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Facts
The assessee filed appeals against the orders of CIT(A)/NFAC for assessment year 2016-17, which dismissed appeals due to delay. The assessee cited financial difficulties, legal proceedings, business burdens, and personal stress as reasons for the delay. The Assessing Officer had determined total income at Rs.26,45,49,456/- and confirmed a penalty of Rs.1,24,49,980/-.
Held
The Tribunal held that while delay cannot be condoned without sufficient cause, the merits of the case should be examined to avoid injustice. Considering the Supreme Court's decisions, the Tribunal deemed it proper to restore the appeals to the CIT(A)/NFAC.
Key Issues
Whether the delay in filing appeals before the CIT(A)/NFAC should be condoned based on the reasons provided by the assessee, and whether the appeals should be decided on merits.
Sections Cited
147, 148, 144B, 43CA, 271(1)(c)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, PUNE BENCH “A”, PUNE
Before: SHRI R. K. PANDA & Ms. ASTHA CHANDRA
The above two appeals filed by the assessee are directed against the separate orders dated 19.03.2025 of the Ld. CIT(A) / NFAC, Delhi relating to assessment year 2016-17. In the assessee has challenged the order of the Ld. CIT(A) / NFAC in dismissing the appeal and thereby upholding the income of Rs.26,45,49,456/- determined by the Assessing Officer as against the returned loss of Rs.2,04,04,835/-. Similarly, in the assessee has challenged the order of the Ld. CIT(A) / NFAC in confirming the penalty of Rs.1,24,49,980/- levied by the Assessing Officer u/s 271(1)(c) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’). For the sake of convenience, both the appeals were heard together and are being disposed of by this common order.
Facts of the case, in brief, are that the assesse is a company and filed its return of income for the impugned assessment year on 23.12.2016 declaring total income at Nil (current year loss of Rs.2,04,04,835/-). Subsequently in compliance to the notice u/s 148 of the Act the assessee filed its return of income on 12.08.2022 declaring total income at Nil and current year loss of Rs.2,04,04,835/-. The Assessing Officer completed the assessment u/s 147 r.w.s. 144B of the Act determining the total income of the assessee at Rs.26,45,49,456/- wherein he made addition of Rs.23,40,39,891/- as unexplained credit of unsecured loans received during the year, Rs.2,08,25,400/- on account of applicability of section 43CA of the Act and an amount of Rs.3,00,89,000/- being unexplained investment in immovable properties.
Since there was delay in filing of the appeal before the Ld. CIT(A) / NFAC by 219 days, the Ld. CIT(A) / NFAC dismissed the appeal on the ground that the assessee could not explain any reasonable cause for filing of such appeal with delay. Similarly, he also dismissed the appeal filed against the penalty levied by the Assessing Officer u/s 271(1)(c) of the Act on the ground that the appeal was filed with a delay of 76 days and no reasonable cause was explained.
Aggrieved with such order of the Ld. CIT(A) / NFAC, the assessee is in appeal before the Tribunal.
The Ld. Counsel for the assessee at the outset submitted that before the Ld. CIT(A) / NFAC the assessee had cited financial difficulties, multiple legal proceedings, business burdens, attachment of stock and properties by the Income Tax Department and personal stress of one of the directors following the demise of one of his family members as the reasons for delay in filing of the appeal. However, the Ld. CIT(A) / NFAC held that the said reasons do not constitute a legally valid ground for condonation of delay. According to him, the assessee company being a separate legal entity is distinct from the shareholders and directors and is responsible for complying with all the statutory requirements of the Income Tax Act including filing of the appeal within prescribed time limit under the Statute. According to him the financial constraints, ongoing litigations and managerial burdens do not absolve an assessee from compliance with statutory timelines. He submitted that this type of reasoning given by the Ld. CIT(A) / NFAC is not justified.
Referring to the decision of Hon'ble Supreme Court in the case of Collector, Land Acquisition vs. Mst. Katiji & Ors. reported in 167 ITR 471 (SC) and various other decisions, he submitted that the delay should have been condoned and the appeal should have been decided on merit.
The Ld. DR on the other hand submitted that the assessee has not proved justifiable reasons for such delay in filing of the appeal before the Ld. CIT(A) / NFAC. He submitted that the Ld. CIT(A) / NFAC has rightly dismissed the appeals on account of delay in filing of the same.
We have heard the rival arguments made by both the sides, perused the orders of the Assessing Officer and the Ld. CIT(A) / NFAC and the paper book filed on behalf of the assessee. We have also considered the various decisions cited before us. It is an admitted fact that there was a delay of 219 days in filing of the quantum appeal and delay of 76 days in filing of the penalty appeal before the Ld. CIT(A) / NFAC. We find the assessee before the Ld. CIT(A) / NFAC while explaining the reasons for such delay has cited the financial difficulties, multiple legal proceeds, business burdens, attachment of stock and properties by the Income Tax Department and personal stress of one of the directors following the demise of one of his family members. It is the submission of the Ld. Counsel for the assessee that the Ld. CIT(A) / NFAC should have considered the same as reasonable cause and condoned the delay.
We find the Hon'ble Supreme Court in the case of Collector, Land Acquisition vs. Mst. Katiji & Ors. (supra) has held that when substantial justice and technical considerations are pitted against each other, cause of substantial justice deserves to be preferred for the other side cannot claim to have vested right in injustice being done because of a non-deliberate delay. Refusing to condone delay can result in a meritorious matter being thrown out at the very threshold and cause of justice being defeated. As against this when delay is condoned the highest that can happen is that a cause would be decided on merits after hearing the parties.
We find recently the Hon’ble Supreme Court in the case of Inder Singh Vs. The State of Madhya Pradesh reported in 2025 LiveLaw (SC) 339 has held as under: “14. 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.”
In the light of the above decisions of Hon’ble Supreme Court cited (supra), we deem it proper to restore both the appeals to the file of the Ld. CIT(A) / NFAC with a direction to condone the delay and decide the appeals on merit as per fact and law after giving due opportunity of being heard to the assessee. The assessee is also hereby directed to make its submissions, if any, on the appointed date without seeking any adjournment under any pretext failing which the Ld. CIT(A) / NFAC is at liberty to pass appropriate order as per law. We hold and direct accordingly. The grounds raised by the assessee are accordingly allowed for statistical purposes.
In the result, both the appeals filed by the assessee are allowed.
Order pronounced in the open Court on 12th December, 2025.