SANMUKHBHAI DANDVATAR,ANKLESHWAR BHARUCH vs. INCOME TAX OFFICER, BHARUCH

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ITA 862/SRT/2025Status: DisposedITAT Surat30 October 2026AY 2017-187 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal condoned the delay of 399 days in filing the appeal, finding that the assessee had demonstrated a "sufficient cause" for the delay. The Tribunal relied on the assessee's explanation regarding their lack of technical expertise and reliance on tax consultants, coupled with the fact that they only became aware of the proceedings upon physical notice. The Tribunal invoked Section 253(5) of the Act and referred to the Supreme Court's decision in Collector, Land Acquisition Vs Mst. Katiji and others, emphasizing a justice-oriented approach over technical considerations. The Tribunal also restored the matter to the file of the Assessing Officer for fresh adjudication, citing the principle of natural justice and noting that no prejudice would be caused to the Revenue. This restoration was made subject to the assessee paying a cost of Rs. 5,000/- to the Income-Tax Department and ensuring strict compliance in future proceedings, with the AO being at liberty to proceed according to law if the assessee fails to participate without unnecessary adjournments. The assessee was directed to make a proper and effective representation before the AO.

What were the facts?

The assessee, an individual claiming to be a farmer, failed to file a return of income for Assessment Year 2017-18. The Assessing Officer (AO) initiated proceedings based on information of a cash deposit of Rs. 10,00,000/- during the demonetization period. Despite notices under Section 142(1) and information requests under Section 133(6), the assessee did not respond. Consequently, the AO assessed the total income at Rs. 22,76,360/- under Section 144. The assessee's appeal before the Commissioner of Income-Tax (Appeals) - NFAC was also dismissed ex-parte due to non-compliance with six hearing notices. The assessee then filed an appeal before the Income Tax Appellate Tribunal (ITAT), which was filed with a delay of 399 days.

What were the issues?

1. Whether the delay of 399 days in filing the appeal before the ITAT should be condoned, considering the assessee's claim of being prevented by sufficient cause. The assessee argued that the delay was not deliberate or intentional, attributing it to a lack of familiarity with technological advancements and the e-proceedings portal, and the reliance on tax consultants whose email IDs were used for communication. The assessee contended that they only became aware of the pending proceedings upon physical service of a notice on June 12, 2025, and that the tax consultant had not acted appropriately. The assessee cited various judicial precedents for a liberal interpretation of limitation rules. The Revenue did not object to the condonation of delay, leaving it to the Tribunal's wisdom. 2. On merits, whether the matter should be restored to the Assessing Officer for fresh adjudication. The assessee requested an opportunity to make an effective representation before the AO, stating they now possess all relevant details and documents. The Revenue, while not opposing restoration, submitted that a cost should be imposed due to the assessee's non-compliance during earlier proceedings and that strict compliance should be ensured.

Which sections of the Income-tax Act were involved?

Section 144,Section 142(1),Section 133(6),Section 253(5)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, SURAT BENCH, SURAT

For Appellant: Shri Krutarth Desai, Advocate
For Respondent: Shri Ashish Kumar, Sr. DR
Hearing: 01/09/2026Pronounced: 30/10/2026

आदेश / O R D E R Per, B. M. Biyani, A.M.:

Feeling aggrieved by the order of first-appeal dated 13.05.2024 passed by learned Commissioner of Income-Tax (Appeals)-NFAC, Delhi [“Ld. CIT(A)”], which in turn arises out of the assessment-order dated 15.11.2019 passed by learned ITO, Ward-2(4), Bharuch [“Ld. AO”] u/s 144 of Income-tax Act, 1961 [“the Act”] for Assessment-Year [“AY”] 2017-18, the assessee has filed this appeal on the grounds mentioned in Appeal Memo (Form No. 36).

