SHEETAL NATH COLONIZERS,BHOPAL vs. ITO,1(2), BHOPAL, AAYKAR BHAWAN, BHOPAL

Per Paresh M Joshi, J.M.:

This is an Appeal filed by the Assessee under section 253 of

the income tax Act 1961,[ herein after referred to as the Act

for the sake of brevity] before this tribunal as & by way of a

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

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order”. The Relevant Assessment year is 2013-14 and the

corresponding previous year period is from 01.04.2012 to

31.03.2013.

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

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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.”

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2.4 That the aforesaid assessment order bears no:

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

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be condoned without there being compelling grounds, as laid down by the Hon'ble Courts.

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."

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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.”

3.1 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

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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

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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).

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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.

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

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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.

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.

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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.

Sd/- Sd/-

(BHAGIRATH MAL BIYANI) (PARESH M JOSHI) ACCOUNTANT MEMBER JUDICIAL MEMBER

Indore Dated : 19/02/2026 Patel/Sr. PS

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Copies to: (1) The appellant (2) The respondent (3) CIT (4) CIT(A) (5) Departmental Representative (6) Guard File By order UE COPY Senior Private Secretary Income Tax Appellate Tribunal Indore Bench, Indore

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