ABHAY SINGH,INDORE V. ITO-3(1), INDORE, INDORE

ITA 51/IND/2025

AI Insights

The case involves Abhay Singh, who appealed against the orders of the Commissioner of Income-Tax (Appeals) for the assessment years 2011-12 and 2012-13. The appeals were based on the grounds that the Income Tax Officer (ITO) had erroneously assessed him for income derived from a bank account that actually belonged to a partnership firm, 'M/s Prakash Motors', of which he was merely an employee and not a partner. The ITAT found that the previous counsel's failure to file the appeals on time was not due to any negligence or mala fide intention of the assessee, but rather a mistake on the part of the counsel. Consequently, the ITAT condoned the delay and remanded the case back to the AO for a fresh assessment, emphasizing the need for substantial justice over technical considerations.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 668937 (ITAT-INDORE)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-06-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2011-2012
• Other Referred Cases: Collector, Land Acquisition Vs Mst. Katiji and others
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: FORASSESSEESUBMITTEDTHATTHEASSESSEE; FORREVENUEDIDNOTRAISE; FORREVENUEAGREESTOTHESUBMISSIONSOFLD.; SHRIASHISHPORWAL
• Assessee Lawyers: SHRIHARSHVIJAYWARGIYA
• Keywords: Condonation of delay; Business income; Principle of natural justice
• Section: 147; 144

