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Judgment
ORDER
Per Raj Kumar Chauhan, Judicial Member:
ITA No. 851/Del/2026 is directed against order dated 16.01.2016 passed by ld. CIT(A) -24, New Delhi u/s 250 of the Act where in the appeal has been dismissed being barred by limitation as there was delay of 744 days in filing the appeal before the ld. CIT(A) against the Assessme nt Order dated 16.03.2023 which was passed u/s 147/144B of the Act. Appeal in IT A 852/De l/2026 pertains to the penalty u/s 2 70A of the Act emanating from the quantum asse ssment order dated 16.03.2023 wherein ld. CIT(A) has dismissed the appeal being barred by limitation as there was delay of 623 days in filing the appeal against the order dated 30.09.2023 u/s 2 70A of the Act Appeal in ITA No. 853/Del/2026 pertains to penalty imposed u/s 271AAC(1) of the Act, ord er dated 30.09 .2023 and the appeal against the same has been dismissed by the impugned order dated 16.01.2026 and the appeal is dismissed being barred by limitation as there was delay of 623 days in filing the appeal against the penalty order dated 30.09.2023.
Since the order of the first appellate authority are of the same date and the parties are same and proceedings are inter-related being quantum proceeding and subsequent penalty proceedings emanating from the main quantum order subject matter of IT A No. 851/Del/2026, hence, we propose to decide all the three appeals by this common order in order to avoid the multiplicity of proceedings.
ITA No. 851/Del/2026 is taken as “lead” case pertaining to the quantum proceedings.
The facts in brief as culled out from the order of authorities below are that the assessee has not filed return of income for A.Y. 2018-19 and have deposited cash of Rs.48,50,000/- and also withdrawn cash of Rs. 24,50,000/-from bank a/c No . 90171250000226 held with Canara Bank (Erstwhile Syndicate bank). The asse ssee has also purchased motor vehicle during the year under consideration. After following the due procedures order u/s 148A(d) of the Act was passed on 30.03.2022 w ith a finding that the income chargeable to tax to the extent of Rs. 2 ,13,68,154/- has escaped assessment w ithin the meaning of section 147 of the Act. It is observed that despite several opportunitie s given before passing the order u/s 148A(d) dated 30.0 3.2022 to the assessee and the assessee has neither filed any reply nor sought any adjournment. Accord ingly, the assessment order u/s 147 r.w.s. 144/144B of the Act w as issued making additio ns as find me ntio ned in para 13 of the impugned order and the total income was determined at Rs.15,56,37,194/-. We have noticed that the appeal against the quantum proceeding subject matter of which is the “lead” case was also d ismissed being barred by limitation. The penalty proceedings were initiated u/s 270A for underreporting of income and u/s 271AAC(1) of the Act for additio n made u/s 69 and 69A of the Act. The assessee/Appellant filed appeal before the ld . CIT(A) and the said appeal is also dismissed being barred by limitation.
We have heard the ld. AR and the ld. DR. The ld. AR at the very outset submitted that the ld. CIT(A) has refused to condone the delay despite there being sufficient cause for condonation o f delay which has resulted into miscarriage of justice and therefore prayed for condoning the delay and restoring the matter to the ld. CIT(A) for deciding the same on merit.
The ld. DR on the other hand would submit that the assessee/appellant has failed to show sufficie nt cause for condonation of delay and the ld. CIT(A) has r ightly dismissed the appeal in quantum proceedings as well as in penalty proceedings.
We have consid ered the submissions and examined the record. We have noticed that the Hon'ble Supreme Cour t in the case of Co llector, Land Acquisition Vs. MST. Katiji & Ors., (1987) 167 ITR 471 (SC), was pleased to hold regarding the condonation o f delay as under:
“The Legislatur e has c onferred t he power to co ndone dela y by enacti ng section 51 o f the Limitati on Act of 1963 in order to enabl e the courts to do substantial justice t o parti es by disposi ng of matters on de merits”. The expr essi on “sufficient caus e” empl oyed by t he Legisla ture is ad equately elastic to enable the courts to apply the law i n a meani ngful ma nner which subserves the ends of j usti ce t hat bei ng the life-purpose of t he existence of the i nstituti on of courts . It is co mmon kno wledge that this court has been maki ng of j ustifiably liberal appr oac h i n matters i nstituted i n t his court. B ut the message do es not appear to have perc olated down to all the other courts in the hi erarc hy. And such a liberal approac h is adopted o n pri nciple as it is realized t hat:
1.Ordinarily, a litigant d oes not stand to bene fit by lodgi ng an appeal late.
2.Refusi ng to condo ne delay can result i n a meritori ous matt er bei ng thrown out at the ver y thr eshol d and c ause of j ustice bei ng defeat ed. As against this, whe n delay is co ndoned, the hi ghest tha t c an happen is that a cause would be decided on merits after hearing the parties.”
