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Facts
The assessee, a co-operative society, deposited a large sum of cash into its savings account. The Assessing Officer reopened the assessment and made an addition. The assessee filed an appeal before the CIT(A)/NFAC, which was dismissed due to a delay.
Held
The Tribunal held that substantial justice should be preferred over technical considerations, especially in cases of non-deliberate delay. Following the Supreme Court's decision in Collector, Land Acquisition vs. Mst. Katiji & Ors., the delay in filing the appeal before the CIT(A)/NFAC was condoned, and the appeal was restored.
Key Issues
Whether the delay in filing the appeal before the CIT(A)/NFAC should be condoned to decide the case on merit, considering the principles of substantial justice.
Sections Cited
69A, 148, 142(1), 144, 147, 144B
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Income Tax Appellate Tribunal, PUNE BENCH “A”, PUNE
Before: SHRI R. K. PANDA & SHRI VINAY BHAMORE
This appeal filed by the assessee is directed against the order dated 28.02.2024 of the Ld. CIT(A) / NFAC, Delhi relating to assessment year 2016-17.
There is a delay of 221 days in filing of this appeal before the Tribunal for which the assessee has filed a condonation application along with an affidavit explaining the reasons for such delay according to which the order of the Ld. CIT(A) / NFAC got delivered on the e-mail of the previous tax consultant although the assessee had updated its e-mail ID in the income tax portal on 18.12.2023 i.e. much prior to the order of the Ld. CIT(A) / NFAC on 28.02.2024. He submitted that the assessee came to know of the order passed by the Ld. CIT(A) / NFAC on verification of the portal by the new consultant and accordingly took the necessary steps for filing of the appeal. He submitted that the delay in filing of the appeal is not an intentional one but due to bonafide reasons.
After considering the contents of the condonation application filed along with the affidavit and after hearing the Ld. DR, the delay in filing of the appeal is condoned and the appeal is admitted for adjudication.
Although a number of grounds have been raised by the assessee, however, these all relate to the order of the Ld. CIT(A) / NFAC in confirming the addition of Rs.129,61,439/- made by the Assessing Officer u/s 69A of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’).
Facts of the case in brief, are that the assessee is a Co-operative Society registered under the Maharashtra State Co-operative Act, 1960 and is engaged in providing credit facilities to its members. On the basis of information available with the department that the assessee had deposited cash of Rs.1,29,61,439/- into saving bank account maintained with Sangli District Central Co-op Bank Ltd. during the financial year 2015-16 relevant to assessment year 2016-17, the Assessing Officer reopened the assessment after recording reasons and after obtaining the prior approval of the competent authority. Accordingly, notice u/s 148 of the Act dated 29.03.2021 was issued and served on the assessee. However, the assessee did not file any return in response to the same. Notice issued u/s 142(1) of the Act was also remained un-complied with. The Assessing Officer thereafter issued a show cause notice u/s 144 of the Act which also remained un- complied with. The Assessing Officer, therefore, proceeded to complete the assessment on the basis of material available on record and passed the order u/s 147 r.w.s. 144 r.w.s. 144B of the Act determining the total income of the assessee at Rs.1,29,61,439/-.
Since the appeal filed before the Ld. CIT(A) / NFAC was delayed by 132 days, the Ld. CIT(A) / NFAC dismissed the appeal by observing as under: “1. Present appeal is filed against the order passed u/s 147r.w.s. 144 of the Income Tax Act, 1961 (the 'Act') dated 24/05/2023 by the ITO, ward-5, Sangli. 2. The appeal is filed late by 132 days as the impugned order was served on 24.05.2023. The appellant has filed application for condonation of delay in filing of appeal. This application is reproduced below- 15. If reply to 14 is yes, enter the There is delay in submission of appeal grounds for condonation of delay (not the assessee Cooperative Society Due to exceeding 500 words) technical issues copy of technical problems enclosed requesting to condone the same. 3. In the 'Statement of Facts', the appellant has stated that its consultant created one e-mail id and mentioned it in its ITR but he did not give it the details to the appellant. 3.1 I have examined facts of the case and request for condonation of delay in filing of appeal. In this case, appeal is filed late by 132 days. The appellant, in Form -35 has requested for condonation of delay on Technical issue ground. As regard, negligence of its consultant, shifting of burden over the consultant and making him responsible for the delay is not acceptable. The appellant chose the consultant and it is responsible for his acts. In view of above discussion, I am satisfied that this case is not a fit case for condonation of delay. It is, therefore, not condoned. The appeal is, therefore, dismissed with no comments on grounds of appeal
