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Facts
The assessee, an agriculturist, filed an appeal after a delay of 247 days against an ex-parte assessment order. The delay was attributed to the assessee not being familiar with the income tax portal and issues with notice delivery to the correct email address. The assessee had made significant bank deposits which were questioned by the Assessing Officer.
Held
The Tribunal condoned the delay in filing the appeal, citing the bonafide lapse and the need for substantial justice. The Tribunal partially remanded the issue of explaining the source of deposits back to the Assessing Officer for further inquiry and opportunity of hearing to the assessee.
Key Issues
Whether the delay in filing the appeal can be condoned due to bonafide reasons, and whether the source of bank deposits made by an agriculturist can be sufficiently explained.
Sections Cited
148, 144, 147, 250, 253, 249, 5, 115BBE, 234A, 234B, 271(1)(b), 271(1)(c), 139(1)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DIVISION BENCH, ‘B’, CHANDIGARH
Before: SHRI RAJPAL YADAY & SHRI KRINWANT SAHAY
�थायी लेखा सं./PAN No: DAZSPS4216N अपीलाथ�/Appellant ��यथ�/Respondent ( Physical Hearing ) �नधा�रती क� ओर से/Assessee by : Sh. Nikhil Goyal, Advocate and Shri Ashok Goyal, Advocate राज�व क� ओर से/ Revenue by : Sh. Vivek Vardhan, Addl. CIT, Sr. DR सुनवाई क� तार�ख/Date of Hearing : 15.01.2025 उदघोषणा क� तार�ख/Date of Pronouncement : 17.01.2025 आदेश/Order Per Rajpal Yadav, VP: The Assessee is in appeal before the Tribunal against the order of ld. CIT(A), National Faceless Appeal Centre (NFAC) dated 26.09.2023.
813 -Chd-2024- Baldev Singh, Fatehabad 2 2. That before proceedings to take note of brief facts, it is pertinent to mention that the appeal filed is time barred by 247 days. In order to explain the delay, Assessee has filed an Application alongiwth an Affidavit dated 25.7.2024 pleading therein that the Assessee, who is an individual, agriculturist filed his return of income for the year under consideration on 16.12.2019 in compliance of a notice issued u/s 148 dated 30.3.2019 by the A.O. The A.O. passed an order u/s 144 r.w.s. 147 and assessed the income after making addition of Rs. 22,97,000/-. That the Assessee being an agriculturist, is not very familiar with income tax portal and hence he was not even aware of the notices under section 250 as the old counsel of the Assessee also did not inform him about the notices. Further, the notices were sent on the other email id against the mail id furnished by the Assessee in form No.35. It is only when Assessee engaged a new counsel to take care of his tax matters, he came to know about notices u/s 250 of the Act and as such, a delay of 247 days ( 248 days as per Assessee) was caused in filing the appeal before the Tribunal. It was submitted that the delay in filing is appeal is inadvertent, bonafide and a request was made to condone the aforesaid delay.
3. With the assistance of the ld. Representatives we have gone through the record carefully.
813 -Chd-2024- Baldev Singh, Fatehabad 3 4. 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:
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 813 -Chd-2024- Baldev Singh, Fatehabad 4 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.
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.
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 (supra). It reads as under:
813 -Chd-2024- Baldev Singh, Fatehabad 5 “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 finis litium (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. 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 813 -Chd-2024- Baldev Singh, Fatehabad 6 applicant the court shall compensate the opposite party for his loss”.
We do not deem it necessary to re-cite or recapitulate the proposition laid down in other decisions. It is suffice to say that the Honble Courts are unanimous in their approach to propound that whenever the reasons assigned by an applicant for explaining the condonation of delay, then such reasons are to be construed with a justice oriented approach.
In the light of the above, if we have examine the facts of the present case than it would reveal that there was no deliberate attempt at the end of the Assessee to make this appeal time barred. It was not a deliberated strategy for litigating the issue in the Tribunal. Due to some bona fide lapse and the detailed reasoning furnished by the ld. Counsel for the Assessee, we condone the delay and proceed to decide the appeals on merits.
