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Income Tax Appellate Tribunal, “A” BENCH, AHMEDABAD
Before: SMT.ANNAPURNA GUPTA & MS. SUCHITRA R. KAMBLE
आयकर अपीलीय अिधकरण आयकर अपीलीय अिधकरण, अहमदाबाद �यायपीठ आयकर अपीलीय अिधकरण आयकर अपीलीय अिधकरण अहमदाबाद �यायपीठ अहमदाबाद �यायपीठ ‘A’ अहमदाबाद। अहमदाबाद �यायपीठ अहमदाबाद। अहमदाबाद। अहमदाबाद। IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH, AHMEDABAD BEFORE SMT.ANNAPURNA GUPTA, ACCOUNTANT MEMBER AND MS. SUCHITRA R. KAMBLE, JUDICIAL MEMBER Assessment Year : 2013-14 Smt. Neelu Sanjay Gupta, The Dy. CIT, Vs. 9th Floor, Cambay Grand Hotel, Central Circle-2(2), S.G. Highway, Thaltej, Ahmedabad Ahmedabad-380054 PAN : ADYPG 0351 K अपीलाथ�/ (Appellant) �� यथ�/ (Respondent) Assessee by : Shri Abhimanyu Singh Bhati, AR Revenue by : Shri R.N. Dsouza, CIT-DR सुनवाई की तारीख/Date of Hearing : 29.02.2024 घोषणा की तारीख /Date of Pronouncement: 28.05.2024 आदेश/O R D E R PER ANNAPURNA GUPTA, ACCOUNTANT MEMBER
Present appeal has been filed by the assessee against order of the Commissioner of Income-tax (Appeals)-5, Ahmedabad [hereinafter referred to as "CIT(A)" for short] dated 02.11.2018 passed under Section 250(6) of the Income-tax Act, 1961 [hereinafter referred to as "the Act" for short], for the Assessment Year (AY) 2013-14.
2. The appeal has been noted to be delayed for filing by 1533 days. The assessee has filed an application seeking condonation of delay along with an affidavit stating all facts mentioned in the application to be true on oath. Both the parties were heard on the application for condonation of delay filed by the assessee.
Smt Neelu Sanjay Gupta Vs. DCIT AY : 2013-14 2
Before proceeding to deal with the condonation application, it is necessary to bring out a brief background of the case before us. In the impugned case, assessment was framed under Section 143(3) of the Act, making addition of loans and advances allegedly received by the assessee during the year amounting to Rs.6,83,40,000/- being unexplained. The addition was made in terms of the provisions of Section 68 of the Act. The assessment order reveals that a search operation was conducted by Central Investigation Department, Gujarat (CID) who had taken away lots of documents including details/data sought by the Department, and, therefore, the assessee was unable to furnish necessary details/information before the Assessing Officer on the issue raised. The assessee stated that whatever was available had already been filed and expressed inability to file any other details; and considering the details available on record, the Assessing Officer made addition of the unsecured loans and advances amounting to Rs.6,83,40,000/- since, as per him, they remained unsubstantiated and accordingly were liable to be treated as unexplained income of the assessee in terms of Section 68 of the Act.
4. Before the ld. CIT(A), the assessee’s appeal was delayed for filing by 22 days, which the assessee explained was on account of being surrounded by legal and Court issues; but, in the absence of any substantiation of this explanation with any cogent evidence and considering the fact that the assessee chose not to participate in her own appeal before the ld. CIT(A), despite three notices of hearing being issued, the ld. CIT(A) refused to condone the delay of 22 days and dismissed the appeal as non-maintainable. Besides, he also dealt with the issue on merits and noting the findings of the Assessing Officer recording the unsecured loans of Rs.6,83,40,000/-
Smt Neelu Sanjay Gupta Vs. DCIT AY : 2013-14 3 remaining unexplained/unchallenged/uncontroverted before him, he confirmed the addition made by the Assessing Officer.
5. Ld. CIT(A)’s order was passed on 02.11.2018; against this order, the assessee has filed the present appeal before us on 28.04.2023. As per the application seeking condonation of delay, the order of ld. CIT(A) dated 02.11.2018 was received by her on 17.12.2018 and the appeal before us was required to be filed on or before 15.02.2019. However, the same was filed on 28.04.2023, resulting in a delay of 1533 days. In the present appeal, therefore, the assessee has challenged the order of the ld. CIT(A) on various counts:-
(i) for not condoning delay of 22 days; (ii) for not providing sufficient opportunity of hearing; (iii) for not appreciating the fact that all her records were lying with CID, Gujarat. (iv) on merits in confirming the addition of Rs.6,83,40,000/- u/s 68 of the Act.
