BT KADLAG CONSTRUCTION PRIVATE LIMITED,NASHIK vs. DEPUTY COMMISSIONER OF INCOME-TAX, CIRCLE - 1, NASHIK

This appeal filed by the assessee is directed against the ex-parte order dated 26.12.2022 of the Ld. CIT(A) / NFAC, Delhi relating to assessment year 2015-16.

There is a delay of 869 days in filing of the appeal before the Tribunal for which the assessee has filed condonation application along with affidavit explaining the reasons for such delay. It has been explained in the condonation application that the delay has occurred in filing of the appeal before the Tribunal due to failure on the part of two consultants of the assessee who were looking after the tax matters. The contents of the affidavit read as under:

The Ld. DR on the other hand strongly opposed the condonation application filed by the assessee.

We have heard the rival arguments made by both the sides on the issue of delay in filing of the appeal and considered the contents of the condonation 4 application filed along with the affidavit of the assessee and also the affidavits filed by the consultants.

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.”

Considering the totality of the facts of the case and in the light of the decisions of Hon’ble Supreme Court cited (supra), the delay in filing of the appeal is condoned and the appeal is admitted for adjudication.

Facts of the case, in brief, are that the assessee is a civil contractor and filed its return of income on 29.09.2015 declaring total income of Rs.2,40,09,890/-. The 5 case was selected for ‘limited scrutiny’ under CASS. Accordingly, notice u/s 143(2) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) dated 04.04.2016 was issued and served on the assessee. Thereafter, notice u/s 142(1) of the Act was issued on 13.06.2017 calling for certain information in response to which the authorized representative of the assessee attended before the Assessing Officer from time to time and filed the requisite details. Rejecting the various explanations given by the assessee, the Assessing Officer made addition of Rs.2,04,57,980/- to the total income of the assessee and determined the total income at Rs.4,44,67,870/-.

In appeal the Ld. CIT(A) / NFAC dismissed the appeal filed by the assessee for non-prosecution by observing as under:

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 the Ld. CIT(A) / NFAC provided only 2 opportunities and thereby dismissed the appeal of the assessee. Further, the Ld. CIT(A) / NFAC has not decided the appeal on merit and has 6 simply dismissed the appeal for want of prosecution which is not as per the provisions of section 250(6) of the Act.

The Ld. DR on the other hand heavily relied on the orders of the Assessing Officer and the Ld. CIT(A) / NFAC.

We have heard the rival arguments made by both the sides, perused the orders of the Assessing Officer and the Ld. CIT(A) / NFAC and the paper book filed on behalf of the assessee. We find the Assessing Officer in the instant case made addition of Rs.2,04,57,980/- in respect of payments made to four (4) sub- contractors holding such payments as not genuine and proper business expense. We find the Ld. CIT(A) / NFAC dismissed the appeal for want of prosecution, the reasons of which have already been reproduced in the preceding paragraphs. It is the submission of the Ld. Counsel for the assessee that given an opportunity, the assessee is in a position to substantiate its case by filing the requisite details. It is also his submission that the Ld. CIT(A) / NFAC has not decided the issue on merit and dismissed the same for want of prosecution.

A perusal of the order of the Ld. CIT(A) / NFAC shows that the Ld. CIT(A)/ NFAC has not decided the appeal on merit but has simply dismissed the same for want of prosecution. We find the provisions of section 250(6) of the Act which read as under:

Since it is the submission of the Ld. Counsel for the assessee that given an opportunity the assessee is in a position to substantiate its case by filing the requisite details, therefore, considering the totality of the facts of the case and in the interest of justice, we deem it proper to restore the issue to the file of the Ld. CIT(A) / NFAC with a direction to grant a reasonable opportunity to the assessee to substantiate its case by filing the requisite details and decide the issue as per fact and law by passing a speaking order. The assessee is also hereby directed to submit the requisite details before the Ld. CIT(A) / NFAC on the appointed date without seeking any adjournment under any pretext, failing which the Ld. CIT(A) / NFAC is at liberty to pass appropriate order as per law. 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.