AMREEN,MEERUT V. ITO,WARD-1(1)(1), MEERUT

ITA 5047/DEL/2024

AI Insights

The case involves two appeals by Amreen against the orders of the Commissioner of Income Tax (Appeals) for the Assessment Years 2013-14 and 2014-15, which were dismissed in limine due to delayed filing. The assessee, a non-filer of income tax returns, had substantial unexplained credits in her bank accounts, which were treated as unexplained deposits and taxed accordingly. The assessee's appeals were initially dismissed due to a delay of 137 days in filing, attributed to her husband's illness and her lack of familiarity with tax matters. The Tribunal, referencing various judicial precedents, decided to condone the delay and remand the case for a decision on its merits.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 27199 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-02-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2013-2014
• Other Referred Cases: DCM Ltd. vs. State of Tamil Nadu, Madhu Dadha vs. ACIT, Collector, Land Acquisition v. Mst. Katiji, UOI V. Tata Yodogawa Ltd, Calcutta Municipal Corporation vs. Pawan Kumar Saraf, ACIT vs. Ranbir Chemicals, CIT vs. Metal Distributors Ltd., State of Rajasthan vs. Chaudhury Construction, HL Malhotra & Company Pvt. Ltd. Vs DCIT, Circle12, New Delhi
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ASHISH TRIPATHI
• Assessee Lawyers: KESHAV GARG
• Keywords: Condonation of delay; Set aside; Business income; Opportunity of being heard; Reasonable cause; Ignorance of law
• Section: 147; 148; 69A; 20

Judgement Text

" Page 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘A’: NEW DELHI BEFORE SHRI VIKAS AWASTHY, JUDICIAL MEMBER AND SHRI AVDHESH KUMAR MISHRA, ACCOUNTANT MEMBER ITA No.5047/Del/2024, A.Y. 2013-14 Amreen, House No.586/11, Near RTO Ka Pul, Shastri Nagar, Meerut PAN: ABNPF0317K Vs. Income Tax officer, Ward- 1(1)(1), Aaykar Bhawan, Meerut (Appellant) (Respondent) ITA No.5048/Del/2024, A.Y. 2014-15 Amreen, House No. 586/11, Near RTO Ka Pul, Shastri Nagar, Meerut PAN: ABNPF0317K Vs. Income Tax officer, Ward- 1(1), Aaykar Bhawan,Meerut (Appellant) (Respondent) Appellantby Sh. Keshav Garg, Advocate Respondentby Sh. Ashish Tripathi, Sr. DR Date of Hearing 24/02/2025 Date of Pronouncement 24/02/2025 ORDER PER AVDHESH KUMAR MISHRA, AM Common grounds and facts arise in the above captioned appeals of the assessee; therefore, these appeals were heard together and are being disposed off by this common order. ITA No.5047 & 5048/Del/2024 Amreen Page 2 2. The appeals for the Assessment Years (hereinafter, the ‘AY’) 2013-14 and 2014-15 filed by the assessee are directed against orders dated 30.07.2024 and 13.08.2024of the Commissioner of Income Tax (Appeals), NFAC, New Delhi [hereinafter, the ‘CIT(A)’]. 3. The assessee has challenged the impugned orders on the reasoning that the Ld. CIT(A), by not condoning the delay in filing appeal, has erred in dismissing appeals in limine. The assessee prayed for condonation of delay and adjudication of the cases on merit. 4. The brief facts of these cases are that theassessee, a non-filer (No Income Tax Return has ever been filed.), had substantial credits in her ICICI Bank saving account in the relevant years. The said bank account of the assessee was red-flagged for Suspicious Transactions by the Bank as the assessee was not explaining the transactions in respond to specific queries by the Bank Authority. Therefore, the Bank Authority filed the Suspicious Transactions Reports (hereinafter, the ‘STR’). The same was marked to the Income Tax Department for enquiry. Based on the information that the assessee, a non-filer of the Income Tax Return(hereinafter, the ‘ITR’), hadcredits/deposits aggregating to Rs.62,87,583/- and Rs. 25,00,959/- in her ICICI Bank Account in AY 2013-14 and 2014-15 respectively, the above- mentioned assessments of the assesseewere reopened under section 148 of the Income Tax Act, 1961 (hereinafter, the ‘Act’).During the course of assessment proceedings, the assessee did not ensure any compliance as ITA No.5047 & 5048/Del/2024 Amreen Page 3 detailed in the assessment orders. Therefore, the entire credits appearing in the said bank account of the assessee were held as unexplained and taxed accordingly under section 69A of the Act. Consequentially, the assessments were completed at income of Rs.62,87,583/- and Rs.25,00,959/- in AY 2013-14 and 2014-15 respectively under section 147 r.w.s. 144 of the Act. 4.1 Before the Assessing Officer (hereinafter, the ‘AO’), the appellant/assessee offered the income @ 8% of the gross credits of Rs.62,87,583/- and Rs.25,00,959/- in AY 2013-14 and 2014-15 respectively on the reasoning that the said bank credits were nothing but the business receipts from the trading of cattle during the relevant years. However, the appellant/assessee failed to demonstrate the existence of such trading before the AO with corroboratory evidence. Therefore, the AO treated the entire credits as unexplained deposits and taxed the same accordingly. Such bank credits/deposits were not held as business receipts by the AO on the reasoning as detailed in the para-11 of the assessment order. 