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Sanmukhbhai Dandvatar ITA No. 862/SRT/2025 - AY 2017-18 2. The background facts leading to present appeal are such that the assessee-individual is claiming to be a farmer. For AY 2017-18, the assessee did not file any return of income. The Ld. AO, taking into an information revealing that the assessee made a cash deposit of Rs. 10,00,000/- in bank a/c during demonetization period, issued notice u/s 142(1) calling assessee to file return. However, the assessee did not respond. Thereafter, the Ld. AO directly collected information from banks u/s 133(6) and issued further notices to assessee seeking explanation but still there was no response from assessee. Ultimately, the Ld. AO, taking into the information of transactions available in bank statement, assessed total income at Rs. 22,76,360/-. Aggrieved, the assessee carried matter in first-appeal before Ld. CIT(A). During first appeal proceedings, the Ld. CIT(A) issued as many as six hearing notices but those notices remained uncompiled by assessee. Ultimately, the Ld. CIT(A) dismissed assessee’s appeal without granting any relief. Now, the assessee has come in next appeal before us.

3.

The present appeal has been filed before ITAT after delay and therefore time-barred. The assessee has filed an application/affidavit for condonation of delay; the same is re-produced for an immediate reference: ‘‘1) The present appellant has preferred an appeal before this august forum for challenging the concurrent findings of the adjudicating authority as well as the First Appellate Authority by which the ex-party assessment order has been passed as well as the ex-party Appellate order was passed. 2) The present appellant submits that the order has been passed by the Learned CIT(A) on 13.05.2024. The appeal has to be preferred within the period of 60 days from the date of service of the order of CIT(A). Therefore, the appeal before this August tribunal has to be preferred on or before 12.07.2024. However, the appeal is being preferred on 16.08.2025. Therefore, there is a delay of total 399 days delay in preferring this appeal before this Hon'ble Tribunal. Therefore, this application for condonation of delay is being preferred before this Hon'ble Tribunal.

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Sanmukhbhai Dandvatar ITA No. 862/SRT/2025 - AY 2017-18 3) The present appellant submits that the delay is neither deliberate nor intentional. It is submitted that the appellant is an individual and not well equipped with the technological advancement. The appellant is also not literate to understand the technicalities of the Income Tax Portal. The notices were being served through Income Tax Portal. The appellant has engaged tax consultants namely M/s MB Consultancy situated at Ankleshwar. Since, the Income Tax related issues are quite complicated and the appellant was not well versed with the technological advancements, the E Mail IDs were provided which are of not the appellant but of the tax consultants. This fact was not within the personal knowledge of the appellant. Therefore, the fact of issuance of notices and orders were not within the personal knowledge of the appellant. Therefore, the appellant was under bonafide belief that notices are being replied by the consultants in accordance with law. The copies of the screenshots showing E Mail IDs, where notices were being served, are annexed herewith and marked as ANNEXURE A. 4) GROUNDS FOR CONDONATION OF DELAY: 4.1) The appellant most respectfully submits that the delay is neither intentional nor deliberate. The appellant was not having any personal knowledge of the service of notice or orders. Therefore, the appellant was prevented from sufficient cause in preferring an appeal before this Hon'ble Tribunal and therefore, delay may please be condoned in the best interest of justice. 4.2) The appellant submits that under the E-Proceedings, notices are being served through registered E Mail ID and update of the same is being sent to the registered Mobile number. The E Mail ID and Mobile number is to be registered on portal. For the sake of convenience, the tax practitioners usually provide their E Mail IDs and mobile numbers so that they can initiate promptly reply to the same. However, in the case on hand, nothing of that sort could have happened and Ex-Party order has been passed. 4.3) The appellant came to the knowledge of the fact when the notice was physically served upon him on 12.06.2025 that proceedings are pending. The copy of the notice is annexed herewith and marked as ANNEXURE B. The notice was served by the verification unit of the Income Tax Department. Accordingly, the fact of service of notice physically stands fortified. 4.4) The appellant upon service of notice have inquired with the Income Tax Department where the appellant learnt that no reply has been filed in response to the Assessment proceedings as well as appellate proceedings. Thereafter, the appellant has inquired with his tax consultants. However, the tax consultant has not replied in appropriate manner. Therefore, the appellant has taken the brief from M/s MB Consultancy in order to ventilate their grievances and approached another advocate to prefer an appeal before the Hon'ble Tribunal. Therefore, the appellant submits that the delay is not attributable to any lethargy at his end but the appellant was prevented from sufficient cause and therefore, the delay deserves to be condoned in the best interest of justice. 5) The appellant submits that if the delay in filing of the appeal is not condoned, the appellant may be made to face serious irreparable losses. On the other hand, the department is not going to lose anything. If the delay is

