BACHRAJ CHHOTELAL MEHTA,SURAT vs. INCOME TAX OFFICER, WARD-2(3)(8), SURAT

IN THE INCOME TAX APPELLATE TRIBUNAL SURAT BENCH “DB” SURAT

BEFORE SHRI SANDEEP GOSAIN (JUDICIAL MEMBER) AND SHRI OM PRAKASH KANT (ACCOUNTANT MEMBER)

ITA No. 529/SRT/2025 Assessment Year: 2008-2009 Bachraj Chhotelal Mehta, ITO Ward-2(3)(8), C-3, 3rd floor, Antwerp Park, 619, Aayakar Bhavan, Majura Apartment, Kansara Sheri, Vs. Gate, Mahidharpura, Surat-395001. Surat-395003. PAN NO. AFRPM 7809 R Appellant Respondent

: Mr. Jay Thakkar, CA Assessee by Revenue by : Mr. J.K. Chandnani, Sr. DR

Date of Hearing : 09/10/2025 : 30/10/2025 Date of pronouncement

ORDER PER OM PRAKASH KANT, AM

This appeal by the assessee is directed against order dated 22.05.2023 passed by the Ld. Commissioner of Income-tax (Appeals) – National Faceless Appeal Centre, Delhi [in short ‘the Ld. CIT(A)’] for assessment year 2008-09, raising following grounds:

1.0 On facts and circumstances of the case and in law, Ld. CIT(A) erred in passing the appeal order ex-parte, without considering the bonafide reasons and compelling circumstances that had precluded the appellant to participate in the appeal proceeding;

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2.0 On facts and circumstances of the case and in law, Ld. 2.0 On facts and circumstances of the case and in law, Ld. 2.0 On facts and circumstances of the case and in law, Ld. CIT(A) erred in confirming the additions made in exparte CIT(A) erred in confirming the additions made in exparte CIT(A) erred in confirming the additions made in exparte assessment order p assessment order passed u/s 144, without considering the assed u/s 144, without considering the bonafide reasons and compelling circumstances that had bonafide reasons and compelling circumstances that had bonafide reasons and compelling circumstances that had precluded the appellant to participate in the assessment precluded the appellant to participate in the assessment precluded the appellant to participate in the assessment proceeding; Additional grounds of appeal raised for the 1st time Additional grounds of appeal raised for the 1st time 3.0 On facts and circumstances of the 3.0 On facts and circumstances of the case and in law, the case and in law, the assessment order passed u/s.144 r.w. Sec 147 is bad assessment order passed u/s.144 r.w. Sec 147 is bad assessment order passed u/s.144 r.w. Sec 147 is bad-in- law, since the assessment order including demand notice law, since the assessment order including demand notice law, since the assessment order including demand notice u/s 156 had been passed in name of a non u/s 156 had been passed in name of a non-existent entity existent entity viz. 'M/s. Vitrag Enterprises' on disclosing the status as viz. 'M/s. Vitrag Enterprises' on disclosing the status as viz. 'M/s. Vitrag Enterprises' on disclosing the status as 'Firm' and disclosing the PAN number as 'No PAN'; nd disclosing the PAN number as 'No PAN'; 4.0 On facts and circumstances of the case and in law, the 4.0 On facts and circumstances of the case and in law, the 4.0 On facts and circumstances of the case and in law, the notice issued u/s.148 is invalid, since had not been issued notice issued u/s.148 is invalid, since had not been issued notice issued u/s.148 is invalid, since had not been issued in name of the appellant (individual), however had been in name of the appellant (individual), however had been in name of the appellant (individual), however had been issued in name of a non issued in name of a non-existent entity named 'M/s. Vitrag named 'M/s. Vitrag Enterprises' and disclosing the PA number as 'No PAN'; Enterprises' and disclosing the PA number as 'No PAN'; Enterprises' and disclosing the PA number as 'No PAN'; 5.0 On facts and circumstances of the case and in law, Ld. 5.0 On facts and circumstances of the case and in law, Ld. 5.0 On facts and circumstances of the case and in law, Ld. AO erred in issuing the notice u/s.148 in absence of AO erred in issuing the notice u/s.148 in absence of AO erred in issuing the notice u/s.148 in absence of tangible material and reason to believe that income tangible material and reason to believe that income tangible material and reason to believe that income chargeable to tax chargeable to tax of the appellant has escaped assessment, of the appellant has escaped assessment, thereby the consequential reassessment order passed thereby the consequential reassessment order passed thereby the consequential reassessment order passed u/s.147 is bad u/s.147 is bad-in-law; 6.0 On facts and circumstances of the case and in law, Ld. 6.0 On facts and circumstances of the case and in law, Ld. 6.0 On facts and circumstances of the case and in law, Ld. CIT(A) erred in confirming the addition of entire (100%) CIT(A) erred in confirming the addition of entire (100%) CIT(A) erred in confirming the addition of entire (100%) alleged non-genuine pur genuine purchase of traded goods (diamonds) chase of traded goods (diamonds) of Rs.79,50,000/ Rs.79,50,000/-; 7.0 Without prejudice to Ground no.6, an alternate prayer is 7.0 Without prejudice to Ground no.6, an alternate prayer is 7.0 Without prejudice to Ground no.6, an alternate prayer is made to estimate the suppressed profits on alleged non made to estimate the suppressed profits on alleged non made to estimate the suppressed profits on alleged non- genuine purchase of Rs.1,59,000/ genuine purchase of Rs.1,59,000/- (@2% of Rs.79,50,000/ (@2% of Rs.79,50,000/- ). 2. At the very threshold, the Ld. Counsel for the assessee drew At the very threshold, the Ld. Counsel for the assessee drew At the very threshold, the Ld. Counsel for the assessee drew our attention to the delay of our attention to the delay of 640 days in the presentation of the in the presentation of the present appeal, as noted by the Registry. The Ld. Counsel present appeal, as noted by the Registry. The Ld. Counsel present appeal, as noted by the Registry. The Ld. Counsel submitted that the delay was neither wilful nor deliberate, but submitted that the delay was neither wilful nor deliberate, but submitted that the delay was neither wilful nor deliberate, but

