RAM BHAGAT PHATELA,SIRSA V. INCOME TAX OFFICER, SIRSA

ITA 327/CHANDI/2025

AI Insights

The case involves Ram Bhagat Phatela, a commission agent dealing in agricultural produce, who appealed against the order of the CIT(A) which dismissed his appeal as being barred by limitation. The assessee had filed his return for A.Y. 2022-23, claiming a TDS credit which was partially disallowed by CPC. The assessee, believing that the matter could be rectified at the CPC level based on advice from the Income-tax Bar Association and a letter from the ITO, Sirsa, filed a delayed appeal. The CIT(A) did not condone the delay, leading to the assessee's appeal to the Tribunal. The Tribunal, considering the circumstances and the absence of mala fide intention, condoned the delay and remitted the case back to the CIT(A) for a fresh decision on merits.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 784835 (ITAT-CHANDIGARH)
• Duration Of Justice: 8 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-11-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2022-2023
• Appeal Filed On: 05-03-2025
• Other Referred Cases: MajjiSannemma vs. Reddy Sridevi, Ajay Dabra vs. Pyare Ram & Ors., Deepak Trading Company vs ITO, Mukesh vs ITO, Collector, Land Acquisition vs. Mst. Katiji & Others
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VINOD KUMAR CHAUDHARY
• Assessee Lawyers: LALIT MOHAN; C.A VIRTUAL
• Keywords: Condonation of delay; Set aside; Opportunity of being heard; Period of limitation; TDS; Time period of passing order

