RADHE FINSEC INDIA LTD.,AHMEDABAD V. THE ITO, WARD-3(1)(2), AHMEDABAD

ITA 506/AHD/2025

AI Insights

The case involves Radhe Finsec India Ltd., which appealed against the order of the Additional Commissioner of Income Tax (Appeals), Visakhapatnam, which had dismissed their appeal for condoning a delay of 2490 days in filing against an intimation under section 143(1) of the Income Tax Act, 1961, for the Assessment Year 2013-14. The intimation had resulted in a double addition to the assessee's income due to an inadvertent error in reporting income in their tax return. The Tribunal found that the delay was due to a reasonable cause, considering the serious health issues of the assessee's director's father, which prevented timely legal recourse.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 398358 (ITAT-AHMEDABAD)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-06-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2013-2014
• Other Referred Cases: CIT v. K.S.P. Shanmugavel Nadar and Ors, Basawaraj v. Land Acquisition Officer, Ajay Dabre v. Pyare Ram, Vareli textile industry vs CIT
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Condonation of delay; Set aside; Reasonable cause; Period of limitation; TDS
• Section: 234B; 115JB

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD “C” BENCH Before: Smt. Annapurna Gupta, Accountant Member And Shri T. R. Senthil Kumar, Judicial Member Radhe Finsec India Ltd. First Floor, 2 Jai Visat Mata, Society, “D” Cabin Road Sabarmati, Ahmedabad-380018 Gujarat PAN: AABCR0461L (Appellant) Vs The ITO, Ward-3(1)(2), Ahmedabad (Respondent) Assessee Represented: Shri Sanjay R. Shah, A.R. Revenue Represented: Shri Sudhakar Verma, Sr.D.R. Date of hearing : 03-06-2025 Date of pronouncement : 06-06-2025 आदेश/ORDER PER : T.R. SENTHIL KUMAR, JUDICIAL MEMBER:- This appeal is filed by the Assessee as against the appellate order dated 02.01.2025 passed by the Additional Commissioner of Income Tax (Appeals), Visakhapatnam refusing to condone the delay of 2490 days in filing the above appeal arising out of the intimation passed under section 143(1) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) relating to the Assessment Year 2013-14. ITA No: 506/Ahd/2025 Assessment Year: 2013-14 I.T.A No. 506/Ahd/2025 A.Y. 2013-14 Page No Radhe Finsec India Ltd. vs. ITO 2 2. Brief facts of the case is that the assessee is a Private Limited Company engaged in the business of financial services. For the Asst. Year 2013-14, assessee filed its Return of Income on 29-09- 2013 declaring income of Rs.32,18,590/- and paying tax of Rs.9,94,545/-. The assessee inadvertently reported the figure of profit and gains from business in Part-A at col. 53d, (in ITR Form No. 6) which was meant for reporting only if regular books of accounts are not maintained. Whereas in Part-B, col.A-37, Schedule-BP, the assessee reported the income of Rs.32,18,589/- which has resulted in double reporting of the income in two different places (in ITR Form No. 6). The return was processed u/s. 143(1) and made double addition of Rs.64,59,669/- and demanded a tax of Rs.13,10,240/-. This intimation was not served on the assessee. However the tax demand thereon was adjusted against the refund due relating to the Asst. Year 2017-18 while passing assessment order dated 27-02-2018. Thus the assessee came to know about the intimation passed u/s. 143(1) for the Asst. Year 2013-14. Therefore the Director of the assessee Company filed a Notarized Affidavit explaining the delay in filing the appeal before Ld. CIT(A) which reads as follows: “I the undersigned, Mr Rajesh Kumar Soni S/o late Shri Trilok Chand Soni, aged about 55 years, Director of Radhe Finsec (India) Limited (the company), resident of P-5 Parshwanath Colony, Anted Road, Vaishali Nagar, Ajmer do hereby solemnly on oath affirm that - 1 I am looking after the financial and taxation matters of the company for past many years. 