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Facts
The assessee, engaged in stitching work, did not file a return for AY 2013-14 due to low income. Reassessment proceedings were initiated based on alleged investment information. The assessee claimed non-receipt of notice and incorrect PAN. The AO completed reassessment ex parte, making an addition for unexplained investment.
Held
The Tribunal held that the CIT(A) erred in dismissing the appeal in limine due to delay without appreciating the cause shown by the assessee, which was due to the CA's lapse. The Tribunal condoned the delay and restored the matter to the CIT(A) for fresh adjudication.
Key Issues
Whether the CIT(A) was justified in dismissing the appeal in limine due to delay without considering the explanation for the delay and the merits of the case. Whether forensic examination is required to ascertain the genuineness of an alleged sale agreement.
Sections Cited
250, 148, 144, 147, 69, 234A, 234B
AI-generated summary — verify with the full judgment below
Order PER LALIET KUMAR, J.M This appeal by the assessee is directed against the order dated 02.04.2025 passed by the Ld. CIT(A), NFAC, Delhi under section 250 of the Act, for A.Y. 2013- 14, whereby the Ld. CIT(A) dismissed the appeal in limine on account of delay of 250 days in filing the first appeal.
In the present appeal Assessee has raised the following grounds: (i) That on the law, facts and in the circumstances of the case, the Ld. CIT(A), NFAC has erred in dismissing the appeal in limine without appreciating that the appellant had shown sufficient cause for the delay of 250 days in filing the appeal, and that the delay was neither deliberate nor due to negligence.
1. (ii) That on the facts and circumstances of the case, the appellant had duly apprised in the application filed for delay that the papers were handed over to its then-authorized Chartered Accountant, Sh. Rishab Gupta, for filing of appeal who, however, due to unknown reasons and illness had failed to file the appeal in time. The said delay was not attributable to any lapse or fault on the part of the appellant.
2 (iii) That it is also explained that upon receiving a recovery notice, the appellant came to know about the non-filing of the appeal, and immediately engaged a new counsel who promptly filed the appeal along with a detailed application for condonation of delay. Meanwhile, the appellant is also like to file an affidavit from the erstwhile CA to establish bona fide and show that there was no negligence on her part.
(iv) That on the law, facts and in the circumstances of the case, the Ld. CIT(A), NFAC has failed to appreciate that the mistake of the counsel should not result in denial of justice to the assessee/appellant, in view of the well-settled principle laid down by the Hon'ble Supreme Court in Concord of India Insurance Co. Ltd. v. Nirmala Devi [(1979) 118 ITR 507 (SC)], where it was held that substantial justice should prevail over technicalities.
(v) That on law, facts and circumstances of the case, the notice was invalid on the ground that notice u/s 148 was never served on the assessee. Further, the appellant also has a strong case on merits, and the CIT(A) ought to have condoned the delay and adjudicated the matter in accordance with law in the interest of justice and fair play. vi. That on law, facts and circumstances of the case, the Ld. CIT(A)/NFAC has erred in upholding the charging of interest u/s 234A and 234B of Income Tax Act,1961. vii. That the appellant seeks permission to add/amend any grounds of appeal at the time of hearing and further to summit proper explanations in support of the additions made at the time of hearing.
3. Briefly, the facts of the case are that the assessee, an individual engaged in small stitching work, did not file a return for A.Y. 2013-14 as her income was below the basic exemption limit. Based on AIR information of alleged investment in an immovable property of Rs.17,64,000, reassessment proceedings were initiated. The assessee consistently submitted that she never received the notice under section 148, that the PAN mentioned in the notice was incorrect, and that she had not purchased any such property. These submissions, along with supporting documents, had been filed through emails and written replies 3.1 The Ld. Assessing Officer, however, completed the reassessment ex parte u/s 144 r.w.s. 147, making an addition of Rs.17,64,000/- treating it as unexplained investment u/s 69 3 4. The assessee thereafter filed an appeal before the Ld. CIT(A) with a delay of 250 days, supported by an application explaining that the delay was solely due to the negligence/illness of the erstwhile Chartered Accountant, which prevented timely filing. These facts are clearly recorded in Form 35 and in the condonation application reproduced in the CIT(A)’s order . 4.1 The Ld. CIT(A) dismissed the appeal at the threshold holding that the assessee had failed to show “sufficient cause”, without adjudicating the matter on merits.