The ld. CIT(A) has reproduced the grounds of seeking condonation o f delay in the lead case which has resulted into dismissal of the appeal being barred by limitation and to appreciate the arguments raised before us, we find it expedient to extr act the relevant portion of the impugned order contained in para 5.1 o nwards as under:
“5 .1 This appeal has been filed be yond sti pulated time of 30 days from date of s ervice o f demand notice/assessment order. The appell ant has filed r equest for condonati on of delay duri ng appeal proc eedi ngs whi ch is repr oduced bel ow:
1.“That A. O. order is 16.03.23. Appeal is bei ng filed on 28.04.25. Henc e, there is a dela y of 744 N o. of days i n filing this appe al.
2.That the delay in filing the appeal has taken place for a r easonabl e caus e as explai ned in followi ng Par as.
3.It so hap pened, that t he impugned asstt. proc eedi ngs started by issuanc e of notice U/s. 148 Dtd.31.03.22, followed by Is 1 notice U/s. 142(1) Did. 02.11.22. Duri ng the c ourse of asstt . proc eedi ngs goi ng on, t he assessee was s earc h U /s . 132 on 12.12.2 2. The i mpugne d asstt. st ood compl et ed vide order Dtd.16.03.23 i.e . subsequent to s earc h. The case was being ta ken care of by the office qfCA . V. K B anka. Sinc e search had already ta ken place prior, to c omple tion of impugned asstt., due to this search, fre sh asstt. proceedings fo r A.Y. 18-19 wer e to rec ommenc e s hortly, therefor e the CA was of the bo nafide thought that the imp ugned asstt. order Dtd.16.03.23 autom atically stands aba ted, and no further action was r equi r ed. Hence under this bonafi de belief, no s teps were taken to file a ppeal bef ore CIT (A) i n this case. Subsequently the asstt. of A.Y. 18-19 U/s. 147 consequent to search on 12.12.22 stood c ompl et ed vide order Dtd. 18.03.25. For filing appeal agai ns t order Dtd. 18.03. 25, CA. Banka e ngaged M/s Raj Kumar & Associates , Charter ed Ac countant s, N ew Del hi on 15.04.25. On exami ni ng the asstt. order Did 18.03.25, it was noticed by the offic e of CA. Raj Kumai ’ Gupta that the asstt. was done only at an income of Rs.26,63,192/-, howeve r t he demand creat ed was Rs. 12,28,76,650/-. On fi ndi ng this analogy, enquiiy was made from CA . Ba nka, when it tr anspir ed that thi s demand mainly relat es to t he earlier impugned asstt. order Dtd. 16.03.23. It was at that point of time, for the fi rst time, on 15.04.25, when t he impugned or der Dtd.16.03.23 was exami ned by offic e of CA. Raj Kumar G upta, it was i nformed to CA. B anka that t he impugned or der was also required to be agi tated in appeal before CIT(A). H ence on advise of the office of CA . Raj Kumar Gupta, immediately st eps were ta ken to file this appeal against impugned order Dtd .16.03.23 and. t his appeal stood filed wi thi n 13 N o. of days w. e.£ 15.04.25, when for the first time this kno wledge came on t he surface tha t t he appeal was required to be file.
4.That in suppo rt of above facts , nece ssary affidavit , as requi red, may be filed at the ti me of heari ng/fixation of appeal.
5.That thus t he del ay has taken place for a bonafide reasonable cause and without any malafide.
6.That , the assessee woul d not had got any benefit by filing t he appeal dela yed, t his aspect als o shows tha t the delay has taken for a re asonabl e cause.
7.That by condoning t he delay, no prejudice wi ll cause to t he revenue, however in cas e of non-condoni ng the delay, t he assesse e will suffer irre parabl e l oss and a liability may remai ned against the asses see, whic h, othe rwise , should not be there as per the Inc ome Tax Act.
In view of above, it is very humbl y requested to ki ndly condoned the delay in filing t he appeal and obli ge. In cas e this r equest is not excee ded, t he assessee wo ul d suffer irreparable loss . The whol e demand cr eated is illegal and likel y t o be del eted. Also, keeping in view the fi nancial positi on o f the assessee, it will be out of t otal mea ns of t he assessee to mak e the payme nt of such demand creat ed illegall y. Also, in case the delay stands condoned, the r evenue will not s uff er on a ny count at all. The c ondonati on of delay will make it possible to make and s ustai n the asstt . to the extent it is legally c orre ct and as pe r la w. In view of a bove it is submitt ed that t he delay be please c ondoned and oblige."