2 For the Asst. Year 2013-14, the company filed its return of income on 29.09.2013 disclosing an amount of Rs. 32,41,080/- u/s. 115JB as against the normal returned income of Rs. 32,18,589/- and paid appropriate tax of Rs.9,94,545/- which after deducting credit u/s I.T.A No. 506/Ahd/2025 A.Y. 2013-14 Page No Radhe Finsec India Ltd. vs. ITO 3 115JAA of Rs. 3,76,957/- came to Rs. 6.17, 588/ The said amount of tax along with interest u/s 234A 234B and 234C resulted into aggregate income tax liability of Rs. 6,40,206/ which after taking credit of TDS of Rs. 4,12,868/- was paid off 3. The Income Tax Officer, Central Processing Centre, Bengaluru issued an intimation u/s. 143(1) of the IT Act dated 15.12.2014 to the company, wherein they doubly counted the income under the normal provisions of the Act at Rs 64,59 670/- and calculated the total amount of tax liability upon the company including interest at Rs.19,21,708/- 4. The said intimation was lost sight of by me because of the fact that my father was undergoing treatment for heart ailment and neurological problems, due to which, he was under medical treatment from December 2014 onwards, during which time, the intimation u/s 143(1) came to be issued to the company and since I was not attending office regularly the said intimation was lost sight of by me 5 For the purpose of corroborating the illness of my father which was very serious, I append with this affidavit relevant papers for his treatment at Annexure-A collectively. 6. Due to the seriousness of illness of my father, I was not attending the office regularly, as a result of which, the above intimation escaped from my notice and proper legal recourse could not be taken by the company against the demand raised pursuant to the said notice u/s.143(1) of the Act. 7 It was only when there was a notice from the Income Tax Department for Asst. Year 2017-18 for adjusting the demand raised pursuant to the intimation u/s. 143(1) for Asst. Year 2013-14 that, I tried to inquire as to why such demand was raised and at that time, it was found out that the said demand has arisen because of the incorrect adjustment made in the intimation u/s.143(1) for Asst. Year 2013-14. 8. I immediately contacted my tax consultant but because of his serious health issue, he could not take care of the disputed demand, as a result of which, I contacted another tax consultant for guiding me and the company in the matter of income tax demand for Asst. I.T.A No. 506/Ahd/2025 A.Y. 2013-14 Page No Radhe Finsec India Ltd. vs. ITO 4 Year 2013-14, who advised me to file belated appeal explaining the circumstances mentioned for the above condonation of delay in filing appeal. 9. This affidavit is filed in order to put in perspective the reasons for delay in filing appeal against intimation u/s.143(1) of the Act for the Asst. Year 2013-14 with a request to the Hon'ble Commissioner of Income Tax (Appeals) under faceless regime to kindly condone the same due to reasonability and sufficiency of the cause, which led to delay in filing appeal, which has been enumerated in the earlier paragraphs. Verified today on this 1st day of May, 2023 at AJMER” 3. In support of the Affidavit, the assessee also filed copies of the medical reports of his 71 years old father undergone medical treatment during that period. However Ld. Addl.CIT(A) not satisfied with the reasons given by the assessee and thereby dismissed the appeal in-limine. 4. Aggrieved against the appellate order, assessee is in appeal before us raising the following Grounds of Appeal: Your Appellant, being aggrieved by the order passed by Addl/JCIT(A)-2, Vishakhapamam [hereinafter referred to as 'CIT(Appeals)'], presents this appeal on the following grounds of appeal, which are without prejudice to each other 1 The learned CIT(Appeals) erred in law and on facts in dismissing the appeal on the ground that provisions of section 249(3) are not fulfilled, and hence, the appeal is treated as time barred. The learned CIT(Appeals) erred in so holding inspite of the fact that the Appellant had filed an affidavit explaining the reasonability of the cause in delay in filing appeal before him by way of affidavit explaining the circumstances due to which the delay occurred. The learned CIT(Appeals) grossly erred in totally disregarding the affidavit filed by the Appellant along with the relevant papers showing the reasonability of the cause for delay in filing the appeal. It is submitted that the order passed by the learned CIT(Appeals) I.T.A No. 506/Ahd/2025 A.Y. 2013-14 Page No Radhe Finsec India Ltd. vs. ITO 5 be set aside with a direction to pass order on merits of the case for doing substantial justice in the matter. 