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occasioned by unavoidable and distressing circumstances which ned by unavoidable and distressing circumstances which ned by unavoidable and distressing circumstances which rendered the assessee incapable of active participation in the rendered the assessee incapable of active participation in the rendered the assessee incapable of active participation in the proceedings. In support of such plea, the Ld. Counsel placed proceedings. In support of such plea, the Ld. Counsel placed proceedings. In support of such plea, the Ld. Counsel placed reliance upon the affidavit of the assessee, the material portions reliance upon the affidavit of the assessee, the material portions reliance upon the affidavit of the assessee, the material portions whereof are extracted hereunder for ready reference: e extracted hereunder for ready reference: e extracted hereunder for ready reference:

3.0 THAT, I could not participate in assessment and 1st 3.0 THAT, I could not participate in assessment and 1st 3.0 THAT, I could not participate in assessment and 1st appeal proceedings and could not furnish the relevant details appeal proceedings and could not furnish the relevant details appeal proceedings and could not furnish the relevant details and documents on record under the bonafide reasons and and documents on record under the bonafide reasons and and documents on record under the bonafide reasons and compelling circumstances beyond my contr compelling circumstances beyond my control, stated as under ol, stated as under :- a) My earlier Chartered accountant had advised me that the a) My earlier Chartered accountant had advised me that the a) My earlier Chartered accountant had advised me that the return of income u/s 148 cannot be filed in my individual return of income u/s 148 cannot be filed in my individual return of income u/s 148 cannot be filed in my individual name and under my PAN, since the notice u/s 148 dated name and under my PAN, since the notice u/s 148 dated name and under my PAN, since the notice u/s 148 dated 12/03/2015 had not been issued in my name and under my 12/03/2015 had not been issued in my name and under my 12/03/2015 had not been issued in my name and under my PAN, however been issued in name of a non wever been issued in name of a non- existent entity existent entity named 'M/s. Vitrag Enterprises' on disclosing the PAN number named 'M/s. Vitrag Enterprises' on disclosing the PAN number named 'M/s. Vitrag Enterprises' on disclosing the PAN number as 'No PAN' and therefore, I could not attend the assessment as 'No PAN' and therefore, I could not attend the assessment as 'No PAN' and therefore, I could not attend the assessment proceeding. Further, since the assessment order u/s 144 r.ws 147 dated Further, since the assessment order u/s 144 r.ws 147 dated Further, since the assessment order u/s 144 r.ws 147 dated 30/10/2015 30/10/2015 had not been passed in my name and under my had not been passed in my name and under my PAN, however had been passed in name of a non PAN, however had been passed in name of a non PAN, however had been passed in name of a non-existent entity named 'M/s. Vitrag Enterprises' on disclosing the status entity named 'M/s. Vitrag Enterprises' on disclosing the status entity named 'M/s. Vitrag Enterprises' on disclosing the status as 'Firm' and disclosing the PAN number as 'No PAN', I could as 'Firm' and disclosing the PAN number as 'No PAN', I could as 'Firm' and disclosing the PAN number as 'No PAN', I could not attend the 1st appeal procee not attend the 1st appeal proceeding; b) I was extremely busy and was in state of mental b) I was extremely busy and was in state of mental b) I was extremely busy and was in state of mental depression, since my younger brother Late Shri Jayesh Kumar depression, since my younger brother Late Shri Jayesh Kumar depression, since my younger brother Late Shri Jayesh Kumar Jain met a severe accident on 14/01/2023, thereby causing Jain met a severe accident on 14/01/2023, thereby causing Jain met a severe accident on 14/01/2023, thereby causing serious injuries on head, face, chest, abdomen, limbs, etc and serious injuries on head, face, chest, abdomen, limbs, etc and serious injuries on head, face, chest, abdomen, limbs, etc and went in coma and w went in coma and was hospitalised for substantial period of as hospitalised for substantial period of time from 15/01/2023 to 12/05/2023 (Hospital Medical time from 15/01/2023 to 12/05/2023 (Hospital Medical time from 15/01/2023 to 12/05/2023 (Hospital Medical records are enclosed). Thereafter, he was bed ridden and records are enclosed). Thereafter, he was bed ridden and records are enclosed). Thereafter, he was bed ridden and ultimately died on 17/01/2025 (copy of his death certificate is ultimately died on 17/01/2025 (copy of his death certificate is ultimately died on 17/01/2025 (copy of his death certificate is enclosed). The serious medical illness o enclosed). The serious medical illness of my brother and his f my brother and his death had resulted in non death had resulted in non-compliance during 1ª appeal compliance during 1ª appeal proceeding; c) My younger brother Late Shri Jayesh Kumar Jain was c) My younger brother Late Shri Jayesh Kumar Jain was c) My younger brother Late Shri Jayesh Kumar Jain was looking after my entire accounts and tax related matters and looking after my entire accounts and tax related matters and looking after my entire accounts and tax related matters and