6. The grounds of appeal raised are as under:-
“1. The learned Commissioner of Income-tax (Appeals) erred in law and on facts in dismissing the appeal of the Appellant.
2. The learned Commissioner of Income-tax (Appeals) erred in law and on facts in not condoning a minor delay of 22 days in filing the appeal.
3. The learned Commissioner of Income-tax (Appeals) erred in law and on facts in not providing sufficient opportunity of hearing to the appellant as the third and last Notice for hearing was not served on the appellant.
4. The learned Commissioner of Income-tax (Appeals) erred in law and on facts by failing to appreciate that as the records were in the custody of the Central Investigation Department, Gujarat, the appellant could not produce relevant evidence before the I.T. Authorities.
Smt Neelu Sanjay Gupta Vs. DCIT AY : 2013-14 4
5. The learned Commissioner of Income-tax (Appeals) erred in law and on facts in confirming the addition of Rs.6,83,40,000/- u/s 68 of the Income Tax Act, 1961.”
Having so stated the background of the case, it is evident that, continuously, right from the assessment proceedings to the first appellate stage and even before us, the assessee has alleged certain handicap in participating in the proceedings/filing relevant documents to justify or prove her claims, and even handicapped in the matter of timely filing of appeals. It appears, from the perusal of these orders, that the handicap was on account of being embroiled in serious matters involving the CID, Gujarat, who appeared to have seized all documents etc. with the assessee during search conducted. In this backdrop of facts emanating from the orders of the authorities below, the assessee’s application for condonation of delay of 1533 days was heard.
8. The ld. Counsel for the assessee reiterated the fact that the delay was attributable to the assessee and her family being embroiled in serious litigations, being searched by CID, Gujarat, and her pleadings were to the effect that her tax matters were being handled by her husband Shri Sanjay Gupta who was subjected to search by various authorities, i.e. Income-Tax Department, CID (Crime) and the Enforcement Directorate, at different points of time, beginning from the year 2010 up to 2019; that he was even taken into judicial custody by the CID(Crime), Gujarat in 2015 and released only in the year 2017 when the Hon’ble Supreme Court granted him bail; that in the intervening period his health deteriorated when he was in judicial custody and subsequently during the COVID-19 period his health deteriorated further and ultimately he passed away in the year 2021; that it
Smt Neelu Sanjay Gupta Vs. DCIT AY : 2013-14 5 was only after his demise that the assessee took charge of affairs being handled by Shri Sanjay Gupta and accordingly, thereafter, when she was informed of the ld. CIT(A)’s order passed against her, rejecting her appeal, she contacted the concerned Counsel who accordingly took necessary action and filed appeal with the delay of 1533 days. The ld. Counsel for the assessee has filed details, bringing out chronologically all the events, which as per the application of the assessee, lead to the impugned delay of 1533 days, and also filed certain evidences to substantiate her claim.
