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Facts
The assessee filed an appeal against the order of the CIT(A) concerning assessment year 2012-13. The appeal was filed with a significant delay of 364 days, for which the assessee cited health issues post-Covid. The core issues involved the reopening of assessment and additions made to the total income.
Held
The Tribunal condoned the delay in filing the appeal, citing the assessee's medical condition and the principle of substantial justice over technicalities. The addition of Rs. 20,45,000/- was deleted, but the issue of salary assessment amounting to Rs. 10,72,056/- was remitted to the AO for fresh examination.
Key Issues
Whether the delay in filing the appeal can be condoned, and the validity of additions made to the assessee's income, including alleged salary and cash deposits.
Sections Cited
253, 249, 5
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Income Tax Appellate Tribunal, DIVISION BENCH, ‘B’ CHANDIGARH
Before: SHRI RAJPAL YADAV & SHRI MANOJ KUMAR AGGARWAL
The assessee is in appeal before the Tribunal against the order of the ld. Commissioner of Income Tax (Appeals) [in short ‘the CIT (A)’] dated 19.04.2024 passed for assessment year 2012-13.
2. The assessee has taken ten grounds of appeal, however, his grievance revolves around two issues, namely; A.Y.2012-13 2 a) The ld.CIT (Appeals) has erred in upholding the re- opening of assessment; b) The ld.CIT (Appeals) has erred in confirming the addition of Rs.20,45,000/- and Rs.10,72,056/- to the total income of the assessee.
In other words, ld.CIT (Appeals) has erred in confirming the determination of income at Rs.31,17,056/- in the hands of the assessee for assessment year 2012-13.
3. The Registry has pointed out that appeal is time barred by 364 days. The assessee has filed an application for condonation of delay. He has also filed his affidavit in support of the application. It has been pleaded in the application that assessee has not been keeping good health after Covid. He has annexed a certificate from Navjivan General Hospital, Fatehabad in support of his contention. Due to stress and trauma on account of his Covid complications, he could not keep a track on income tax litigation. He prayed that delay in filing the appeal be condoned and it be heard on merit. On the other hand, ld. DR submitted that there is a huge delay of 364 days, almost one year. Assessee should be more vigilant in prosecuting his A.Y.2012-13 3 litigation with the Income Tax Department. He has not appeared before the AO also.
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 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:
ITA No.871/CHD/2025 A.Y.2012-13 4
Ordinarily a litigant does not stand to benefit by lodging an appeal late.
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.
"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 benefit by resorting to delay. In fact, he runs a serious risk.
ITA No.871/CHD/2025 A.Y.2012-13 5
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.
Similarly, we would like to make reference to authoritative pronouncement of Hon’ble Supreme Court in the case of N. Balakrishnan Vs. M. Krishnamurthy (1998) 7 SCC 123 dated 03.09.1998. It reads as under:
“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.
ITA No.871/CHD/2025 A.Y.2012-13 6
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”.
In the light of above, if we examine the explanation of the assessee, then it would reveal that assessee would not gain anything by making the appeal time barred. There could be some negligence at the end of the assessee, but if we weigh the penalty in the shape of tax liability on huge additions made by the AO to the total income of the assessee vis-à-vis his negligence on account of his medical condition, then punishment is dis-proportionate to the negligence. The addition would be confirmed without adjudicating the issues A.Y.2012-13 7 on merit. Therefore, we condone the delay and proceed to decide the appeal on merit.
6.1 As far as challenging the re-opening of assessment is concerned, we do not find any merit in it because assessee did not file his return of income and AO has information that a cash deposit of more than Rs.20,45,000/- was made in the Saving Bank Account of the assessee apart from credit of salary. Therefore, we do not find any error in the action of ld. Revenue Authorities and we uphold the re-opening of assessment.
In all other grounds, assessee has taken peripheral arguments except challenge to the addition of Rs.20,45,000/- and Rs.10,72,000/-.
