RAM BHAGAT PHATELA,SIRSA vs. INCOME TAX OFFICER, SIRSA

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ITA 327/CHANDI/2025Status: DisposedITAT Chandigarh12 November 2025AY 2022-20234 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the delay of 87 days in filing the appeal before the CIT(A) was to be condoned. The Tribunal found the assessee's explanation that he acted under a bona fide belief that rectification at the CPC level was the correct remedy to be plausible and consistent with departmental communications. Citing the Supreme Court's decision in Collector, Land Acquisition vs. Mst. Katiji & Others, the Tribunal emphasized that substantial justice should prevail over technical considerations and a liberal approach should be adopted in condoning delays when no mala fide intention or deliberate inaction is established. The Tribunal also noted that the Chandigarh Bench of the ITAT had consistently condoned delays in similar cases arising from confusion created by CPC rectification processes. The Tribunal concluded that the cause shown constituted 'sufficient cause' under Section 249(3) of the Act, as there was no evidence of deliberate neglect and the assessee stood to gain nothing by delaying the appeal. Consequently, the order of the CIT(A) rejecting the appeal on limitation was set aside, and the matter was remitted to the CIT(A) for adjudication on merits. The CIT(A) was directed to decide the appeal afresh in accordance with law, keeping in view the binding precedents of the ITAT, Chandigarh Bench, in Deepak Trading Company vs ITO and Mukesh vs ITO, and to afford due opportunity of hearing to the assessee.

What were the facts?

The assessee, Ram Bhagat Phatela, filed an appeal before the Income Tax Appellate Tribunal (ITAT), Chandigarh Bench, for Assessment Year 2022-23. The appeal challenged an order passed by the Commissioner of Income Tax (Appeals) [CIT(A)] which had rejected the assessee's appeal on grounds of limitation. The assessee had filed the appeal before the CIT(A) with a delay of 87 days. The assessee's grievance pertained to non-grant of TDS credit due to a mismatch with the CPC. The ITO, Ward-1, Sirsa, had advised the assessee to approach CPC, Bengaluru for rectification, leading to confusion regarding the appropriate remedy.

What were the issues?

1. Whether the delay of 87 days in filing the appeal before the CIT(A) is to be condoned on the grounds of sufficient cause, as provided under Section 249(3) of the Income Tax Act, 1961. Assessee's Contention: The assessee argued that the delay was not deliberate or due to negligence but arose from a bona fide belief that the TDS credit mismatch could be rectified at the CPC level. This belief was influenced by a representation made by the Income-tax Bar Association, Sirsa, regarding similar CPC mismatches and advice from the ITO, Ward-1, Sirsa, to approach CPC, Bengaluru. The assessee relied on the principle that substantial justice should prevail over technicalities. Revenue's Contention: The Revenue contended that condonation of delay is not automatic and requires cogent evidence of sufficient cause. The Revenue cited Supreme Court judgments in Majji Sannemma vs. Reddy Sridevi and Ajay Dabra vs. Pyare Ram & Ors., emphasizing that delay should not be condoned without a bona fide explanation. The Revenue also noted the absence of documentary evidence showing rectification applications filed with CPC within the limitation period. However, the Revenue fairly submitted that if the assessee's explanation was considered bona fide, the matter could be restored to the CIT(A) for adjudication on merits, referencing Chandigarh Tribunal precedents in Deepak Trading Company vs ITO and Mukesh vs ITO.

Which sections of the Income-tax Act were involved?

Section 249(3)

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IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BENCHES, “SMC” CHANDIGARH HEARING THROUGH: HYBRID MODE BEFORE: SHRI. LALIET KUMAR, JUDICIAL MEMBER

आयकर अपील सं. / ITA No. 327 /Chd/2025 निर्धारण वर्ष / Assessment Year : 2022-23

Ram Bhagat Phatela Shop No. 3 C/o Hans Raj Babu Lal II Additional Mandi, Sirsa Haryana-125055

बनाम The ITO Ward-1, Sirsa

स्थायी लेखा सं./PAN NO: AZYPP5932H अपीलार्थी/ Appellant

\s sufficient cause was shown and that the delay was due to negligence and inaction.

5.

Against the order of the Ld. CIT(A) the assessee preferred an appeal before the Tribunal.

6.

