Shri Neel Kumar Ajmera Alias Nilesh Ajmera vs. Pr. Commissioner Of Income Tax Indore I

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ITA/1/2025HC Madhya Pradesh01 April 2025Bench: HON'BLE SHRI JUSTICE SUSHRUT ARVIND DHARMADHIKARI6 pages
For Petitioner: Ashish GoyalFor Respondent: Harsh Parashar
AI SummaryRemanded

What did the High Court hold?

The High Court held that the appellant had been able to put forth a "sufficient cause" for the delay in filing the appeal before the ITAT. The Court referred to pronouncements by the Supreme Court in Inder Singh Vs. State of Madhya Pradesh and Mool Chandra (supra). These judgments emphasize that while delay cannot be condoned without sufficient cause, merits of a case should not be scuttled merely on the basis of limitation. The Court highlighted that the cause for delay, rather than its length, is the critical factor. If the cause falls within the ambit of "sufficient cause," it deserves condonation irrespective of the delay's duration. The Court also noted that if no fault can be attributed to the appellant and the cause shown is sufficient, then an error may lie in not adopting a liberal or justice-oriented approach. Consequently, the High Court set aside the ITAT's order dated 23.08.2024, condoned the delay in filing the appeal before the ITAT, and remanded the matter back to the ITAT for decision on merits after affording a reasonable opportunity of hearing to both parties. The High Court found that the delay was not due to negligence or malafides but due to sufficient cause.

What were the facts?

The assessee, Shri Neel Kumar Ajmera alias Nilesh Ajmera, is in appeal before the High Court of Madhya Pradesh against an order of the Income Tax Appellate Tribunal (ITAT), Indore Bench. The ITAT had dismissed the assessee's appeal in limine on the grounds of limitation, citing a delay of 1797 days. The dispute traces back to an assessment order under Section 153A dated 30.12.2011, which assessed total income at Rs. 65,91,95,580/-. Subsequent appeals to the CIT(A) and ITAT led to a remand. A fresh order by the Assessing Officer was followed by another appeal to the CIT(A), which was dismissed for want of prosecution on 20.02.2019. The assessee then filed an appeal before the ITAT on 22.03.2024, which was dismissed for being time-barred.

What were the issues?

1. Whether the High Court should condone the delay of 1797 days in filing the appeal before the ITAT, considering the reasons provided by the assessee, turning on the principle of "sufficient cause" under the Income Tax Act, 1961. Assessee's Contention: The assessee argued that the delay was due to personal hardships, including his brother's civil and criminal litigations, harassment by creditors, death threats, and subsequent relocation to Mumbai. He claimed he did not receive the CIT(A)'s order dated 20.02.2019 until 2024. The assessee also contended that a significant portion of the delay (15.03.2020 to 30.05.2022) falls within the COVID-19 pandemic period, for which the Supreme Court had condoned delays. He relied on the Supreme Court's judgments in Mool Chandra Vs. Union of India and Inder Singh Vs. State of Madhya Pradesh, emphasizing that the cause of delay, not its length, is paramount, and a liberal, justice-oriented approach should be adopted when sufficient cause is shown. Revenue's Contention: The revenue argued that the assessee had not shown sufficient cause to explain the delay in filing the appeal before the ITAT, and therefore, the appeal should be dismissed solely on the grounds of delay and laches.

Which sections of the Income-tax Act were involved?

Section 260-A,Section 132,Section 153A

AI-generated summary — verify with the full judgment below

NEUTRAL CITATION NO. 2025:MPHC-IND:8489

1 ITA No.1/2025

IN THE HIGH COURT OF MADHYA PRADESH AT INDORE BEFORE HON'BLE SHRI JUSTICE SUSHRUT ARVIND DHARMADHIKARI & HON'BLE SHRI JUSTICE GAJENDRA SINGH ON THE FIRST OF APRIL, 2025 INCOME TAX APPEAL No.1 of 2025 SHRI NEEL KUMAR AJMERA ALIAS NILESH AJMERA Versus PR. COMMISSIONER OF INCOME TAX INDORE I

Appearance: Shri Ashish Goyal – Learned counsel for the appellant.