5.2I ha ve carefully considered the application for condonati on of delay of 744 days in fi ling the pr ese nt appeal. The appe llant has sought condonati on on t he ground t hat CA V.K. Banka, who was handling the case, was under bonafide belief t hat t he ass essment proc eedi ngs date d 16.03.2023 stood automatical ly aba ted due to search under sectio n 13 2 conduc ted on 12.12.2022 during the pendency of ass essme nt proc eedi ngs. The appellant has submitted that t he impugned as sessment proceedi ngs started by iss uanc e of notice unde r sect ion 148 dated 31.03.2022 and during the course of asse ssment proc eedi ngs, t he assess ee was subjected t o search on 12.12.2 022. The imp ugned assessment stood c ompl eted vide order dat ed 16.03.2023, which was subsequent to t he search. The appellant contend ed that si nce searc h had taken place prior to comple tion of impugne d assess ment, the CA was of the bonafide thought that the impugned ass essment order a utoma tically stands aba ted and no furt her acti on was required. The appellant furt her submitted that subsequently whe n new CA was engaged on 15.04.2025 for filing appeal agai nst subsequent ass essme nt or der dat ed 18.03.2025, it was discovered that appeal agai nst the impugned order da ted 16.03.2023 was also requi red to be file d, and accordi ngly the present appeal was filed withi n 13 days of suc h discover y.
5.3I ha ve careful ly examine d the subm issions made by the appel lant and the document s filed i n s uppor t of the condonati on application. The delay of 744 days, which is appr oximat ely 2 years and 14 days, is i nordi nate and excessive. The legal positi on rega rdi ng abat ement of assessment pr oc eedi ngs upon searc h is well-se ttl ed . Secti on 153 A of the Income Tax A ct, 1961 provides for assessment i n case of search but does no t provide for aut omatic abatement of pending assessment proceedi ngs. The assess ment order dated 16.03.2023 was pass ed after the s earch and was a valid o rder passed by t he compet ent author ity. The claim that a professi onal Chartered Account ant was under bonafi de belief that the assessment would automaticall y abat e is not acceptable as it refl ects gross negligence or lack of professi onal compet ence. A pro fessional tax consultant is e xpected to be well-versed with the provisions of the Income Tax Act and i gnorance of such fundamental legal positi on cannot be terme d as bonafide belief but amounts to professi onal negli gence . The expla nati on that the need t o file ap peal was discovered only on 15.04.2025 when new CA was enga ged is not credible. The assess ment order was rec eiv ed o n 16.0 3.2023 and demand would hav e been raised and c ommunicat ed to the appellant immediat el y thereafter. A ny prudent assess ee would have taken immediate st eps to verify the status and challenge the order if aggri eved. The fac t that the app ellant remai ned inac tive for mor e than two y ears clearly demonstrates lack of due diligenc e and bona fides. Professi onal negli gence of a (Charter ed Acco untant cannot be a ground for c ondonati on o f delay. The delay also causes prejudice t o the revenue. In view o f t he abov e, I am not satisfi ed that the appel lant has made out a c as e for condonati on of de lay. The application for condonation of dela y is accordi ngly rejected.
5.4Since the applicat ion for condo nation of dela y has bee n r eject ed, t he appeal filed by the appel lant is time-barr ed and not maintai nable . In view of the rejecti on of condonati on of delay, t he appeal is dismissed as time-barr ed. Conseque ntly, there is no need t o adj udi cate the merits o f the various gr ounds of appeal rai sed by t he appellant.
5.5In the r esul t, the appeal filed by the appellant is DISMISS ED as tim e-barred.”
We fur ther noticed that the ground seeking condonation of delay in all the three appeals are identical and similar. It is thus evident fro m the contents o f the imp ugned order that the ld. CIT(A) has not considered the contents of the application seeking condonation of delay in a proper and justified manner and has taken a hyper technical view while refusing to condone the delay. Moreover, no contrary material has been produced either before the ld. CIT(A) or before us w hich may contrad ict the contents of the grounds seeking condo nation of delay before the first appellate authority. The grounds o f condonation of delay as reproduced above, in our considered opinion, were sufficient and justified in the given facts and cir cumstances of the case . The right of appeal is a statutory right and the same cannot be denied on acco unt o f mere technicality. Moreover, by filing the appeal w ith a delay is not going to help the assessee/appellant in any manner. Therefore, the substantive and statutory r ight of the assessee to file appeal and the disposal of the same on merit cannot be defeated and denied because of the mere technicality and for that reason, we are of the considered o pinion that the d enial o f condonation of delay in quantum appeal as we ll as in penalty appeals subject matter of pending appeals under co nsideration before us has resulted into miscarriage of justice.
In view of the judgment of the Hon’ble Supreme Court in case of Collector, Land Acquisition (supra) and fo r the reason discussed above, we find it a fit case to condone the delay on account of sufficient cause having been shown by the assessee/appellant. Accordingly, we condone the delay in filing the appeal before the ld . C IT(A) in the larger interest of justice and restore the matter in quantum proceedings as we ll as in penalty proceedings subject matter of appeal No. 851 to 853/Del/2026 to the file of the ld . CIT(A) for deciding the same after giving effective opportunity of hearing to the assessee who may submit the necessary submissions/documents pending before the ld. CIT(A) w ithin a period of 60 days of this order.
In the result, all the appeals of the assessee are allowed for statistical pur poses.