REENA BHANUSHALI ,MUMBAI V. ITO, WARD, 42(1)(4), MUMBAI

ITA 907/MUM/2025

AI Insights

The case involves Reena Bhanushali, the appellant, contesting an order from the CIT(A), National Faceless Appeal Centre, which dismissed her appeal in limine due to a delay in filing. The original assessment was made under sections 147, 144, and 144B of the Income-tax Act, 1961, for the Assessment Year 2015-16, resulting in an addition of Rs.65,29,800 to her income. The appellant argued that the delay was caused by personal circumstances, including a troubled marriage and subsequent divorce, which affected her ability to receive notices and attend hearings. The Tribunal, referencing various Supreme Court decisions, emphasized the importance of substantial justice over technicalities and decided to condone the delay and remand the case for a fresh assessment on merits.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 46928 (ITAT-MUMBAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-04-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2015-2016
• Other Referred Cases: Collector Land Acquisition Vs. Mst. Katiji & Others, N.Balakrishnan Vs. M. Krishnamurthy
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Condonation of delay; Set aside; Opportunity of being heard; Reasonable cause; Source of fund
• Section: 147; 144; 69

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL “D” BENCH MUMBAI BEFORE SHRI AMIT SHUKLA, JUDICIAL MEMBER AND SHRI GIRISH AGRAWAL, ACCOUNTANT MEMBER ITA No. 907/MUM/2025 Assessment Year: 2015-16 Reena Bhanushali D/201, Akar Pinnacle, Datta Pada, Jaya Nagar, Borivali (East), Mumbai – 400066. (PAN: AJNPG2745G) Vs. ITO, Ward 42(1)(4), Mumbai (Appellant) (Respondent) Present for: Assessee : Shri Rajesh Shah Revenue : R. R. Makwana, Addl. CIT Date of Hearing : 03.04.2025 Date of Pronouncement : 09.04.2025 O R D E R PER GIRISH AGRAWAL, ACCOUNTANT MEMBER: This appeal filed by the Assessee is against the order of Ld. CIT(A), National Faceless Appeal Centre (NFAC), Delhi, vide order no. ITBA/NFAC/S/250/2024-25/1072292107(1), dated 17.01.2025, passed against the assessment order by Assessment Unit, Income Tax Department, u/s. 147 r.w.s 144 r.w.s. 144B of the Income-tax Act, 1961 (hereinafter referred to as the “Act”), dated 16.03.2023, for Assessment Year 2015-16. 2. Grounds taken by the Assessee are reproduced as under: 2 ITA No. 907/Mum/2025 Reena Bhanushali, AY 2015-16 1. On the facts and circumstances of the case, learned CIT(A)-NAFC erred in dismissing the appeal in limine and by the said action confirmed the addition of Rs.65,29,800. 2. On the facts and circumstances of the case, learned CIT(A)-NAFC erred in not considering the reasonable and sufficient cause for not filing an appeal in time. The learned CIT(A)-NFAC ought to have admitted the appeal and condoned the delay in filing of an appeal for reasonable cause. 3. a) On the facts and circumstances of the case, learned CIT(A)-NFAC erred in not passing an order on merit. b) The appellant submits that the CIT(A)-NFAC is duty bound to pass an order on merit. 4. On the facts and circumstances of the case, learned CIT(A)-NFAC erred in not considering the following Grounds of Appeal: a) The Assessing Officer eared in re-opening of the assessment though the assessment was got time barred during the period in which notice was issued. b) The AO erred in passing ex-parte order since no notice was served on the appellant and even the physical notice which AO claimed to have issued, was issued at wrong address. c) The appellant had filed subsequent returns but before the assessment proceedings started u/s.148 of the act and wherein the change of address and email ID was given. However, the AO wrongly issued the notices at wrong address and email ID. d) The AO erred in invoking provisions of Section 69 though on facts and in law are not applicable. The appellant submits that the funds were utilized from known-source. The appellant submits that full details of the Source of Funds were provided and it was wrongly confirming the addition which was made u/s.69 of the Act. e) The AO wrongly charged interest u/s.234A of Rs. 18,15,840 of the Act. f) The AO wrongly charged interest u/s.234B of Rs. 19,36,896 of the Act. 6. On the facts and circumstances of the case, the appellant was not provided with proper opportunity and the order may be set aside.” 3. Ld. Counsel for the assessee submitted that the first appellate order has dismissed the appeal of the assessee in limine on account of delay of 129 days in filing the appeal before ld. CIT(A). Merits of the case has not been dealt with at the first appellate stage. In this respect, 3 ITA No. 907/Mum/2025 Reena Bhanushali, AY 2015-16 assessee had furnished petition for condonation of delay from which relevant extracts are produced by ld. CIT(A) in his order. Perusal of the same reveals that assessee did not have access to email ID on which notices were issued. She had a troubled marriage and got divorced on 10.07.2014. The disturbances continued thereafter. It was mentioned that the ex-husband did not cooperate and did not provide any details but retained the control which resulted into non attending of the hearing notices. Later, assessee came to know about the order, after which matter was taken up expeditiously and an appeal was filed with a delay of 129 days. Even at the assessment stage, assessee could not receive the notices since they were addressed at the erstwhile address which had changed subsequently on account of divorce hence the assessment order was also an ex parte order. Even at the assessment stage, assessee could not furnish the details as called for by the ld. Assessing Officer. Ld. CIT(A) not accepting the reasons for delay as explained by the assessee, dismissed the same in limine, without dealing with the merits of the case. 3.1. To address the issue in hand before us, we need to delve into the understanding of the expression “sufficient cause”. Sub-section 3 of Section 249 contemplates that the CIT(A) may admit an appeal after expiry of relevant period, if he is satisfied that there was a “sufficient cause” for not presenting it within that period. Similarly, it has been used in section 5 of Indian Limitation Act, 1963. Whenever interpretation and construction of this expression has fallen for consideration before Hon'ble High Court as well as before the Hon'ble Supreme Court, then, Hon'ble Court were unanimous in their conclusion that this expression is to be used liberally. 