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Facts
The assessee, who had not filed an ITR, was assessed by the AO under Section 144 read with Section 147, adding an unexplained fixed deposit of Rs.20 lakhs, among other incomes. The assessee filed an appeal against this order before the CIT(A) with a delay of 558 days, which the CIT(A) partly condoned but dismissed the appeal for the remaining 45-day delay.
Held
Citing the Hon'ble Supreme Court's pronouncement on prioritizing substantial justice, the Tribunal set aside the CIT(A)'s order. It directed the CIT(A) to condone the entire delay and decide the appeal on merits, providing the assessee with a proper hearing.
Key Issues
Whether the CIT(A) erred in dismissing the appeal by not condoning a 45-day delay in filing, and if the principles of substantial justice should mandate condonation of such delay to allow a decision on merits.
Sections Cited
147, 148, 142(1), 144
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Income Tax Appellate Tribunal, PUNE “SMC” BENCH : PUNE
Before: SHRI RAMA KANTA PANDA & MS. ASTHA CHANDRA
This appeal filed by the Assessee is directed against the order dated 28.11.2024 of the learned CIT(A)-National Faceless Appeal Centre [in short the “NFAC”] Delhi, for assessment year 2012-2013.
The assessee in the grounds of appeal has challenged the order of the Ld. CIT(A) in dismissing the appeal on account of delay in filing the appeal and thereby sustaining the addition of Rs.20 lakhs made by the Assessing Officer as unexplained fixed deposit.
2 ITA.No.2592/PUN./2024
Facts of the case, in brief, are that the assessee is an individual and had not filed his return of income for the year under consideration. Information was received by the Department that the assessee had sold immovable property at Pune for a consideration of Rs.71,50,000/- and also made fixed deposit of Rs.1,60,00,000/- in Oriental Bank of Commerce. The Assessing Officer, therefore, had reason to believe that income to the extent of Rs.2,31,30,000/- has escaped assessment. He, therefore, after recording reasons as
per the provisions of sec.147, issued notice u/sec.148 of the Act to the assessee on 29.03.2019. Statutory notice u/sec.142(1) of the Act along with a detailed questionnaire was also issued on 09.08.2019. The assessee, in response to the questionnaire issued by the Assessing Officer, filed his detailed submissions. After considering the various replies given by the assessee, the Assessing Officer noted that apart from the cash deposit of Rs.1,60,00,000/- with Oriental Bank of Commerce, assessee is also having fixed deposit of Rs.20 lakhs and another capital gains deposit of Rs.40,05,000/-.
Since the assessee had not disclosed the source of such deposit of Rs.20 lakhs, the Assessing Officer added the same to the total income of the assessee apart from bringing the salary income of Rs.92,367/-. The Assessing Officer accordingly assessed the total income of the assessee at 3 ITA.No.2592/PUN./2024 Rs.20,92,367/- vide order dated 27.12.2019 passed u/sec.144 r.w.s.147 of the Income Tax Act, 1961 (in short "the Act").
The assessee filed an appeal before the Ld. CIT(A) with a delay of 558 days which is partly during the Covid period. Although the Ld. CIT(A) after considering the decision of Hon’ble Supreme Court in Re: Cognizance for Extension of Limitation 438 ITR 296 (SC) read with judgment in Cognizance for Extension of Limitation, In re 432 ITR 206 (SC) dated 08- 03-2021 and 421 ITR 314, excluded the delay of 468 days, however, he did not condone the delay of 45 days out of 558 days of delay in filing of the appeal before him and dismissed the appeal being barred by limitation.
Aggrieved with such order of the Ld. CIT(A), the assessee is in appeal before the Tribunal.
6. After hearing both the sides, we find from the order of the Ld. CIT(A) that the assessee had given detailed reasoning for presenting the appeal with a delay of 558 days including the delay of 45 days excluding the Covid period. We find the Hon’ble Supreme Court in the case of Collector, Land Acquisition vs., MST Katiji [1987] 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.
4 ITA.No.2592/PUN./2024 It has further been held that 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. In view of the above decision of Hon’ble Supreme Court in the case of Collector, Land Acquisition vs., MST Katiji (supra) and considering the totality of the facts and circumstances of the case and in the larger interest of justice, we set aside the order of the Ld. CIT(A) with a direction to condone the delay of 45 days in filing of the appeal and decide the appeal on merits as
per fact and law. Needless to say, the Ld. CIT(A) is directed to 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, appeal filed by the assessee is allowed for statistical purposes.
Order pronounced in the open Court on 15.01.2025.