PRECISELY SOFTWARE AND DATA INDIA PRIVATE LIMITED,NEW DELHI V. DEPUTY COMMISSIONER OF INCOME-TAX, DELHI

ITA 7130/DEL/2025

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The case involves Precisely Software and Date India P. Ltd, which appealed against the order of the Additional/Joint Commissioner of Income-tax (Appeals)-11, Mumbai, concerning the Assessment Year 2018-19. The primary issue was the disallowance of a gratuity provision amounting to Rs.4,85,07,732/- made by the Centralized Processing Centre (CPC) in the intimation under section 143(1) of the Income Tax Act, 1961. The assessee had initially disallowed a lesser amount of Rs.2,73,34,330/- in its return, which included contributions towards Gratuity and Provident Fund. The Tribunal condoned the delay in filing the appeal, which was initially dismissed by the CIT(A) on grounds of limitation, and decided to hear the case on merits.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 842394 (ITAT-DELHI)
• Duration Of Justice: 3 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-02-2026
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2018-2019
• Appeal Filed On: 07-11-2025
• Other Referred Cases: Collector Land Acquisition vs. Mst. Katiji & Ors. 167 ITR 471, Ram Nath Sao @ Ram Nath Sahu & Others vs Gobardhan Sao and Others, 2002 SCC (3) 195/2002 SCR (2) 77
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MANOJ KUMAR
• Assessee Lawyers: KASHISH GUPTA; CHARTERED ACCOUNTANT; SHRUTI KHIMTA
• Keywords: Condonation of delay; Set aside; Reasonable cause