On going through the same, we find that the assessment in her case for the impugned year was initiated by issuing notice u/s 143(2) of the Act on 17.09.2014, and the order passed on 26.02.2016. The chronology of events filed before us reveals that during this period the Income-Tax Department had carried out search and survey operation on the various entities owned by her husband Shri Sanjay Gupta, i.e. Neesa Group; that even the Central Excise Department had carried out search on the said Group; the CID (Crime) had filed an FIR against her husband and also carried out search operation at the residential and business premises of Shri Sanjay Gupta, and Shri Sanjay Gupta was also arrested by CID and sent to judicial custody wherein his health had started deteriorating. These are evident from the events narrated from 08.09.2010 to 26.02.2016 in the details of chronology of events filed before us as under:-
Date Particulars Evidence 08/09/2010 Income Tax Department carried out search and survey Para 3; Page 2 operation on the premises of Neesa Group entities and Mr. Sanjay Gupta 08/04/2011 Appointed Chairman of Metro Link Express for Para 4; Page 2 Gandhinagar and Ahmedabad (MEGA) 08/03/2013 Search carried out by Central Excise Department at Neesa Para 5; Page 3 Group 30/08/2013 Mr. Sanjay Gupta’s last day as Chariman of MEGA Para 4; Page 2 01/04/2015 FIR 03/2015 was filed against Mr. Sanjay Gupta by Para 4; Page 2 CID Crime
Smt Neelu Sanjay Gupta Vs. DCIT AY : 2013-14 6
May, 2015 CID Crime carried out search operations at the residential Para 4; Page 3 and business premises of Mr. Sanjay Gupta and seized books of account along with digital documents/ records. 14/05/2015 Mr. Sanjay Gupta was arrested by CID Crime and later sent Para 4; Page 3 to judicial custody (He was finally released on bail vide order dated 19.09.2017) 10/01/2016 Annexure 1; Page Dr. Bimal Goswami medical certificate diagnosing his health 1-5 26/02/2016 Assessment Order passed for AY 2013-14 in the case of As per Assessment assessee. order
In her affidavit filed before us, these events have been narrated at paragraph No. 3 to 5 of the application as under:-
“3. The applicant states that her husband, late Shri Sanjay Gupta, was an Indian Administrative Service (IAS) Officer of 1985 batch of Gujrat Cadre who, after serving for about 17 years, resigned from the government service in February 2002 and joined as a CEO of Mudra Port of the Adani Group and worked there from 2002 to 2007. Having acquired first-hand experience in the private sector, he entered the hospitality industry after forming Gandhinagar Hospitality Private Limited (now known as 'Neesa Leisure Limited') and launched 'Cambay Hotel' in Gandhinagar, Gujarat. With the passage of time, the group grew by leaps and bounds, and Shri Sanjay Gupta entered in different forays, viz., computers, technology, food processing, manpower management, etc., and accordingly, a large number of companies were also formed to handle different businesses viz. Neesa Leisure Limited, Neesa Infrastructure Limited, Neesa Agritech & Foods Limited and Neesa Technologies Limited under the umbrella of 'Neesa Group'. He employed about 2000 employees and was supported by a large number of Managers, Engineers, Chartered Accountants/ Accountants, Company Secretaries etc. The applicant used to depend on her husband for her income tax-related matters. However, there was a great setback to the business activities of the 'Neesa Group' after search and survey operations were carried out at the premises of 'Neesa Group' companies/entities and the residential premises of the Promoter Director by the Income Tax Department on 8th September, 2010.
In 2011, Shri Sanjay Gupta was appointed as Chairman/ Executive Chairman of Metro Link Express for Gandhinagar and Ahmedabad (MEGA) Company Limited by the Government of Gujarat on the basis of his vast experience in handling infrastructure projects, while working as an IAS. He had worked in the above capacity from 8th April, 2011 to 30th August, 2013. After his resignation, an FIR No.03/2015 dated 1st April, 2015 was registered
Smt Neelu Sanjay Gupta Vs. DCIT AY : 2013-14 7 by the CID-Crime, Gandhinagar Zone on a complaint filed by the Additional Collector & CEO of MEGA Company Limited for misappropriating funds of MEGA Company Limited against Shri Sanjay Gupta and other persons u/s 409, 418, 465, 467, 468, 471, 120-B and 114 of I.P.C and sections 13(1)(c) and 13 (1)(d) under the Prevention of Corruption Act. CID- Crime Department carried out search operations in the month of May, 2015 at the residential and business premises of Shri Sanjay Gupta and seized books of account along with digital documents/records. Shri Sanjay Gupta was arrested by the CID, Crime Branch, Ahmedabad on 14th May, 2015 and later on sent into judicial custody. His bail applications were rejected by the Sessions Court as well as High Court. Ultimately, Shri Sanjay Gupta got bail from the Hon'ble Gujarat High Court vide order dated 5th April, 2016 but this release was brief as the Hon'ble Supreme Court on an appeal by the State of Gujarat has stayed the bail order of Hon'ble Gujarat High Court vide its order dated 26.09.2016. He could finally get bail from Hon'ble Supreme Court vide its order dated 19.09.2017. He was imprisoned for about two years, which had a negative impact on both his physical and mental health. He not only got liver fibrosis while he was in jail but also numerous other severe illnesses. Despite the urgency of the operation, he could not be operated upon due to his precarious health. He was also referred to Psychiatric Department by Jail Authorities considering his deteriorating mental condition. A few medical records from the aforementioned time period are enclosed herewith as Annexure-A.
