APAASSO MALI,PUNE vs. ITO 11(1), SWARGATE

Aggrieved, the assessee carried the matter before the Ld. CIT(A)/NFAC. Before the Ld. CIT(A)/NFAC, the appeal was filed with a delay of 248 days. The Ld. CIT(A)/NFAC did not condone the said delay and dismissed the appeal observing that the reasons cited by the assessee do not constitute „sufficient cause‟ for not presenting the appeal in time. The relevant findings and observations of the Ld. CIT(A)/NFAC are as under : “5. Decision of the Appellate Authority on condonation of delay in filing the appeal:- As mentioned above, the appeal against the order under section 147r.w.s144r.w.s144Bdated 17-03-2023 served on 17-03-2023. This shows that the delay in filing the appeal as per the provisions of section 249(2) of the Act was 248 days. On perusal of Form No. 35 in column no 14 the appellant regarding condonation of delay submitted the following reasons "That I, Apaasso Mali, am the Appellant file an application for Condonation of delay. That I, the above-named Applicant, am well conversant with the facts stated below. That the income tax s 144/147r.w.s144B on the Income Tax Act, 1961 for the assessment year 2018-2019 in my case has been completed by National Faceless Assessment Centre, Delhi by order dated 17/03/2023. That, the time for filing of the appeal before the CIT (Appeals) was to expire on 17/04/2023. That the Applicant, Apaasso Mali had financial crisis in the business, unavoidable family circumstances and also not guided by proper advice in the matter of appeal. Due to the above-mentioned facts, the Applicant could not file the appeal well within the stipulated time That the memo of appeal has been filed on 22/11/2023 before the Honorable CIT (A), National Faceless Appeal 5.1 The sub-section (3) of Section 249 of the Act regarding power of the CIT (appeals) to condone the delay in filing the appeal is reproduced as under- "The Joint Commissioner (Appeals) or the Commissioner (Appeals) may admit an appeal after the expiration of the said period if he is satisfied that the appellant had sufficient cause for not presenting it within that period" 5.2 As per Form no. 35, the appeal is delayed for 248 days. The order under section 147r.w.s144r.w.s1448 was passed on 17-03-2023 which was served upon to appellant on same day 17-03-2023. Accordingly, the due date for filing the appeal to CIT(A) against the same was 17-04-2023, but the appeal has been 3

4 There is legal maxim- "Vigilantibus non dormientibus Jura subveniunt" meaning that law assists those who are vigilant with their rights and not those who sleep thereupon. It is trite that filing of an appeal or an application under any Act is a right provided by the concerned statute. These rights carry certain obligations including adhering to the time limit prescribed in the statute for filing of such an appeal or application. Sometimes the relevant statute carves out exceptions by granting the competent authority/forum a power to entertain an appeal or application beyond the prescribed period on sufficient cause. It is in the hue of such an express authorization that the concerned authority/forum can exercise its discretion and condone the delay, if satisfied with the reasonableness of the cause in late presentation. In the context of Income-tax Act, 1961, although section 249(2) of the Act requires the filing of an appeal before the CIT(A) within 30 days, sub-section (3) empowers the CIT(A) to admit an appeal after the expiry of the said period if he is satisfied that the appellant had sufficient cause for not presenting the appeal within the period. As discussed in the preceding para, the present appellant has not been able to show any reasonable cause for filing the appeal late by248days. From the facts of the case, it is clear that the statutory right to appeal which was vested with the appellant was not exercised within the stipulated time u/s 249(2). Thus, this clearly is a case of laches and is directly the result of deliberate inaction on the part of the appellant. Therefore, the law cannot come to its rescue by condoning the delay for such inaction on the part of the appellant. 5.5 In a comparable set of facts and circumstances, the Hon'ble Supreme Court in their judgment dated 16-12-2021 in the case of MajjiSannemma @ Sanyasirao versus Reddy Sridevi&Ors.inCivil Appeal No.7696 of 2021 has observed as under- 6.2 “We have gone through rough the averments in the application for the condonation of delay. There is no sufficient explanation for the period from 15.03.2017 till the Second Appeal was preferred in the year 2021. In the application seeking condonation of delay it was stated that she is aged 45 years and was looking after the entire litigation and that she was suffering from health issues and she had fallen sick from 01.01.2017 to 15.03.2017 and she was advised to take bed rest for the said period. However, there is no explanation for the period after 15.03.2017. Thus, the period of delay from 15.03.2017 till the Second Appeal was filed in the year 2021 has not at all been explained. Therefore, the High Court has not exercised the discretion judiciously 7. At this stage, a few decisions of this Court on delay in filing the appeal are referred to and considered as under. 7.1in the case of Ramlal, Motilal and Chhotelal(supra), it is observed and held as under. "In construing s. 5 it is relevant to bear in mind two important considerations. The first consideration is that the expiration of the period of limitation prescribed for making an appeal gives rise to a right in favour of the decree holder to treat the decree as binding between the parties. In other words, when the period of limitation prescribed has expired the decree holder has obtained a benefit under the law of limitation to treat the decree as beyond challenge, and this legal right which has accrued to the decree holder by lapse of time should not be lightheartedly disturbed. The other consideration which cannot be ignored is that if sufficient cause for excusing delay is shown discretion is given to the Court to condone delay and admit the appeal. This discretion has been deliberately conferred on the Court in order that judicial power and discretion in that behalf should be exercised to advance substantial justice. As has been observed by the Madras High Court in Krishna v. Chattappan, (1890) J.L.R. 13 Mad. 269, "s. 5 gives the Court a discretion which in respect of juri iction 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