Shri Harsh Parshar – Learned counsel for the Income Tax.

"Reserved on : 11.02.2025" "Pronounced on : 01.04.2025" JUDGMENT

Per: Justice Sushrut Arvind Dharmadhikari

Heard on the question of admission. 2. This appeal under Section 260-A of the Income Tax Act, 1961 has been filed being aggrieved by order dated 23.08.2024 passed by the Income Tax Appellate Tribunal, Indore Bench, Indore in ITA No.234/IND/2024, whereby learned ITAT has dismissed the appeal in limine on the ground of limitation, whereby the appeal was filed with a delay of 1797 days. 3. The brief facts of the case are that search and seizure under Section 132 of the Income Tax Act was carried out and Assessment Signed by: SANTOSH KUMAR TIWARI Signing time: 01-04-2025 18:47:47 Signature Not Verified NEUTRAL CITATION NO. 2025:MPHC-IND:8489

2 ITA No.1/2025

Order under Section 153A of the Income Tax Act was passed on 30.12.2011 in which the total income was assessed at Rs.65,91,95,580/-. Being aggrieved by the said order, the appellant filed the appeal before Commissioner of Income-Tax (Appeals) {in short “CIT(A)”}. The CIT(A) dismissed the appeal. Being aggrieved, the appellant filed appeal before the ITAT and vide order dated 17.05.2016, the matter was remanded back to Assessing Officer on certain grounds for fresh adjudication. The Assessing Officer passed a fresh order on 27.12.2017. Again being aggrieved by order dated 27.12.2017 passed by CIT(A), the appellant preferred an appeal before the CIT(A). The Appellate Authority dismissed the appeal vide order dated 20.02.2019 for want of prosecution without adjudicating on the merits of the case on the ground that on the dates of hearing neither the appellant was present nor filed any written submission. Being aggrieved by the said order, the appellant preferred appeal before Income Tax Appellate Tribunal, Indore Bench, Indore on 22.03.2024 with a delay of 1797 days. However, the same has been dismissed on the ground of limitation vide order dated 20.08.2024. Hence, this petition. 4. The learned counsel for the appellant submits that earlier, he used to reside at 29-30 Paliwal Nagar, Indore alongwith the family of his real brother for the last 15 years. In the income tax record, same address was disclosed. However, due to misfortune of the appellant, the brother of the assessee was dragged into various civil and criminal litigations. In view of the aforesaid, the appellant alongwith the family members were Signed by: SANTOSH KUMAR TIWARI Signing time: 01-04-2025 18:47:47 Signature Not Verified NEUTRAL CITATION NO. 2025:MPHC-IND:8489

3 ITA No.1/2025

also harassed by various creditors and the Government Department including death threats. Various criminal cases were also registered against the appellant. Because of this, the appellant as well as the family of the appellant had to move to Mumbai. During 2018 to 2024 brother of the appellant was either missing, absconding or imprisoned. The appellant in such circumstances could not coordinate properly with his tax consultants. At no point of time, the appellant received any notice from the CIT(A) as well as the order passed by the CIT(A) on 20.02.2019. This fact came to the knowledge of the appellant in the month of year 2024 and thereafter, without causing any delay, appeal was filed being aggrieved by the order of the CIT(A) before the ITAT on 22.03.2024. Out of the delay of 1797 days, the delay between 15.03.2020 to 30.05.2022 (period covered by Covid-19 pandemic) and also looking to the fact that the Apex Court on its own motion in SLP No.3/2020 had condoned the delay due to Covid-19 pandemic, meaning thereby only 990 days remained to be explained. 5. Learned counsel for the appellant further submitted that the appellant filed an application for condonation of delay alongwith an affidavit in the appeal before the ITAT explaining the aforesaid details due to which delay occurred. However, the ITAT without considering the reasons assigned in the application for condonation of delay, rejected his application and refrained from entering into the merits of the case and also dismissed the appeal as barred by time. 6. Learned counsel for the petitioner submitted that the delay was Signed by: SANTOSH KUMAR TIWARI Signing time: 01-04-2025 18:47:47 Signature Not Verified NEUTRAL CITATION NO. 2025:MPHC-IND:8489

