KETAN PRIYAVADAN SHAH,AHMEDABAD V. THE ITO, WARD-1(2)(3), AHMEDABAD

ITA 734/AHD/2025

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The case involves Ketan Priyavadan Shah, the assessee, who appealed against the order of the Commissioner of Income-tax (Appeals), National Faceless Appeal Centre, Delhi, which had dismissed his appeal in limine due to a delay of 114 days. The delay was attributed to the assessee's failure to receive the assessment order in time, as it went to the spam folder of his registered email. The Tribunal considered the principles of substantial justice and the Supreme Court's directives on condoning delays, emphasizing the absence of mala fide and the assessee's initial participation in the assessment proceedings. The Tribunal's decision to condone the delay and restore the matter for a decision on merits underscores the judicial preference for resolving disputes substantively rather than procedurally.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 717720 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-08-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2020-2021
• Appeal Filed On: 07-04-2025
• Other Referred Cases: Officer, Chief Postmaster General v. Living Media India Ltd., SRF Ltd. v. ACIT, Collector, Land Acquisition v. Mst. Katiji, Vedabai v. Shantaram Baburao Patil
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ATUL PANDEY
• Assessee Lawyers: PARIN SHAH
• Keywords: Set aside; Unexplained investment; Initiation of penalty proceedings
• Section: 143(3); 69; 234B

Judgement Text

"आयकर अपीलीय अिधकरण आयकर अपीलीय अिधकरण आयकर अपीलीय अिधकरण आयकर अपीलीय अिधकरण,अहमदाबाद \bयायपीठ अहमदाबाद \bयायपीठ अहमदाबाद \bयायपीठ अहमदाबाद \bयायपीठ ‘C’ अहमदाबाद। अहमदाबाद। अहमदाबाद। अहमदाबाद। IN THE INCOME TAX APPELLATE TRIBUNAL “C” BENCH, AHMEDABAD ]BEFORE MS. SUCHITRA R. KAMBLE, JUDICIAL MEMBER AND MAKARAND V.MAHADEOKAR, ACCOUNTANT MEMBER ITA No.734/Ahd/2025 Asstt.Year : 2020-2021 Ketan Priyavadan Shah 6, Vidyanagar Co-op Hsg. Society Ashram Road, Usmanpura Ahmedabad. PAN : AFGPS 3703 K Vs. The ITO, Ward-1(2)(3) Vejalpur Ahmedabad. (Applicant) (Responent) Assessee by : Shri Parin Shah, AR Revenue by : Shri Atul Pandey, Sr.DR सुनवाई क तारीख/Date of Hearing : 12/08/2025 घोषणा क तारीख /Date of Pronouncement: 14/08/2025 आदेश आदेश आदेश आदेश/O R D E R PER MAKARAND V.MAHADEOKAR, AM: This appeal by the assessee is directed against the order of the Commissioner of Income-tax (Appeals), National Faceless Appeal Centre, Delhi [hereinafter referred to as “Ld. CIT(A)”], dated 31.03.2025, for the Assessment Year 2020–21, whereby the Ld. CIT(A) dismissed the appeal of the assessee in limine on the ground of delay of 114 days in filing the appeal before him against the order dated 23.09.2022 passed under section 143(3) read with section 144B of the Income Tax Act, 1961 [hereinafter referred to as “the Act”] by Assessment Unit, Income Tax Department [hereinafter referred to as “Assessing Officer or AO”] 2. Facts of the case 2.1 The assessee filed his return of income on 10.01.2021 declaring total income of Rs.6,90,340/-. The case was selected for limited scrutiny under Printed from counselvise.com ITA No.734/Ahd/2025 3 Officer, Chief Postmaster General v. Living Media India Ltd., and SRF Ltd. v. ACIT, he dismissed the appeal in limine without going into the merits. 3. Aggrieved by the order of CIT(A), the assessee is in appeal before us raising following grounds of appeal: 1. The order passed by lower authorities is bad in law and required to be quashed. 2. Ld. NFAC erred in law and on facts in dismissing appeal in limine ignoring submission of the appellant. 3. Appellant prays that appeal may be set aside for adjudication on merits considering submission. 4. Ld. NFAC erred in law and on facts in confirming addition of Rs.13,35,000/- as unexplained investment by invoking section 69 of the Act. 5. Ld. NFAC erred in law and on facts in confirming addition of Rs.4,36,16,750/- as unexplained investment by invoking section 69 of the Act. 6. Ld. NFAC erred in law and on facts in confirming addition of Rs.89,93,282/- made by invoking section 56(2)(x) (b) of the Act. 7. Initiation of penalty proceedings under section 271AAC of the Act is unjustified. 8. Initiation of penalty proceedings under section 270A of the Act is unjustified. 9. Charging of interest under section 234A, 234B and 234C are unjustified. 4. During the course of hearing before us the Ld. Authorised Representative (AR) submitted that the delay of 114 days occurred due to bona fide reasons. The assessment order was not received physically or through portal intimation in time, as departmental communications went to the spam folder of the assessee’s registered e-mail. The assessee came to know of the order only on 13.02.2023 through an Inspector’s call and filed the appeal on 14.02.2023. 4.1 It was argued that there was no mala fide in the delay, the assessee had participated in the assessment proceedings initially, and the appeal should have been decided on merits. The AR prayed that the delay be condoned, the order of the Ld. CIT(A) be set aside, and the matter be restored to his file for decision on merits. Printed from counselvise.com ITA No.734/Ahd/2025 5 particularly when the additions made by the AO are substantial in quantum. 6.3 The Ld. CIT(A), while refusing condonation, has relied on certain decisions where there was no acceptable explanation. The facts of those cases are distinguishable because here, the assessee has shown participation in the assessment, absence of mala fide, and specific cause (non-receipt of order in time due to e-mail delivery issues). 6.4 The Hon’ble Supreme Court in Collector, Land Acquisition v. Mst. Katiji (167 ITR 471) has held that the expression “sufficient cause” should receive a liberal construction so as to advance substantial justice, and that generally, when there is no gross negligence or mala fide, delay should be condoned. Similarly, in Vedabai v. Shantaram Baburao Patil (253 ITR 798), it was emphasised that where technical considerations are pitted against substantial justice, the latter should prevail. 6.5 Considering the principles laid down by the Hon’ble Supreme Court and the interest of justice, we are of the considered view that the delay deserves to be condoned, and the matter restored to the Ld. CIT(A) for decision on merits. Accordingly, we condone the delay of 114 days in filing the appeal before the Ld. CIT(A). The impugned order of the Ld. CIT(A)is set aside, and the matter is restored to his file with a direction to decide the appeal on merits, after affording reasonable opportunity of hearing to the assessee. 7. In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the Court on 14th August, 2025 at Ahmedabad. Sd/- Sd/- (SUCHITRA R. KAMBLE) JUDICIAL MEMBER (MAKARAND V. MAHADEOKAR) ACCOUNTANT MEMBER (True Copy) Ahmedabad, dated 14/08/2025 Printed from counselvise.com "