ABHISHEK TAK,MUMBAI vs. CENTRAL CIRCLE 1(3), MUMBAI

The brief facts of the case are that the assessee, Shri Abhishek Tak, is engaged in the business of import, export and trading of cut and polished as well as rough diamonds. The assessee filed his return of income for A.Y. 2015-16 on 23.09.2015 declaring total income of ₹1,18,880/-. Subsequently, on the basis of information received from the Investigation Wing in connection with the search conducted in the case of Shri Bhanwarlal Jain Group, the assessment was reopened and notice under section 148 of the Income-tax Act, 1961 ("the Act") was issued on 05.09.2018. The Assessing Officer was of the view that the assessee was involved in providing accommodation entries relating to unsecured loans, purchases and sales and had earned commission therefrom. He computed gross commission income at ₹16,05,657/- and, after allowing 10% thereof towards expenses, made an addition of ₹14,45,092/- on protective basis, observing that the corresponding commission income had already been assessed on substantive basis in the case of Shri Bhanwarlal Jain. The Assessing Officer further did not accept the loss disclosed by the assessee from the trading activity and computed business income at ₹1,62,06,438/- by applying a rate of 9.82% to the turnover of ₹16,50,35,008/-. The assessment was accordingly completed under section 144 read with section 147 vide order dated 19.11.2019 at a total income of ₹1,77,70,410/- as against the returned income of ₹1,18,880/-.

Aggrieved by the assessment order, the assessee preferred an appeal before the learned CIT(Appeals) on 24.12.2019. The learned CIT(Appeals), disposed of the appeal on the basis of the material available on record and the written submissions filed on behalf of the assessee. Vide order dated 24.01.2022, the learned CIT(Appeals) dismissed the appeal of the assessee.

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

At the outset, we find that the present appeal before the Tribunal has been filed with a substantial delay. The order of the learned CIT(Appeals) was passed on 24.01.2022, whereas the present appeal has been instituted only in the year 2026. Thus, reckoned from the normal period prescribed for filing an appeal before the Tribunal, there is a delay of approximately 1,467 days, i.e. a little over four years, in filing the present appeal. The assessee has filed an application seeking condonation of the said delay, supported by an affidavit dated 20.04.2026.

In the affidavit, the assessee has explained that the e-mail address registered on the Income-tax portal was abhisheklodha8@gmail.com, which belonged to his relative Shri Abhishek Lodha. According to the assessee, the said relative did not inform him about the notices or orders received at that e- mail address. The assessee has further stated that after filing the first appeal, he had entrusted the matter to Chartered Accountant Shri Suresh Anchaliya and was depending upon him for conduct of the appellate proceedings. According to the assessee, neither the relative whose e-mail address was registered on the portal nor the earlier Chartered Accountant informed him about the notices issued by the learned CIT(Appeals) or about the appellate order dated 24.01.2022. The assessee has also stated that his relations with the said persons had subsequently become strained because of his weak financial position and inability to make further payments.

The assessee has further stated on oath that subsequently, when he came in contact with Advocate Shri Ketan Shah at Ahmedabad, he informed him that an income-tax matter was pending but that he had not received any appellate order. The Advocate thereafter asked the assessee to obtain the password of the Income-tax portal from his erstwhile Chartered Accountant. Upon verification of the portal on 15.04.2026, the assessee came to know for the first time that the learned CIT(Appeals) had already passed the appellate order on 24.01.2022. According to the assessee, immediately thereafter he instructed the Advocate to take steps for filing the present appeal before the Tribunal.

During the course of hearing before us on 10.09.2026, considering the unusually long delay in filing the appeal, the learned Counsel for the assessee sought time to file an undertaking that the assessee would pay cost of ₹50,000/- in case the matter was restored and would fully cooperate in the proceedings. Pursuant thereto, the assessee has filed a duly sworn undertaking before us stating that he is willing to pay cost of ₹50,000/- and that he shall cooperate with the Authorities in the event of restoration of the matter. The said undertaking is taken on record.

We have considered the application for condonation of delay, the affidavit filed by the assessee, the undertaking placed on record and the overall facts and circumstances of the case. There can be no dispute that the delay is substantial. An assessee who has instituted appellate proceedings is expected to remain vigilant and make reasonable enquiries regarding the progress of his appeal. At the same time, while deciding an application for condonation of delay, the Court or Tribunal is required to examine whether the explanation is bona fide and whether refusal to condone the delay would result in the matter being shut out without adjudication on merits.

