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Facts
The assessee, engaged in trading iron and steel, filed an appeal against an order that dismissed their appeal before the CIT(A) due to a significant delay in filing. The CIT(A) had confirmed additions made by the AO regarding sundry creditors.
Held
The Tribunal held that the CIT(A) erred in dismissing the appeal solely on grounds of delay without properly considering the assessee's explanation and affidavit. The Tribunal set aside the CIT(A)'s order, restoring the case for adjudication on merits.
Key Issues
Whether the CIT(A) was justified in dismissing the appeal due to delay without considering the assessee's explanation and affidavit, and whether the assessee's delay in filing was a sufficient cause for condonation.
Sections Cited
250, 41(1), 143(2), 143(3)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, MUMBAI BENCH “SMC”, MUMBAI
Before: SHRI OM PRAKASH KANT & SHRI. RAJ KUMAR CHAUHAN
O R D E R PER RAJ KUMAR CHAUHAN (J.M.): 1. This appeal is filed by the appellant/assessee against the order dated 22.03.2024 of Learned Commissioner of Income Tax (Appeals) /Addl. /JCIT (A)-3, Kolkata[hereinafter referred to as the “CIT(A)”],passed under section 250 of the Income Tax Act, 1961 [hereinafter referred to as “the Act”] for the A.Y. 2012-13, wherein the appeal of the assessee was dismissedby the Ld. CIT(A) on the ground that assessee neither sought Yogesh Raghavji Mehta any condonation nor filed any satisfactory explanation regarding the delay, therefore the addition of Rs. 17,65,841/- made by the AO u/s 41(1) of the Act was confirmed.
The brief facts of the case are that the assessee/appellantis engaged in the business of Trading in Iron and Steel under the name and style of M/s. Yogesh Steel Traders. The assessee has filed his Return of Income on 03.09.2012 declaring total income 8,58,195/-. Subsequently, the case was selected for scrutiny and statutory notice u/s 143(2) of the Act dated 23.09.2013 and notice u/s 142(1) of the Act dated01.07.2014 was issued and served on the assessee. During the assessment proceedings, it was noticed by the AO that the sundry creditors which were outstanding for more than 3 years i.e. M/s. Ambika Steel, M/s. Laxmi Mechanical, Riddhi Siddhi and Vishal Enterprises, having a total sundry credit of Rs. 17,65,841/-. It was noticed that the assessee has not submitted any details in respect of the aforesaid sundry creditors and failed to explain as to why the sundry creditors mentioned above, should not be considered as non-genuine and the amount of credit against them should not considered as income u/s 41(1) of the Act as there is no supporting evidence /documents submitted by the assessee. The AO
3. Aggrieved by the order of AO, assessee preferred the appeal before Ld. Ld. CIT(A) requesting condonation of delay of almost 4 years by filing the appeal on 28.03.2019 against the assessment order served on 14.03.2015 and the Ld. CIT(A) did not find the grounds justified and sufficient cause for condonation of delay and has dismissed the appeal of the assessee.
4. Aggrieved by the said impugned order, the assessee is in appeal before us. The only grievance of the assessee is that the Ld. CIT(A) has erred in passing the impugned order and dismissed the appeal on the ground of delay and has refused to condone the delay unnecessarily and has confirmed the addition made without affording opportunity to the assessee.
5. We have heard Ld. AR and Ld. DR and examined the record. At the outset, Ld. AR submitted that the Ld. CIT(A) dismissed the appeal on the ground of delay in filing the appeal and did not consider the explanation given by the assessee. It is further argued by Ld. AR that the appellant/assessee has filed an affidavit giving detailed reasons as to why there was delay of approx 4 years in filing the appeal before the Ld. CIT(A). In support of seeking condonation of delay, the assessee has filed an affidavit alongwith proof and the contents of the affidavit are extracted below:-
“1. I say that I'm the proprietor of the Yogesh Steel Traders.
2. I say that the order u/s 250 of the Act dated 22.03.2024 passed by the Commissioner of Income Tax, AppealADDL/JCIT (A)-3 Kolkata. I say that the said order was never received by me.
I say that the last day of filing appeal before the Income Tax Appellate Tribunal, Mumbai, as counted from the date of orderwas 21.05.2024. I say that the appeal is filed on 30.06.2025 and therefore there is a delay of 407 days, if counted from the date of the order. I say that the said delay was on account of the reasons stated hereinafter.
I say that I am not aware of the tax matters.
I say that I had appointed a representative who was handling tax matters including filing return of income, handling assessments, appeals, reply of the notices, etc.
