GULSHAN KUMAR,GURGAON vs. ITO WARD-1(3), GURGAON
Income Tax Appellate Tribunal, DELHI BENCH ‘A’: NEW DELHI
Before: SHRI CHALLA NAGENDRA PRASAD & SHRI AVDHESH KUMAR MISHRA
PER AVDHESH KUMAR MISHRA, AM
The appeal for the Assessment Year (‘AY’) 2020-21 filed by the Assessee is directed against the order dated 18.01.2024 of the Commissioner of Income
Tax (Appeals), NFAC, New Delhi [‘CIT(A)’].
2. The assessee has raised following grounds of appeal:
“1. On the facts and circumstances of the case, the order passed by the leaned
National Faceless Appellate Centre (NFAC) is bad, both in the eye of law and on the facts.
2 (i) On the facts and circumstances of the case, NFAC has erred both on facts and in law in passing the order without giving assessee a proper and adequate opportunity of being heard is clear violation of principle of natural justice.
(ii) That the non-appearance before the NFAC was on account of reasons beyond the control of the assessee.
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(iii) That the NFAC has erred both on facts and in law in passing the order ex-parte without giving any findings on merits of the case.
3 On the facts and circumstances of the case, the Ld. NFAC has erred, both on facts and in law, in confirming the assessement order assessing the income of the assessee Rs. 55,76,110/- as against the returned income of Rs 6,20,380/-
4 (i) On the facts and circumstances of the case, the learned NFAC has erred, both on facts and in law, in confirming the additions made by Ld AO amounting to Rs. 8,39,112/-
(ii) That the above confirmation disallowances/addition made by Ld AO amounting to Rs. 8,39,112/- on account of non-deduction of TDS u/s 194H, without appreciating the fact that it's the first year of appellant having turnover exceeding the monetary limits specified u/s 44AB of the Income tax Act, 1961. (iii) That the above disallowance and addition has been confirmed merely relying on the assessment order.
(iv) That the addition has been confirmed without any justification or report or enquiry from the Ld AO.
5 (i) On the facts and circumstances of the case, the learned NFAC has erred, both on facts and in law, in confirming the additions made by Ld AO amounting to Rs. 20,75,000/- under section 69A of the Act.
(ii) That the above confirmation of disallowances/addition made by Ld AO amounting to Rs. 20,75,000/- on account of loans and advances given to blood relatives/family members and to employee through banking channel.
(iii) That the above disallowance and addition has been confirmed merely relying on the assessment order.
(iv) That the addition has been confirmed without any justification or report or enquiry from the Ld AO.
6 (i) On the facts and circumstances of the case, the learned NFAC has erred, both on facts and in law, in confirming the additions made by Ld AO amounting to Rs. 20,41,660/-
(ii) That the above confirmation of adhoc disallowances/addition made by Ld. AO amounting to Rs. 20,41,660/- on account of excess usage of raw material with regards to restaurant and catering business.
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(iii) That the above disallowance and addition has been confirmed merely relying on the assessment order.
(iv) That the addition has been confirmed without any justification or report or enquiry from the Ld. AO.
7. The appellant craves leave to add, amend or alter any of the grounds of appeal.”
3. The relevant facts giving rise to this appeal are that the assessee,
Proprietor of Gulshan Dhaba & Caterers, filed his Income Tax Return (‘ITR’) declaring income of Rs.6,20,380/- on 14.01.2021. The case was scrutinized and consequential assessment was completed at income of Rs.55,76,110/- after disallowing 25% of purchases and making disallowance/addition under section 40(a)(ia) and 68 of the Income Tax Act, 1961 (‘Act’). Before, the Ld.
Assessing Officer (‘AO’), no effective compliance was made by the assessee though many opportunities of being heard were provided by the Ld. AO.
Aggrieved, the assessee filed appeal before the Ld. CIT(A), who dismissed the appeal, ex-parte, holding as under:
“5. In Grounds of appeal no. 1 to 4 appellant has challenged the addition amounting to Rs. 49,55,732/- on account of deemed income and u/s 40 a(ia) of the I.T. Act. The assessee has not submitted any explanation regarding the source of these credits in bank a/c, which are the main issue in this case.
Other grounds of appeal are general in nature. Several opportunities have been allowed to the appellant in terms of the notices fixed for hearing of the appeal under section 250 of the Act issued to the appellant. No compliance has been made by the appellant till date. The details of the opportunities allowed to the appellant to represent in this case are tabulated as under: -
………………………..
6. The aforesaid non compliances reveals beyond doubt that the appellant has nothing to say in the matter of present appeal. Thus, it appears that the assessee is not interested in prosecution of the present appeal and the same
Gulshan Basti is liable to be dismissed on this ground itself. The law assists those who are vigilant and not those who sleep over their rights. This principle is embodied in the well-known dictum "VIGILATIBUS, NON DORMENTIBUS, JURA
SUBVENIUNT. Considering the facts and relying on the decision of the Hon'ble, ITAT, Delhi Bench, in the case of CIT Vs Multiplan India Ltd.
reported in 38-ITD-320 and the judgement of the Hon'ble Madhya Pradesh
High Court in the case of Estate of Late Tukoji Rao Holker Vs. CWT (1997) reported in 223-ITR-480 the present appeal is liable to be dismissed.
7. The appellant has raised grounds of appeal No. 1 to 4 which challenged the addition of amount of Rs. 49,55,732/- on account of deemed income and u/s 40 a(ia) of the I.T. Act. However, no written submissions were filed in respect of Grounds of Appeal No. 1 to 4. It is noted that the appeal of the appellant has been dismissed by me for non-prosecution in para 6. In view thereof the various grounds raised in appeal have become academic in nature. Grounds of Appeal No. 1 to 4 are hereby dismissed. Therefore, required no separate adjudication.
