K.B. PROCESSING,KOLKATA V. I.T.O., WARD - 50(6), KOLKATA

ITA 2305/KOL/2024

AI Insights

The case involves K. B. Processing, the appellant, who did not file a return of income for the assessment year 2017-18. The Income Tax Officer (ITO) noticed substantial cash deposits during the demonetization period and assessed the income, adding Rs. 39,50,020. The assessee's appeal to the Ld. CIT(A) was dismissed due to a significant delay in filing, which was later found to be unintentional. The tribunal, referencing Supreme Court precedents, decided to remit the case back to the Ld. CIT(A) for a fresh assessment, emphasizing the need to advance substantial justice.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 469720 (ITAT-KOLKATA)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-03-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2017-2018
• Other Referred Cases: Shakuntala Devi Jain v. Kuntal Kumari [AIR 1969 SC 575], N.Balakrishnan v. M.Krishnamurthy [1998 (7) SCC 123]
• Laws Referred To: Income Tax Act
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Condonation of delay
• Section: 142(1); 13

Judgement Text

"आयकर अपीलȣय अͬधकरण, कोलकाता पीठ “एसएमसी’’, कोलकाता IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH: KOLKATA Įी Ĥदȣप क ुमार चौबे, ÛयाǓयक सदèय एवं Įी संजय अवèथी, लेखा सटèय क े सम¢ [Before Shri Pradip Kumar Choubey, Judicial Member &Shri Sanjay Awasthi, Accountant Member] I.T.A. No. 2305/Kol/2024 Assessment Year: 2017-18 K. B. Processing (PAN: AALFK 4243 L) Vs. ITO, Ward-50(6), Kolkata Appellant / ) अपीलाथȸ ( Respondent / Ĥ×यथȸ Date of Hearing / सुनवाई कȧ Ǔतͬथ 20.02.2025 Date of Pronouncement/ आदेश उɮघोषणा कȧ Ǔतͬथ 17.03.2025 For the assessee / Ǔनधा[ǐरती कȧ ओर से Shri Anil Kumar Kochar, Advocate For the revenue / राजèव कȧ ओर से Shri Gautam Patra, Addl. CIT (D.R) Shri Pratap Kumar Mishra, ITO, Ward- 43(1), Kolkata ORDER / आदेश Per Pradip Kumar Choubey, JM: This is an appeal preferred by the assessee against the order of the Ld. Commissioner of Income Tax (Appeals)-NFAC, Delhi (hereinafter referred to as the “Ld. CIT(A)”] dated 18.09.2024 for the AY 2017-18. 2. Brief facts of the case of the assessee are that the assessee did not file return of income for the AY 2017-18. It has come into notice of the AO that a huge cash deposit 2 I.T.A. No.2305/Kol/2024 Assessment Year: 2017-18 K. B. Processing in the back account particularly during the demonetization period and also during the FY 2016-17 was made. Accordingly, a notice u/s 142(1) was issued to the assessee. The assessee did not file any return in response to the same and he was non-compliant. A show cause has also been issued but no one from the assessee’s side either appear or made in written compliance, as a result of which, the AO assessed the income and added Rs. 39,50,020/- 3. Aggrieved by the said order, the assessee preferred an appeal before the Ld. CIT(A) wherein the appeal of the assessee has been dismissed on account of delay in filing of the appeal. Being aggrieved and dissatisfied, the assessee preferred an appeal before us. 4. The Ld. Counsel instead of arguing into the merit of the case has only submitted that the assessee has to give an opportunity to place his case before the Ld. CIT(A) as the delay caused by the assessee was not intentional rather the copy of the order passed by the AO was come into the notice of the assessee recently when he received the penalty orders. The Ld. Counsel submits that there is no existence of the firm during the year and the order having been sent in the inbox of the of the assessee which was not regularly looked into and was only recently upon receiving call from the Department as the outstanding taxes the same came into the knowledge of the assessee and thereafter he took immediate action. The Ld. Counsel submits that assessee filed an appeal on 29.10.2021 though it ought to be filed on 03.12.2019 but since it has no knowledge of passing order, hence, the delay was therefore not intentional. The Ld. Counsel submits in the interest of justice, assessee has to be given an opportunity to place his case before the Ld. CIT(A) after condoning the delay. The assessee has filed an affidavit to this effect. 