Meanwhile, the Central Excise Department (Service Tax), Ahmedabad had also carried out search operations at the group companies on 8th March, 2013 and seized some documents/ records. The negative publicity due to search operations and other actions by multi agencies disrupted the business activities of the group as a whole resulting in a serious financial crisis because the financial lenders to the Group started pressing for recovery of their loans/ advances. The reputation of the group shattered and therefore, no employee wanted to be associated with the group. Almost all the experienced regular staff of the group left one by one resulting in an acute manpower shortage combined with the fact that no experienced and good person wanted to join the group, therefore compliance with various enactments including the Income Tax Act, 1961 became difficult.”
The medical certificate of the doctor diagnosing the condition of Shri Sanjay Gupta in judicial custody was also filed as evidence, and we have noted that, even during the assessment proceedings, the assessee had Smt Neelu Sanjay Gupta Vs. DCIT AY : 2013-14 8 brought the fact of the CID (Crime) conducting search and seizing documents was brought to the notice of the Assessing Officer with the assessee expressing her inability to furnish necessary details, therefore, before the Assessing Officer. This finds mention at page No.3 of the assessment order, wherein reply of the assessee dated 24.02.2016 is reproduced mentioning the above facts. This is also corroborated by the explanation of delay in filing appeal to the ld. CIT(A) which is reproduced in the order of the ld. CIT(A) also, mentioning that the delay was on account of the fact that the assessee was surrounded by many legal and Court issues, and therefore, could not take-up this matter – which finds mention at page No. 8 of the ld. CIT(A)’s order as under:-
“…… However, the appeal has been filed with the delay of 22 days. For making such a delay the appellant make a prayer for condonation of delay in Form No.35 column No.15. The relevant portion of the same is reproduced as under:- “As the assessee was surrounded by many other legal and court issues this matter couldn’t be taken up. So the assessee request to kindly condone the delay.””
The ld. CIT(A)’s order, we have noted, was passed on 02.11.2018 and since the passing of the assessment order till the date of passing of the ld. CIT(A) order, the events, which have stated to have taken place, were the deterioration of the condition of Shri Sanjay Gupta certified by the medical certificate of the doctor treating him, Copies of all of which were filed before us; the Hon’ble Supreme Court staying the bail order granted to Shri Sanjay Gupta by the Hon’ble Gujarat High Court in 2016; then the Hon’ble Supreme Court finally granting bail to Shri Sanjay Gupta in 2017; and the Corporate Insolvency Resolution Process being initiated against Company M/s. Neesa Leisure Ltd., the company promoted by Shri Sanjay Gupta, in 2017, along
Smt Neelu Sanjay Gupta Vs. DCIT AY : 2013-14 9 with the Enforcement Directorate registering the case against Shri Sanjay Gupta, pursuant to FIR filing against him in 2017. All the events from 05.04.2016 to 02.11.2018, i.e. till passing of the order of the ld. CIT(A) are mentioned in the chronology of events as under:-
