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Facts
The assessee's appeal was dismissed by the CIT(A) due to a delay in filing. The assessee's counsel argued that the delay was due to the assessee's hospitalization and the critical illness and subsequent death of the tax practitioner.
Held
The Tribunal condoned the delay, citing the Hon'ble Supreme Court's principles that substantial justice should be preferred over technical considerations. The Tribunal found sufficient cause for the delay and observed that the CIT(A) had not properly adjudicated the merits of the case.
Key Issues
Whether the delay in filing the appeal before the CIT(A) should be condoned, and if so, whether the appeal should be remanded for fresh adjudication on merits.
Sections Cited
250, 148
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Income Tax Appellate Tribunal, PUNE BENCHES “A” :: PUNE
Before: DR.DIPAK P. RIPOTE & SHRI VINAY BHAMORE
ORDER
PER DR. DIPAK P. RIPOTE, AM:
This appeal filed by the assessee is against the order of ld.Commissioner of Income Tax(Appeals)[NFAC], passed under section 250 of the Income Tax Act, 1961, dated 25.10.2024 for Assessment Year 2017-18. The assessee has raised the following grounds of appeal : “1. That on the facts and circumstances of the case, the Learned [A] Commissioner of Income Tax (Appeals) has erred in law and in facts in passing the order under section 250 of the Income tax act 1961 dated 25.10.2023 and assessing the total income of Rs. 6,72,31,213 /- and thereby raising tax demand of Rs. 8,81,35,469/-.
2. The Learned Commissioner of Income Tax (Appeals) erred in law and in fact in disallowing the condonation of delay, despite there being sufficient cause with the appellant for not filing of appeal in time.
3. The Learned Commissioner of Income Tax (Appeals) erred in law and in fact in disallowing the condonation of delay and dismissing the appeal of the appellant on technical grounds and not deciding the matter on merit.
4. The Learned Commissioner of Income Tax (Appeals) erred in law and in fact, in making the addition of 6,66,43,563/- and not taking into consideration that the appellant had deposited cash of Rs 87,73,675/- and total deposited amount was Rs 90,14,927/-.
5. The Learned Commissioner of Income Tax (Appeals) erred in law and in fact in in not taking into consideration that source of income for cash deposited of Rs 87,73.675/- is the amount received from appellant business activities.
6. The appellants crave leave to add, alter, amend and/or rescind any of the above submission at the time of or before the personal hearing.
7. The appellants crave leave to refer and reply upon any case law and/ or Judgement as and when produced.” Submission of ld.AR :
2. Ld.AR for the Assessee appeared virtually. Ld.AR submitted that ld.CIT(A) has dismissed the appeal of the assessee on account of delay. Ld.AR submitted that ld.CIT(A) has not condoned the delay, when there were sufficient reasons. Ld.AR submitted that Assessee was hospitalized during the period. Ld.AR invited our attention to the Copy of the Affidavit and Medical Certificate. [A] Ld.AR also submitted that the Tax Practitioner was also critically ill during the period and subsequently died. Therefore, ld.AR pleaded that one more opportunity may be provide to file necessary details.
Submission of ld.DR : 3. Ld.DR for the Revenue relied on the order of AO and CIT(A).
Findings & Analysis : 4. We have heard both the parties and perused the records. There is a delay of 374 days in filing appeal before this Tribunal also. On perusal of the Affidavit and the Medical Certificate filed by the assessee, we are convinced that there was sufficient cause for the delay.
4.1 The Hon’ble Supreme Court in the case of Esha Bhattacharjee Vs. Managing Committee of Raghunathpur Nafar Academy and others Civil Appeal Nos.8183-8184 of 2013 vide order dated 13/09/2013 has laid down following principles for deciding Condonation Application: Quote, “ 15. From the aforesaid authorities the principles that can broadly be culled out are: i) There should be a liberal, pragmatic, justice-oriented pedantic approach while dealing with an application for condonation of delay, [A] for the courts are not supposed to legalise injustice but are obliged to remove injustice. ii) The terms “sufficient cause” should be understood in their proper spirit, philosophy and purpose regard being had to the fact that these terms are basically elastic and are to be applied in proper perspective to the obtaining fact- situation. iii) Substantial justice being paramount and pivotal the technical considerations should not be given undue and uncalled for emphasis. iv) No presumption can be attached to deliberate causation of delay but, gross negligence on the part of the counsel or litigant is to be taken note of. 4.2 The Hon’ble Bombay High Court in the case of EBR vs UOI [2018] 89 taxmann.com 194 (Bombay)[06-11-2017] has observed as under while condoning the delay in that case : i) Quote ,“ 12. In view of the law laid down by the Apex Court, it was not necessary for the petitioner to have explained each and every day's delay. On the contrary, the Apex Court held that when substantial justice and technical considerations are pitted against each other, the cause of substantial justice is to be preferred. The Apex Court also held there is no presumption that delay is intentional and deliberate, as normally a litigant does not stand to benefit by resorting to delay” Unquote.
4.2 Thus, the entire thrust of these rulings is on substantial justice. Accordingly, we condone the delay.
In this case, assessee had filed original return of income for A.Y.2017-18 on 28.10.2017 declaring total income of Rs.5,87,650/-. [A] The Assessing Officer issued notice u/s.148 on 31.03.2021. Assessing Officer made an addition of Rs.6,66,43,563/- on account of cash deposits in Vidharbha Konkan Gramin Bank based on the information available on “INSIGHT” portal of the Income Tax Department. Aggrieved by the assessment order, assessee filed appeal before the ld.CIT(A) with a delay. The ld.CIT(A) dismissed the appeal on account of delay. The paragraph 18 of ld.CIT(A)’s order is reproduced here as under : “18. In the result, as delay in filing of appeal is not condoned because appellant failed to establish sufficient cause, the appeal is not admitted and it rejected accordingly.
It is also observed that the case based on records available, statement of facts and Assessment order, appears very weak on merits also.
In the result, the appeal is dismissed.”
5.1 However, we have perused the Affidavit and Medical Certificate and we are convinced that there was sufficient cause for delay. Even otherwise, the substantial justice is more important than the procedural delay. No assessee is going to benefit by delay. In this case, on perusal of the ld.CIT(A)’s order at page 11, ld.CIT(A) has recorded certain facts. At page 11, it has been mentioned that Assessee had claimed that she had never made the deposits. She had [A] only deposited cash of Rs.87,73,675/- which was sourced from her business. Assessee also filed copy of bank statements before the ld.CIT(A). However, ld.CIT(A) opined that bank statement is not sufficient to confirm the claim. In this case, ld.CIT(A) has not verified the Bank Statements and has not arrived at a conclusion of cash deposits. In these facts and circumstances of the case, we are convinced that grave injustice is caused to the assessee by not condoning the delay, by ld.CIT(A). Substantial justice is more important than procedural delay. Therefore, we set aside the order of ld.CIT(A) to ld.CIT(A) for denovo adjudication. Assessee shall file all details before the ld.CIT(A). The ld.CIT(A) shall provide opportunity of hearing to the assessee. Accordingly, grounds of appeal raised by the assessee are allowed for statistical purpose.