Judgement Text

"आयकर अपीलीय अधिकरण धिल्ली पीठ “सी”, धिल्ली श्री धिकास अिस्थी, न्याधयक सिस्य एिं श्री ब्रजेश क ुमार स िंह, लेखाकार सिस्य क े समक्ष IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “C”, DELHI BEFORE SHRI VIKAS AWASTHY, JUDICIAL MEMBER& SHRI BRAJESH KUMAR SINGH, ACCOUNTANT MEMBER आअसं.7130/धिल्ली/2025(नि.व. 2018-19) ITA No. 7130/DEL/2025 (A.Y.2018-19) Precisely Software and Date India P. Ltd, 6 Bhikaji Cama Place, 709-710, Ansal Chamber-II, RK Puram (Main), New Delhi 110066 PAN: AAECM-9134-E ...... अपीलार्थी/Appellant बिाम Vs. Deputy Commissioner of Income Tax, Circle 19(1), CR Building, Delhi 110002 .....प्रनिवादी/Respondent अपीलार्थी द्वारा/ Appellant by: Ms. Kashish Gupta, Chartered Accountant & Ms. Shruti Khimta, Advocate प्रधििािीद्वारा/Respondent by: Shri Manoj Kumar, Sr. DR सुिवाई की निथर्थ/ Date of hearing : 25/02/2026 घोषणा की निथर्थ/ Date of pronouncement : 25/02/2026 आदेश/ORDER PER VIKAS AWASTHY, JM: This appeal by the assessee is directed against the order of Additional/Joint Commissioner of Income-tax (Appeals)-11, Mumbai (hereinafter referred to as ‘the CIT (A)’) dated 29.08.2025, for the Assessment Year 2018-19. 2. The appeal is time barred by 07days. The assessee has filed an application for condonation of delay citing reasons causing delay in filing of appeal. After perusal of the same, we are satisfied that delay in filing of appeal is not intentional. The delay has been caused for the reasons stated in petition which appears to be Printed from counselvise.com 2 ITA No. 7130/DEL/2025 (A.Y.2018-19) bonafide. Thus, delay of 07days in filing of appeal is condoned and appeal is admitted for decision on merits. 3. Ms. Kashish Gupta, appearing on behalf of the assessee submits that the assessee had filed its original return of income u/s.139(1) of the Income Tax Act,1961(hereinafter referred to as ‘the Act’) on 30.11.2018. During the year under consideration, the assessee had created a provision of gratuity amounting to Rs.4,85,07,732/- in its books of account and made payment of gratuity of Rs.2,11,73,402/-. While filing return of income the assessee had suo moto disallowed payments of contribution towards Provident Fund and Gratuity Fund amounting to Rs.2,73,34,330/-. To substantiate her submissions, the ld. AR referred to Column 11 of the ITR-6 for AY 2018-19 at page 30 of the paper book. She further submitted that in The Tax Audit Report, ‘Provision for payment of gratuity not allowable u/s.40A(7) of the Income Tax Act,1961(hereinafter referred to as ‘the Act’)’ was duly reported as Rs.4,85,07,732/-. The said amount reflected in Audit Report was without netting off/adjustment of gratuity payment of Rs.2,11,73,402/- . In intimation issued u/s.143(1) of the Act the Centralized Processing Centre (CPC) again made disallowance of Rs.4,85,07,732/-. Against the disallowance made in intimation u/s.143(1) of the Act dated 11.09.2019, the assessee filed appeal before the CIT(A). There was delay of 305 days in filing of appeal before the CIT(A). The assessee filed an application for condonation of delay in filing of appeal. The reason for delay in filing of the appeal before the First Appellate Authority was explained stating that initially the assessee was not aware of the correct course of action to be taken against the intimation issued u/s.143(1) of the Act. The assessee was in dilemma to file rectification petition or appeal against intimation u/s.143(1) of the Act. Thereafter, it was on account of Covid-19 pandemic which further resulted in Printed from counselvise.com 3 ITA No. 7130/DEL/2025 (A.Y.2018-19) delay in filing of appeal. The CIT(A) dismissed appeal of the assessee on the ground of limitation. The ld. AR submits that the assessee has prima facie good case on merits. In case appeal of the assessee is not heard on merits, the assessee shall suffer huge financial loss. There was no reason for the assessee not to file appeal against the addition made in proceedings u/s.143(1) of the Act. It was only because of the act that the assessee was not properly advised immediately after receiving of intimation u/s.143(1) of the Act is resulted in delay in filing of appeal before the CIT(A). 4. Per contra, Shri Manoj Kumar, representing the department vehemently defended the impugned order. The ld. DR submits that the assessee has not been able to justify/explain reason for delay in filing of appeal before the CIT(A). Therefore, the appeal of assessee was dismissed on the ground of limitation. 5. Both sides heard, orders of the authorities below examined. Undisputedly, there was delay of more than 305 days in filing of appeal before the CIT(A). The assessee had filed an application before the CIT(A) for condoning delay but the said application did not find favour with the First Appellate Authority. After examining the application and considering the submissions of the assessee, we find reasonable cause for delay in filing of appeal before the First Appellate Authority. 6. The Hon’ble Apex Court in an unequivocal manner has repeatedly held that acceptance of reason given by the appellant/petitioner explaining delay should be the rule and refusal an exception. By taking a pedantic and hyper technical view the explanation furnished should not be rejected, causing loss and irreparable injury to the party against whom the lis terminates. The expression “sufficient cause” should be liberally construed so as to sub-serve the ends of justice. Printed from counselvise.com 4 ITA No. 7130/DEL/2025 (A.Y.2018-19) 6.1 The Hon’ble Apex Court in the case of Collector Land Acquisition vs. Mst. Katiji & Ors. 167 ITR 471 has held that liberal approach should be adopted while dealing with an application praying for condonation of delay. Refusing to condone delay can result in meritorious matter being thrown out at the very threshold and cause of justice being defeated. Pedantic and hyper technical approach should not be adopted while dealing with an application for condonation of delay. 6.2 The Hon’ble Apex Court in the case of Ram Nath Sao @ Ram Nath Sahu & Others vs Gobardhan Sao and Others, 2002 SCC (3) 195/2002 SCR (2) 77 has held that the expression “sufficient cause” within the meaning of Section 5 of the Limitation Act or Order 22 Rule 9 of Civil Procedure Code or any other similar provision should receive a liberal construction so as to advance substantial justice. The courts should not proceed with the tendency of finding fault with cause shown and reject the petition by a slipshod order in over jubilation of disposal derive. Acceptance of explanation furnished should be the rule and refusal, an exception, more so when no negligence or inaction or want of bonafide can be imputed to the defaulting party. 7. On merits, the assessee has been able to demonstrate that it has made a suo motu disallowance of Rs. 2,73,34,330/- on account of contribution towards Gratuity and Provident Fund for its employees. The disallowance of Rs. 4,85,07,732/- made by the CPC pertains to the provision created during the relevant year and reported in the Tax Audit Report. The contribution made during the year towards Gratuity and Provident Fund has already been suo motu disallowed by the assessee. In principle, we are in agreement with the submissions of the assessee that once a suo motu disallowance has been made, no further Printed from counselvise.com 5 ITA No. 7130/DEL/2025 (A.Y.2018-19) disallowance of the same amount is warranted. However, for the purpose of quantification, we deem it appropriate to restore the issue to the file of the AO to quantify the exact amount of disallowance to be made under section 40A(7) of the Act. If the suo motu disallowance made by the assessee is commensurate with the disallowance required to be made, no further disallowance is warranted. 8. In the result, impugned order is set aside and appeal of the assessee is allowed in the terms aforesaid. Order pronounced in the open court on Wednesday the 25th day of February, 2026. Sd/- Sd/- (BRAJESH KUMAR SINGH) (VIKAS AWASTHY) लेखाकार सदस्य/ACCOUNTANT MEMBER न्यानयक सदस्य/JUDICIAL MEMBER धिल्ली / Delhi, ददिांक/Dated 26/02/2026 NV/- प्रतिलिपि अग्रेपििCopy of the Order forwarded to : 1. अपीलार्थी/The Appellant , 2. प्रनिवादी/ The Respondent. 3. The PCIT 4. ववभागीय प्रनिनिथि, आय.अपी.अथि., सिल्ली /DR, ITAT, धिल्ली 5. गार्ड फाइल/Guard file. BY ORDER, //True Copy// (Asstt. Registrar) ITAT, DELHI Printed from counselvise.com "