Date Particulars Evidence 05/04/2016 Mr. Sanjay Gupta got bail vide order of Hon’ble Gujarat Para 4; Page 3 High Court 20/04/2016 Appeal filed by the appellant before the CIT(A)-5, Ahmedabad 26/09/2016 Hon’ble Supreme Court on an appeal by the State of Para 4; Page 3 Gujarat stayed the bail order of Hon’ble Gujarat High Court 14& 15/11/ Dr. B. P. Singh’s (Prayag Hospital) medical certificate on Annexure 1; Page 6-7 2016 the treatment given to Mr. Sanjay Gupta 15/12/2016 Liver function test of Mr. Sanjay Gupta Annexure 1; Page 14 09/02/2017 Dr. B. P. Singh’s medical certificate diagnosing Mr. Sanjay Annexure 1; Page 8 Gupta’s health 11/03/2017 Dr. Haresh Panchai’s medical certificate giving history and Annexure 1; Page 17-18 diagnosis of Mr. Sanjay Gupta’s health 04/04/2017 Dr. S. K. Vaghela’s medical certificate giving history and Annexure 1; Page 9-11 diagnosis of Mr. Sanjay Gupta’s health 26/04/2017 Dr. S. S. Srivastava’s medical certificate and diagnosis of Annexure 1; Page 19 Mr. Sanjay Gupta’s health 26/08/2017 Dr. A. R. Singh’s medical certificate giving history and Annexure 1; Page 12-13 diagnosis of Mr. Sanjay Gupta’s health. 19/09/2017 Hon’ble Supreme Court granted bail to Mr. Sanjay Gupta Para 4; Page 3 2017 Corporate Insolvency Resolution Process (CIRP) was Para 6; Page 4 initiated by financial creditors against M/s Neesa Leisure Ltd the company promoted by Mr. Sanjay Gupta. 2017 Enforcement Directorate, Ahmedabad had registered Para 6, Page 4 ECIR/AMZO/02/2017 pursuant to FIR No. 03/2015. 05/09/2018 Dr. Bimal Goswami’s (Shivam Surgical Hospital) medical Annexure 1; Page 15 certificate and diagnosis of Mr. Sanjay Gupta’s health 02/11/2018 CIT(A) passed the order for AY 2013-14 As per CIT(A) Order
And stated in the application filed by the assessee along with the necessary evidences of doctor’s certificate regarding the health of Shri Sanjay Gupta at para No.6 of his application as under:-
“6. The Creditors/ lenders of Neesa Leisure Limited (flagship company of the group) had initiated winding-up proceedings and also initiated action under the SARFESAI Act and Recovery of Debts & Bankruptcy Act, 1993. Later on, in 2017, the Financial Creditors/ lenders initiated 'Corporate Insolvency Resolution Process’ (CIRP). Besides the above, Criminal Proceedings under Smt Neelu Sanjay Gupta Vs. DCIT AY : 2013-14 10
IPC and the Prevention of Corruption Act were continuing personally against Shri Sanjay Gupta till 2021. In view of the above position and in the absence of proper attention by Shri Sanjay Gupta, who was suffering from various ailments and pressures from a number of government agencies, representation could not be made during the assessment proceedings as well as appellate proceedings under the Income Tax Act, 1961 as evident by the orders passed by the above authorities due to disruption of supporting documents and evidence as well as changes from time to time in Authorised Representatives.”
The events taking place after the service of the CIT(A)’s order are in relation to the investigation carried out by Enforcement Directorate on Shri Sanjay Gupta regarding the provisional attachment of the personal properties of Shri Sanjay Gupta by Enforcement Directorate; further deterioration of health of Shri Sanjay Gupta, and ultimately the demise on 25.04.2021- that resultantly the assessee Smt. Neelu Gupta took charge of all affairs and appointed one Shri Aakash Jain, Chartered Accountant to look into the Income Tax matters of the Neesa Group and Family in December 2022 who informed the assessee of the impugned order of ld. CIT(A) being passed and no appeal being filed against the same; that thereafter the assessee contacted a consultant in the same month itself, i.e. April 2023 and filed appeal before us on 28.04.2023. These facts find mention at paragraph Nos. 7 & 8 of her application as under:-
“7. During the second wave of the COVID-19, Shri Sanjay Gupta was affected from Corona Virus and was admitted to Heritage Hospital, Lucknow on 5th April, 2021, and later on, when his health further deteriorated, he was shifted to Sanjay Gandhi Postgraduate Institute of Medical Sciences, Lucknow, where he breathed his last on 25th April, 2021. His wife and children (a daughter and a son) also could not meet him during the above period as he was in ICU/ isolation.
