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Facts
The assessee filed a first appeal before the CIT(A) against an assessment order which added Rs. 2,14,58,000/- as unexplained investment. The CIT(A) dismissed the appeal solely on the grounds of delay, as it was filed 65 days after the prescribed period without condonation of delay.
Held
The Tribunal held that the CIT(A) failed to properly consider the application for condonation of delay and the supporting documents, including medical certificates and affidavits, which indicated a bonafide reason for the delay. The delay was not abnormal and there was sufficient cause shown.
Key Issues
Whether the CIT(A) was justified in dismissing the appeal solely on the ground of delay without considering the explanation and evidence provided for condonation of delay.
Sections Cited
253 of the Income Tax Act, 1961, 147 r.w.s 144B of the Act, 69 r.w.s 115BBE of the Act, 246A of the Act, 249(2) of the Act, 249(3) of the Act, Limitation Act
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Income Tax Appellate Tribunal, INDORE BENCH, INDORE
second Appeal. The Assessee is aggrieved by the order bearing Number:-ITBA/NFAC/S/250/2025-26/1082096271 (1) dated 29.10.2025 passed by the Ld. CIT(A) u/s 250 of the Act, which is herein after referred to as the “Impugned
Factual Matrix 2.1 That as and by way of an “assessment order” made u/s 147 r.w.s 144B of the Act, total income of the assessee was computed and assessed at Rs.2,14,58,000/- u/s 69 r.w.s 115BBE of the Act. The assessee firm had filed its return of income declaring total income of Rs. NIL on 31.10.2013 electronically.
2.2 In the aforesaid assessment order it is recorded as under:-
“It is noticed that the assessee firm had purchased immovable properties of Rs.4,43,54,722/-during the F.Y.2012-13 from different parties. As per copies of sale deed, it is noticed that the assessee had made payment of Rs.2,14,58,000/- during the F.Y.2012-13 relevant to AY.2013-14 out of total payment of Rs.4,43,54,722/-, which was made out of undisclosed sources of income. Issued notice u/s 148 of the Act on 30.03.2021 for the A.Y.2013-14 to furnish return of income within 30 days. In response thereto, assessee filed return of income on 29.05.2021 declaring total income at Rs. zero. Thereafter, issued statutory notice u/s 143(2) on 30.09.2021. In response thereto, the assessee submitted his reply on 13.12.2021 stated that no notice u/s 142(1) is supplied
Sheetal Nath Colonizers A.Y.2013-14 to him regarding needed documents for the proceedings. Kindly supply us the same” 2.3 In the aforesaid assessment order it is also recorded as under:
“A detailed shown cause notice was issued on 21.02.2022 to furnish reply by 07.03.2022 wherein addition of Rs. 2,148,000/- on account of unexplained investment u/s 69 read with section 115BBE of the Act was proposed. Penalty proceeding u/s 271(1)(c) of the Act was also proposed in SCN. In response thereto AR of the assessee furnished reply on 28.02.2002 at final stage of assessment proceedings which examined and found not convincing. The relevant portion of reply is reproduced herewith. Para-4 of reply dated 28.12.2022 During the financial year 2011-12 assessee has purchase the land amounting to Rs. 4,43,54 7224 Copy of first two pages of the title deeds enclosed P 40 to 78) during the financial year 2012-13 assessee has made a payment of Rs.2,14,58,000-(Actual figure is Rs.2,34,58,000/-) during the year under consideration (Copy of ledger account of the sellers are enclosed). The source of such find is (i) Capital contribution by partners (ii) Advance received from the customers against the sale of plots of land and house and (iii) Sale of plots and houses. Conclusion with facts: I have considered all the facts & circumstance and material related to case available on records as mentioned supra. The assessee has not filed corroborative evidence and explanation for proving source of investment out of advance on sale of flats. There is no nexus between source of investment and advance taken on sale of flats on different dates in absence of documentary evidence, I therefore, held that assessee made payment of Rs.2,14,58,000/- for investment in immovable properties out of undisclosed sources, I therefore, added back unexplained investment of Rs.2,14,58,000/- in his income u/s 60 read with section115BBE of the Act which is not recorded in the books of account of the assessee and failed to furnish source of investment as discussed.”
ITBA/AST/S/147/2021-22/1041086069(1) & that the same is dated 20.03.2022 which is hereinafter referred to as the “Impugned Assessment Order”.