2 The learned CIT (Appeals) grossly erred in rejecting the appeal at the threshold without looking into the merits of the case of the Appellant, and thus, erred in ignoring the substance of the matter, and thus, ignoring the cause of substantial justice in the matter It is submitted that it be so held now and the learned CIT(Appeals) be directed to decide the issue on merits of the case 3 The learned Assessing Officer erred in law and on facts in making addition of Rs 32,41,080/- to the returned income of the Appellant while processing the return u/s. 143(1), which was wrongly made and the learned CIT(Appeals) erred in not dealing with this issue while rejecting the appeal of the Appellant before him at the threshold It is submitted that it be so held now and the addition of Rs. 32,41,080/- made to the returned income of the Appellant be deleted. 4. The learned Assessing Officer erred in law and on facts in charging interest u/s 234B and 234C of the Act and the learned CIT(Appeals) erred in confirming the same by not entertaining the ground on the merits of the case. It is submitted that the same be deleted 5. The appellant reserves the right to add, alter or amend any of the grounds of appeal. 5. Ld. Counsel Mr. Sanjay R. Shah appearing for the assessee submitted that the Addl.CIT(A) without considering the Notarized Affidavit submitted before him and the medical illness of the Director’s father refused to condone the delay. In fact, the intimation order came to the knowledge of the assessee after adjusting the demand against the refund due for the Asst. Year 2017-18. Thus it is neither willful nor wanton in filing the appeal with the delay of 2490 days before Ld. CIT(A). However on merits, the assessee has a good case making double entry of income by I.T.A No. 506/Ahd/2025 A.Y. 2013-14 Page No Radhe Finsec India Ltd. vs. ITO 6 wrongly filling Form No. 6. Therefore Ld. Counsel requested to condone the delay and setaside the matter back to the file of Jurisdictional Assessing Officer and pass fresh order on merits of the case. 6. Per contra Ld. Sr. D.R. Shri Sudhakar Verma appearing for the Revenue strongly opposed the delay and requested to confirm the order passed by the Lower Authorities. 7. We have given our thoughtful consideration and perused the materials available on record. Prima facie there is inadvertent mistake in filing the Return of Income in Form No. 6 by the assessee which has resulted in raising the tax demand. Since the tax demand was adjusted as against the refund due relating to the subsequent Asst. Year 2017-18. Thereafter the assessee realized the intimation order passed u/s. 143(1) for the Asst. Year 2013-14 and therefore filed an appeal with the delay of 2490 days. Certainly, the delay is huge. But length of the delay becomes insignificant, if there was sufficient cause for such delay which prevented the assessee in filing the appeal. As such we need to consider the cause for the delay and not the length of the delay. Accordingly in our considered view when there was a reasonable cause, the period of delay may not be relevant factor. The Hon’ble Madras High Court in the case of CIT v. K.S.P. Shanmugavel Nadar and Ors reported in 153 ITR 596 held as under: “Since in this case the assessee had been prosecuting other remedies, the time taken by those proceedings should naturally be taken while determining the question whether the assessee had sufficient cause for not presenting the appeal in time. Therefore, the revenue was not right in submitting that the appeal filed under section 17 was an appeal against the original order of assessment under the Act, which was passed about 20 years ago, as it was evident that the appeal was against an order of rejection of relief by the I.T.A No. 506/Ahd/2025 A.Y. 2013-14 Page No Radhe Finsec India Ltd. vs. ITO 7 assessing authority. Thus, though the Tribunal's view that there was no question of limitation in such cases, was not correct yet the AAC was right in condoning the delay and entertaining the appeal.” 7.1 From the above we note that the Hon’ble Madras High Court was pleased to condone the delay for 20 years approximately by holding that there was sufficient and reasonable cause on the part of the assessee for not filing the appeal within the period of limitation. Thus, the delay in the instant case is 2490 days which cannot be considered to be inordinate or excessive in comparison to the delay of 20 years. 