The Hon'ble Supreme Court in Collector, Land Acquisition, Anantnag &Anr. v. Mst. Katiji& Ors. [1987] 167 ITR 471 (SC); (1987) 2 SCC 107 has held that the expression "sufficient cause" should receive a liberal construction so as to advance substantial justice and that ordinarily a litigant does not stand to benefit by lodging an appeal late. The Hon'ble Supreme Court further observed that when substantial justice and technical considerations are pitted against each other, the cause of substantial justice deserves to be preferred.

Similarly, in N. Balakrishnan v. M. Krishnamurthy (1998) 7 SCC 123, the Hon'ble Supreme Court has held that the length of delay is not by itself decisive and that the acceptability of the explanation is the primary consideration. The Hon'ble Court also observed that where the explanation does not disclose mala fides or a deliberate attempt to delay the proceedings, the Court should adopt a justice-oriented approach. At the same time, where there has been some lapse on the part of the litigant, the prejudice resulting from such delay can appropriately be compensated by imposition of costs.

Reference may also be made to the decision of the Hon'ble Supreme Court in Concord of India Insurance Co. Ltd. v. Smt. Nirmala Devi & Ors.

Further, in Improvement Trust, Ludhiana v. Ujagar Singh & Ors. (2010) 6 SCC 786, the Hon'ble Supreme Court reiterated that there is no straight-jacket formula for deciding the question of sufficient cause and that each case has to be examined on its own facts. The Hon'ble Supreme Court observed that unless mala fides are apparent, an attempt should ordinarily be made to decide the controversy on merits rather than terminate the proceedings merely on a technical ground. Significantly, while condoning the delay in that case, the Hon'ble Supreme Court imposed cost of ₹50,000/- so as to balance the equities.

Applying the above principles to the facts before us, we find that although the assessee has not displayed the degree of vigilance normally expected from a litigant, the explanation furnished by him cannot be rejected outright as lacking in bona fides. The assessee has explained on oath that the e-mail address registered on the portal belonged to a relative, that he was depending upon his earlier professional adviser for conduct of the appeal and that neither of them informed him regarding the appellate proceedings or the order passed by the learned CIT(Appeals). He has specifically stated that he came to know of the order only when the portal was checked by his new Advocate on 15.04.2026 and thereafter steps were taken to institute the present appeal.

Another important factor which weighs with us is the magnitude of the additions involved. Against the returned income of merely ₹1,18,880/-, the assessment has been completed at ₹1,77,70,410/-. The additions include business income of ₹1,62,06,438/- and protective commission income of ₹14,45,092/-. Thus, the financial consequences arising from the assessment are substantial. In our considered view, in such circumstances, declining to condone the delay would result in the assessee being deprived of an adjudication of substantial tax additions on merits.

We also take into account that the assessee has also filed an undertaking pursuant to the proceedings before us and has agreed to pay cost of ₹50,000/-. The imposition of substantial costs would, in our view, appropriately balance the assessee's lack of vigilance on the one hand and the requirement of substantial justice on the other. Considering the explanation furnished in the affidavit, the substantial quantum involved, the undertaking given before us and the principles laid down by the Hon'ble Supreme Court in the decisions referred to above, we are of the considered view that this is a fit case where the delay should be condoned and the assessee should be afforded one final opportunity to have his appeal decided on merits.

We accordingly condone the delay of approximately 1,467 days in filing the appeal before the Tribunal, subject to payment of costs of ₹50,000/- (Rupees Fifty Thousand only) to the Prime Minister's National Relief Fund (PMNRF). The assessee shall deposit the said amount and furnish proof of payment before the learned Assessing Officer. The undertaking furnished by the assessee is taken on record.

Coming to the merits, considering the peculiar facts of the case and with a view to providing one opportunity to the assessee, we consider it appropriate, in the interest of justice, to set aside the impugned order dated 24.01.2022 and restore the entire appeal to the file of the Assessing Officer for de-novo adjudication in accordance with law.

The assessee is directed to fully cooperate in the fresh the course of assessment proceedings, appear on the dates fixed by the learned the Assessing Officer, file the necessary evidence and submissions within the time allowed and not seek unnecessary adjournments. In case the assessee fails to cooperate without reasonable cause, the learned the Assessing Officer shall be at liberty to proceed and decide the appeal in accordance with law on the basis of the material available on record.