4.2 Aggrieved, the assessee filed belated appeals before the CIT(A). However, the reasoning given for the belated appeals before the CIT(A) was held unsatisfactory and the delay in filing appeals before the CIT(A) was not condoned by the Ld. CIT(A). Consequentially, both appeals were dismissed in limine by the Ld. CIT(A) holding as under:- ITA No.5047 & 5048/Del/2024 Amreen Page 4 “5.1 On going through the reasons, the assessee has stated that her husband was looking after the affairs of the tax matters and he had fever. The documentary evidence in this regard is not submitted further the assessee has also stated that she was not aware of time limit for filling of appeal and number of days were lost in finding tax professionals. It is stated that ignorance of law is not an excuse. 5.2 Having gone through the assessee's aforesaid application for condonation of delay, I find that there is a delay of 137 days in filing of appeal and no case has been made out by the assessee explaining delay. 5.3. It is thus seen that no circumstances have been explained nor any evidence for existence of any circumstances which prevented the assessee from filing the appeal in time has been filed. 5.4 The aforesaid application, therefore does not explain reasons much less showing and demonstrating sufficient cause. It is a settled position of law that the assessee is duty bound to explain each day's delay after the last date of limitation. It is a clear case of sheer negligence for non- pursuing available remedy in time. It is for the appellant concerned to explain the delay and it is not the function of the appellate authorities to find the cause of delay. The appellate authority has to examine whether sufficient cause has been shown by the party for condoning delay and whether such cause is acceptable or not. In that view of the matter, the Tribunal cannot condone the delay without asking the party concerned to explain the delay, by giving its own reason for the delay [DCM Ltd. vs. State of Tamil Nadu, (1995) 96 STC 263, 264(Madras)]. 5.5 In this regard, it will be relevant to examine how the Courts have dealt with similar cases. A reference may be made to decision of Hon'ble High Court of Madras in the case of Madhu Dadha vs. ACIT reported 317 ITR 458 (Mad); (2010) 186 Taxmann 8 (Madras). In this case, there was delay of 558 days in filing appeal. The Hon'ble Court observed that though liberal approach is to be adopted while deciding the condonation of delay, however, there is always a requirement of sufficient cause to explain the delay. In para 8, the Hon'ble Court examined the reasons and has observed as under. ITA No.5047 & 5048/Del/2024 Amreen Page 5 \"8. From a reading of the above, it is clear that the appellant has not explained the cause of delay in filing the appeal, especially when authorised representative viz., representative who was given charge to file the appeal had died exactly one year after the last date of filing of the appeal. When that be so, it is pertinent to point out that actually the filing of the appeal was not done and even after the death of Ashok Kumbat, the assessee had taken more than six months in filing the present appeal. The assessee had neither given any particular or details in the affidavit as on which date the papers were handed over to the counsel for preparing the appeal and on what occasion the assessee enquired about the progress in preparing the appeal and filing the same.” 5.5.1 The Hon'ble Court, in para 9, observed that averments in the affidavit were quite vague. Further, in para 11 and 12, Hon'ble court referred to the judgment of Hon'ble Supreme Court in the case of Collector, Land Acquisition v. Mst. Katiji [1987] 167 ITR 471 (SC)., wherein the Honourable Supreme Court had explained the fact for sufficient cause for condonation of delay. The Hon'ble court observed as under: \"In this case, considering the fact that the Government is the appellant and also the delay in filing the appeal is only four days, condoned the delay. It is specifically mentioned that the sufficient cause is adequately elastic to enable the courts to apply the law in a meaningful manner which sub-serves the ends of justice and they may liberal approach only for the reason that every day's delay must be explained, which does not mean that a pedantic approach should be made. The doctrine must be applied in a rational common sense and pragmatic manner. Finally, the Supreme Court had rightly held that turning to the facts of that particular case giving rise to that appeal, the Honourable Supreme Court was satisfied that sufficient cause exists for the delay. Therefore, the delay was condoned only after the Court came to the conclusion that the sufficient cause was shown and proved and which has been accepted by the said Court. 