4 ITA No.1/2025

not because of any negligence or malafides but due to sufficient cause which prevented the appellant from filing the appeal in time. It is also contended that though the delay may be of around 990 days but still the Appellate Authority ought to have seen the cause behind such delay and not the length of delay. In support of his contention, he placed reliance on the judgment of the Apex Court in the case of Mool Chandra Vs. Union of India and another reported in (2025) 1 SCC 625. 7. Per contra, learned counsel for the respondent vehemently opposed the prayer and submitted that no sufficient cause has been shown by the appellant in explaining the delay caused in filing the appeal before ITAT, therefore, the appeal deserves to be dismissed on the ground of delay and laches alone. 8. Heard the learned counsel for the parties. 9. The Supreme Court in the case of Inder Singh Vs. State of Madhya Pradesh reported in 2025 INSC 382 has held as under: “There can be no quarrel on the settled principle of law that delay cannot be condoned without sufficient cause, but a major aspect which has to be kept in mind is that, if in a particular case, the merits have to be examined, it should not be scuttled merely on the basis of limitation.”

10.

Similarly, the Supreme Court in the case of Mool Chandra (supra), has held as under: “It is not the length of delay that would be required to be considered while examining Signed by: SANTOSH KUMAR TIWARI Signing time: 01-04-2025 18:47:47 Signature Not Verified NEUTRAL CITATION NO. 2025:MPHC-IND:8489

5 ITA No.1/2025

the plea for condonation of delay, it is the cause for delay which has been propounded will have to be examined. If the cause for delay would fall within the four corners of “sufficient cause”, irrespective of the length of delay same deserves to be condoned. However, if the cause shown is insufficient, irrespective of the period of delay, same would not be condoned.”

11.

In the aforesaid case, the Supreme Court has further held as under: “if negligence can be attributed to the appellant, then necessarily the delay which has not been condoned by the Tribunal and affirmed by the High Court deserves to be accepted. However, if no fault can be laid at the doors of the appellant and cause shown is sufficient then we are of the considered view that both the Tribunal and the High Court were in error in not adopting a liberal approach or justice oriented approach to condone the delay.”

12.

In view of the aforesaid pronunciation of law as well as after going through the reasons assigned for delay in filing the appeal, this Court is of the considered opinion that although a delay cannot be condoned without sufficient cause but the merits of the case cannot be discarded solely on the technical grounds of limitation. A liberal approach should be taken in condoning delays when the limitation Signed by: SANTOSH KUMAR TIWARI Signing time: 01-04-2025 18:47:47 Signature Not Verified NEUTRAL CITATION NO. 2025:MPHC-IND:8489

6 ITA No.1/2025

ground undermines the merits of the case and obstructs substantial justice. 13. Hence, this Court finds that the appellant has been able to put forth “sufficient cause” for the delay in filing the appeal before ITAT. 14. Accordingly, the order dated 23.08.2024 passed by the Income Tax Appellate Tribunal, Indore Bench, Indore in ITA No.234/IND/2024 is hereby set aside. 15. The delay in filing an appeal before the ITAT is herby condoned. 16. The matter is remanded back to Income Tax Appellate Tribunal, Indore Bench, Indore and it is directed that the appeal shall be decided afresh in accordance with law on merits after affording reasonable opportunity of hearing to both the parties. 17. With aforesaid direction, the present ITA is hereby allowed.

(SUSHRUT ARVIND DHARMADHIKARI) (GAJENDRA SINGH) JUDGE JUDGE

Shanu Signed by: SANTOSH KUMAR TIWARI Signing time: 01-04-2025 18:47:47 Signature Not Verified

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