As Shri Sanjay Gupta was himself handling all legal matters including income tax matters of the group as well as his family members, the applicant was never involved nor knew about all the legal or quasi- legal proceedings pending in her case. The grieving applicant after the mourning period was Smt Neelu Sanjay Gupta Vs. DCIT AY : 2013-14 11
over, wanted to ensure that all the pending legal and other legal proceedings against the family members and group companies pending in various Courts/ Tribunals as well as various Authorities were properly represented even in the absence of Shri Sanjay Gupta. At present, there are about 150 court cases pending at various stages in numerous Courts/ Tribunals viz. High Court, Criminal Courts, Civil Courts, NCLT, NCLAT, DRT, etc. in various cities Ahmedabad, Gandhinagar, Jaipur, New Delhi, Mumbai, Allahabad, Udaipur etc. She has faced a lot of difficulties as she does not have a factual and legal background of matters pending before different Courts/forums. Accordingly, she started first contacting and meeting with Advocates who were representing the Group as well as family members' matters in various Criminal Courts in India. This was a herculean task and consumed a lot of time. As the applicant is not aware of the nitty gritty of the Income Tax law, she was looking for some previous staff members/accountants of the Group, who could guide her. One old staff accountant, Shri Pravesh Shah had agreed to work for part-time for the applicant, who was assigned to find out the details of all pending matters. Shri Pravesh Shah could only provide limited guidance on some issues and advised the applicant as to whom to contact and get complete details. As per his advice, the applicant contacted Shri Anand Kothari, Chartered Accountant, who had earlier handled her and Neesa Group companies' matters before the Income Tax Department and asked him to help her and provide the list of pending matters but despite much follow-up with him, he could not provide with the same. Therefore, the applicant has contacted a new Chartered Accountant, Shri Aakash Jain, and assigned him the task of compliance with various notices received from the Income Tax Department from time to time in the month of December, 2022. After vouching for his work and being satisfied, the applicant asked him to go through the complete records of the group companies and family members and compile the list of pending matters. During the process, it was found that even finding out the passwords from earlier Chartered Accountants and Accountants was also a time- consuming exercise as no systematic records were maintained for the passwords. The mobile numbers and email ids provided on ITBA Portal were of earlier employees/Chartered Accountants of the Group, who had left long back and therefore required a lot of effort on the part of the applicant to secure passwords in order to obtain details. Shri Aakash Jain, Chartered Accountant informed the applicant in the first week of April, 2023 that an appeal filed before the CIT(A) in her case for the A.Yr.2013-14 has been dismissed and no second appeal has been filed and therefore huge demand is outstanding in her case. The applicant thereafter contacted M/s Bhati & Associates, Advocates, Ahmedabad regarding the same. Who advised that the date of service of the order of the Id. CIT(A) dated 2nd November, 2018 be provided to them along with other necessary documents to prepare the appeal. Immediately, thereafter
Smt Neelu Sanjay Gupta Vs. DCIT AY : 2013-14 12 enquires were conducted with the Income Tax Department to ascertain the date of service of the appellate order and to collect the necessary documents. Thereafter, it was found that the above- referred order was served on the assessee on 17.12.2018. As stated earlier, Shri Sanjay Gupta was suffering from physical and mental health issues and had gone underground at the beginning of 2019 as he did not have the strength and courage to face investigation and legal proceedings by Enforcement Directorate and remained so until he breathed his last during the second wave of COVID-19 i.e. 25.04.2021. Whereafter, the applicant had to apprise herself of all the legal matters which were going on against her, her family, and the group companies. She apprised herself first of the most urgent criminal matters and thereafter matters where Notices of hearings were being received. With no legal background or the functioning of the group companies and their finances, it took the applicant some time to understand the matter and thereafter collect all the details and papers which were left disorganized after many searches by various government agencies. But steadily she arranged for all the details required by her advocates and appointed advocates where no one was representing their matters. It was only after the appointment of Shri Aakash Jain, Chartered Accountant who had for the first time brought to her Notice that there was no appeal filed against the Order of the CIT(A) dated 02.11.2018 in connection with AY 2013-14 and that a huge demand was outstanding. She had to solely rely and depend on the help of professionals and their advice to understand why huge demands were outstanding in her case. Pursuant to this information, it came to the applicant's knowledge that an appeal was required to be filed immediately against the above-mentioned CIT(A)'s Order. Thus, this resulted in a delay of 1533 days.”
Accordingly, the ld. Counsel for the assessee has made out a case there being bona fide reason for delay of 1533 days in the filing of the present appeal before us.
The ld. DR vehemently objected to the application for condonation of delay and has pleaded that the delay be not condoned.
