KODIYIL THAMEEM,PAYYANNUR V. THE INCME TAX OFFICER, WARD 4, KANNUR

ITA 766/COCH/2023

AI Insights

The case involves an appeal by Kodiyil Thameem ABC Sales Corporation against the order of the National Faceless Appeal Centre, Delhi, which confirmed the addition of Rs. 22,48,500 to the assessee's income for unexplained cash deposits during the demonetisation period. The assessee had initially filed a return declaring an income of Rs. 13,82,690 for the Assessment Year 2017-18. The Income Tax Officer, Ward-4, Kannur, made the addition, which was upheld by the CIT(A). The Tribunal noted that the CIT(A) had dismissed the appeal due to a significant delay (740 days) without adequately addressing the reasons for the delay provided by the assessee, which included health issues and difficulties during the COVID-19 pandemic.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 23438 (ITAT-COCHIN)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-01-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: misc
• Other Referred Cases: Commissioner, Nagar Parishad, Bhilwara Vs. Labour Court, Bhilwara and Another
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: LEENA LAL
• Assessee Lawyers: SURESH KUMAR
• Keywords: Condonation of delay; Set aside; Reasonable cause
• Section: 143(3)

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH BEFORE SHRI INTURI RAMA RAO, AM ITA No. 766/Coch/2023 Assessment Year: 2017-18 Kodiyil Thameem ABC Sales Corporation, ABC Esquire Payannur, Kannur 670307 [PAN: AFPPT3775D] .......... Appellant Vs. The Income Tax Officer Ward - 4, Kannur .......... Respondent Appellant by: Shri Suresh Kumar, CA Respondent by: Smt. Leena Lal, Sr. D.R. Date of Hearing: 12.12.2024 Date of Pronouncement: 09.01.2025 O R D E R This appeal filed by the assessee is directed against the order of the National Faceless Appeal Centre, Delhi [CIT(A)] dated 10.10.2023 for Assessment Year (AY) 2017-18. 2. Brief facts of the case are that the assessee filed return of income for AY 2017-18 on 27.02.2018 declaring a total income at Rs. 13,82,690/-. Against the said return of income, the assessment was completed by the Income Tax Officer, Ward-4, Kannur (hereafter “the AO”) vide order dated 10.12.12019 u/s. 143(3) of the 2 ITA No. 766/Coch/2023 Kodiyil Thameem Income Tax Act, 1961 (the Act) making an addition of Rs. 22,48,500/- on account of unexplained cash deposits during demonetisation period. 3. Being aggrieved, an appeal was filed before the CIT(A), who vide the impugned order confirmed the action of the AO. 4. I heard the rival contentions of both the parties and perused the material available on record. At the outset I find that the appellant filed appeal before the learned CIT(A) with a delay of 740 days. The appellant explained the delay before the CIT(A) stating that the person handling tax matter was ailing from kidney related problems and the assessment order was passed during the Covid-19 pandemic period, owing to the difficulties faced during the pandemic period the appellant could not communicate with the person handling tax matters. The learned CIT(A), without dealing with, as to how the said explanation does not constitute a reasonable cause had refused to condone the delay without assigning any reason by passing a cryptic order as under: - “Though the petition for condonation of delay in filing of appeal has been rejected and the appeal has been dismissed the case is also discussed on merits as under” 5. However, he proceeded to dispose the issue in appeal on merits. Once the delay is not condoned the CIT(A) ought not have dealt with the merits of the issue in the appeal as held by the Hon'ble 3 ITA No. 766/Coch/2023 Kodiyil Thameem Supreme Court in Commissioner, Nagar Parishad, Bhilwara Vs. Labour Court, Bhilwara and Another reported in 2009 (3) SCC 525 wherein the court has taken a view that while deciding an application for condonation of delay the High Court ought not to have gone into the merits of the case. It has been further held:- \"5. While deciding an application for condonation of delay, it is well settled that the High Court ought not to have gone into the merits of the case and would have only seen whether sufficient cause had been shown by the appellant for condoning the delay in filing the appeal before it. We ourselves have also examined the application filed under Section 5 of the Limitation Act before the High Court and, in our opinion, the delay of 178 days has been properly explained by the appellant. That being the position, we set aside the impugned order of the High Court. Consequently, the appeal filed before the High Court is restored to its original file. The High Court is requested to decide the appeal on merit in accordance with law after giving hearing to the parties and after passing a reasoned order.\" 6. Thus, the order passed by the CIT(A) suffers from ambiguity and the CIT(A) was not justified in refusing to condone the delay without giving reasons as to how the explanation tendered by the appellant does not constitute sufficient cause for delay. 7. In the circumstances, I am of the considered opinion that the matter requires remand to the file of the CIT(A) for de novo adjudication in accordance with law after affording opportunity of hearing to the assessee. 4 ITA No. 766/Coch/2023 Kodiyil Thameem 8. In the result, the appeal filed by the assessee stand allowed for statistical purposes. Order pronounced in the open court on 9th January, 2025. Sd/- (INTURI RAMA RAO) ACCOUNTANT MEMBER Cochin, Dated: 9th January, 2025 n.p. Copy to: 1. The Appellant 2. The Respondent 3. The Pr. CIT concerned 4. The Sr. DR, ITAT, Cochin 5. Guard File Assistant Registrar ITAT, Cochin "