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Facts
The assessee, engaged in the trading of food grains, filed a return declaring income. The case was selected for scrutiny, and the Assessing Officer (AO) disallowed 10% of purchases from non-filing suppliers and 20% of expenses. The assessee's appeal before the CIT(A) was dismissed due to a 94-day delay in filing.
Held
The Tribunal held that the delay of 94 days was not inordinate and that the assessee had a reasonable cause for the delay. The Tribunal directed the AO to supply details of non-filing suppliers and to reframe the assessment, re-examining the disallowance of expenses.
Key Issues
Whether the delay in filing the appeal was condonable and whether the AO correctly disallowed purchases and expenses without providing complete details of non-filing suppliers.
Sections Cited
143(3), 144B, 142(1), 147, 148
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, JAIPUR BENCHES,”SMC” JAIPUR
Before: DR. S. SEETHALAKSHMI, JM & SHRI RATHOD KAMLESH JAYANTBHAI, AM vk;dj vihy la-@ITA. No.1297/JPR/2024
fu/kZkj.k o"kZ@Assessment Years : 2020-21 Sh. Rajesh Gupta cuke The ITO, 1 ward No. 19, Mohalla Diwan Wadi Vs. Ward- Bhiwadi, Alwar. Tijara- 301 411 (Raj). LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No.: AXMPK6855A vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksj ls@ Assessee by : Shri P.C. Parwal, C.A. jktLo dh vksj ls@ Revenue by : Shri Gautam Singh, JCIT-. DR a lquokbZ dh rkjh[k@ Date of Hearing : 11/02/2025 mn?kks"k.kk dh rkjh[k@Date of Pronouncement : 11 /04/2025 vkns'k@ ORDER PER: DR. S. SEETHALAKSHMI, J.M. The assessee has filed an appeal against the order of the order of the ld. CIT(A), National Faceless Appeal Centre, Delhi dated 28.08.2024 [hereinafter referred as “(CIT(A)/NFAC” ] for the assessment year 2020- 21 in the matter of Section 143(3) r.w.s. 144B of the Income Tax Act, 1961 raising therein following grounds of appeal. Ground 1 :The Ld. CIT(A), NFAC has erred on facts and in law in holding that there exists no sufficient or good reason for condoning alleged inordinate delay of more than 94 days in filing the appeal and thus dismissing the appeal as barred by limitation.
Sh. Rajesh Gupta vs. ITO Ground 2 : The Ld. CIT(A), NFAC has erred on facts and in law in not deciding the merit of ground taken by assessee against disallowance of Rs.18,62,680/- out of purchases made by AO by presuming that such suppliers are non filers, therefore, the purchases are suspicious. Ground 3 :The Ld. CIT(A), NFAC has erred on facts and in law in not deciding the merit of ground taken by assessee against adhoc disallowance of Rs.31,340/- out of expenses debited to P&L A/c.
2.1 Apropos grounds of appeal of the assessee, brief facts of the case are that assessee is engaged in trading business of food grains in the name of M/s Rajesh Kumar & Sons. He filed return declaring total income of Rs.10,38,370/-. The case was selected for scrutiny to verify the genuineness of purchases made from the suppliers who are non-filers and the genuineness of the expenses claimed. The assessee filed reply to notices u/s 142(1) dt. 26.10.2021 and 03.12.2021. However no reply was filed to show cause notice dt. 15.03.2022. The AO verified the ledgers of purchases, quantitative details, bank statements, stock valuation and the turnover as per GST Annual return. He however, held that out of the total purchases made, 18 suppliers involving purchase of Rs. 18,62,67,910/- are non-filers of return and thus cannot be treated as fully genuine. Hence to cover the discrepancy 10% of the total purchases i.e., 18,94,020/- is disallowed. He further disallowed 20% of the expenses of Rs.1,56,700/- i.e., Rs.31,340/- and thus assessed total income vide order u/s 143(3) dt. 23.09.2022 at Rs.29,32,390/-.
Sh. Rajesh Gupta vs. ITO 2.2 Against the said order assessee filed appeal before ld. CIT(A) on 25.01.2023. Thus, there was a delay of 94 days in filing the appeal. In form no. 35 assessee explained the reasons for delay and requested for condonation of delay. Detailed submissions were filed on merits of the addition and separate application for the condonation of delay along with affidavit in support of the same was filed. The same is reproduced at page 10 to 56 of the appellte order. The Ld. NFAC however held that there exist no sufficient or good reason for condoning inordinate delays of more than 94 days in filing the appeal and thus the same was dismissed as barred by limitation. 2.3 During the course of hearing the AR of the assessee referred to page 45 to 50 of the appellate order where the application for condonation of delay is reproduced. He further referred to the affidavit filed before NFAC which is reproduced at page 51 and 52 of the appellate order to contend that assessee was unaware of the assessment order and the fact of passing the assessment order came to his notice when the notice of penalty was received by him by post. Thereafter he contacted his ld. AR who downloaded the assessment order on 20.01.2023. The assessee thereafter appointed another ld. AR to file the appeal against the assessment order and thus there is a good and reasonable cause for delay in filing the appeal.
Sh. Rajesh Gupta vs. ITO 2.4 On the other hand Ld. DR relied on the order of the CIT(A). 2.5 We have considered the facts of the case and gone through the relevant material on record. We note that assessee has explained the reasons for delay in filing the appeal. These reasons are not vague and general in nature as held by ld. CIT(A). The delay of 94 days is otherwise not inordinate. Hon’ble Supreme Court in case of Collector, Land Acquisition Vs. Mst. Katiji& Others 167 ITR 471 (SC) has held that the legislature has conferred the power to condone delay by enacting section 5 of the Indian Limitation Act of 1963 in order to enable the Courts to do substantial justice to parties by disposing of matters on ‘merits’. The expression ‘sufficient cause’ employed by the legislature is adequately elastic to enable the Courts to apply the law in a meaningful manner which subverses the ends of justice- that being the life-purpose for the existence of the institution of Courts. It is common knowledge that this Court has been making a justifiably liberal approach in matters instituted in this Court. But the message does not appear to have percolated down to all the other Courts in the hierarchy. And such a liberal approach is adopted on principle as it is realized that: (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 Sh. Rajesh Gupta vs. ITO 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 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. In view of the above, the Ld. CIT(A) was not correct in not admitting the appeal. We further find that assessee has not responded to show cause notice dt. 15.03.2022 though w.r.t earlier reply filed AO has verified the purchases, quantitative value, fall in GP rate, etc. Before ld. CIT(A) assessee has contended that AO has not supplied the name and address of 18 suppliers who are stated to be non-filers of the return. Therefore in the interest of substantial justice, we direct the AO to supply Sh. Rajesh Gupta vs. ITO details of 18 parties who are non-filers of return and after considering the response of the assessee frame denovo assessment. The AO would also relook the disallowance of 20% of expenses made by him. Thus the appeal of the assesse is allowed for statistical purpose.
3.0 In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open Court on 11 /04/2025.