7.2 The next controversy arises what is the sufficient cause, it has not been defined anywhere under the Act, but refers to an occasion which is beyond the control of a normal person. What is beyond the control of a person, the test of reasonable approach under normal circumstances should be applied. As such no hard and fast rule can be applied to figure out the whether there was sufficient cause for the delay. It depends upon case-to-case basis. However, the Hon’ble Courts in the series of judgements have held that while condoning the delay the expression of ‘sufficient cause’ should be construed for advancing substantial justice to the party concerned. For evaluating ‘sufficiency of cause’ and then, for deciding condonation of delay, following principles laid down by Hon'ble Apex Court in the case of Mst. Katiji (167 ITR 471) should be kept in mind: (i) Ordinarily, a litigant does not stand to benefit by lodging an appeal late. (ii) Refusing to condone delay can result in a meritorious matter being thrown out at the very threshold and cause of justice being defeated. As against this when delay is condoned the highest that can happen is that a cause would be decided on merits after hearing the parties. I.T.A No. 506/Ahd/2025 A.Y. 2013-14 Page No Radhe Finsec India Ltd. vs. ITO 8 (iii) \"Every day's delay must be explained\" does not mean that a pedantic approach should be taken. Why not every hour's delay, every second's delay? The doctrine must be applied in a rational common-sense pragmatic manner. (iv) When substantial justice and technical considerations are pitted against each other, cause of substantial justice deserves to be preferred for the other side cannot claim to have vested right in injustice being done because of a non- deliberate delay. (v) There is no presumption that delay is occasioned deliberately, or on account of culpable negligence, or on account of mala fides. A litigant does not stand to benefit by resorting to delay. In fact, he runs a serious risk. (vi) It must be grasped that judiciary is respected not on account of its power to legalize injustice on technical grounds but because it is capable of removing injustice and is expected to do so. 7.3 From the above judgment of the Hon’ble Apex Court, we note that the substantial justice deserves to be preferred rather than deciding the matter on the basis of technical defect. 7.4. It is trite law that where a case has been presented in the Court beyond limitation, the petitioner has to explain the Court as to what was the \"sufficient cause\" which means an adequate and enough reason which prevented him to approach the Court within limitation as held by Hon’ble Supreme Court in the following cases: (a) Basawaraj v. Land Acquisition Officer, (2013) 14 SCC 81: \"9. Sufficient cause is the cause for which the defendant could not be blamed for his absence. The meaning of the word \"sufficient\" is \"adequate\" or \"enough\", inasmuch as may be necessary to answer the purpose intended. Therefore, the word \"sufficient\" embraces no more than that which provides a platitude, which when the act done suffices to accomplish the purpose intended in the facts and circumstances existing in a case, duly examined from the viewpoint of a reasonable standard of a cautious man. In this context, \"sufficient cause\" means that the party should not have acted in a negligent manner or there was a want of bona fide on its part in view of the facts and circumstances of a case or it cannot be alleged that the party has \"not acted diligently\" or \"remained inactive\". However, the facts and circumstances of each case must afford sufficient ground to enable the court concerned to exercise discretion for the reason that whenever the court exercises discretion, it has to be exercised judiciously. The applicant must satisfy the court that he was prevented by any \"sufficient cause\" I.T.A No. 506/Ahd/2025 A.Y. 2013-14 Page No Radhe Finsec India Ltd. vs. ITO 9 from prosecuting his case, and unless a satisfactory explanation is furnished, the court should not allow the application for condonation of delay. The court has to examine whether the mistake is bona fide or was merely a device to cover an ulterior purpose. (See Manindra Land and Building Corpn. Ltd. v. Bhutnath Banerjee (AIR 1964 SC 1336 Mata Din v. A. Narayanan [(1969) 2 SCC 770), Parimal v. Veena [(2011) 3 SCC 545] and Moniben Devraj Shah v. Municipal Corpn. of Brihan Mumbai (2012) 5- SCC 157].)” (b) Ajay Dabre v. Pyare Ram 2023 SCC Online SC 