7.1 The brief facts of the case are that AO has noticed a deposit of Rs.20,45,000/- in the Saving Bank Account of the assessee maintained with IDBI Bank, District Kurukshetra. He also found that a salary payment of Rs.10,72,056/- has been made to the assessee which has also been deposited and assessee did not file the return of income. Since an ex-parte A.Y.2012-13 8 assessment order was passed, therefore these additions have been made to the total income of the assessee.
7.2 Before ld.CIT (Appeals), assessee has contended that as far as the salary amount is concerned, it is an incorrect figure taken by the ld. AO. Actually, assessee has received salary of Rs.5,36,028/- on which TDS had already been deducted by the employer of Rs.32,203/-. In support of this, he has produced Form No. 26AS and Form No.16. With regard to deposits of Rs.20,45,000/-, the assessee has contended that his brother has given him the money of Rs.16,50,000/- which was used for purchasing Demand Draft in favour of Dy. Excise & Taxation Commissioner. These Demand Drafts were purchased for a sum of Rs.11 lacs and Rs.3 lacs. One more Demand Draft was purchased of Rs.2,50,000/- which was later on cancelled and this amount was withdrawn in cash and handed over to his brother Shri Naveen Garg. Affidavit of Shri Naveen Garg has been filed before us. The assessee has placed on record copy of Form No.26AS from his employer, Form No.16, Certificate issued u/s 203 of the Income Tax Act by the employer, Bank A.Y.2012-13 9 Statement exhibiting deposits of cash amounting to Rs.12,50,000/- and others and purchase of Demand Draft in favour of Dy. Excise & Taxation Commissioner (Excise). On the strength of these documents, he submitted that addition of Rs.20,45,000/- be not made in the hands of the assessee. Rest was misconstrued by the AO on account of ex-parte assessment but assessee has filed details before the CIT (Appeals). The ld. DR on the other hand submitted that these details were not filed before the AO. It is not discernible whether ld.CIT (Appeals) has called for a report from the AO or not on these documents.
We have duly considered the rival contentions and gone through the record carefully. It is pertinent to note that AO got an information that cash of Rs.20,45,000/- was deposited in the bank account of the assessee maintained with IDBI, Kurukshetra. Thus, it was incumbent upon the AO to call for a bank statement from the bank and not to wait for the assessee. This document must be in his possession which has been placed before us also. A perusal of this document would reveal that Demand Draft of Rs.9,59,183/- appears to A.Y.2012-13 10 have been purchased on 28.09.2010. The details with regard to purchase of Demand Drafts have been reflected in the bank statement. The assessee's brother has owned up payment of cash to the assessee for purchase of Demand Drafts which were required to be paid to Excise Department, hence there cannot be any doubt regarding genuineness of this claim of the assessee. Thus, CIT (Appeals) ought to have not confirmed the addition of Rs.20,45,000/-. We, accordingly, allow this fold of grievance and delete the addition of Rs.20,45,000/-.
8.1 As far as salary income is concerned, assessee has submitted that he has received salary of Rs.5,36,028/- only which is reflected from Form No. 26AS. On page No. 34 of the Paper Book, copy of Form No.26AS is available. A perusal of this document would reveal that total payment was made at Rs.5,36,028/- on which TDS of Rs.32,203/- has been made. The gross salary of the assessee is of Rs.9,15,915/- which is reflected from Form No. 16 available on page No. 38 of the Paper Book, but, there are other statutory deductions debited in this certificate issued u/s 203, therefore, we deem it A.Y.2012-13 11 appropriate to remit this issue to the file of AO for fresh examination. The AO has erred in construing the salary of the assessee at Rs.10,72,056/- and assessing the gross salary. The AO has to allow statutory benefits, if any, admissible to the assessee including TDS deducted by the employer. Therefore, AO will re-examine the issue of assessment of salary in the hands of the assessee afresh after providing due opportunity of hearing to the assessee. The alleged addition of Rs.20,45,000/- to the total income of the assessee stands deleted.
In the result, appeal of the assessee is partly allowed.
Order pronounced on 36.09.2025.