4 ITA No. 907/Mum/2025 Reena Bhanushali, AY 2015-16 3.2. We may make reference to the following observations of the Hon'ble Supreme Court from the decision in the case of Collector Land Acquisition Vs. Mst. Katiji & Others, 1987 AIR 1353: \"1. Ordinarily a litigant does not stand to benefit by lodging an appeal late. 2. 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. 3. \"Every day's delay must be explained\" does not mean that a pedantic approach should be made. Why not every hour's delay, every second's delay? The doctrine must be applied in a rational common sense pragmatic manner. 4. 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. 5. 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. 6. 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.\" 3.3. Similarly, we would like to make reference to authoritative pronouncement of Hon'ble Supreme Court in the case of N.Balakrishnan Vs. M. Krishnamurthy (supra). It reads as under: \"Rule of limitation are not meant to destroy the right of parties. They are meant to see that parties do not resort to dilatory tactics, but seek their remedy promptly. The object of providing a legal remedy is to repair the damage caused by reason of legal injury. Law of limitation fixes a life-span for such legal remedy for the redress of the legal injury so suffered. Time is precious and the wasted time would never revisit. During efflux of time newer causes would sprout up necessitating newer persons to seek legal remedy by approaching the courts. So a life span must be fixed for each remedy. Unending period for launching the remedy may lead to unending uncertainty and consequential anarchy. Law of limitation is thus founded on public policy. It is enshrined in the maxim Interest reipublicae up sit finis litium (it is for the general welfare that a period be putt to litigation). Rules of limitation are not meant to destroy the right of the parties. They are meant to see that parties do not resort to dilatory tactics but seek their 5 ITA No. 907/Mum/2025 Reena Bhanushali, AY 2015-16 remedy promptly. The idea is that every legal remedy must be kept alive for a legislatively fixed period of time. A court knows that refusal to condone delay would result foreclosing a suitor from putting forth his cause. There is no presumption that delay in approaching the court is always deliberate. This Court has held that the words \"sufficient cause\" under Section 5 of the Limitation Act should receive a liberal construction so as to advance substantial justice vide Shakuntala Devi lain Vs. Kuntal Kumari [AIR 1969 SC 575] and State of West Bengal Vs. The Administrator, Howrah Municipality [AIR 1972 SC 749]. It must be remembered that in every case of delay there can be some lapse on the part of the litigant concerned. That alone is not enough to turn down his plea and to shut the door against him. If the explanation does not smack of mala fides or it is not put forth as part of a dilatory strategy the court must show utmost consideration to the suitor. But when there is reasonable ground to think that the delay was occasioned by the party deliberately to gain time then the court should lean against acceptance of the explanation. While condoning delay the Could should not forget the opposite party altogether. It must be borne in mind that he is a looser and he too would have incurred quiet a large litigation expenses. It would be a salutary guideline that when courts condone the delay due to laches on the part of the applicant the court shall compensate the opposite party for his loss.\" 3.4 We do not deem it necessary to re-cite or recapitulate the proposition laid down in other decisions. It is suffice to say that the Hon'ble Courts are unanimous in their approach to propound that whenever the reasons assigned by an applicant for explaining the delay, then such reasons are to be construed with a justice-oriented approach. 3.5. In light of the above, if we examine the facts, then it would reveal that there is a delay of 129 days in filing of the first appeal by the assessee before the ld. CIT(A). In her submissions as reproduced in the order of ld. CIT(A), assessee has explained the reasons which prevented her in filing the appeal withing the prescribed limitation. Therefore, for the just decision of the controversy, it is incumbent upon us to condone the delay. Considering the said explanation of the assessee, we condone the same. 6 ITA No. 907/Mum/2025 Reena Bhanushali, AY 2015-16 4. Since, assessee under her compelling reasons, could not make submissionsand representation at both the stages, we find it appropriate in the interest of justice and fair play to remit the matter back to the file of ld. Assessing Officer for denovo meritorious assessment . Needless to say, that the assessee be given reasonable opportunity of being heard. We also direct the assessee to be diligent in attending the hearing notices and avoid taking adjournments unless warranted by compelling reasons. Accordingly, grounds raised by the assessee are allowed for statistical purposes. 5. In the result, appeal by the assessee is allowed for statistical purposes. Order is pronounced in the open court on 09 April, 2025 Sd/- Sd/- (Amit Shukla) (Girish Agrawal) Judicial Member Accountant Member Dated: 09 April, 2025 MP, Sr.P.S. Copy to : 1 The Appellant 2 The Respondent 3 DR, ITAT, Mumbai 4 5 Guard File CIT BY ORDER, (Dy./Asstt.Registrar) ITAT, Mumbai "