92: ‘13. This Court in the case of Basawaraj v. Special Land Acquisition Officer while rejecting an application for condonation of delay for lack of sufficient cause has concluded in Paragraph 15 as follows: \"15. The law on the issue can be summarised to the effect that where a case has been presented in the court beyond limitation, the applicant has to explain the court as to what was the \"sufficient cause\" which means an adequate and enough reason which prevented him to approach the court within limitation. In case a party is found to be negligent, or for want of bona fide on his part in the facts and circumstances of the case, or found to have not acted diligently or remained inactive, there cannot be a justified ground to condone the delay. No court could be justified in condoning such an inordinate delay by imposing any condition whatsoever. The application is to be decided only within the parameters laid down by this Court in regard to the condonation of delay. In case there was no sufficient cause to prevent a litigant to approach the court on time condoning the delay without any justification, putting any condition whatsoever, amounts to passing an order in violation of the statutory provisions and it tantamounts to showing utter disregard to the legislature.\" 14. Therefore, we are of the considered opinion that the High Court did not commit any mistake in dismissing the delay condonation application of the present appellant. 7.5. Thus, it is crystal clear from the above legal proposition that the discretion to condone the delay has to be exercised judiciously based on facts and circumstances of each case. 7.6 We also note that the Hon’ble Gujarat High Court in the case of Vareli textile industry versus CIT reported in 154 Taxman 33 has held as under: It is equally well-settled that where a cause is consciously abandoned (as in the present case) the party seeking condonation has to show by cogent evidence sufficient cause in support of its claim of condonation. The onus is greater. One of the propositions of settled legal position is to ensure that a meritorious case is not I.T.A No. 506/Ahd/2025 A.Y. 2013-14 Page No Radhe Finsec India Ltd. vs. ITO 10 thrown out on the ground of limitation. Therefore, it is necessary to examine, at least prima facie, whether the assessee has or has not a case on merits. 8. From the above, it is transpired that a meritorious case of the assessee should not be thrown away due to negligence or on account of technical lapses. 8.1. In the light of the above stated discussion, we proceed to evaluate whether the delay in the present case needs to be condoned in the given facts and circumstances. The assessee states that intimation order passed u/s. 143(1) was not served on the assessee when the tax demand was adjusted against the Refund due for A.Y. 2017-18 assessee came to know about the same which is not disputed by the Revenue. Further the CPC without considering the double entry of income entered by the assessee made the addition of Rs.64,59,669/-. We also find that if we reject the application of the assessee for condoning the delay then it would amount to legalise injustice on technical ground, whereas the Tribunal is capable of removing injustice and to do justice. In view of the above, we are of the considered opinion that it is a fit case to condone the delay of 2490 days by imposing a cost of Rs. 5,000/- payable by the assessee to the Income Tax Department within two weeks of receipt of copy of this order. Thus, we condone the delay of 2490 days in filing the appeal. However on merits, we deem it fit to set-aside the matter back to the file of Jurisdictional Assessing Officer to consider the matter afresh on production of receipt of payment of the cost of Rs.5,000/- and pass order in accordance with law by giving proper opportunity of hearing to the assessee. I.T.A No. 506/Ahd/2025 A.Y. 2013-14 Page No Radhe Finsec India Ltd. vs. ITO 11 9. In the result, the appeal filed by the Assessee allowed for statistical purpose. Order pronounced in the open court on 06-06-2025 Sd/- Sd/- (ANNAPURNA GUPTA) (T.R. SENTHIL KUMAR) ACCOUNTANT MEMBER JUDICIAL MEMBER Ahmedabad : Dated 06/06/2025 आदेश कȧ ĤǓतͧलͪप अĒेͪषत / Copy of Order Forwarded to:- 1. Assessee 2. Revenue 3. Concerned CIT 4. CIT (A) 5. DR, ITAT, Ahmedabad 6. Guard file. By order/आदेश से, उप/सहायक पंजीकार आयकर अपीलȣय अͬधकरण, अहमदाबाद "