M/S RASHMI,BENGALURU vs. THE INCOME TAX OFFICER, WARD - 3(1)(1), BENGALURU

ITA 1645/BANG/2026Status: DisposedITAT Bangalore22 September 2026AY 2017-187 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the delay of 2024 days in filing the appeal before the CIT(A) should be condoned. The Tribunal referred to the Supreme Court's decision in Collector, Land Acquisition, Anantnag & Anr. v. Mst. Katiji & Ors. (supra), emphasizing that the expression 'sufficient cause' is elastic and courts should adopt a pragmatic approach to advance substantial justice, rather than being pedantic. The Tribunal noted that the peculiar feature of the case was the connection of the assessee's grievance with proceedings involving the individual partner. It found no finding by the CIT(A) that the delay was deliberate. The Tribunal reasoned that substantial justice would be served by providing the assessee an opportunity to have its grievance adjudicated on merits. Therefore, the order of the CIT(A) dismissing the appeal in limine was set aside, and the matter was restored to the CIT(A) for de novo adjudication on merits. The CIT(A) was directed to decide whether there was double taxation or if the income was wrongly offered, after examining all records and applicable law. The assessee was directed to cooperate and furnish relevant documents. The appeal was allowed for statistical purposes.

What were the facts?

The assessee, M/s Rashmi, a partnership firm engaged in distributing Indane gas, was dissolved on August 31, 2016. For Assessment Year 2017-18, the firm received lorry hire charges, on which TDS under Section 194C was deducted. The firm offered these charges in its return. However, income received from September 1, 2016, to March 31, 2017, was taxed in the hands of a partner. The partner's appeal against this was dismissed. Subsequently, the firm appealed to the CIT(A) against the intimation for taxing income in the partner's hands. This appeal was filed with a delay of 2024 days. The CIT(A) dismissed the firm's appeal in limine due to the delay, without adjudicating on the merits.

What were the issues?

1. Whether the delay of 2024 days in filing the appeal before the CIT(A) deserves to be condoned, considering the provisions of the Income Tax Act, 1961, and the principle of substantial justice? Assessee's Contentions: The assessee argued that the delay of 2024 days was neither intentional nor deliberate. They contended that the expression 'sufficient cause' should be interpreted liberally and justice-oriented, especially when seeking adjudication of a genuine tax dispute on merits. Reliance was placed on the Supreme Court judgment in Collector, Land Acquisition, Anantnag & Anr. v. Mst. Katiji & Ors. (1987) 167 ITR 471 (SC) for a pragmatic approach. The assessee also submitted that no prejudice would be caused to the Revenue if the matter was restored to the CIT(A) for examination on merits. They sought to withdraw the income wrongly offered in the firm's computation due to the dismissal of the partner's appeal. Revenue's Contentions: The Revenue argued that the assessment of the firm and its partner are separate proceedings. Therefore, the dismissal of the partner's appeal does not automatically entitle the firm to withdraw income already offered. They also noted that the assessee failed to file revised returns. The Revenue submitted that the CIT(A)'s order dismissing the appeal in limine should be upheld.

Which sections of the Income-tax Act were involved?

Section 194C,Section 250,Section 143(1)

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Income Tax Appellate Tribunal, BANGALORE BENCHES, BANGALORE

Before: SHRI BALAKRISHNAN S & SHRI SOUNDARARAJAN K.

For Respondent: Shri. Pradeep S - Addl. CIT
Pronounced: 22.09.2026

PER SHRI BALAKRISHNAN S, ACCOUNTANT MEMBER:

This appeal by the assessee-firm is directed against the order passed by the learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi [hereinafter referred to as "the CIT(A)"], dated 31.03.2026 under section 250 of the Income-tax Act, 1961 ("the Act"), arising out of the intimation passed u/s 143(1) of the Act dt 23.04.2018, for the AY 2017-18. IT

The order continues below.

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