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due to his accident, medical illness and ultimate deat due to his accident, medical illness and ultimate deat due to his accident, medical illness and ultimate death, the Income tax matters could not be attended and such had Income tax matters could not be attended and such had Income tax matters could not be attended and such had resulted in non resulted in non-compliance during the 1st appeal proceeding; compliance during the 1st appeal proceeding; d) I had completely closed my business and permanently d) I had completely closed my business and permanently d) I had completely closed my business and permanently shifted my place of residence from Surat to Mumbai (Aadhar shifted my place of residence from Surat to Mumbai (Aadhar shifted my place of residence from Surat to Mumbai (Aadhar card disclosing the card disclosing the address at Mumbai is enclosed) and my address at Mumbai is enclosed) and my non-presence in Surat had resulted in non presence in Surat had resulted in non-compliance during compliance during assessment and 1st appeal proceedings; assessment and 1st appeal proceedings; e) I was not served with the notices of hearing, since were e) I was not served with the notices of hearing, since were e) I was not served with the notices of hearing, since were served by affixture and thus, I could not furnish the relev served by affixture and thus, I could not furnish the relev served by affixture and thus, I could not furnish the relevant details and documents during course of assessment and details and documents during course of assessment and details and documents during course of assessment and appeal proceedings. appeal proceedings. I declare that there is no wilful or deliberate attempt nor any I declare that there is no wilful or deliberate attempt nor any I declare that there is no wilful or deliberate attempt nor any gross negligence for non gross negligence for non-furnishing the details and documents furnishing the details and documents on record and my non on record and my non-compliance had occurred under t compliance had occurred under the bonafide reasons as stated herein above. I respectfully make a bonafide reasons as stated herein above. I respectfully make a bonafide reasons as stated herein above. I respectfully make a prayer before the Hon'ble ITAT to adopt a liberal approach and prayer before the Hon'ble ITAT to adopt a liberal approach and prayer before the Hon'ble ITAT to adopt a liberal approach and grant me a final opportunity to represent the case on legal grant me a final opportunity to represent the case on legal grant me a final opportunity to represent the case on legal issues and on on merits. 2.1 It was further submitted that the impugne It was further submitted that the impugned assessment and d assessment and first appellate proceedings were completed first appellate proceedings were completed ex parte ex parte, and that the assessee, having been prevented by sufficient cause, now seeks an assessee, having been prevented by sufficient cause, now seeks an assessee, having been prevented by sufficient cause, now seeks an opportunity of being heard on merits. opportunity of being heard on merits.

