MOHAN HARIBHAU KHEDKAR,PUNE V. I.T.O WARD-4(4), PUNE, PUNE

ITA 1299/PUN/2025

AI Insights

The case involves an appeal by Mohan Haribhau Khedkar against the order of the National Faceless Appeal Centre (NFAC), Delhi, which arose from an assessment order passed under sections 147 and 144B of the Income-tax Act, 1961. The primary contention was regarding the validity of the notice issued under section 148 and the subsequent additions made to the assessee's income. The ITAT admitted an additional ground concerning the addition of Rs.4,36,520 on account of a receivable from NESL, which the assessee argued was a bad debt. The Tribunal condoned a delay in filing the appeal and dismissed the legal challenges regarding the notice and reassessment proceedings as not pressed, focusing instead on the merit of the additional ground.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 708427 (ITAT-PUNE)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-07-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Assessment Year: 2014-2015
• Other Referred Cases: National Thermal Power Company Ltd. Vs CIT, Inder Singh Vs. State of Madhya Pradesh
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: DEEPAK KUMAR KEDIA
• Assessee Lawyers: ROHIT S. TAPADIYA
• Keywords: Condonation of delay; Reasonable cause
• Section: 148; 143(3)

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCHES “SMC”, PUNE BEFORE DR.MANISH BORAD, ACCOUNTANT MEMBER आयकर अपील सं. / ITA No.1299/PUN/2025 Assessment Year : 2014-15 Mohan Haribhau Khedkar 1102, b-2, Drumadal, Model Colony, Lakaki Road, Shivajinagar, Pune 411016 PAN: ABPPK2947N Vs. Income Tax Officer, Ward – 4(4), Pune Appellant Respondent आदेश / ORDER The captioned appeal at the instance of assessee pertaining to A.Y. 2014-15 is directed against the order dated 04.02.2025 of National Faceless Appeal Centre(NFAC), Delhi passed u/s.250 of the Income-tax Act, 1961 (hereinafter also called ‘the Act’) arising out of Assessment Order dated 12.03.2022 passed u/s.147 r.w.s144B of the Act. 2. Assessee has raised the following grounds of appeal: “On facts and in law and without prejudice to each other. 1. The order passed u/s 143(3) r.w.s147 be declared as null and void. 2. The notice issued u/s.148 of the Income Tax Act is invalid and therefore the notice be quashed. 3. The appellant craves its right to add to or alter the Grounds of Appeal at any time before or during the course of hearing of the case.” 2.1 Assessee has also raised an Additional Ground which reads as follows : Appellant by : Shri Rohit S. Tapadiya Respondent by : Shri Deepak Kumar Kedia Date of hearing : 08.07.2025 Date of pronouncement : 14.07.2025 ITA No.1299/PUN/2025 Mohan Haribhau Khedkar 2 “The ld. AO erred in making addition of Rs.4,36,520/- on account of balance receivable from NESL. The above additional ground may please be admitted in the interest of justice.” 3. Since the above additional ground raised by the assessee do not require any fresh facts to be investigated, the same is admitted for adjudication by virtue of judgment of Hon'ble Supreme Court in the case of National Thermal Power Company Ltd.Vs CIT 229 ITR 383. 4. Registry has informed that the appeal before this Tribunal is time barred by 20 days. Assessee has filed application for condonation of delay stating as under : “Hon Sir, The Order was received by me on 4th February 2025 and an appeal was required to be filed by 30th April 2025. However, it is being filed now. Thus, there is delay of 20 days the delay is caused due to following reason 1. After receipt of order, I happen to understand that the CIT-A has sent back to Matter to AO for fresh adjudication. So, I did not forward the said order to my consultant. 2. Thereafter, on 2nd May 2024, my consultant randomly checked portal and found that in my case order has been passed. 3. He then enquired with me and asked me about the receipt of order. I informed him that the I had received the order, however, as relief was granted by CIT-A, I was waiting for the further communication from Assessing officer. 4. My consultant then informed me that, although CIT-A had directed the AO to do the assessment afresh, CIT-A ought to have adjudicated the legal ground relating to validity of notice u/s 148 of the IT Act. 5. Accordingly, he then advised me to file appeal before your honour. As I was not aware about legal aspect of ground relating to validity of notice u/s 148, the appeal filing got delayed.” 