2.5 That the assessee being aggrieved by the aforesaid “Impugned assessment order” prefers the first appeal u/s 246A of the Act before the Ld. CIT(A) who by the “Impugned Order” has dismissed the first appeal of the assessee on the grounds & reasons stated therein. The core ground & reasons for the dismissal of the first appeal was as under:
“5.7 From the above decisions it becomes clear that in the case of condonation of delay, where the appeal was filed beyond the limitation of period, the courts are empowered to condone the delay, provided that the appellant can prove his claim of inability to file appeal within the prescribed period. Litigant must be able to demonstrate that there was "sufficient cause" which obstructed his action to file appeal, beyond the prescribed time limit. 5.8 In the present case, the appellant has sought condonation of delay in Form 35 stating "That the accountant of the assessee was not available. "The reason for delay in filing of appeal given by the assessee is not at all sufficient and reasonable cause and the illness of the accountant is not a sufficient & reasonable cause for delay in filing of appeal. The appellant has not adduced any reasonable cause which prevented it from filing the appeal within the prescribed period of thirty days. It has filed the present appeal after a delay of 65 days. Unless and until it is demonstrated that there was sufficient cause that prevented the appellant from exercising its legal remedy of filing appeal within that prescribed period of thirty days, the delay thereafter cannot
5.9 On the given facts of the case, it is clear that the statutory right to appeal which was vested with the appellant has not been exercised within the stipulated time under section 249(2). Thus, this is clearly a case of lapses, which are directly the result of deliberate inaction on the part of the appellant.
5.10 This is not a case of change in law which is beneficial to the appellant and hence the delay in seeking such remedy may be condoned in the furtherance of substantial justice. Therefore, there is no denial or destruction of a statutory right in this case, by adhering to the prescribed period of limitation as otherwise it will only Jead to protract the matter endlessly and will undoubtedly render the legislative scheme and intention behind the concerned provision otiose as held by the Hon'ble Supreme Court in the case of Assistant Commissioner (CT) LTU, Kakinada & Ors. Vs M/s Glaxo Smith Kline Consumer Health Care Limited (2020) (36 G.S.T.L. 305).
5.11 Hon'ble High Court of Punjab and Haryana, in the case of CIT Vs Ram Mohan Kabra (2002) (257 ITR 773) (Punjab & Haryana) has upheld the decision of Tribunal, in declining the condonation of delay of five days only, with the following ratio:-
*3. The provisions relating to prescription of limitation in every statute must not be construed so liberally that it would have the effect of taking away the benefit accruing to the other party in a mechanical manner. Where the Legislature spells out a period of limitation and provides for power to condone the delay as well, there such delay can be condoned only for sufficient and good reasons supported by cogent and proper evidence. Now it is a settled principle of law that the provisions relating to specified period of limitation must be applied with their rigour and effective consequences."
On the facts and circumstances of the case, and in view of the position of law applicable on the given facts, I am satisfied that the appeal has not been presented within the period prescribed under section 249(2) of the Act, i.e. thirty days from the date of service of the notice of demand relating to the assessment order. I am also satisfied that the appellant has not been able to show any "sufficient cause" for not presenting the appeal within the said prescribed period, within the meaning of section 249(3) of the Page 5 of 12
Act, read with section 5 of The Limitation Act. Accordingly, the appeal is not admitted for adjudication on merits X DEPAR 7. In the result, the present appeal is dismissed.”
2.5 The assessee being aggrieved by the “Impugned Order” has preferred the instant second appeal before this Tribunal & has raised the following grounds of appeal in the Form No. 36 against the “Impugned Order” which are as under:-
“1.The Ld. CIT(A) was not justified in confirming the addition of Rs.2,14,58,000/- u/s 69 of the Act considering the same as unexplained Investment without considering the facts and circumstances of the case 2.The Ld. CIT(Appeals) was not justified in rejecting the application for condonation without considering the facts and circumstances of the Case. 3.The Appellant craves leave to add, amend OR modify any of the grounds of appeal.”