4. The appeal is dismissed.”
7. Aggrieved with such order of the Ld.CIT(A) / NFAC, the assessee is in appeal before the Tribunal.
The Ld. Counsel for the assessee referring to the decision of the Hon'ble Supreme Court in the case of Collector, Land Acquisition vs. Mst. Katiji & Ors. reported in 167 ITR 471 (SC) submitted that the delay in filing of the appeal before the Ld. CIT(A) / NFAC should have been condoned by him and should have decided the appeal on merit. He accordingly requested the Bench that the matter may be restored to the file of the Ld. CIT(A) / NFAC to condone the delay and decide the appeal on merit.
The Ld. DR on the other hand strongly opposed the above submissions of the Ld. Counsel for the assessee. He submitted that the assessee never filed the return in response to notice u/s 148 of the Act nor participated in the assessment proceedings. Further, there is a delay in filing of the appeal before the Ld. CIT(A)/ NFAC as well as before the Tribunal. The assessee has not filed any details to substantiate the source of huge cash deposits into the bank account. In view of these circumstances, the order of the Ld. CIT(A) / NFAC be upheld and the grounds raised by the assessee be dismissed.
We have heard the rival arguments made by both the sides and perused the orders of the Assessing Officer and Ld. CIT(A) / NFAC. It is an admitted fact that the appeal has been filed before the Ld. CIT(A) / NFAC with a delay of 132 days and the assessee has explained the reasons for such delay before the Ld. CIT(A) / NFAC by mentioning as under: “3. In the 'Statement of Facts', the appellant has stated that its consultant created one e-mail id and mentioned it in its ITR but he did not give it the details to the appellant.”
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. Respectfully following the decision of the Hon'ble Supreme Court in the case of Collector, Land Acquisition vs. Mst. Katiji & Ors. (supra), the delay in filing of the appeal is condoned and the appeal is admitted for adjudication.
In light of the decision of the Hon'ble Supreme Court in the case of Collector, Land Acquisition vs. Mst. Katiji & Ors (supra), we deem it proper to restore the issue to the file of the Ld. CIT(A) / NFAC with a direction to condone the delay and decide the appeal on merit and as per fact and law. Needless to say the Ld. CIT(A) / NFAC shall give due opportunity of being heard to the assessee.
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.
Order pronounced in the open Court on 4th April, 2025.
Sd/- Sd/- (VINAY BHAMORE) (R. K. PANDA) JUDICIAL MEMBER VICE PRESIDENT पुणे Pune; दिन ांक Dated : 4th April, 2025 GCVSR आदेश की प्रतितिति अग्रेतिि/Copy of the Order is forwarded to: अपीलार्थी / The Appellant; 1. 2. प्रत्यर्थी / The Respondent 3. The concerned Pr.CIT, Pune 4. DR, ITAT, ‘A’ Bench, Pune गार्ड फाईल / Guard file. 5. आदेशानुसार/ BY ORDER, // True Copy // Senior Private Secretary आयकर अपीलीय अधिकरण ,पुणे / ITAT, Pune
S.No. Details Date Initials Designation 1 Draft dictated on 03.04.2025 Sr. PS/PS 2 Draft placed before author 04.04.2025 Sr. PS/PS Draft proposed & placed before the 3 JM/AM Second Member Draft discussed/approved by Second 4 AM/AM Member 5 Approved Draft comes to the Sr. PS/PS Sr. PS/PS 6 Kept for pronouncement on Sr. PS/PS 7 Date of uploading of Order Sr. PS/PS 8 File sent to Bench Clerk Sr. PS/PS Date on which the file goes to the Head 9 Clerk 10 Date on which file goes to the A.R. 11 Date of Dispatch of order