred in law and on facts by not condoning the delay in Filling of Appeal, such delay is requested to be condoned. 2. The learned CIT(A) erred in law and on facts in confirming the Gross Profit addition of Rs.11,22,959/- made by AO, such addition is requested to be deleted. Your appellant craves leave to add, amend, alter, edit, delete, modify or change all or any of the grounds of appeal at the time of or before the hearing of the appeal.” 3. The brief facts of the case are that the assessee is an individual engaged in business activities who filed his return of income for the assessment year 2017-18. During the course of assessment proceedings,

ITA No. 2178/Ahd/2025 Punambhai Merajbhai Rabari vs. ITO Asst.Year –2017-18 - 2– the Assessing Officer examined the financial results of the assessee and observed that there was a significant fall in the gross profit rate as compared to the preceding year. The Assessing Officer compared the gross profit of the current year with that of the earlier year and, despite the assessee having started a new line of business in trading of Amul products as against earlier service activity, proceeded to estimate the gross profit at a higher rate. The Assessing Officer did not point out any specific defects in the books of accounts maintained by the assessee, nor were the books rejected under section 145 of the Act. However, solely on the basis of comparison of profit rates, the Assessing Officer made an addition of Rs. 11,12,959/- by estimating gross profit at 5% of turnover as against the profit of 1.69% declared by the assessee. Accordingly, the assessment was completed by the AO under section 143(3) of the Act, making the offered said addition.

4.

Aggrieved by the assessment order, the assessee preferred an appeal before the Ld. CIT(Appeals). However, the appeal was filed with a substantial delay of about 989 days. During the appellate proceedings, the assessee submitted that instead of filing an appeal, initially the assessee had opted for revision under section 264 of the Act within a short period from the date of assessment order, which was later rejected by Ld. CIT(A) on technical grounds. The assessee further explained that due to lack of proper communication from the assessee’s accountant, confusion regarding appropriate legal remedy, and lack of knowledge of law, the appeal could not be filed before CIT(A) within the prescribed time.

5.

The Ld. CIT(Appeals), after considering the submissions, held that the assessee had failed to establish sufficient cause for condonation of such

ITA No. 2178/Ahd/2025 Punambhai Merajbhai Rabari vs. ITO Asst.Year –2017-18 - 3– inordinate delay. The CIT(A) observed that ignorance of law, reliance on accountant, and confusion regarding remedy do not constitute valid grounds for condonation, especially in the absence of supporting evidence. The CIT(Appeals) further noted that the assessee had not explained the delay on a day-to-day basis and that the delay was attributable to negligence and inaction on the part of the assessee.

6.

Relying on various judicial precedents, the Ld. CIT(Appeals) held that the law of limitation must be applied strictly and delay cannot be condoned merely on equitable considerations. Accordingly, the delay of 989 days was not condoned by CIT(A). Since the delay was not condoned, the appeal was treated as non-est and was not admitted for adjudication on merits. Consequently, without examining the addition made by the Assessing Officer on merits, the Ld. CIT(Appeals) dismissed the appeal of the assessee.

7.

The assessee is in appeal before us against the order passed by CIT(Appeals) dismissing the appeal of the assessee.

8.

The issue for our consideration is whether the Ld. CIT(Appeals) was justified in not condoning the delay of 989 days in filing the appeal before him and dismissing the appeal without adjudicating the issues on merits.

9.

On careful consideration of the facts, we find that the assessee had initially, within a short span of time from the date of assessment order, opted for filing a revision petition under section 264 of the Act. The said revision petition remained pending for a considerable period and was finally rejected by CIT(A) on technical grounds. The order passed by Ld. CIT u/s 264 of the Act has also been placed before us for our records. It is

ITA No. 2178/Ahd/2025 Punambhai Merajbhai Rabari vs. ITO Asst.Year –2017-18 - 4– also evident from the record that the assessee is not highly educated and was dependent upon his accountant for handling tax matters. The communication regarding passing of the revision order was not conveyed to the assessee and we note that there was considerable confusion regarding the appropriate remedy, whether to challenge the revision order before the Hon’ble High Court or to file an appeal before the Ld. CIT(Appeals). This resulted in delay in approaching the appellate authority.

10.

In our considered view, the conduct of the assessee does not reflect any deliberate negligence or malafide intention but rather demonstrates a bona fide attempt to pursue a legal remedy, albeit under a mistaken belief. The delay has occurred due to a combination of factors such as reliance on professional advice, lack of proper communication, and confusion regarding legal recourse. It is a settled position of law that when substantial justice and technical considerations are pitted against each other, the cause of substantial justice deserves to be preferred.

11.

We further observe that the addition made by the Assessing Officer is on account of estimation of gross profit without rejecting the books of accounts and without pointing out any specific defects. Such an issue in our view, requires proper examination on merits. Further, the Assessing Officer has also noted that there was evidently a change in the business of the assessee during the impugned assessment year wherein the the assessee had started a new business. The books of account of the assessee are also duly audited. Therefore, we are of the considered view that that denial of opportunity to the assessee to contest the addition on merits would result in miscarriage of justice.

ITA No. 2178/Ahd/2025 Punambhai Merajbhai Rabari vs. ITO Asst.Year –2017-18 - 5–

12.

In view of the above facts and circumstances, we are of the considered opinion that the Ld. CIT(Appeals) was not justified in refusing to condone the delay and in dismissing the appeal in limine. Accordingly, we direct the Ld. CIT(Appeals) to condone the delay in filing of appeal and to adjudicate the issues afresh on merits after providing adequate opportunity of being heard to the assessee.

13.

Thus, the matter is restored to the file of CIT(Appeals)for de-novo consideration in accordance with law.

14.

In the result, the appeal of the assessee is allowed for statistical purposes. This Order pronounced in Open Court on 23/04/2026

Sd/- Sd/- (ANNAPURNA GUPTA) (SIDDHARTHA NAUTIYAL) ACCOUNTANT MEMBER JUDICIAL MEMBER Ahmedabad; Dated 23/04/2026 TANMAY, Sr. PS TRUE COPY आदेश की �ितिलिप अ�ेिषत/Copy of the Order forwarded to : 1. अपीलाथ� / The Appellant 2. ��थ� / The Respondent. 3. संबंिधत आयकर आयु� / Concerned CIT 4. आयकर आयु�(अपील) / The CIT(A)- 5. िवभागीय �ितिनिध, आयकर अपीलीय अिधकरण, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाड� फाईल / Guard file. आदेशानुसार/ BY ORDER,

उप/सहायक पंजीकार (Dy./Asstt.Registrar) आयकर अपीलीय अिधकरण, अहमदाबाद / ITAT, Ahmedabad

1.

Date of dictation 06.04.2026 (Dictated over dragon software) 2. Date on which the typed draft is placed before the Dictating Member 06.04.2026 3. Other Member………………… 4. Date on which the approved draft comes to the Sr.P.S./P.S 16.04.2026 5. Date on which the fair order is placed before the Dictating Member for pronouncement 23.04.2026 6. Date on which the fair order comes back to the Sr.P.S./P.S 23.04.2026 7. Date on which the file goes to the Bench Clerk 23.04.2026 8. Date on which the file goes to the Head Clerk…………………………………... 9. The date on which the file goes to the Assistant Registrar for signature on the order…………………….. 10. Date of Dispatch of the Order……………………………………

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