During the course of hearing the assessee explained that he had acted bona fide on the advice of the Income-tax Bar Association, Sirsa, which had made a representation to the Pr. Commissioner of Income Tax, Rohtak regarding similar CPC mismatches in TDS credits for A.Y. 2022-23. 6.1 The ITO, Ward-1, Sirsa vide letter dated 06.03.2023 advised the assessee to approach CPC, Bengaluru for rectification, stating that rectification rights were not transferred to the jurisdictional AO. This resulted in confusion about the appropriate remedy. The assessee contended that the delay was neither deliberate nor due to negligence but was caused by a bona fide belief that the matter could be rectified at the CPC level.

7.

Per Contra, the Ld. DR supported the order of the CIT(A) and submitted that the condonation of delay is not automatic and must be based on cogent and verifiable evidence showing “sufficient cause."

7.

1 The DR placed reliance on the judgments of the Hon'ble Supreme Court in MajjiSannemma vs. Reddy Sridevi [2021 SCC Online SC 1260] and Ajay Dabra vs. Pyare Ram & Ors. (SLP No. 15793/2019, dated 31.01.2023), wherein it was held that in the absence of bona fide explanation, delay should not be condoned.

7.

2 It was contended that the assessee has not produced any documentary evidence showing that any rectification application was actually filed before CPC, Bengaluru or that any active step was taken within the limitation period.

7.

3 The DR, however, fairly submitted that if the Hon'ble Tribunal were to consider the assessee's explanation as bona fide, then the matter may be restored to the CIT(A) for adjudication on merits, with a direction to decide the issues afresh in accordance with law and keeping in mind the binding

precedents of the Chandigarh Tribunal in Deepak Trading Company vs ITO (ITA No. 107/Chd/2025, dated 01/07/2025) and ITA No. 44/Chd/2025, IN THE CASE OF MUKESH VS ITO where similar CPC-related TDS disputes were adjudicated.

8.

I have heard both sides and carefully perused the record. It is not in dispute that the assessee's grievance relates merely to non-grant of TDS credit due to a CPC mismatch. The explanation that the assessee was under a bona fide belief that rectification at CPC level was the correct remedy is plausible and consistent with departmental communications dated 06.03.2023, which advised the assessee to approach CPC.

8.

1 The Hon'ble Supreme Court in Collector, Land Acquisition vs. Mst. Katiji& Others [(1987) 167 ITR 471 (SC)] has laid down that substantial justice should prevail over technical considerations and that a liberal approach should be adopted in condonation of delay when no mala fide intention or deliberate inaction is established.

8.

2 The Hon'ble Chandigarh Bench various matters has also consistently condoned delays in filing appeals before CIT(A) where the delay arose due to confusion created by CPC rectification processes.

8.

3 In the present case, the delay of 87 days stands satisfactorily explained. There is no evidence of deliberate neglect, and the cause shown by the assessee constitutes “sufficient cause" within the meaning of section 249(3) of the Act. The assessee stands to gain nothing for not pursuing the appeal in time, therefore I condone the delay in filling the appeal before the Ld. CIT(A) .

8.

4 Since I have already condoned the delay in filing the appeal before the Ld. CIT(A), and as the Ld. CIT(A) has not adjudicated the grounds on merits, I hereby remit the matter to the file of the Ld. CIT(A) with a direction to decide the appeal afresh on merits, in accordance with law.While adjudicating the appeal in remand proceedings, the Ld. CIT(A) shall keep in view the binding precedents of the Hon'ble ITAT, Chandigarh Bench, in the cases of Deepak

Trading Company vs ITO [ITA No. 107/Chd/2025] and ITA No. 44/Chd/2025, wherein the Hon'ble Tribunal has laid down the legal position relating to TDS mismatch and CPC processing issues. The Ld. CIT(A) may also consider and apply any other decision of the Hon'ble Tribunal, if the facts of the present case are found to be similar.

9.

The Ld. CIT(A) shall further ensure that due and adequate opportunity of being heard is afforded to the assessee before deciding the matter afresh.

10.

The delay of 87 days in filing the appeal before the CIT(A) is condoned. The order of the CIT(A) rejecting the appeal on limitation is set aside, and the matter is restored to the file of the CIT(A) for decision on merits in accordance with law and the above observations.

11.

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

Order pronounced in the open Court on 12/11/2025 AG

आदेश की प्रतिलिपि अग्रेषित /

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