Loading judgment…
Facts
The assessee company had unexplained cash deposits of Rs. 50,00,000/-. The Assessing Officer (AO) reopened the case and added the amount to the returned income as the assessee failed to establish its source, nature, and genuineness. The assessee appealed to the CIT(A), but the appeal was dismissed due to a delay of 172 days without sufficient cause.
Held
The Tribunal held that condonation of delay is a matter of discretion and requires a liberal construction of "sufficient cause" to advance substantial justice, as per Supreme Court judgments. The Tribunal found the explanation for the delay to be potentially satisfactory and remitted the appeal back to the CIT(A).
Key Issues
Whether the delay in filing the appeal before the CIT(A) of 172 days was justifiable under Section 5 of the Limitation Act, considering the explanation provided by the assessee.
Sections Cited
148, 5
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “A” BENCH: KOLKATA
ORDER / आदेश Per Pradip Kumar Choubey, JM:
This is the appeal preferred by the assessee against the order of Commissioner of Income Tax (Appeals), -NFAC, Delhi (hereinafter referred to as the Ld. CIT(A)] dated 18.03.2025 for AY 2013-14.
Assessment Year: 2013-14 Devnadi Advisory Pvt. Ltd.
Brief facts of the case of the assessee are that the assessee company has shown income of Rs. 25,47,290/- but as per the information received from DDIT(Inv), Unit that cash of Rs. 50,00,000/- was deposited in DP Trading account with Axis Bank was transferred from Gopikar Supply Pvt. Ltd. to the account of the assessee company and it was remained unexplained. After taking approval for reopening of the case of the assessee for AY 2013-14 the case was reopened, notice u/s 148 was issued and asked to the assessee to file the return of income, the assessee filed submission. The Ld. AO after perusing the submission has held that burden upon the assessee to establish the source, nature and genuineness of the amount of Rs. 50,00,000/- but that have not been discharged by the assessee by submitting any documentary evidences, as a result of which the assessment was completed and an amount of Rs. 50,00,000/- has been added to the returned income of the assessee.
Aggrieved by the said order, the assessee preferred an appeal before the Ld. CIT(A) wherein the appeal of the assessee has been dismissed as it has been filed after a delay of 172 days and there was no sufficient cause has been shown.
Being aggrieved and dissatisfied the assessee preferred an appeal before us.
The Ld. A.R instead of arguing into the merit of the case has only prayed that the assessee has to give an opportunity to place its case before the Ld. CIT(A) by condoning the delay as the order passed by the Ld. CIT(A) is not on merit rather he dismissed the appeal of the assessee on account of delay in filing the appeal. The Ld. A.R submits that a sufficient cause has been shown by the assessee before the Ld. CIT(A) that the person who is looking after the income tax matter went on leave for a long time and he did not file appeal against the order of AO. The prayer of the assessee is to remit the appeal of the assessee back to the file of Ld. CIT(A) after condoning the delay.
The Ld. D.R did not raise any objection in remitting back the appeal of the assessee to the file of Ld. CIT(A) for fresh consideration.
Upon hearing the submission of the counsel of the respective parties, we have perused the order of Ld. CIT(A) and find that the appeal of the assessee has been Assessment Year: 2013-14 Devnadi Advisory Pvt. Ltd. dismissed as it has been opined by the Ld. CIT(A) that the delay of 172 days in filing the appeal is not condoned as no sufficient cause has been shown. The Ld. A.R submits that in fact the person who is looking after the income tax matters went on leave for a long time to his native place and suddenly, he fell ill at his residence and due to that reason, the appeal could not be filed in time.
In this context, we have perused the several decisions of the Hon'ble Apex Court and find that in Shakuntala Devi Jain v. Kuntal Kumari [AIR 1969 SC 575], this Court reiterated the following classic statement from Krishna vs. Chathappan [1890 ILR 13 Mad 269]:
"... Section 5 gives the courts a discretion which in respect of jurisdiction is to be exercised in the way in which judicial power and discretion ought to be exercised upon principles which are well understood; the words `sufficient cause' receiving a liberal construction so as to advance substantial justice when no negligence nor inaction nor want of bona fides is imputable to the appellant."
In N.Balakrishnan v. M.Krishnamurthy [1998 (7) SCC 123], this Court held: "It is axiomatic that condonation of delay is a matter of discretion of the court. Section 5 of the Limitation Act does not say that such discretion can be exercised only if the delay is within a certain limit. Length of delay is no matter, acceptability of the explanation is the only criterion. Sometimes delay of the shortest range may be uncondonable due to a want of acceptable explanation whereas in certain other cases, delay of a very long range can be condoned as the explanation thereof is satisfactory. Once the court accepts the explanation as sufficient, it is the result of positive exercise of discretion and normally the superior court should not disturb such finding, much less in revisional jurisdiction, unless the exercise of discretion was on wholly untenable grounds or arbitrary or perverse. But it is a different matter when the first court refuses to condone the delay. In such cases, the superior court would be free to consider the cause shown for the delay afresh and it is open to such superior court to come to its own finding even untrammeled by the conclusion of the lower court. The primary function of a court is to adjudicate the dispute between the parties and to advance substantial justice...... 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. A court knows that refusal to condone delay would result in foreclosing a suitor from putting forth his cause. There is no presumption that delay in approaching the court is always deliberate. This Court has held that the words "sufficient cause" under Section 5 of the Limitation Act should receive a liberal construction so as to advance substantial justice.”
Assessment Year: 2013-14 Devnadi Advisory Pvt. Ltd. 8. Considering the submission made by the assessee, order passed by the Ld. CIT(A) and keeping in view the Hon’ble Supreme Court judgment regarding the condonation of delay, we are remitting the appeal back to the file of Ld. CIT(A) for fresh consideration after condoning the delay of 172 days. The Ld. CIT(A) is directed to pass a afresh order on merit after hearing of the assessee.
In the result, the appeal filed by the assessee is allowed for statistical purposes.
Order is pronounced in the open court on 22nd July, 2025
Sd/- Sd/- (Sanjay Awasthi/संजय अव�थी) (Pradip Kumar Choubey /�द�प कुमार चौबे) Accountant Member/लेखा सद�य Judicial Member/�या�यक सद�य Dated: 22nd July, 2025 SM, Sr. PS Copy of the order forwarded to: 1. Appellant- Devnadi Advisory Pvt. Ltd., 13, Becharam Chowdhury lane, Howrah-711101 2. Respondent – ITO, Ward-13(1), Kolkata 3. Ld. CIT(A)-NFAC, Delhi 4. Ld. PCIT- , Kolkata 5. DR, Kolkata Benches, Kolkata (sent through e-mail)