Judgement Text

"Page 1 of 6 आयकरअपीलीयअिधकरण, इंदौरɊायपीठ, इंदौर IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE SHRI B.M. BIYANI, ACCOUNTANT MEMBER AND SHRI PARESH M. JOSHI, JUDICIAL MEMBER ITA No.51 & 52/Ind/2025 Assessment Year:2011-12 & 2012-13 Abhay Singh 72-GJ, Anupam Nagar, Scheme No.54, Vijay Nagar, Indore बनाम/ Vs. ITO-3(1) Indore (Assessee/Appellant) (Revenue/Respondent) PAN: CMEPS5095M Assessee by Shri Harsh Vijaywargiya, AR Revenue by Shri Ashish Porwal, Sr. DR Date of Hearing 23.06.2025 Date of Pronouncement 25.06.2025 आदेश/ O R D E R Per B.M. Biyani, A.M.: Feeling aggrieved by two separate orders of first-appeal, both dated 22.04.2024 and both passed by learned Commissioner of Income-Tax (Appeals)-NFAC, Delhi [“CIT(A)”] for Assessment-Year [“AY”] 2011-12 & 2012-13, which in turn arises out of respective assessment-orders dated 19.12.2018 passed by learned ITO-3(1), Indore [“AO”] u/s 144 r.w.s. 147 of Income-tax Act, 1961 [“the Act”], the assessee has filed these appeals on the grounds mentioned in Appeal Memo (Form No. 36). Abhay Singh ITA No. 51 & 52 /Ind/2025 - AY 2011-12 & 2013-14 Page 2 of 6 2. The registry has informed that these appeals are delayed by 12 days and therefore time-barred. Ld. AR for assessee submitted that the assessee has filed applications for condonation of delay supported by affidavits on stamp. Referring to same, Ld. AR submitted that the assessee immediately after receipt of impugned orders, handed over the same to previous counsel and paid appeal filing fee also but the previous counsel did not file appeals in time. Ultimately, the assessee approached present counsel and with his assistance, filed these appeals to ITAT. Ld. AR submitted that there is no lethargy, negligence, mala fide intention or ulterior motive of assessee in making delay and the assessee does not stand to derive any benefit because of delay. He further submitted that the sole reason of delay is previous counsel’s mistake. He submitted that there is a “sufficient cause” for delay and hence the delay should be condoned. Ld. DR for Revenue did not raise objection against condonation of delay. We have considered the explanation advanced by assessee and in absence of any contrary fact or material on record, the assessee is found to have a “sufficient cause” for delay in filing present appeal. We find that section 253(5) of the Act empowers the ITAT to admit an appeal after expiry of prescribed time, if there is a “sufficient cause” for not presenting appeal within prescribed time. It is also a settled position by Hon’ble Supreme Court in Collector, Land Acquisition Vs Mst. Katiji and others 1987 AIR 1353, 1987 2 SCC 387 that whenever substantial justice and technical considerations are opposed to each other, the cause of substantial justice must be preferred by adopting a justice- Abhay Singh ITA No. 51 & 52 /Ind/2025 - AY 2011-12 & 2013-14 Page 3 of 6 oriented approach. Thus, taking into account the provision of section 253(5) and the decision of Hon’ble Supreme Court, we take a judicious view, condone delay, admit these appeals and proceed with hearing. 3. Ld. AR next submitted that in both of these matters, the AO has acted u/s 147 on the basis of AIR information revealing cash deposits in bank a/c and ultimately, in the assessment-orders passed, the AO has made additions of estimated business income on the basis of impugned deposits in bank a/c. But the relevant Bank A/c No. 004105012592 with ICICI Bank considered by AO belonged to a partnership firm “M/s Prakash Motors”. Ld. AR submitted that the said firm was constituted by two partners Shri J.P. Gupta and Shri Ajay Gupta and the assessee was just an employee of the firm. He submitted that a “General Power of Attorney” was given by partners of firm to assessee-employee to open and operate bank a/c in the name of firm and based on such authority, the assessee maintained the aforesaid A/c with ICICI Bank in the name of firm. Ld. AR submitted that although the a/c belonged to partnership firm “M/s Prakash Motors” but by mistake the assessee-employee’s PAN was fed in the banking system. The assessee has filed following certificate issued by bank to demonstrate these facts: Abhay Singh ITA No. 51 & 52 /Ind/2025 - AY 2011-12 & 2013-14 Page 4 of 6 Abhay Singh ITA No. 51 & 52 /Ind/2025 - AY 2011-12 & 2013-14 Page 5 of 6 4. Ld. AR submitted in open court that “M/s Prakash Motors” is a separate assessee and regularly getting accounts audited and filing income- tax returns in which the transactions of said bank a/c have been duly recorded. Thus, in nutshell, Ld. AR submitted that the said bank a/c does not belong to assessee and the transactions made therein cannot be considered for taxation in assessee’s hands. Ld. AR submitted that the addition made by AO in the hands of assessee on accounts of estimated business income on the basis of deposits in impugned bank a/c is not sustainable. Therefore, the present matters must be remanded to the file of AO for a fresh adjudication after necessary verification. 5. Ld. DR for revenue agrees to the submissions of Ld. AR. 6. In view of above submissions of parties; having regard to the principle of natural justice and also bearing in mind that no prejudice would be caused to revenue if the present matters are restored at the level of AO rather it would result in a better adjudication as per correct facts and law, we remand these matters to the file of AO for adjudication afresh, at the risk and responsibility of assessee. The AO shall give necessary opportunity of hearing to assessee and pass appropriate orders uninfluenced by his earlier orders. The assessee is also directed to remain vigilant and ensure participation in the hearings as may be fixed by AO and do not seek unnecessary adjournments failing which the AO shall be at liberty to pass appropriate orders in accordance with law. Ordered accordingly. Abhay Singh ITA No. 51 & 52 /Ind/2025 - AY 2011-12 & 2013-14 Page 6 of 6 7. Resultantly, these appeals are allowed for statistical purpose. Order pronounced in open court on 25/06/2025 Sd/- Sd/- (PARESH M. JOSHI) (B.M. BIYANI) JUDICIAL MEMBER ACCOUNTANT MEMBER Indore िदनांक/Dated : 25/06/2025 Patel/Sr. PS Copies to: (1) The appellant (2) The respondent (3) CIT (4) CIT(A) (5) Departmental Representative (6) Guard File By order UE COPYSr. Private Secretary Income Tax Appellate Tribunal Indore Bench, Indore "