YASH ENTERPRISES,THANE vs. INCOME TAX OFFICER, WARD 2(4)/2(2), KALYAN, KALYAN

Facts

The assessee, Yash Enterprises, is challenging an order dated 27.06.2024 passed by the National Faceless Appeal Centre (NFAC), Delhi (CIT(A)), which upheld an order dated 05.12.2019 by the Assessing Officer (AO) under Section 144 of the Income Tax Act, 1961. The AO made additions of Rs. 20,15,500/- under Section 69A read with Section 115BBE for unexplained cash deposit and Rs. 38,00,679/- (10% of unexplained deposit of Rs. 3,80,06,790/-). The assessment year is 2017-18. The assessee did not respond to statutory notices or show cause notices during assessment proceedings. Similarly, the assessee failed to prosecute the appeal before the CIT(A) diligently, leading to its dismissal. The present appeal before the ITAT was filed with a delay of approximately 660 days.

Held

The Tribunal considered the rival submissions and acknowledged the lack of diligence by the appellant at various stages. However, it noted that the appellant was involved in defending a civil dispute related to the business, with supporting court orders produced. The Tribunal also took into account the medical grounds cited. Citing the Supreme Court's decision in Collector, Land Acquisition vs. Mst. Katiji, the Tribunal held that a party does not gain by delaying a remedy and there is no presumption of intentional delay. The issue of condoning delay depends on facts and circumstances. In the peculiar facts of this case, the Tribunal was inclined to condone the delay subject to costs. Consequently, the delay was condoned, the impugned order of the CIT(A) and the AO's order were set aside, and the assessment proceedings were restored to the file of the AO for fresh decision on merits, with a direction to give adequate opportunity of hearing to the appellant. The appellant was directed to pay costs of Rs. 50,000/- to the Prime Minister's Relief Fund within 15 days, which was a condition precedent.

Key Issues

1. Whether the delay of approximately 660 days in filing the present appeal before the Tribunal is liable to be condoned, considering the reasons provided by the appellant? Assessee's Contention: The assessee contends that the delay occurred due to being engaged in defending a civil dispute concerning the business premises and machinery, where an order of injunction/status quo was passed on 06.05.2022. Additionally, there were medical grounds related to the wife and sister of a partner, which prevented timely action. The assessee also cited a dispute with a lessee, Mr. Vishwanath R. Panvelkar, regarding lease rent non-payment, which reached the civil court. Revenue's Contention: The Revenue argues that there has been a lapse on the part of the appellant at every stage, from assessment proceedings to filing the appeal before the Tribunal, and therefore, the delay cannot be condoned.