I say that the assessment order u/s 143(3) of the Act was passed. Against the said order, immediately an appeal was filed in Form 35 before the Commissioner of Income Tax Appeals on 28.03.2019. This appeal was filed manually. In form 35, email id mentioned was harshadpshah_1953@yahoo.co.in, i.e., of my earlier representative, who was receiving of the notices.
7. I say that notices of hearing u/s 250 of the Act issued were all received on the said email address. However, I had changed my representative and the said notices were never brought to my knowledge.
8. I say that, subsequently, order dated 22.03.2024 u/s 250 of the Act was passed by the Ld. CIT(A), ADDL/JCIT (A)-3 Kolkata. I say that even the said order was not received by me. It must have gone to the same email address.
I say that earlier representative did not inform me about the First Appellate Proceedings.
10. I say that none of the above notices and order were served through post.
I say that I recently appointed Chartered Accountant who was looking for tax matters. When he was visiting the tax portal for some work sometimes in June 2025, he realized that notices were issued and order was passed u/s 250 of the Act for the AY 2012-13.
I say that he immediately informed us, and we were told to file appeal before this Hon'ble Court.
I say that, that the Assessee has very good case on merits and if the condonation of delay in filing of the appeal is denied it would seriously undermine the cause of justice, resulting into miscarriage of justice for the Assessee Society and that if the same is granted then the same may only result in hearing of appeal on merits. I say that the Courts have held that if technical issues are pitted against substantial cause, then the latter has to be preferred over the earlier.
I say that the delay was inadvertent and unintentional and for bonafide reasons and had occurred due to circumstances which were beyond our control. I say that the Officer Bearers of the society are working in Honorary capacity with bonafide intentions.
I say that therefore, there is sufficient cause for delay of 407days on our part in filing the appeal.
In the circumstances, I pray that this Hon'ble Court may be pleased to condone the delay and decide the case on merits.
I say that whatever has been stated above is true and correct to the best of my knowledge and belief.
Solemnly affirmed at Mumbai on this 1st day of July 2025.”
It is therefore submitted that the case may be referred back to the Ld. CIT(A) and the delay in filing the appeal before the Ld. CIT(A) may be condoned in the interest of justice.
6. The Ld. DR has relied upon the order of the Ld. CIT(A) stating that there was no sufficient cause for condonation of delay and the order passed by Ld. CIT(A) is legally perfect. Therefore, Ld. DR requested for dismissal of the appeal filed by the assessee.
We have heard the rival submissions and perused the record. We have noticed that Ld. CIT(A) has dismissed the appeal without assigning any Yogesh Raghavji Mehta reasons as required in section 250(6) of the Act which is transparent from the observation in the last para of the impugned order which is the only reason mentioned for dismissal of the appeal. The conclusion para of the impugned order is extracted below:-
Delay in filing appeal: The Assessment order was served on 14/03/15 but the appeal has been filed on 28/03/2019 after a lapse of almost 4 years. Moreover, the appellant has neither sought any condonation nor filed any satisfactory explanation regarding the delay. As the law assists those who are vigilant with their rights and not those who sleep thereupon. Therefore, the appeal is dismissed.
It is thus evident from the above extracts that the Ld. CIT(A) has dismissed the appeal on the ground that the assessee has neither sought any condonation nor filed any satisfactory explanation regarding the delay. While examining the contents of the affidavit, it is noticed that assessee has not received the notice of the appeal and for these reason, the assessee could not seek the condonation of delay. We further notice that the revenue has not contradicted the affidavit filed by the assessee, by filing any counter affidavit. Nothing has been brought on record before us that the contents of affidavit filed by the assessee is not correct. Thus from the above facts, we are convinced that the explanation given Yogesh Raghavji Mehta by the assessee for failure to seeking condonation of delay is bonafide and are genuine. The impugned order has been passed without affording effective opportunity of hearing and no reasons assigned as required in section 250(6) of the Act.
9. For the above reasons, the impugned order of the Ld. CIT(A) is not sustainable in the eyes of law and resulted miscarriage of justice. Accordingly, we set aside the impugned order and restore the case to the file of Ld. CIT(A) who shall dispose the same on merit after giving effective opportunity of hearing to the assessee. The appellant/assessee shall present its case before the Ld. CIT(A) within 90 days of this order for seeking condonation of delay for filing appeal before the Ld. CIT(A) by filing detailed affidavit which will be considered as per law.
In the result, appeal filed by the assessee is allowed for statistical purposes.
Order pronounced in the open court on 21.08.2025