8. As a result, the appeal is dismissed.”
4. At the outset, the Ld. Authorized Representative (‘AR’) prayed for condonation of delay of 379 days in filing this appeal. He submitted that the earlier Ld. Counsel looking after the tax matter of the assessee got critically ill, hence, the tax matters of the assessee were not attended properly in time. An affidavit of the appellant assessee narrating the reason for filing belated appeal was brought on the record.
5. The condonation of delay in filing this appeal is on the record. It was submitted that the delay was not due to any negligence or lack of due diligence on the part of the assessee as assessee was not in knowledge of faceless appeal and on-line compliances. There is no dispute that under section 254 of the Act, the Tribunal may pass such orders as it thinks fit. In Gulshan Basti case of HL Malhotra & Company Pvt. Ltd. Vs DCIT, Circle-12, New Delhi (ITA
No. 211/2020 & CM Appeals 32045-32047/2020 dated 22nd December, 2020), the Hon’ble Delhi High Court has held that in absence of anything malafide or deliberate delay as a dilatory tactic, the Court should normally condone the delay as the intent is always to promote substantial justice following the Hon’ble Supreme Court decisions in the case of Collector, Land Acquisition,
Anantnag & Anr. Vs Mst. Katiji and others (1987) 2 SCC 107 and N.
Balakrishnan Vs M. Krishnamurthy 1998 (7) SCC 123. 6. The explanation of the appellant assessee therefore, becomes relevant to determine whether the same reflects sufficient and reasonable cause on his part in not presenting this appeal within the prescribed time. In case of Collector, Land Acquisition vs MST Katiji (Supra), the Hon'ble Supreme Court has held that the expression ‘Sufficient Cause’ employed by the legislature is adequately elastic to enable the Courts to apply the law in a meaningful manner to sub-serves the ends of justice that being the life-purpose of the existence of the institution of Courts. It was further held by the Hon’ble
Supreme Court that such liberal approach is adopted on one of the principles that 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. Another principle laid down by the Hon’ble Supreme Court is that when substantial justice and technical
Gulshan Basti considerations are pitted against each other, the 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. It was also held by the Hon’ble Supreme Court that there is no presumption that delay is occasioned deliberately, or on account of culpable negligence, or on account of malafides.
A litigant does not stand to benefit by resorting to delay. In fact, he runs a serious risk. In the instant case, applying the same principles, we find that there is no culpable negligence or malafide on the part of the assessee in delayed filing of this appeal as he does not stand to benefit by resorting to such delay. Therefore, in the factual matrix of the present case, we find that there exists sufficient and reasonable cause for condoning the delay in filing this appeal as held by the Hon’ble Supreme Court, where substantial justice and technical considerations are pitted against each other, the cause of substantial justice deserved to be preferred.
7. In the interest of substantial justice, the delay in filing this appeal deserves to be condoned and this appeal be decided on merit. We do not see any prejudice which will be caused to the Revenue in deciding this appeal on merit. In light of aforesaid discussions, in exercise of powers under section 254 of the Act, we hereby condone the delay in filing this appeal as we are satisfied that there is sufficient cause for not presenting this appeal within the prescribed time.
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The Ld. AR of the assessee prayed for remanding the matter to the AO as none the Authorities below had decided the case on merit. 9. The Ld. Sr. DR defended orders of the Authorities below. The Ld. Sr. DR, drawing our attention to various paras of assessment orders and impugned orders, submitted that reasonable opportunities of being heard were provided to the appellant assessee by the Ld. AO and the Ld. CIT(A). However, the appellant assessee tactfully ensured non-compliance to avoid proper investigations. Hence, he prayed for upholding of the impugned order. 10. We take note of the fact that the Ld. CIT(A) has not decided each ground of appeal after discussing the issues in detail and his reasons for agreeing with the assessment order though he/she, as per provisions of section 250(6) of the Act, is obliged to dispose of the appeal in writing with well-reasoned order on each point of determination arisen for his consideration. It is evident from the perusal of section 251(1)(a), 251(1)(b) and Explanation of section 251(2) of the Act that the CIT(A) is required to apply his/her mind to all the issues which arise from the impugned order before him/her, whether or not these issues have been raised by the assessee before him/her. On cumulative consideration of the provisions of section 250(6) of the Act read with sections 250(4), 250(5), 251(1)(a), 251(1)(b) of the Act and Explanation of section 251(2) of the Act, the Ld. CIT(A) is not empowered to dismiss the appeal for non- prosecution of appeal and is obliged to dispose of the appeal on merits. Gulshan Basti
Further, we also take note of the fact that the assessee has not ensured any effective compliance before the Ld. AO. 12. We have heard both parties and perused the material available on the record. We take note of the fact that the both Authorities below have decided the case ex-parte and not on the merits. Considering the facts in entirety and without offering any comment on merit of the case, we deem it fit to set aside the impugned order and remit the matter back to the file of the Ld. AO for deciding the case afresh/denovo, in accordance with law, after providing adequate opportunity of being heard to the appellant assessee. Ordered accordingly. The appellant assessee, no doubt, shall cooperate in remitted assessment proceedings. 13. In the result, the assessee’s appeal is allowed for statistical purposes. Order pronounced in open Court on 15th October, 2025 (C. N. PRASAD) (AVDHESH KUMAR MISHRA) JUDICIAL MEMBER ACCOUNTANT MEMBER
Dated: 30/10/2025
Binita, Sr. PS