Having heard the contentions of both the parties, we find that the assessee has demonstrated sufficient cause before us for the delay in filing the appeal of 1533 days before us. In fact, this period includes the period of the pandemic of COVID-19 (March 2020 to February 2022), when the Hon’ble
Smt Neelu Sanjay Gupta Vs. DCIT AY : 2013-14 13 Supreme Court extended the period of limitation in all proceedings before the Courts / Tribunal vide its order dated 08.03.2021 in Suo Motu WR (C) No. 3 of 2020. Therefore, this period of approximately 720 days needs to be ignored for considering the period of delay in the filing of the present appeal, resulting the delay being only of remaining 700 days. For the same also, we find that the assessee has demonstrated her inability to have filed the appeal considering the difficult circumstances in which she was embroiled, demonstrating the various searches and investigations carried out by the different Government authorities on her husband, who was handling allegedly her affairs, who was also taken into judicial custody during this period and who ultimately passed away in 25th April 2021. The assessee, we have noted, had pointed out her situation even to the Assessing Officer and ld. CIT(A), as noted above by us, when she mentioned her inability to produce all necessary documents since they were allegedly seized by the CID, Gujarat during the search conducted, and also attributed the delay in filing appeal to the ld. CIT(A) to the reason of being embroiled in legal and financial matters. None of the reasons attributed to the delay have been controverted by the Department before us, nor have they been proved to be false. On the contrary, we have found them corroborated by the consistent pleading made by the assessee all throughout, right from the assessment proceedings and during the appellate stage, of being embroiled in legal matters. Therefore, sufficient cause for the delay in filing of the present appeal, we find, is clearly established by the assessee. Expression “sufficient cause” employed in sub- section 3 of Section 249 of Income-tax Act, which provides powers to the ld. Commissioner to condone the delay in filing the appeal before him, has also been used in Section 5 of Indian Limitation Act, 1963. Whenever interpretation and construction of this expression has fallen for consideration before Hon'ble High Court as well as before the Hon'ble Supreme Court, then,
Smt Neelu Sanjay Gupta Vs. DCIT AY : 2013-14 14 Hon'ble Court were unanimous in their conclusion that this expression is to be used liberally. We may make reference to the following observations of the Hon'ble Supreme court from the decision in the case of Collector Land Acquisition Vs. Mst. Katiji & Others, 1987 AIR 1353:
"1. Ordinarily a litigant does not stand to benefit by lodging an appeal late.
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. 3. "Every day's delay must be explained" does not mean that a pedantic approach should be made. Why not every hour's delay, every second's delay? The doctrine must be applied in a rational common sense pragmatic manner.
4. 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.
5. There is no presumption that delay is occasioned deliberately, or on account of culpable negligence, or on account of mala fides. A litigant does not stand to benefit by resorting to delay. In fact he runs a serious risk.
It must be grasped that judiciary is respected not on account of its power to legalize injustice on technical grounds but because it is capable of removing injustice and is expected to do so."
Similarly, we would like to make reference to authoritative pronouncement of Hon'ble Supreme Court in the case of N. Balakrishnan Vs. M. Krishnamurthy (supra). It reads as under: "Rule of limitation are not meant to destroy the right of parties. They are meant to see that parties do not resort to dilatory tactics, but seek their remedy promptly. The object of providing a legal remedy is to repair the damage caused by reason of legal injury. Law of limitation fixes a life-span for such legal remedy for the redress of the legal injury so suffered. Time is precious and the wasted time would never revisit. During efflux of time newer causes would sprout up necessitating newer persons to seek legal remedy by approaching the courts. So a life span must be fixed for each remedy. Unending period for launching the remedy may lead to unending uncertainty and consequential
Smt Neelu Sanjay Gupta Vs. DCIT AY : 2013-14 15 anarchy. Law of limitation is thus founded on public policy. It is enshrined in the maxim Interest reipublicae up sit finis litium (it is for the general welfare that a period be putt to litigation). Rules of limitation are not meant to destroy the right of the parties. They are meant to see that parties do not resort to dilatory tactics but seek their remedy promptly. The idea is that every legal remedy must be kept alive for a legislatively fixed period of time. A court knows that refusal to condone delay would result foreclosing a suitor from putting forth his cause. There is no presumption that delay in approaching the court is always deliberate. This Court has held that the words "sufficient cause" under Section 5 of the Limitation Act should receive a liberal construction so as to advance substantial justice vide Shakuntala Devi lain Vs. Kuntal Kumari [AIR 1969 SC 575] and State of West Bengal Vs. The Administrator, Howrah Municipality [AIR 1972 SC 749]. It must be remembered that in every case of delay there can be some lapse on the part of the litigant concerned. That alone is not enough to turn down his plea and to shut the door against him. If the explanation does not smack of mala fides or it is not put forth as part of a dilatory strategy the court must show utmost consideration to the suitor. But when there is reasonable ground to think that the delay was occasioned by the party deliberately to gain time then the court should lean against acceptance of the explanation. While condoning delay the Could should not forget the opposite party altogether. It must be borne in mind that he is a looser and he too would have incurred quiet a large litigation expenses. It would be a salutary guideline that when courts condone the delay due to laches on the part of the applicant the court shall compensate the opposite party for his loss."