12. As far as the present case is concerned, the assessee has never made proper plea for sufficient cause giving evidence and proof beyond reasonable doubt for the delay, that too, for inordinate delay of 558 days in filing the appeal\". (emphasis supplied) ITA No.5047 & 5048/Del/2024 Amreen Page 6 5.5.2 In the subsequent paragraph 14, Hon'ble Court, observed as under: \"14. At this juncture, we have to be guided by the judgment in the case of T.N.M. Bank Ltd. v. App. Auty [1990] 1 LLN 457. In that particular case, the Division Bench of this court has held that, “...We are of the view that the question of limitation is not merely a technical consideration. Rules of limitation are based on principles of sound policy and principles of equity. Is a litigant liable to have a Damocles' sword hanging over his head indefinitely for a period to be determined at the whims and fancies of the opponent?\" In that decision, this Court has held that the delay of 285 days in preferring the appeal could not be condoned. It was held that the condonation of delay was not justified on facts and evidence of the case. As rightly pointed out that the Rules of limitation are based on principles of sound public policy and principles of equity. Though there is no presumption that the delay is occasioned deliberately or on account of culpable negligence, if the admitted facts in that case are taken note of, there is no doubt that the delay on the part of the appellant is deliberate and the appellant is clearly guilty of culpable negligence. Such negligent attitude of the appellant was not taken care to preserve the right of appeal and having been slept over for more than 558 days and not explained the delay without any reasonable doubt, the appellant cannot avail sympathy or discretion of this Court\". (emphasis supplied) 5.6 It is also a settled position of law that the delay is unexcusable unless sufficient cause is shown. In this regard, reliance is placed on Supreme Court decision in the case of Calcutta Municipal Corporation vs. Pawan Kumar Saraf (1999) 1 SC 39. This case was referred to and considered by Hon'ble ITAT Chandigarh in para 6.1 in the case of ACIT vs. Ranbir Chemicals 114 ITD 121. Relevant para 6.1 is reproduced below: \"6.1 Hon'ble Supreme Court in the case of UOI V. Tata Yodogawa Ltd 1988 (38) ELT 739 held that delay due to inter departmental correspondence and processing is not a sufficient cause for condonation of delay. Similarly in the case of Calcutta Municipal Corpn v. Pawan Kumar Saraf J.T. 1999 (1) S.C. 39 it was held by the Hon'ble Apex Court that even if the Court should be liberal ITA No.5047 & 5048/Del/2024 Amreen Page 7 in condonation of delay, it should be unexcusable unless sufficient cause is shown. Their Lordships in para 20 in the above case held as under: \"It was submitted that the Court should be liberal in condoning the delay. Liberal alright, but delay is unexcusable unless sufficient cause is shown. It is not the law that when an application seeking the condonation of delay is filed by the State or any authority, this Court must invariably condone the delay irrespective of whether sufficient cause is shown or not.\" (emphasis supplied) 5.7 It is also a settled position of law that a Proper Explanation and Reasons have to be given for explaining delay. Reliance is placed on the decision of Hon'ble Calcutta High Court in the case of CIT v. Metal Distributors Ltd. [1988] 172 ITR 356. This case was referred to and considered by Hon'ble ITAT Chandigarh in para 6.2 in the case of ACIT vs. Ranbir Chemicals 114 ITD 121. Para 6.2 is reproduced below: \"6.2 Hon'ble Calcutta High Court in the case of CIT v. Metal Distributors Ltd. [1988] 172 ITR 3561 held \"that in the absence of proper explanation for the delay in presenting for leave to appeal to the Hon'ble Supreme Court, the delay could not be condoned.\" On the similar matter and facts, the Hon'ble Rajasthan High Court in the case of State of Rajasthan v. Chaudhury Construction AIR 1988 Raj. 123 held- \"that in the absence of material particulars as to why delay had been caused, the delay could not be condoned by merely accepting the explanation that the delay occurred in the Government Office.