Feeling aggrieved the assessee is in appeal before the Tribunal.
During the course of hearing the Ld. AR submitted that the delay was bona fide, unintentional, and caused due to the CA’s lapse. The assessee immediately acted and filed an appeal upon receipt of recovery notice. It was further contended that the assessee has a strong case on merits, as she never purchased the property in question, and the PAN mismatch and non-service of section 148 notice go to the root of validity of reassessment. 6.1 It was further submitted that the Ld. CIT(A) ought to have adopted a liberal and justice-oriented approach as per the principles laid down by the Hon’ble Supreme Court in Collector, Land Acquisition v. MST. Katiji and Concord of India Insurance Co. Ltd. v. Nirmala Devi. 6.2 The Learned AR submitted that the assessee did not enter into any agreement during the year and that the document relied upon by the Revenue is fabricated and does not contain the signatures or thumb impression of the assessee. During the proceedings before the tribunal , the Learned AR furnished a sale document stated to be the agreement itself, asserting that the entire consideration was received during the subsequent assessment year.
Per contra, the Ld. DR relied upon the order of the Ld. CIT(A). During the appellate proceedings, the Learned DR furnished agreement to sell under which the entire sale consideration was received during the relevant financial year 4 and therefore the Assessing Officer had reopened the assessment, in accordance with law.
I have carefully considered the rival submissions and perused the material on record, including the assessment order It is settled law that while dealing with delay, a pragmatic, justice-oriented view should be taken rather than a pedantic or technical one. The Hon’ble Supreme Court in Katiji held that substantial justice must prevail over technicalities and that a litigant does not stand to benefit by causing delay. In the present case, the explanation of the assessee is backed by a consistent sequence of events and is not mala fide. The delay was caused by the admitted lapse of the earlier CA. The assessee acted diligently immediately after receiving recovery notice. These facts are evident from her condonation application and are not disputed by the Department. 8.1 Further, this is a case where the assessment was framed ex parte, and the assessee has asserted that she never purchased the alleged property, that the PAN used in the notice was incorrect, and that the notice under section 148 was never served. These are meritorious contentions which deserve adjudication on merits. 8.2 I am therefore of the considered view that the Ld. CIT(A) erred in refusing to condone the delay, particularly when denial of condonation has resulted in depriving the assessee of an effective opportunity to contest an ex parte reassessment. 8.3 The ends of justice would be met if the delay is condoned and the matter is restored to the file of the Ld. CIT(A) for fresh adjudication on merits, after granting adequate opportunity to the assessee. Accordingly, the delay of 250 days in filing the appeal before the Ld. CIT(A) is hereby condon. The impugned order dated 02.04.2025 of the Ld. CIT(A) is set aside. 8.4 Further, given that the entire case hinges on the genuineness of the alleged agreement and the existence of conflicting claims regarding the 5 handwriting, signatures, and thumb impressions appearing on it, I deem it necessary to direct a forensic examination. Accordingly, the Ld. CIT(A) shall obtain the opinion of a Government-approved handwriting/fingerprint expert who shall examine (i) the alleged agreement relied upon by the Revenue showing receipt of full consideration during the year, and (ii) the registered sale deed executed in the subsequent year, and shall verify whether the signatures, handwriting, and thumb impressions appearing on both documents are of the same person or different persons. The expert shall also examine whether the alleged agreement contains any interpolations, overwriting, additions, or signs of fabrication. 8.5 After obtaining the forensic report, the Ld. CIT(A) shall confront both parties with the findings and thereafter adjudicate the appeal afresh by passing a reasoned and speaking order in accordance with law.
In view of the above discussion, the impugned order of the Ld. CIT(A) is set aside and the matter is restored to his file for fresh adjudication in terms of the directions herein. The appeal of the assessee is allowed for statistical purposes.
In the result, appeal of the Assessee is allowed for statistical purposes. Order pronounced in the open Court on 20/11/2025. ( LALIET KUMAR) JUDICIAL MEMBER AG