Dissatisfied, the assessee is in appeal before the Tribunal raising the following grounds of appeal: “Ground No. 1: On the facts and circumstances of the case, the learned CIT(A) erred in law and on facts in dismissing the appeal in limine without considering the merits of the case by not condoning the delay of 248 days in filing the appeal, despite the appellant providing sufficient cause for the delay. Ground No. 2: On the facts and circumstances of the case, the order passed by the Assessing Officer u/s 143(3) r.w.s. 144B of the Income Tax Act, 1961 is bad in law and against the facts and circumstances of the case. Ground No.3: 3.1 On the facts and circumstances of the case, the Ld. CIT(A) erred in rejecting the appeal of the assessee without comprehensive consideration of the substantive grounds challenging the original assessment order. 3.2 On the facts and circumstances of the case, the Ld. CIT(A) ought to have appreciated that the appellant is from small town at Sangli in Maharashtra and not very techno savvy to understand faceless regime of income tax assessment. The scenario justifies condonation of delay. 3.3 On the facts and circumstances of the case, the Id. CIT(A) erred in Conducting proceedings ex-parte, not providing adequate and meaningful opportunities to present the case, relying on unverified information without giving an opportunity to rebut. Ground No. 4:

1 On the facts and in the circumstances of the case and in law, the Learned Assessing Officer has erred in making an addition of 2 25,84,320/- by applying a profit rate of 8%, instead of computing the profit at the prescribed rate of 6% under Section 44AD of the Income Tax Act. 4.2 On the facts and in the circumstances of the case and in law, the Learned Assessing Officer has erred in treating an amount of ₹ 18,73,540/- as business income based on the turnover disclosed in the Service Tax Return and ignoring the fact that this results in a double addition. The LD Assessing Officer failed to appreciate that turnover declared in service tax returns cannot be over and above the turnover considered for taxation based on books /or other record. 4.3 On the facts and in the circumstances of the case and in law, the Learned Assessing Officer has erred in treating the amount of ₹21,75,000/- related to time deposits as unexplained investment under Section 69 of the Income Tax Act ignoring the fact that these deposits were made through the sweep account facility linked to the current account of the Appellant. 4.4 On the facts and in the circumstances of the case and in law, the Learned Assessing Officer has erred in not allowing credit for Tax Deducted at Source (TDS) amounting to 3,48,250/-, which was deducted from the income of the Appellant. Ground No.5 5.1 On the facts and circumstances of the case the LD AO erred in invoking section 69 to tax undisclosed investments when the appellant is assessed under section 44AD on presumptive basis. 5.2 On the facts and circumstances of the case the LD AO erred in levying tax at special rate U/s 115BBE. Ground No. 6 6.1 On the facts and circumstances of the case the LD AO erred in initiating penalty u/s 270A as well as 272A(1)(d) and u/s 271AAC of income tax act. 6.2 On the facts and circumstances of the case the LD AO erred in levying interest under sections 234A, 234B, 234C, 234D and fee u/s 234F for default in furnishing return of income are. Ground No. 7 The Appellant hereby reserves the right to add, amend, alter, delete, or raise any additional ground/s on or before the date of hearing.”

The Ld. AR submitted that the assessee had a reasonable/sufficient cause for not being able to file the appeal within the statutory prescribed time limit. The Ld. AR further submitted that the assessee was compelled to cease his business activities from FY 2020-21 onwards due to operational difficulties and disruption in business caused by Covid-19 pandemic as well as the medical condition of his mother. He submitted that the assessee along with his family has shifted to Kolhapur from Pune and his only source of income is from agricultural activity. Post closing of his business, the assessee has not engaged any professional tax consultant. As the assessee was unfamiliar with the e-proceedings and digital communication protocols of the Income Tax

The Ld. DR, on the other hand, relied on the order of the Ld. CIT(A)/ NFAC.

We have heard the rival arguments made by both the sides and perused the material available on record. We find that the Ld. CIT(A)/NFAC has dismissed the appeal of the assessee being barred by limitation, the reasons of which have already been reproduced in the preceding paragraph. Before us, the Ld. AR placed on record the affidavit of the assessee stating the aforementioned reasons for delay in filing the appeal before the Ld. CIT(A)/NFAC.

We find some force in the arguments of the Ld. AR. We find the Hon'ble Supreme Court in the case of Collector, Land Acquisition vs. Mst. Katiji & Ors. reported in 167 ITR 471 (SC) 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:

In light of the above factual matrix of the case and the decision(s) of the Hon‟ble Supreme Court (supra), we deem it proper, in the interest of justice, to set aside the impugned order of the CIT(A)/NFAC and restore the matter back to his file with a direction to condone the delay and decide the appeal on merit(s) as per fact and law after giving due opportunity of being heard to the parties. Needless to say, the assessee shall appear and make submissions on the appointed date without seeking adjournment under any pretext unless required for a sufficient cause, failing which the Ld. CIT(A)/NFAC shall be 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, the appeal filed by the assessee is allowed for statistical purposes.

अपील र्थी / The Appellant. 2. प्रत्यर्थी / The Respondent. 3. The Pr. CIT concerned. 4. दिभ गीय प्रदिदनदि, आयकर अपीलीय अदिकरण, “ए” बेंच, पुणे / DR, ITAT, “A” Bench, Pune. 5. ग र्ड फ़ इल / Guard File.