DHARMENDRA JINENDRA JAIN,AHMEDABAD vs. THE ITO, WARD-1(2)(1), AHMEDABAD

The brief facts of the case are that the assessee, Shri Dharmendra Jinendra Jain, filed his return of income for A.Y. 2018-19 on 08.08.2018 declaring an income of Rs. 11,75,900/-. The assessee was engaged in the business of publishing daily newspapers and earned income from newspaper sales and advertisements. During assessment proceedings, the Assessing Officer observed that the assessee had made payments of Rs. 9,00,000/- to Times Press Pvt. Ltd. towards job work charges, which is a related concern u/s 40A(2)(b) of the Act. Since the said company had been struck off by the MCA, the assessee was called upon to justify the payment and file supporting documents. However, in the absence of explanation, the Assessing Officer held Page No 3 Dharmendra Jinendra Jain vs. ITO that payment to a struck off company could not be accepted as genuine and accordingly disallowed the sum of Rs. 9,00,000/-, and treated it as unexplained expenditure u/s 69C of the Act.

In appeal, CIT(Appeals), CIT(Appeals) noted that there was a delay of 1116 deys in filing of appeal. The assessee explained that the present appeal was delayed since the assessee relied on his accountant and tax consultant, who wrongly advised him that since an appeal was already filed for A.Y. 2017-18 on the same issue, there was no need to file a separate appeal for A.Y. 2018-19. On this basis, the assessee sought condonation of delay of 1116 days and also filed Affidavits from himself and his consultant. The CIT(A) considered the explanation, the grounds of appeal, and the supporting Affidavit but observed that the delay was inordinate and not supported by sufficient cause as required under section 249(3) of the Act. The CIT(Appeals) noted that the appeal ought to have been filed within 30 days from the date of the order u/s 143(3) of the Act, but the assessee had approached only after more than three years. The CIT(Appeals) placed reliance on several judicial precedents, including decisions of the Hon’ble Supreme Court and various High Courts, which held that while “sufficient cause” under limitation law may receive liberal interpretation in cases of short delays. However, inordinate and unexplained delays caused by negligence or deliberate inaction cannot be condoned as it prejudices the rights of the other party and defeats the legislative intent of finality in litigation. The CIT(Appeals) held that the assessee failed to demonstrate any reasonable or compelling grounds that prevented him from filing the appeal within time.

The assessee is in appeal before us against the order passed by CIT(Appeals) dismissing the appeal of the assessee. Before us, the ld. counsel for the assessee submitted that CIT(Appeals) dismissed the appeal of the assessee without giving any specific comments on the application for condonation of delay filed before him. The ld. counsel for the assessee submitted that that the CIT(Appeals) ought to have given a specific finding on the infirmities in the application for condonation of delay filed by the assessee.

In response, Ld. DR placed reliance on the observations made by CIT(Appeals) in the appellate order.

We have heard the rival contentions and perused the material on record. However, we find that the CIT(Appeals) has dismissed the appeal of the assessee without giving any specific observations on the application for condonation of delay of 1116 days filed before him. In our considered view, the issue of condonation of delay is a vital matter which requires specific examination and a speaking finding from the appellate authority. In the interest of justice, we therefore set aside the impugned order and restore the matter to the file of the CIT(Appeals) with a direction to consider afresh the assessee’s application for condonation of delay of 1116 days in filing of the appeal, examine the supporting affidavits and Page No 5 Dharmendra Jinendra Jain vs. ITO submissions, and thereafter pass a reasoned order in accordance with law after affording due opportunity of hearing to the assessee.

In the result, the appeal of the assessee is allowed for statistical purposes.