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Facts
The assessee's assessment was completed under Section 143(3) of the Income Tax Act, 1961, with additions for marketing expenses and gifts. The assessee filed an appeal before the CIT(A)/NFAC, but it was delayed by 142 days. The CIT(A)/NFAC dismissed the appeal as time-barred, finding that the assessee failed to demonstrate sufficient cause for the delay.
Held
The Tribunal found that there was reasonable cause for the delay, citing the assessee's father's serious illness and subsequent death, as well as an employee's mistake. Following a Supreme Court precedent, the Tribunal condoned the delay and restored the matter to the CIT(A)/NFAC for a decision on merits.
Key Issues
Whether the CIT(A) erred in not condoning the 142-day delay in filing the appeal; Whether the assessee had sufficient cause for the delay in filing the appeal.
Sections Cited
143(2), 142(1), 143(3)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, PUNE BENCH “B”, PUNE
Before: SHRI R. K. PANDA & SHRI VINAY BHAMORE
This appeal filed by the assessee is directed against the order dated 29.08.2024 of the Ld. CIT(A) / NFAC, Delhi relating to assessment year 2016-17.
There is a delay of 63 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. 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.
Facts of the case in brief, are that the assessee under his proprietorship concern M/s. Herbomed Remedies is engaged in business of propaganda cum distribution of wholesale trading business in medicine. He filed his return of income on 20.12.2016 declaring total income of Rs.91,99,830/-. The return was selected for complete scrutiny. Accordingly, statutory notices u/s 143(2) and 142(1) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) were issued and served on the assessee, in response to which the assessee filed the requisite details. After considering the submissions made by the assessee from time to time, the Assessing Officer completed the assessment u/s 143(3) of the Act on 21.12.2018 determining the total income of the assessee at Rs.160,66,690/- wherein he made the addition of Rs.68,66,860/- on account of the following: i) Out of marketing expenses Rs.64,66,860/- Rs.4,00,000/- ii) On account of gift
The assessee filed an appeal before the Ld. CIT(A) / NFAC which was delayed by 142 days. Since the assessee, according to the Ld. CIT(A) / NFAC, did not explain for each day of the delay in filing of the appeal and failed to file formal petition for condonation of delay with supporting documentary evidence demonstrating sufficient cause, he dismissed the appeal filed by the assessee being barred by limitation.
Aggrieved with such order of the Ld. CIT(A) / NFAC, the assessee is in appeal before the Tribunal by raising the following grounds: The following grounds are taken without prejudice to each other
On facts and in law, 1] The learned CIT(A) erred in not condoning the delay in filing the appeal and thereby erred in dismissing the appeal of the appellant. 2] The learned CIT(A) erred in holding that the appellant was negligent and there was a lackadaisical approach on the part of the appellant in not filing the appeal within the stipulated time limit and hence, the delay of 142 in filing the appeal cannot be condoned. 3] The learned CIT(A) erred in holding that the appellant was unable to prove any evidence that he was prevented from sufficient cause in not filing the appeal within the stipulated time limit and hence, the delay in filing appeal could not be condoned. 4] The learned CIT(A) failed to appreciate that the appellant was prevented from sufficient cause he is not filing the appeal within the stipulated time event and hence, the delay of 142 days in filing appeal should have been condoned. 5] The learned CIT(A) ought to have appreciated that appellant was not negligent and considering the reasons submitted, there was sufficient cause on the part of the appellant is not filing the appeal within the time limit and therefore, the delay in filing appeal should have been condoned and the appeal should have been decided on merits. 6] The appellant craves leave to add, alter, amend or delete any of the above grounds of appeal.
The Ld. Counsel for the assessee at the outset submitted that the Assessing Officer passed the order u/s 143(3) of the Act on 21.12.2018 and in Form No.35, the assessee had explained the reasons for such delay according to which he was under the bonafide belief that the appeal is filed. However, such appeal was not filed due to the mistake on the part of the employee. He submitted that the assessee came to know the non-filing of the appeal only when the penalty notice was received. The Ld. Counsel for the assessee referring to the affidavit of the assessee submitted that his father was seriously ill during that time and being the only son he was looking after him since November, 2018. Subsequently, he got admitted in the hospital and expired on 04.08.2019. He submitted that the assessee was not going to get any benefit by not filing the appeal in time. He submitted that due to unavoidable domestic duties and failure on the part of the employee to handover the papers to the consultant, the appeal could not be filed in time. 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), he submitted that in light of the said decision, the matter may be restored to the file of the Ld. CIT(A) / NFAC with a direction to condone the delay and decide the appeal on merit.
The Ld. DR on the other hand heavily relied on the order of the Ld. CIT(A) / NFAC dismissing the appeal in limini on account of delay in filing the appeal. He submitted that the assessee has not explained each day of delay and the submissions made by the Ld. Counsel for the assessee are general in nature. He accordingly submitted that the grounds raised by the assessee should 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 due to delay of 142 days in filing of the appeal before the Ld. CIT(A) / NFAC, he dismissed the same being barred by limitation. According to the Ld. CIT(A) / NFAC, the assessee failed to explain each day of delay and the application filed before him requesting for condonation of delay does not contain any supporting documentary evidence. The relevant para of the Ld. CIT(A) / NFAC reads as under:
“6. In the instant case, though the appellant has submitted certain ground for delay in filing the appeal, vide column No.15 of Form No.35, but failed to file any formal petition seeking condonation of delay along with affidavit and supporting documentary evidence demonstrating sufficient cause. In the instant case, the prescribed due date for filing of appeal was 30.01.2019 (Assessment order date- 21.12.2018, Date of Service of Demand Notice as per Form-35 31.12.2018). Hence, there is huge delay of 142 days in filing the appeal, for which no sufficient cause has been demonstrated by the appellant for belated filing of appeal.”
We find the assessee in the condonation application filed along with the affidavit has given the hospitalization and subsequent death of his father. It has also been mentioned in the condonation application filed along with the affidavit that due to unavoidable domestic duties and failure on the part of his employee to get the work done in time, the delay occurred and there was no intention to disregard the provisions of law.
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.
Following the decision of Hon'ble Supreme Court cited above and in view of the averments made in the condonation application filed along with the affidavit, we are of the considered opinion that there was a reasonable cause on the part of the assessee for not filing the appeal in time before Ld. CIT(A) / NFAC. We, therefore, 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 issue on merit and as per fact and law after providing 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 27th March, 2025.
Sd/- Sd/- (VINAY BHAMORE) (R. K. PANDA) JUDICIAL MEMBER VICE PRESIDENT पुणे Pune; दिन ांक Dated : 27th March, 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, ‘B’ Bench, Pune 5. गार्ड फाईल / Guard file. आदेशानुसार/ BY ORDER, // True Copy // Senior Private Secretary आयकर अपीलीय अधिकरण ,पुणे / ITAT, Pune
S.No. Details Date Initials Designation 1 Draft dictated on 27.03.2025 Sr. PS/PS 2 Draft placed before author 27.03.2025 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