3.1 The law on condonation of delay is now well settled. The law on condonation of delay is now well settled. The law on condonation of delay is now well settled. It is a salutary principle, enunciated by the Hon’ble Supreme Court in salutary principle, enunciated by the Hon’ble Supreme Court in salutary principle, enunciated by the Hon’ble Supreme Court in

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Collector, Land Acquisition v. Mst. Katiji & Ors. Collector, Land Acquisition v. Mst. Katiji & Ors. [(1987) 167 ITR 471 [(1987) 167 ITR 471 (SC)], that while construing the expression “sufficient cause” under (SC)], that while construing the expression “sufficient cause” under (SC)], that while construing the expression “sufficient cause” under section 5 of the Limitation Act, a liberal and justice-oriented section 5 of the Limitation Act, a liberal and justice section 5 of the Limitation Act, a liberal and justice approach ought to be adopted so as to advance the cause of approach ought to be adopted so as to advance the cause of approach ought to be adopted so as to advance the cause of substantial justice. The Hon’ble Court has substantial justice. The Hon’ble Court has observed that a litigant observed that a litigant does not stand to benefit by lodging an appeal late and that refusal does not stand to benefit by lodging an appeal late and that refusal does not stand to benefit by lodging an appeal late and that refusal to condone delay may result in a meritorious matter being thrown to condone delay may result in a meritorious matter being thrown to condone delay may result in a meritorious matter being thrown out at the very threshold, thus defeating the cause of justice. out at the very threshold, thus defeating the cause of justice. out at the very threshold, thus defeating the cause of justice.

3.2 The same principle was reiter The same principle was reiterated in N. Balakrishnan v. M. N. Balakrishnan v. M. Krishnamurthy [(1998) 7 SCC 123], where the Apex Court held that [(1998) 7 SCC 123], where the Apex Court held that [(1998) 7 SCC 123], where the Apex Court held that the length of delay is not material so long as the explanation offered the length of delay is not material so long as the explanation offered the length of delay is not material so long as the explanation offered is bona fide and not tainted with mala fides or gross negligence. The is bona fide and not tainted with mala fides or gross negligence. The is bona fide and not tainted with mala fides or gross negligence. The expression “sufficient cause” must receive a liberal construction to nt cause” must receive a liberal construction to nt cause” must receive a liberal construction to subserve the ends of justice. subserve the ends of justice.

3.3 Tested Tested Tested on on on the the the touchstone touchstone touchstone of of of these these these authoritative authoritative authoritative pronouncements, we are satisfied that the cause pleaded by the pronouncements, we are satisfied that the cause pleaded by the pronouncements, we are satisfied that the cause pleaded by the assessee is reasonable and genuine. The untimely accident, assessee is reasonable and genuine. The untimely accident, assessee is reasonable and genuine. The untimely accident, prolonged illness, and eventual demise of his brother longed illness, and eventual demise of his brother—who was longed illness, and eventual demise of his brother attending to the tax affairs of the assessee attending to the tax affairs of the assessee—coupled with his own coupled with his own mental mental mental distress and distress and distress and relocation relocation relocation to to another to another city, another city, city, constitute constitute constitute circumstances beyond the assessee’s control. The record does not circumstances beyond the assessee’s control. The record does not circumstances beyond the assessee’s control. The record does not suggest any deliberate inaction or conscious disregard of the any deliberate inaction or conscious disregard of the any deliberate inaction or conscious disregard of the process of law.

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3.4 Accordingly, we are inclined to condone the delay in the filing Accordingly, we are inclined to condone the delay in the filing Accordingly, we are inclined to condone the delay in the filing of the present appeal. The delay of 640 days is, therefore, condoned of the present appeal. The delay of 640 days is, therefore, condoned of the present appeal. The delay of 640 days is, therefore, condoned and the appeal is admitted for adjudication on m and the appeal is admitted for adjudication on merits. erits.

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Order pronounced by way display o Order pronounced by way display of result on notice board f result on notice board on 30/10/2025 under Rule 34(4) of ITAT Rules, 1963. /10/2025 under Rule 34(4) of ITAT Rules, 1963. /10/2025 under Rule 34(4) of ITAT Rules, 1963.

Sd/- Sd/ Sd/- Sd/ (SANDEEP GOSAIN (SANDEEP GOSAIN) (OM PRAKASH KANT OM PRAKASH KANT) JUDICIAL MEMBER JUDICIAL MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER Dated: 30/10/2025 Rahul Sharma, Sr. P.S. Copy of the Order forwarded to Copy of the Order forwarded to : 1. The Appellant 2. The Respondent. 3. CIT 4. DR, ITAT, Surat 5. Guard file. BY ORDER, BY ORDER, //True Copy// (Assistant Registrar) Registrar) ITAT, Surat ITAT, Surat