6. Accordingly, the appeal has been filed before your honour with an prayer to condone the delay.” ITA No.1299/PUN/2025 Mohan Haribhau Khedkar 3 5. I have heard the rival submissions and gone through the averments made in the condonation application. Hon’ble courts by virtue of various judgments observed that when consideration of an appeal on merits is pitted against the rejection of a meritorious claim on the technical ground of the bar of limitation, the Courts lean towards consideration on merits by adopting a liberal approach towards ‘sufficient cause’ to condone the delay. The Court considering an application under section 5 of the Limitation Act may also look into the prima facie merits of an appeal. A liberal approach may be adopted when some plausible cause for delay is shown. Hon’ble Supreme Court in the case of Inder Singh Vs. State of Madhya Pradesh judgment dated 21.03.2025 (2025 INSC 382) condoned delay of 1537 days sub-serving the cause of justice. It was held so while observing that the appeal filed by the appellant with a delay was unintentional, much less due to any deliberate laches, and was well-explained by the State before the High Court. Hon’ble Court further held that in cases where the merits are significant, a more liberal approach may be adopted to allow for the examination of the case on its merits. Having gone through the averments made in the condonation application and considering the ratio laid down by the Hon’ble Court in the case of Inder Singh (supra), I am of the view that due to ‘reasonable cause’ assessee failed to file appeal within the stipulated time. I therefore condone the delay of 20 days and admit the appeal for adjudication. 6. During the course of hearing before me, Ld. Counsel for the assessee requested for not pressing the legal issue raised vide Ground Nos. 1 and 2 challenging the validity of notice ITA No.1299/PUN/2025 Mohan Haribhau Khedkar 4 issued u/s.148 of the Act and validity of re-assessment proceedings. Since these grounds have not been pressed, I hereby dismiss Ground Nos. 1 and 2 as ‘not pressed’. 7. The only effective issue remains for my consideration is that whether ld.CIT(A) erred in confirming the addition of Rs.4,36,520/- made by the Assessing Officer on account of balance receivable from NSEL. 8. Ld. Counsel for the assessee referring to the ledger account of the broker namely Phillip Commodities India Pvt. Ltd. submitted that the only profit earned by the assessee from the transaction carried out on the exchange is Rs.7132.22 and the remaining amount of Rs.2,25,045.18 which was outstanding as on 31.03.2014 is still not received from the broker and is almost a bad debt. 9. On other hand, ld. Departmental Representative vehemently argued supporting the orders of the lower authorities. 10. I have heard the rival contentions and perused the record placed before me. I observe that the assessee is an individual and income of Rs.11,58,660/- declared in the return furnished on 07.07.2014. Case picked up for scrutiny for issue of notice u/s.148 of the Act on the basis of information received from National Spot Exchange in respect of traders/brokers having exposure to NESL exchange platform and that there was alleged misuse and exploitation by unscrupulous brokers and traders to launder huge sums of black money. Ld. Assessing Officer based on the information available from the ledger account of the assessee found that sum of Rs.4,36,520/- was ITA No.1299/PUN/2025 Mohan Haribhau Khedkar 5 credited by the broker and made addition of the said sum. Income assessed at Rs.14,82,328/-. 11. Before me, Ld. Counsel for the assessee has referred to the ledger account of the broker namely Phillip Commodities India Pvt. Ltd. On going through the said ledger account, I find that on 15.07.2013 there was a purchase made by the assessee at Rs.4,49,095.10 and the payment for the said purchase was made by the assessee on 16.07.2013. Now the purchase made by the assessee was sold at Rs.4,56,755.52 leaving behind the profit of Rs.7660.42. After 15.07.2013 when the said transaction of purchase and sale was completed, there is credit balance of Rs.4,56,805.52 and there is no further credit transaction indicated in the ledger account and only there are debit transactions which are the amounts paid by the broker to the assessee against the outstanding balance payable to the assessee. I find that the net profit earned by the assessee from the transaction on National Spot Exchange is Rs.7660.42. Before me, it has been stated that the assessee did not disclose this income in the return of income because the outstanding amount receivable from the broker has turned out to be a bad debt and the assessee has landed up into net loss. Under these given facts and circumstances, I am of the considered view that ld. Assessing Officer grossly erred in making the addition of Rs.4,36,520/- because the income earned from the National Spot Exchange is Rs.7660.42 and therefore the remaining amount of addition of Rs.4,28,859.58 is hereby deleted. The additional ground raised by the assessee on merit is hereby partly allowed. ITA No.1299/PUN/2025 Mohan Haribhau Khedkar 6 12. In the result, appeal of the assessee is partly allowed. Order pronounced on this 14th day of July, 2025. Sd/- (MANISH BORAD) ACCOUNTANT MEMBER पुणे / Pune; \u0001दनांक / Dated : 14th July, 2025. Satish आदेश क\u0002 \u0003ितिलिप अ ेिषत / Copy of the Order forwarded to : 1. अपीलाथ / The Appellant. 2. \u000eयथ / The Respondent. 3. The Pr. CIT concerned. 4. िवभागीय ितिनिध, आयकर अपीलीय अिधकरण, “SMC” ब\u0014च, पुणे / DR, ITAT, “SMC” Bench, Pune. 5. गाड\u0004 फ़ाइल / Guard File. आदेशानुसार / BY ORDER, // True Copy // Senior Private Secretary आयकर अपीलीय अिधकरण, पुणे / ITAT, Pune. "