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Sanmukhbhai Dandvatar ITA No. 862/SRT/2025 - AY 2017-18 condoned, then the matter may be decided on its merits. It is the settled position of law that provisions qua delay is required to be interpreted very liberally unless the bonafide of the appellant is at stake. The appellant submits that balance of convenience is in his favor and appellant is having a prima facie case on hand. Therefore, the delay may please be condoned in the best interest of justice. The applicant submits that he was not careless or negligent about his rights but was under bonafide belief that his taxation consultant is taking due care of his case. Since, the applicant was not having enough acquaintance about E Proceedings or faceless system of assessment and appeal. Further to that, E Mail and Mobile number was provided by his tax consultant as per his convenience to do the work on portal without calling the applicant at regular interval for OTPs etc. 7) The applicant submits that his activeness and vigilance can be appreciated by the fact that without any delay, the appeal is preferred from the date of his getting knowledge about the fact. This shows the bonafide of the applicant. The applicant submits that, delay is neither deliberate nor by any negligence so that if the delay is not condoned, the applicant will suffer irreparable loss and injury. On the other hand, if the delay is condoned, the respondent will not suffer in any way. Therefore, the delay caused due to genuine and bona fide reasons is required to be condoned in the interest of justice and equity. 8) The applicant submits that it is observed in case of Rafiq C Munshilal (AIR 1981SC 1400) that "we cannot be a party to an innocent party suffering injustice merely because his chosen advocate defaulted". Similar view is taken by ITAT Ahmadabad in case of Gujarat Tube Well Co Vs ITO (43 TTJ 331). 9) It is not well settled position in law in the case of N. Balakrishnan V M. Krishnamurthy (1998) (7 SCC 123) for the proposition that rules of limitation are not meant to destroy the rights of parties. They are meant to see that parties do not resort to dilatory tactics, but seek their remedy promptly. The object of providing legal remedy is to repair the damage caused by reason of legal injury. The law of limitation fixes a lifespan for such legal remedy for the redress of the legal injury so suffered. Time is precious and wasted time would never revisit. 10) Reliance upon the decision of Hon'ble Supreme Court in the case of B Madhuri Goud Vs B Damodar Reddy (2012) 12 SCC 693, it was held in Para 5 and 6 that, the Limitation Act 1963 has not been enacted with the object of destroying the rights of the parties but to ensure that they approach the court for vindication of their rights without unreasonable delay. The idea underlying the concept of limitation is that every remedy should remain alive only till the expiry of the period fixed by the legislature. At the same time, the courts are empowered to condone the delay provided that sufficient cause is given by the applicant for not availing the remedy within the prescribed period of limitation. The expression "Sufficient cause" used in section 5 of the Limitation Act 1963 and other statutes is elastic enough to enable the courts to apply the law in a meaningful manner which serves the ends of justice. No hard and fast rule has been or can be laid down for deciding the applications for condonation of delay but over the years courts have repeatedly observed that a liberal approach to be adopted in such matters so that substantive rights of parties are not defeated only on the grounds of delay.

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Sanmukhbhai Dandvatar ITA No. 862/SRT/2025 - AY 2017-18 11) Further reliance is placed on the Judgment of Hon'ble High Court of Himachal Pradesh in the case of E-Governance Society Vs Commissioner of Income Tax (Exemption), in which it was held that "where assessee sent documents to counsel to file appeal, but counsel had taken no steps, delay in filing appeal was to be condoned though there was some negligence on part of the assessee in following up the matter". Further reliance is placed on the judgment of Hon'ble ITAT, Chandigarh Bench in the case of Emsons Organics Ltd Vs Dy CIT [2020] 113 taxmann.com 269, in which it was held that, "where facts sufficiently demonstrated that delay of 615 days in filing appeal was non deliberate and by filing of appeal late, assessee had not derived any undue advantage, Tribunal was justified in condoning the delay". It is held by Hon'ble High Court of Karnataka in the case of Mrs. Premalatha Pagaria Vs Income Tax officer, [2021] 130 taxmann.com 403 that, "where there was inadvertent mistake on the part of assessee's Chartered Accountant in filing appeal before the Tribunal, delay of 310 days was to be condoned". In view of the aforesaid, the applicant humbly prays that Hon'ble Members may be pleased to: To condone the delay in preferring the appeal in the case against the impugned order passed by the Respondent. FOR THIS ACT OF JUSTICE AND KINDNESS, THE APPLICANT SHALL AS IN DUTY BOUND EVERY PRAY.’’

