M/S. RAKESH METAL & TUBES ,MUMBAI vs. INCOME TAX OFFICER 19(3) (1), MUMBAI

Briefly stated facts necessary for adjudication of the controversy at hand are: Assessing Officer (AO) made an addition of Rs.19,52,082/- being 12.5% of the total amount of alleged bogus purchases made by the assessee to the tune of Rs.1,56,16,653/-. The case was reopened on the basis of information received from Sales Tax Department that assessee is one of the beneficiaries of the accommodation entries being provided by the accommodation entry providers. AO accordingly framed the assessment at the total income of Rs.21,92,076/- under section 143(3) read with section 147 of the Income Tax Act, 1961 (for short the ‘Act’).

Assessee carried the matter before the Ld. CIT(A) by way of filing appeal who has dismissed the appeal only on ground of delay in filing the appeal without deciding the issues on merits. Feeling aggrieved with the impugned order the assessee has come up before the Tribunal by way of filing present appeal.

We have noticed that impugned order passed by Ld. CIT(A) is not on merits rather appeal of the assessee was dismissed on the ground of delay in filing the same. In para 2 of the impugned order it is mentioned that the appeal before the Ld. CIT(A) was filed on 19.11.2019 whereas the same was required to be filed on 25.04.2015 resulting into delay of 54 months.

Now before the Tribunal assessee has challenged the impugned order passed by Ld. CIT(A) primarily on the ground that non condoning the delay by Ld. CIT(A) is arbitrary, illegal and sought to condone the same on the grounds inter alia that the entire income tax related issues were being looked after by father of one of the partners namely Rajesh Uttamchand Shah, who remained admitted in the hospital for treatment of multi organ dysfunction, refractory heart failure, acute kidney injury on chronic kidney disease, bilateral pleural effusion, right vocal cord paresis, ischemic heart disease-post PTCA, LV Dysfunction, hypothyroidism and hypertension and the entire family got involved in providing him the medical treatment; that Uttamchand Prakash G. Shah father of one of the partners ultimately died as per death certificate available on record; that after death of Uttamchand Prakash G. Shah father of the assessee it has come to the notice that all the income tax related matters got delayed. All the reasons pleaded for seeking condonation of delay are supported with an affidavit and medical record running into 25 pages.

However, on the other hand, the Ld. D.R. for the Revenue opposed the application for condonation of delay on the ground that when Rajesh Uttamchand Shah was one of the partners in the

Keeping in view the facts duly narrated in the affidavit inter alia that the assessee’s father namely Uttamchand Prakash G. Shah was suffering from multiple ailments during the period of delay and remained hospitalized in Sir HN Reliance Foundation Hospital, which we consider beyond the control of the assessee and all these facts to our mind are sufficient cause with the assessee not to file the appeal in time.

Hon’ble Supreme Court while deciding the issue of condonation of delay in case of Land Acquisition Collector vs. MST Katiji & Others 167 ITR 471 (SC) held that “when substantial justice and technical considerations are pitted against each other, the case of substantial justice deserves to be preferred, for the other side cannot claim to have a vested right in injustice being done because of a non deliberate delay”. So the principle laid down by the Hon’ble Supreme Court is applicable to the reasons of delay in not filing appeal within limitations being beyond the control of the assessee and as such are sufficient to condone the delay.

Even by applying the principle of natural justice assessee is required to be provided with an opportunity of being heard which has not been granted by the lower revenue authority. So we are of the considered view that delay of 54 months in filing the appeal before Ld. CIT(A) was neither intentional nor deliberate on the part of the assessee and there being sufficient reasons the Ld. CIT(A) is directed to condone the delay and to decide the appeal of the

We are of the considered view that when the Ld. CIT(A) has not gone into merits in deciding the appeal rather deciding the same on ground of delay only by dismissing the application for condonation of delay filed by the assessee which has been condoned as per preceding paras, the case is required to be remitted back to the Ld. CIT(A) to decide afresh on merits after condoning the delay as per our findings in the preceding paras. So without entering into merits of the contentions raised by the assessee the impugned order passed by the Ld. CIT(A) is set aside to the file of the Ld. CIT(A) to decide afresh after providing opportunity of being heard to the assessee.

Resultantly, the appeal filed by the assessee is allowed for statistical purposes.