AJAR AMAR STEELS 1725 10G, 3-A, FOCAL POINT LUDHIANA 141010,PUNJAB vs. THE PCIT (CENTRAL) LUDHIANA, PUNJAB

4. We also take note of chronology of different orders which read as under : 1. Order u/s 263 31.03.2021 2. Order under Section 143(3) r.w.s. 263 20.03.2022 passed by the ld. Assessing Officer 3. Order of CIT (Appeals) against the 16.02.2024 order of AO 20.03.2022 4. Order of the Hon'ble ITAT Chandigarh 19.09.2024 Bench against the order of CIT (Appeals) withdrawing appeal 5. Date of filing appeal against the order 07.09.2024 u/s 263 4.1 A conjoint reading of both these facts would reveal that according to the assessee, it was under an impression that when issue regarding payment of salary to the partner will be re-adjudicated by the AO in pursuance of 263 order, then it will challenge it before the appropriate Forum. It has ITA No.950/CHD/2024 A.Y.2017-18 3 challenged as discernable from the chronological details of the orders extracted supra but during that proceeding, it revealed that in 263 proceeding, ld.CIT itself decided the disallowance of salary payment to Shri Sorav Jain, hence nothing left for the AO for adjudication. He has to executed the order of ld. CIT and only compute the income. When this aspect was faced by the assessee in ITA 399/CHD/2024 challenging the order of CIT (Appeals) against assessment order passed in pursuance of 263 order, then assessee withdrew that appeal and filed the present appeal. Thus, it has availed its remedy under misconception of facts or on failure of understanding of the Tax Consultant of the impugned order passed u/s 263 of the Act. Had it was advised to file an appeal against this order because in the second round, nothing has been left for the AO, then it would have filed the appeal well in advance. There is no deliberate attempt at the end of the assessee. It has prosecuted the Income Tax litigation at every stage.

ITA No.950/CHD/2024 A.Y.2017-18 4 through all these facts and circumstances. We are of the view that there was no deliberate attempt at the end of the assessee to make the appeal time barred. It was on account of a bonafide error at the end of the assessee as well as its Tax Consultant in construing the meaning of the impugned order passed u/s 263 of the Act. Therefore, the delay in filing the appeal deserves to be condoned.

5.1 It is pertinent to note that sub-section 5 of Section 253 contemplates that the Tribunal may admit an appeal or permit filing of memorandum of cross- objections after expiry of relevant period, if it is satisfied that there was a sufficient cause for not presenting it within that period. This expression sufficient cause employed in the section has also been used identically in sub-section 3 of section 249 of Income Tax Act, which provides powers to the ld. Commissioner to condone the delay in filing the appeal before the Commissioner. Similarly, it has been used in section 5 of Indian Limitation Act, 1963. Whenever interpretation and construction of this expression has fallen for consideration before Hon’ble High Court as well as before the Hon’ble Supreme Court, then, Hon’ble Court

ITA No.950/CHD/2024 A.Y.2017-18 5 were unanimous in their conclusion that this expression is to be used liberally. We may make reference to the following observations of the Hon’ble Supreme court from the decision in the case of Collector Land Acquisition Vs. Mst. Katiji & Others, 1987 AIR 1353:

1. 1. Ordinarily a litigant does not stand to benefit by lodging an appeal late.

2. 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. 3. "Every day’s delay must be explained" does not mean that a pedantic approach should be made. Why not every hour's delay, every second's delay? The doctrine must be applied in a rational common sense pragmatic manner.

4. 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.

5. There is no presumption that delay is occasioned deliberately, or on account of culpable negligence, or on account of mala fides. A litigant does not stand to A.Y.2017-18 6 benefit by resorting to delay. In fact, he runs a serious risk.

6. It must be grasped that judiciary is respected not on account of its power to legalize injustice on technical grounds but because it is capable of removing injustice and is expected to do so.

“Rule of limitation are not meant to destroy the right of parties. They are meant to see that parties do not resort to dilatory tactics, but seek their remedy promptly. The object of providing a legal remedy is to repair the damage caused by reason of legal injury. Law of limitation fixes a life-span for such legal remedy for the redress of the legal injury so suffered. Time is precious and the wasted time would never revisit. During efflux of time newer causes would sprout up necessitating newer persons to seek legal remedy by approaching the courts. So a life span must be fixed for each remedy. Unending period for launching the remedy may lead to unending uncertainty and consequential anarchy. Law of limitation is thus founded on public policy. It is enshrined in the maxim Interest reipublicae up sit finislitium (it is for the general welfare that a period be putt to litigation). Rules of limitation are not meant to destroy the right of the parties. They are meant to see that parties do not resort to dilatory tactics but seek their remedy promptly. The idea is that every legal remedy must be kept alive for a legislatively fixed period of time. A court knows that refusal to condone delay would result foreclosing a suitor from putting forth his cause. There is no presumption that delay in approaching the court is always deliberate.

A.Y.2017-18 7 This Court has held that the words "sufficient cause" under Section 5 of the Limitation Act should receive a liberal construction so as to advance substantial justice vide Shakuntala Devi lain Vs. Kuntal Kumari [AIR 1969 SC 575] and State of West Bengal Vs. The Administrator, Howrah Municipality [AIR 1972 SC 749]. It must be remembered that in every case of delay there can be some lapse on the part of the litigant concerned. That alone is not enough to turn down his plea and to shut the door against him. If the explanation does not smack of mala fides or it is not put forth as part of a dilatory strategy the court must show utmost consideration to the suitor. But when there is reasonable ground to think that the delay was occasioned by the party deliberately to gain time then the court should lean against acceptance of the explanation. While condoning delay the Could should not forget the opposite party altogether. It must be borne in mind that he is a looser and he too would have incurred quiet a large litigation expenses. It would be a salutary guideline that when courts condone the delay due to laches on the part of the applicant the court shall compensate the opposite party for his loss”.

8. We have duly considered the rival contentions and gone through the record carefully. In our opinion, ld. CIT has misconstrued the Partnership Deed. There was a minor

ITA No.950/CHD/2024 A.Y.2017-18 9 typographical error but salary has been mentioned specifically against the name of the partner who will be entitled for that and if this minor ambiguity is being appreciated, then view ought to be taken in favour of the assessee i.e. in the manner in which assessee has given benefit of this Deed in its accounts. It is not an item which has really caused any prejudice to the interests of Revenue. The AO has appreciated this Deed and accepted its interpretation according to the way assessee has interpreted it. The ld. CIT has committed an error by branding the assessment order as erroneous in such a minor issue. Therefore, we allow the appeal of the assessee and quash the impugned order passed u/s 263 of the Income Tax Act.

Order pronounced on 29.09.2025.