The Assessee has taken five grounds of appeal out of which Ground No. 5 is a general which does not call for recording of any specific findings.
9. In Ground No.3, Assessee has pleaded that the ld. Assessing Officer has erred in charging the tax u/s 115BBE of the Act. According to the Assessee, he is an agriculturist and the deposits were 813 -Chd-2024- Baldev Singh, Fatehabad 7 made out of agriculture income. However, we are of the view that charging of tax will be dependent on the outcome of Ground No. 2, therefore, at this stage, this ground is a pre-matured. Once status of addition is determined only thereafter a view can be taken of i.e., under which section rate of tax is to be applied. Hence, this ground is being treated as premature at this stage.
10. In Ground No.4, the Assessee has challenged the interest charged u/s 234A and 234B of the Act and initiation the penalty u/s 271(1)(b) and 271(1)(c) of the Act. We find that charging of interest u/s 234A and 234B is consequential to the additions made to the income of the Assessee which is yet to be decided.
11. As far as initiation of penalty is concerned, the Assessee has an independent right to challenge those proceedings before the appropriate Forum, therefore, these pleas also cannot be taken in this appeal where quantum additions are challenged. Hence, Ground No.4 is also rejected.
12. In Ground Nos. 1 & 2, the Assessee has challenged that ld. A.O. has erred in making an addition of Rs. 22,97,336/- by reopening of the assessment u/s 147 of the Income Tax Act, 1961.
The brief facts of the case are that Assessee has not filed return of income u/s 139(1) of the Act, however, A.O. found that the 813 -Chd-2024- Baldev Singh, Fatehabad 8 Assessee had made deposits of Rs. 22,20,000/- in a saving bank account with State Bank of Bikaner and Jaipur (now State Bank of India). The case of the Assessee was reopened by issuing of notice u/s 148 on 29.3.2019. In response to that notice the Assessee did not file return but he filed the return before finalization of the assessment order. Such return was field on 16.12.2019 and the same day assessment order has been passed u/s 144 read with section 147 of the I.T. Act. In other words, the A.O. has framed best judgement assessment.
Appeal to the CIT(A) did not bring any relief to the Assessee. The ld. CIT(A) has upheld the assessment order by way of an ex-parte order. Ld. Counsel for the Assessee submitted that somehow notices were sent to some other email and the Assessee being a semi-literate fellow, engaged in agricultural activities could not keep a track on income tax proceedings. The Assessee has filed an application for additional evidence vide which he has filed copies of the ‘Jamabandi’ for assessment years 2008-09 and 2012-13, copy of ‘Girdawari’ for assessment years 2012-13 and 2013-14. He also filed ‘Jamabandi’ for A.Y. 2013-14 and a copy of the bank statement has also been filed. In this way, a paper book containing of 57 pages has been filed by the Assessee. The ld. Counsel for the Assessee with the assistance of these documents had contended that copy of ‘Jamabandi’ as such is a per se
813 -Chd-2024- Baldev Singh, Fatehabad 9 admissible evidence which reflect the land owned by the Assessee whereas, ‘Girdawari’ reflects the agricultural activity conducted by the Assessee of his land or land owned by any other person. According to him, the Assessee has earned agricultural income and has some past savings out of which these deposits have been made.
The ld. DR, on the other hand submitted that both the orders are ex-parte. These documents have not been examined by any of authority, therefore, at the most it can be sent back to the A.O. for verification and adjudication.
On the consideration of above facts and circumstances, we are of the view that a limited enquiry is required to be conducted by the Assessing Officer for verifying these agricultural activities as well as any other savings with the Assessee for explaining the source of deposits. For verification of this limited facts, this issue is partially remanded back to the file of the jurisdictional Assessing Officer who will decide the issue after giving the Assessee proper opportunity of hearing. The Assessee will be at liberty to file any documentary evidence including the paper book filed before us. Therefore, we set aside both the impugned orders. Accordingly, the appeal of the Assessee stands allowed for statistical purposes.
813 -Chd-2024- Baldev Singh, Fatehabad 10 17. In the result, appeal is allowed for statistical purposes.
Order pronounced on 17.01.2025