5. Contrary to that the Ld. D.R supports the impugned order. 6. Upon hearing the Counsel for the respective parties, we have gone through the order passed by the AO as well as Ld. CIT(A). There is no dispute that the order passed 3 I.T.A. No.2305/Kol/2024 Assessment Year: 2017-18 K. B. Processing by the AO is also an ex-parte order. There was no compliance before the AO as well as Ld. CIT(A). The appeal of the assessee has been dismissed on account of delay as the appeal was filed after a delay of 665 days. The Ld. CIT(A) has held in its order that there was no sufficient cause has been mentioned in the condonation petition by the assessee. We have gone through the affidavit filed by the assessee which is as follows- 4 I.T.A. No.2305/Kol/2024 Assessment Year: 2017-18 K. B. Processing 5 I.T.A. No.2305/Kol/2024 Assessment Year: 2017-18 K. B. Processing 7. We have also gone through the order of the Hon’ble Supreme Court in this context and find that Hon’ble apex court has held thus- Shakuntala Devi Jain v. Kuntal Kumari [AIR 1969 SC 575], this Court reiterated the following classic statement from Krishna vs. Chathappan [1890 ILR 13 Mad 269]: \"... Section 5 gives the courts a discretion which in respect of jurisdiction is to be exercised in the way in which judicial power and discretion ought to be exercised upon principles which are well understood; the words `sufficient cause' receiving a liberal construction so as to advance substantial justice when no negligence nor inaction nor want of bona fides is imputable to the appellant.\" 7.1. In N.Balakrishnan v. M.Krishnamurthy [1998 (7) SCC 123], this Court held: \"It is axiomatic that condonation of delay is a matter of discretion of the court. Section 5 of the Limitation Act does not say that such discretion can be exercised only if the delay is within a certain limit. Length of delay is no matter, acceptability of the explanation is the only criterion. Sometimes delay of the shortest range may be uncondonable due to a want of acceptable explanation whereas in certain other cases, delay of a very long range can be condoned as the explanation thereof is satisfactory. Once the court accepts the explanation as sufficient, it is the result of positive exercise of discretion and normally the superior court should not disturb such finding, much less in revisional jurisdiction, unless the exercise of discretion was on wholly untenable grounds or arbitrary or perverse. But it is a different matter when the first court refuses to condone the delay. In such cases, the superior court would be free to consider the cause shown for the delay afresh and it is open to such superior court to come to its own finding even untrammeled by the conclusion of the lower court. The primary function of a court is to adjudicate the dispute between the parties and to advance substantial justice...... Rules of limitation are not meant to destroy the rights of parties. They are meant to see that parties do not resort to dilatory tactics, but seek their remedy promptly. A court knows that refusal to condone delay would result in 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.” 8. Going over the facts of the case and apex court judgment we are inclined to remit back appeal of the assessee to the file to the Ld. CIT(A) for fresh order after condoning the delay. 6 I.T.A. No.2305/Kol/2024 Assessment Year: 2017-18 K. B. Processing In the result, the appeal of assessee is allowed for statistical purposes. Order is pronounced in the open court on 17th March, 2025 Sd/- Sd/- (Sanjay Awasthi/संजय अवèथी) (Pradip Kumar Choubey /Ĥदȣप क ुमार चौबे) Accountant Member/लेखा सदèय Judicial Member/ÛयाǓयक सदèय Dated: 17th March, 2025 SM, Sr. PS Copy of the order forwarded to: 1. Appellant- K. B . Processing, Bodai Panchayat Road, Jugberia, Sodpur, Kolkata- 700110 2. Respondent – ITO, Ward-50(6), Kolkata 3. Ld. CIT(A)-NFAC, Delhi 4. Ld. Pr. CIT- , Kolkata 5. DR, Kolkata Benches, Kolkata (sent through e-mail) True Copy By Order Assistant Registrar ITAT, Kolkata Benches, Kolkata "