4.

The averments made by assessee in above affidavit, which are self- explanatory and which do not require repetition, were discussed and the Ld. DR for revenue does not have any objection if the bench condones delay and accordingly left it to the wisdom of bench. We have considered the explanation advanced by assessee and in absence of any contrary fact or material on record, the assessee is found to have a “sufficient cause” for delay in filing present appeal. We find that section 253(5) of the Act empowers the ITAT to admit an appeal after expiry of prescribed time, if there is a “sufficient cause” for not presenting appeal within prescribed time. It is also a settled position by Hon’ble Supreme Court in Collector, Land Acquisition Vs Mst. Katiji and others 1987 AIR 1353, 1987 2 SCC 387 that whenever substantial justice and technical considerations are opposed to each other, the cause of substantial justice must be preferred by adopting

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Sanmukhbhai Dandvatar ITA No. 862/SRT/2025 - AY 2017-18 a justice-oriented approach. Thus, taking into account the facts of case, the provision of section 253(5) and the decision of Hon’ble Supreme Court, we take a judicious view, condone delay, admit appeal and proceed with hearing.

5.

On merit of case, the Ld. AR submitted that the orders passed by both of the lower authorities are ex-parte due to lack of submissions by assessee but the assessee is now having in his possession, all relevant details and documents and ready to make an effective representation before Ld. AO. He prayed that in the interest of justice, one more opportunity be given to assessee by way of restoring this matter at the level of Ld. AO. He acknowledged that the assessee shall definitely make a proper and effective representation before Ld. AO.

6.

The Ld. DR for revenue, though not opposing the prayer of the assessee for restoration, submitted that the assessee had remained non- compliant during the assessment proceedings as well as proceedings of first- appeal, which constrained the lower authorities to pass ex-parte orders. It was, therefore, submitted that while restoring the matter, a suitable cost must be imposed upon assessee and also appropriate directions may be issued to ensure strict compliance by the assessee.

7.

Considering the above submissions of parties; having regard to the principle of natural justice and also bearing in mind that no prejudice would be caused to revenue if the present matter is restored at the level of Ld. AO, we restore this matter to the file of Ld. AO for adjudication afresh, at the risk

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Sanmukhbhai Dandvatar ITA No. 862/SRT/2025 - AY 2017-18 and responsibility of assessee and subject to payment of cost of Rs. 5,000/- by assessee to Income-tax Department through a suitable challan. It is may clear that the assessee shall not claim any credit or refund of such payment. The Ld. AO shall give necessary opportunity of hearing to assessee and pass an appropriate order uninfluenced by his earlier order. The assessee is also directed to remain vigilant and ensure participation in the hearings as may be fixed by Ld. AO without seeking unnecessary adjournments failing which the Ld. AO shall be at liberty to proceed in accordance with law. Ordered accordingly.

8.

In result, this appeal is allowed for statistical purposes, subject to payment of cost by assessee as mentioned above.

Order pronounced in open court on 30/10/2026

Sd/- Sd/- [ SUCHITRA KAMBLE ] [ B.M. BIYANI ] JUDICIAL MEMBER ACCOUNTANT MEMBER //True Copy// Place : Surat िदनांक /Dated : 30/10/2026 Sr. PS Copies to: (1) The appellant (2) The respondent (3) CIT (4) CIT(A) Digitally signed by HEMA HEMA KISHORE (5) Departmental Representative KISHORE JAKKA JAKKA Date: 2026.10.30 16:55:13 (6) Guard File +05'30' By order UE COPYAssistant Registrar Income Tax Appellate Tribunal Surat Bench, Surat

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