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BENCHES, “SMC” CHANDIGARH HEARING THROUGH: HYBRID MODE BEFORE: SHRI. LALIET KUMAR, JUDICIAL MEMBER आयकर अपील सं./ ITA No. 327 /Chd/2025 िनधाŊरण वषŊ / Assessment Year : 2022-23 Ram Bhagat Phatela Shop No. 3 C/o Hans Raj Babu Lal II Additional Mandi, Sirsa Haryana-125055 बनाम The ITO Ward-1, Sirsa ˕ायी लेखा सं./PAN NO: AZYPP5932H अपीलाथŎ/Appellant ŮȑथŎ/Respondent िनधाŊįरती की ओर से/Assessee by : Shri Lalit Mohan, C.A (Virtual) राजˢ की ओर से/ Revenue by : Shri Vinod Kumar Chaudhary, JCIT, Sr. DR सुनवाई की तारीख/Date of Hearing : 11/11/2025 उदघोषणा की तारीख/Date of Pronouncement : 12/11/2025 आदेश/Order PER LALIET KUMAR, J.M This appeal by the assessee is directed against the order of the Ld. CIT, Appeal Addl/JCIT(A)-4 Mumbai dated 06.01.2025 passed under section 250 of the Income-tax Act, 1961, whereby the appeal of the assessee was dismissed in limine as being barred by limitation for 87 days. 2. The assessee, an individual engaged as a commission agent (Kachha Arhtiya) dealing in agricultural produce, filed his return of income for A.Y. 2022- 23 on 31.07.2022, declaring an income of Rs.7,91,300/- and claiming TDS credit of Rs.1,13,872/-. 3. The CPC, while processing the return u/s 143(1), granted TDS credit of only Rs.41,634/-, disallowing balance TDS of Rs.72,238/-. The intimation was served on the assessee on 17.02.2023. 4. The assessee filed the appeal before the CIT(A) on 09.06.2023, resulting in a delay of 87 days. The CIT(A) declined to condone the delay, holding that no Printed from counselvise.com 2 sufficient cause was shown and that the delay was due to negligence and inaction. 5. Against the order of the Ld. CIT(A) the assessee preferred an appeal before the Tribunal. 6. During the course of hearing the assessee explained that he had acted bona fide on the advice of the Income-tax Bar Association, Sirsa, which had made a representation to the Pr. Commissioner of Income Tax, Rohtak regarding similar CPC mismatches in TDS credits for A.Y. 2022-23. 6.1 The ITO, Ward-1, Sirsa vide letter dated 06.03.2023 advised the assessee to approach CPC, Bengaluru for rectification, stating that rectification rights were not transferred to the jurisdictional AO. This resulted in confusion about the appropriate remedy. The assessee contended that the delay was neither deliberate nor due to negligence but was caused by a bona fide belief that the matter could be rectified at the CPC level. 7. Per Contra, the Ld. DR supported the order of the CIT(A) and submitted that the condonation of delay is not automatic and must be based on cogent and verifiable evidence showing “sufficient cause.” 7.1 The DR placed reliance on the judgments of the Hon’ble Supreme Court in MajjiSannemma vs. Reddy Sridevi [2021 SCC Online SC 1260] and Ajay Dabra vs. Pyare Ram & Ors. (SLP No. 15793/2019, dated 31.01.2023), wherein it was held that in the absence of bona fide explanation, delay should not be condoned. 7.2 It was contended that the assessee has not produced any documentary evidence showing that any rectification application was actually filed before CPC, Bengaluru or that any active step was taken within the limitation period. 7.3 The DR, however, fairly submitted that if the Hon’ble Tribunal were to consider the assessee’s explanation as bona fide, then the matter may be restored to the CIT(A) for adjudication on merits, with a direction to decide the issues afresh in accordance with law and keeping in mind the binding Printed from counselvise.com 3 precedents of the Chandigarh Tribunal in Deepak Trading Company vs ITO (ITA No. 107/Chd/2025, dated 01/07/2025) and ITA No. 44/Chd/2025, IN THE CASE OF MUKESH VS ITO where similar CPC-related TDS disputes were adjudicated. 8. I have heard both sides and carefully perused the record. It is not in dispute that the assessee’s grievance relates merely to non-grant of TDS credit due to a CPC mismatch. The explanation that the assessee was under a bona fide belief that rectification at CPC level was the correct remedy is plausible and consistent with departmental communications dated 06.03.2023, which advised the assessee to approach CPC. 8.1 The Hon’ble Supreme Court in Collector, Land Acquisition vs. Mst. Katiji& Others [(1987) 167 ITR 471 (SC)] has laid down that substantial justice should prevail over technical considerations and that a liberal approach should be adopted in condonation of delay when no mala fide intention or deliberate inaction is established. 8.2 The Hon’ble Chandigarh Bench various matters has also consistently condoned delays in filing appeals before CIT(A) where the delay arose due to confusion created by CPC rectification processes. 8.3 In the present case, the delay of 87 days stands satisfactorily explained. There is no evidence of deliberate neglect, and the cause shown by the assessee constitutes “sufficient cause” within the meaning of section 249(3) of the Act. The assessee stands to gain nothing for not pursuing the appeal in time, therefore I condone the delay in filling the appeal before the Ld. CIT(A) . 8.4 Since I have already condoned the delay in filing the appeal before the Ld. CIT(A), and as the Ld. CIT(A) has not adjudicated the grounds on merits, I hereby remit the matter to the file of the Ld. CIT(A) with a direction to decide the appeal afresh on merits, in accordance with law.While adjudicating the appeal in remand proceedings, the Ld. CIT(A) shall keep in view the binding precedents of the Hon’ble ITAT, Chandigarh Bench, in the cases of Deepak Printed from counselvise.com 4 Trading Company vs ITO [ITA No. 107/Chd/2025] and ITA No. 44/Chd/2025, wherein the Hon’ble Tribunal has laid down the legal position relating to TDS mismatch and CPC processing issues. The Ld. CIT(A) may also consider and apply any other decision of the Hon’ble Tribunal, if the facts of the present case are found to be similar. 9. The Ld. CIT(A) shall further ensure that due and adequate opportunity of being heard is afforded to the assessee before deciding the matter afresh. 10. The delay of 87 days in filing the appeal before the CIT(A) is condoned. The order of the CIT(A) rejecting the appeal on limitation is set aside, and the matter is restored to the file of the CIT(A) for decision on merits in accordance with law and the above observations. 11. In the result, appeal of the Assessee is allowed for statistical purposes. Order pronounced in the open Court on 12/11/2025 Sd/- ( LALIET KUMAR) JUDICIAL MEMBER AG आदेश की Ůितिलिप अŤेिषत/ Copy of the order forwarded to : 1. अपीलाथŎ/ The Appellant 2. ŮȑथŎ/ The Respondent 3. आयकर आयुƅ/ CIT 4. आयकर आयुƅ (अपील)/ The CIT(A) 5. िवभागीय Ůितिनिध, आयकर अपीलीय आिधकरण, चǷीगढ़/ DR, ITAT, CHANDIGARH 6. गाडŊ फाईल/ Guard File आदेशानुसार/ By order, सहायक पंजीकार/ Assistant Registrar Printed from counselvise.com "