In the light of various judicial pronouncements by various Courts and the principles for condonation of delay having been laid down and settled by the Hon’ble Apex Court in various decisions to the effect that the assessee’s right to appeal should not be denied on the mere technicality of limitation and liberal view should be taken for condoning the delay in filing appeal where sufficient cause is adduced and the delay is not attributable to any laxity on the part of the assessee, we have no hesitation, therefore, in condoning the delay of 1533 days/700 days in filing the present appeal before us. The delay is accordingly condoned.
The order was pronounced in the open court.
Smt Neelu Sanjay Gupta Vs. DCIT AY : 2013-14 16
Now, proceeding to the various grounds raised before us.
Ground No. 2 challenging the order of the ld. CIT(A) for not having condoned the delay of 22 days, we hold, needs to be allowed in the light of the facts and circumstances demonstrated by the ld. Counsel for the assessee before us, as noted above. Therefore, Ground of appeal No.2 of the assessee is allowed, and the order of the ld. CIT(A), holding the appeal as non- maintainable by not condoning the delay of 22 days in filing the appeal before him, is set aside.
22. Ground No.3 is on the issue of the order of the ld. CIT(A) having been passed against all principles of natural justice, by not giving sufficient opportunity of hearing to the assessee.
23. Ground No.4 is relating to the issue of ld. CIT(A) having been failed to appreciate the circumstances in which the assessee was embroiled and her inability, therefore, to prove her case.
24. Ground No.5 relates to the merits of the case in confirming the addition made by the Assessing Officer of Rs.6,83,40,000/- pertaining to various loans and advances taken by the assessee, remaining unexplained u/s 68 of the Act.
During the course of hearing before us, it was put at Bar to the ld. Counsel for the assessee that considering the fact which was stated time and again by the assessee at various forums that all documents and material were seized by the CID and she was in no position to procure any further material to prove her case, what objective would be served by giving the assessee another chance of hearing. The ld. Counsel for the assessee was directed to Smt Neelu Sanjay Gupta Vs. DCIT AY : 2013-14 17 demonstrate a plausible case on merits for the justification of restoring the appeal back to the ld. CIT(A) on the ground that the assessee remained unheard before the said authority. The order-sheet entry to this effect was passed on 13.02.2024 and the ld. Counsel for the assessee sought some time to comply with the directions. The order-sheet entry is reproduced hereunder:-
“Both parties heard extensively on the assessee's application seeking condonation of delay in filling the present appeal of the assessee by 1533 days. Further, the ld. counsel for the assessee prays for the appeal to be restored back to the CIT(A) since she remained unheard. The ld. Counsel for the assessee was directed to demonstrate a plausible case on merits for the justification of restoration of appeal. Some time was sought for the same. Accordingly, appeal is adjourned to 29th Feb. 2024 for the ld. counsel for the assessee to comply with our aforestated requirement. To continue as part-heard.”
Thereafter, on 29.02.2024, the ld. Counsel for the assessee submitted two sets of paper-book containing evidences with regard to the addition made by the Assessing Officer u/s 68 of the Act, with respect to each of the parties consisting of PAN details of the said parties, copies of their accounts in the books of the assessee, copies of the bank statement of the loan creditors reflecting the loan advances to the assessee, copies of the bank account of assessee reflecting receipt of the loan, and copies of confirmation from certain parties also. Noting the same, that the assessee probably has some explanation and evidences to substantiate the unsecured loans taken by her and considering the fact that the addition made u/s 68 of the Act was confirmed without affording due opportunity of hearing to the assessee and without considering the different facts and circumstances in which she was surrounded, the issue is restored back to the Assessing Officer with the direction to look into the genuineness of these unsecured loans afresh after
Smt Neelu Sanjay Gupta Vs. DCIT AY : 2013-14 18 giving due opportunity of hearing to the assessee and considering all evidences and documents filed by her.
Ground of appeal Nos. 3 & 4 are accordingly allowed, and Ground of appeal No.5 is allowed for statistical purposes.
In effect, the appeal of the assessee is allowed for statistical purposes.
Order pronounced in the open Court on 28.05.2024 at Ahmedabad.