\" (emphasis supplied) 5.8 In view of the foregoing discussion, factual matrix and the judicial precedents, I find that no case has been made out by the assessee for existence of sufficient cause in the application for condonation of substantial period of delay of 137 days in filing of appeal. I also find that it is also a settled position of law that the delay is un-excusable unless sufficient cause is shown. I further find that proper explanation and reasons for delay have not been given. Therefore, I am of the view that in the absence of existence of reasonable cause and also in the absence of ITA No.5047 & 5048/Del/2024 Amreen Page 8 proper explanation and reasons, without being supported by proper evidence, the appeal filed by the assessee late by 137, the delay is not condonable. Hence, the appeal of the assessee is not admitted and the same is dismissed in limine.” 5. The Ld. Counsel of the assessee reiterated the reasoning, already filed before the Ld. CIT(A), for condonation of the delay in filing these appeals. He submitted that the Ld. CIT(A) had not condoned the delay in filing these appeals though there was genuine reason for that as the appellant assessee, a non-filer of the ITR, was not well acquainted with the income tax matter and had not had any professional assistance to look after the filing of the appeal in the income tax matter. The delay was not an extra ordinary delay as it was less than 160 days in each case.The application for condonation of the delay annexed with the appeal memo (Form-35) filed before the Ld. CIT(A) stated the reason for delay as the appellant assessee’s husband who looked after her income tax matter fell ill. It was further stated that there was none other than her spouse to look after her business; therefore, illness derailed the routine work. Per contra, the Ld. DR submitted that the condonation applications in filing appeals before the CIT(A) did not reflect any reasonable cause on the part of the appellant assessee. He accordingly opposed condoning the delay in filing appeals before the CIT(A). 6. We have heard the Ld. Counsel and the Ld. DR. and perused the material available on record. There is no dispute and is an admitted fact that there has been a delay in filing appeals before the CIT(A). There is also ITA No.5047 & 5048/Del/2024 Amreen Page 9 no dispute that under section 254 of the Act, the Tribunal may pass such orders as it thinks fit. We are of the considered view that there was no malafide or deliberate delay in filing appeals before the CIT(A). In the interest of substantial justice, the delay in filing appeals before the CIT(A) deserve to be condoned and these appeals be decided on merit. We do not see any prejudice which will be caused to the Revenue in deciding these appeals on merit. In case of HL Malhotra & Company Pvt. Ltd. Vs DCIT, Circle12, New Delhi (ITA No. 211/2020 & CM Appeals 32045-32047/2020 dated 22nd December, 2020), the Hon’ble Delhi High Court had held that in absence of anything male fide 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. 7. The explanation of the appellant assessee therefore, becomes relevant to determine whether the same reflects sufficient and reasonable cause on her part in not presenting appeals before the CIT(A) 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 ITA No.5047 & 5048/Del/2024 Amreen Page 10 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 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 male fides. 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 appeals before the CIT(A) and it does not stand to benefit by resorting to such delay. Therefore, in the factual matrix of the present case, we find that there exist sufficient and reasonable cause for condoning the delay in filing appeals before the CIT(A) 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. ITA No.5047 & 5048/Del/2024 Amreen Page 11 8. In light of aforesaid discussions, in exercise of powers under section 254 of the Act, we hereby condone the delay in filing appeals before the CIT(A) as we are satisfied that there was sufficient cause for not presenting appeals before the CIT(A) within the prescribed time and these appeals. 9. In view thereof, without offering any comment on merit of the case, we deem it fit to set aside the impugned orders and remit the matter back to the file of the CIT(A) for deciding these cases, in accordance with law, after providing adequate opportunity of being heard to the assessee. The assessee, no doubt, shall cooperate in fresh appellate proceedings before the Ld. CIT(A). 10. In the result, both appeals of the assessee are allowed for statistical purposes. Order pronounced in open Court on 24th February, 2025 Sd/- Sd/- (VIKAS AWASTHY) (AVDHESH KUMAR MISHRA) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated:24/02/2025 Binita, Sr. PS Copy forwarded to: 1. Appellant 2. Respondent 3. PCIT 4. CIT(Appeals) 5. Sr. DR: ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI "