HARISH KUMAR,MANDI GOBINDGARH vs. INCOME TAX OFFICER, WARD-1, GOBINDGARH

That on the facts, circumstances and legal position of the case, the Worthy CIT(A),NFAC in Appeal No. 227/IT/CIT(A)/PТА/12-13 has erred in passing order dtd. 27.08.2014 in contravention of provisions of S.250 of the Income Tax Act, 1961 (hereinafter referred to as “Act").

That on facts, circumstances and legal position of the case, Worthy CIT(A) has erred in confirming the action of Ld. AO of disallowing an amount of Rs. 16,41,454/-on account of freight, cartage and labour expenses paid in cash, without due consideration of the contentions made during the proceedings.

That on facts, circumstances and legal position of the case, Worthy CIT(A) has erred in confirming the action of Ld. AO of disallowing the trading loss of Rs. 75,99,470/- by treating genuine sales as false without appreciating the nature of transactions.

That on facts, circumstances and legal position of the case, Worthy CIT(A) has erred in confirming the action of Ld. AO of disallowing the amount of Rs. 5,93,626/- on account of alleged interest free advances without establishing any substantiated basis.

That on facts, circumstances and legal position of the case, Worthy CIT(A) has erred in confirming the action of Ld. AO of disallowing Rs.69,984/- on account of alleged personal expenses without any supporting evidence.

That on facts, circumstances and legal position of the case, the order passed by Ld. AO and then by Worthy CIT(A) deserves to be quashed since the same have been passed without affording reasonable opportunity of being heard to the appellant.

That the appellant craves leave for any addition, deletion, or amendment in the grounds of appeal on or before the disposal of the same.

Briefly stated, the facts of the case as emanating from the assessment records are that the assessee is engaged in the business of trading of iron and steel. During the course of assessment proceedings, the Assessing Officer made various additions/disallowances, inter alia, disallowance of freight, cartage and labour expenses amounting to Rs.16,41,454/-, addition on account of alleged trading loss of Rs.75,99,470/-, disallowance of interest on alleged interest-free advances amounting to Rs.5,93,626/- and disallowance on account of personal use of expenses amounting to Rs.69,984/-. The total additions aggregated to Rs.99,04,534/-.

Aggrieved by the assessment order, the assessee preferred an appeal before the Ld. CIT(A). The Ld. CIT(A), after considering the submissions of the assessee, confirmed the additions made by the Assessing Officer. It was, inter alia, observed that the assessee failed to furnish proper evidences in respect of freight payments; that the trading loss claimed by the assessee was not substantiated and appeared to be non- genuine; that no business purpose was established in respect of interest-free advances; and that disallowance on account of personal use of expenses was justified. Accordingly, the appeal of the assessee was dismissed.

Against the order of the Ld. CIT(A), the assessee has preferred the present appeal before the Tribunal raising various grounds challenging the additions sustained by the Ld. CIT(A). However, at the outset, it is noticed that the impugned order of the Ld. CIT(A) is dated 27.08.2014 and the same was served upon the assessee on the said date. The present appeal has been filed on 17.06.2025. Thus, there is an inordinate delay of more than ten years in filing the present appeal before the Tribunal.

During the course of hearing, the Ld. Authorised Representative (AR) for the assessee submitted that the assessee is a small businessman and due to lack of proper legal advice and circumstances beyond control, the appeal could not be filed within the prescribed time. It was prayed that a liberal view may be taken and the delay be condoned in the interest of substantial justice.

Per contra, the Ld. Departmental Representative (DR) strongly opposed the condonation of delay and submitted that the delay is highly excessive and no reasonable or sufficient cause has been shown by the assessee. It was contended that in absence of any cogent explanation or supporting material, such an inordinate delay cannot be condoned and the appeal deserves to be dismissed as time barred.

We have heard the rival submissions and perused the material available on record. The short issue for our consideration is whether the delay of more than ten years in filing the present appeal deserves to be condoned. It is an admitted position that the impugned order was passed on 27.08.2014 and the appeal has been filed only on 17.06.2025. There is thus a delay of more than a decade. We further find that no application for condonation of delay supported by affidavit has been filed on record explaining day-to-day delay. Even during the course of hearing, no plausible or reasonable explanation substantiated with evidence has been furnished.

1 The Hon’ble Supreme Court in Esha Bhattacharjee vs. Managing Committee of Raghunathpur Nafar Academy (2013) 12 SCC 649 has held that though a liberal approach is required while considering condonation of delay, the same cannot be extended to cases of gross negligence, inaction or lack of bona fides. It has been further held that inordinate delay without sufficient cause cannot be condoned as a matter of right.

2 Further, in University of Delhi vs. Union of India, the Hon’ble Apex Court has reiterated that the law of limitation has to be applied with all its rigour and courts cannot condone delay in a routine manner in absence of a satisfactory explanation.

3 Similarly, in Delhi Metro Rail Corporation Ltd. vs. Tarun Pal Singh, the Hon’ble Supreme Court has held that where there is a gross and unexplained delay, the same cannot be condoned merely on equitable considerations and that the doctrine of limitation cannot be diluted.

4 Applying the aforesaid principles to the facts of the present case, we find that the delay of more than ten years is not only inordinate but is also wholly unexplained. The explanation furnished by the assessee is vague and does not inspire confidence.

5

In the result, the appeal of the assessee is dismissed.