DHAIRYASHIL SHARMA GONDIL,WALWA vs. INCOME TAX OFFICER,WARD 5, SANGALI, SANGALI

Although a number of grounds have been raised by the assessee, however, these all relate to the order of the Ld. CIT(A) / NFAC in confirming the adhoc addition of Rs.23,12,287/- made by the Assessing Officer u/s 69 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) by dismissing the appeal on account of delay.

Facts of the case, in brief, are that the assessee is an individual engaged in the business of civil construction. He filed his return of income on 29.03.2016 declaring total income of Rs.5,00,170/-. The case was selected for scrutiny under CASS. Accordingly statutory notice u/s 143(2) of the Act was issued and served on the assessee. The Assessing Officer thereafter completed the assessment u/s 143(3) of the Act on 13.12.2017 determining the total income of the assessee at Rs.7,43,664/-.

Subsequently the PCIT exercised jurisdiction u/s 263 of the Act and passed an order directing the Assessing Officer to decide the issue afresh after examining the issue regarding the claim of labour charges of Rs.25,73,039/- and site expenses of Rs.20,51,536/-. The Assessing Officer thereafter issued statutory notices u/s 142(1) of the Act to the assessee on various occasions. Due to non-compliance to the said statutory notices, the Assessing Officer completed the assessment u/s 144 r.w.s. 263 r.w.s. 144B of the Act on 22.09.2021 by disallowing an amount of Rs.23,12,287/- being 50% of labour expenses of Rs.25,72,039/- and site expenses of Rs.20,51,536/-. The Assessing Officer accordingly determined the total income of the assessee at Rs.28,24,519/-.

Since the assessee filed the appeal before the Ld. CIT(A) / NFAC with a delay of 417 days, the Ld. CIT(A) / NFAC did not condone the delay and dismissed the appeal filed by the assessee.

Aggrieved with such order of the Ld. CIT(A) / NFAC, the assessee is in appeal before the Tribunal.

The Ld. Counsel for the assessee submitted that due to non-receipt of the assessment order the assessee was unable to file the appeal within time. He submitted that the registered email ID of the assessee was inactive on the income tax portal. Subsequenlty, the assessee changed the new email ID on the income tax portal. However, since the assessee was suffering from illness and the order was not received in the changed email ID of the assessee, the assessee was unable to file the appeal in time. Although the same was submitted before the Ld. CIT(A) / NFAC, however, the Ld. CIT(A) / NFAC disregarded the same and did not condone the delay. He accordingly submitted that in the interest of justice the matter may be restored to the file of the Ld. CIT(A) / NFAC with a direction to condone the delay and decide the issue on merit.

The Ld. DR on the other hand submitted that the Ld. CIT(A) / NFAC has given justifiable reasons while dismissing the appeal on account of delay. The assessee has not satisfactorily explained the reasonable cause for such delay in filing of the appeal. He accordingly submitted that the order of the Ld. CIT(A) / NFAC be upheld and the grounds raised by the assessee be dismissed.

We have heard the rival arguments made by both the sides, perused the orders of the Assessing Officer and the Ld. CIT(A) / NFAC. It is an admitted fact that the assessee has filed the appeal before the Ld. CIT(A) / NFAC with a delay of 417 days after excluding the Covid period. We find the assessee before the Ld. CIT(A) / NFAC has explained the reasons for such delay which is on account of non-receipt of the order by the assessee which was served on his inactive email ID and no order was received in the changed email ID. It is an admitted fact that the order was served on the assessee through his earlier email ID and not through physical service. Since the assessee is an individual and the email ID was inactive during the period and no physical order was served on the assessee, therefore, we find some force in the arguments of the Ld. Counsel for the assessee that there was a reasonable cause on the part of the assessee for not filing the appeal within the stipulated time.

We find the Hon'ble Supreme Court in the case of Collector, Land Acquisition vs. Mst. Katiji & Ors. reported in 167 ITR 471 (SC) has held that 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. 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.

We find recently the Hon’ble Supreme Court in the case of Inder Singh Vs. The State of Madhya Pradesh reported in 2025 LiveLaw (SC) 339 has held as under: “14. There can be no quarrel on the settled principle of law that delay cannot be condoned without sufficient cause, but a major aspect which has to be kept in mind is that, if in a particular case, the merits have to be examined, it should not be scuttled merely on the basis of limitation.”

In the light of the above decisions of Hon’ble Supreme Court cited (supra), we deem it proper to restore the issue to the file of the Ld. CIT(A) / NFAC with a direction to condone the delay and decide the appeal on merit after giving due opportunity of being heard to the assessee. The assessee is also hereby directed to make its submissions, if any, on the date of hearing without seeking unnecessary adjournments. We hold and direct accordingly. The grounds raised by the assessee are accordingly allowed for statistical purposes.

In the result, the appeal filed by the assessee is allowed for statistical purposes.