3. Record of Hearing 3.1 The hearing in the matter took place before this Tribunal on 29.01.2026 when the Ld. AR for & on behalf of the Assessee appeared before us & interalia contended that the “Impugned Order” is bad in law, illegal & not Proper. It therefore deserves to be set aside. It was contended that the sole ground to reject the first appeal of the assessee was non
Sheetal Nath Colonizers A.Y.2013-14 condonation of delay in preferring the first appeal. In law first appeal is required to be filed within 30 days but in the instant first appeal before the Ld. CIT (A) there was a delay of 65 days which delay was not condoned and the appeal came to be rejected on grounds of delay. It was then submitted that the “impugned assessment order” was dated 20/03/2022 whereas the first appeal ought to have filed within 30 days i.e. by 20/04/2022 however the same was filed on 22/06/2022. The Ld. AR then invited the attention of this tribunal to internal page 3 & 4 of the impugned order and stated that accountant of the assessee Mr Mahendra Parmar was seriously ill and doctor had advised him bed rest. Since all the documents were with the said accountant the assessee could not contact his counsel for preparation of first appeal on time. When the said accountant resumed his duties in office on 01/06/2022 the counsel was contacted and the first appeal was filed. Hence there was a delay of 65 days. Copy of the affidavit of the assessee and his accountant in support was too placed on the record. However the first appeal came to be dismissed
Sheetal Nath Colonizers A.Y.2013-14 basis limitation i.e. delays of 65 days in filing the first appeal. The Ld. AR in order to strengthen his arguments has placed on the record of this tribunal a copy of application for the condonation of delay filed before the Ld. CIT (A). The copy of medical certificate of Dr BM Nikose dated 30/05/2022 is attached too, evidencing that accountant Mahendra Parmar was not well w.e.f. 01/04/2022 to 30/05/2022 and was advised rest and care. It is also certified that he was suffering from “COPD” and “infective hepatitis”. Copy of affidavit dt. 13/06/2022 of Mahendra Parmar accountant in support of “COD” dated 30/05/2022 made before the Ld. CIT(A) was placed on record too and so also of Kamal Kumar Jain managing partner of the assessee.
Per Contra the Ld. DR for and on behalf of the revenue submitted that it would be just and fair to remand the matter back to the file of Ld. CIT (A).
Observations Findings & conclusions
1. Sheetal Nath Colonizers A.Y.2013-14 4.1 We have to decide the legality, validity and proprietary of the “impugned order” basis records of the case & the rival submission canvassed before us.
4.2 We have carefully perused the records of the case and have heard the submissions.
4.3 We basis records of the case & after hearing & upon examining the rival contentions of the Ld. AR & the Ld. DR canvassed before us, are of the considered opinion that the first appeal of the assessee is dismissed solely on the ground of limitation i.e. delay in filling the first appeal by 65 days.
1. The Ld. CIT (A) in the impugned order has not taken into consideration the COD application along with enclosures and has held that there is no documentary evidence in form 35 in support of reason for delay. It is a bald assertion without any basis, which is not supported by cogent and proper evidence and same would not constitute “sufficient cause” within the meaning of section 249(3) of the act. We observe that COD application dated 30.05.2022 with its accompaniments have not been taken into consideration by the Ld. CIT (A) though
1. Sheetal Nath Colonizers A.Y.2013-14 in Para 4 internal page 3 & 4 of the impugned order he has recorded the facts stated in the said COD application. We observe that in the COD application and in the form no. 35 the necessary reasons for delay has been given along with affidavits in support of both the accountant Mahendra Parmar as well as Kamal Kumar Jain (managing partner) which ought to have been considered. Medical certificate too was placed on record. We therefore hold that to lay emphasis on evidence in COD application noting more could be done by the assessee. Further the delay is not abnormal. It is bonafide. Sufficient reason logically has been given which amounts to sufficient cause. The first appeal of the assessee cannot be dismissed on hyper technical ground of delay which is not abnormal. First appeal is substantive right of assessee. Under these circumstances we set aside the impugned order as delay before the Ld. CIT (A) was bonafide.
1. There was no negligence. Sufficient cause is shown. Hence the impugned order is set aside and we remand the matter back to the file of the Ld. CIT(A) to decide the first appeal on merits.
1. Sheetal Nath Colonizers A.Y.2013-14 4.4 In view of the above, we set aside the impugned order and remand the case back to the file of the Ld. CIT (A) who shall now pass a speaking and well-reasoned order on merits of the case.
5 Order 5.1 In the result the impugned order is set aside as & by way of remand back to the file of the Ld. CIT(A) who shall now pass a speaking & well reasoned order on merits.
5.2 In the result, the Appeal of the assessee is allowed for statistical purpose.
Pronounced in open court on 19 .02.2026.