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Judgment
Per Raj Kumar Chauhan, Judicial Member:
These appeals are directed against the even order dated 07.08.2025 of Ld. Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre, Delhi [hereinafter referred to as the “CIT(A)/NFAC”] passed u/s 250 of the Income Tax Act, 1961 [hereinafter referred to as “the Act”] wherein addition of Rs.9,61,042/- in respect of interest income under the head “income from other sources” along with addition of Rs.1,49,27,277/- u/s 69C of the Act for unexplained money was confirmed.
Vide this common order, we propose to dispose off these appeals, because the same emanates from the Assessment Order dated 15.03.2023 against the same assessee. Because the ITA No. 7502/Del/2025 pertains to the quantum order/assessment order and the other appeals pertains to the penalty imposed subsequent to the passing of the assessment order u/s 147 r.w.s. 144 & 144B of the Act.
The facts in brief as culled out for the authorities below are that the case of the assessee was reopened on the basis of information available with JAO that during financial year 2017-18 relevant to Assessment Year 2018-19, assessee made time deposits of Rs.1,49,27,277/- in the Central Bank of India and earned interest income of Rs.9,61,042/-. As per Assessing Officer, the income element of time deposit in the bank account along with interest earned has escaped assessment for the relevant year. Proceedings u/s 148A of the Act by issuing show-cause notice u/s 148A(b) were initiated by issuing a show-notice. The assessee in his reply dated 28.03.2022 didn't offer any explanation and merely asked for adjournment till 10.04.2022. Since the proceeding u/s 148 were getting barred by limitation on 31.03.2022, the AO after recording reasons of reopening, initiated assessment u/s 147 of the Act after obtaining the necessary administrative approval u/s 151 of the Act. Accordingly a notice u/s 148 of the Act was issued to the assessee on 31.03.2022 which was duly served upon him. The assessee was required to furnish ITR in response to the notice u/s 148 within 30 days of the service of the notice. However, the assessee did not furnish any response despite opportunities on various dates as find mentioned in para 4 of the Assessment Order. Despite several opportunities as mentioned therein, the assessee has not filed any response. Hence, the Assessing Officer proceeded to pass best judgment assessment u/s 144 of the Act which resulted into making of the addition as mentioned above.
Aggrieved by the Assessment Order, the assessee filed appeal before the Id. CIT(A)/NFAC, Delhi alongwith request to condone the delay of 524 days. The Id. CIT(A) however was not satisfied with the explanation given for the delay and concluded that the assessee/appellant has failed to show sufficient cause for condonation of delay and accordingly the appeal was dismissed in limine.
Subsequent to the dismissal of appeal and passing of the impugned Assessment Order regarding quantum proceedings, the Assessing Officer also proceeded to impose penalty u/s 270AAC(1) which was challenged before the Id. CIT(A) who has dismissed the appeal in limine while refusing the condone the delay of 335 days and is subject matter of ITA No. 7503/Del/2025. The assessee has further filed appeal allegedly against imposing of penalty u/s 270A and the appeal against the same by the Id. CIT(A) u/s 250 was also dismissed in limine while refusing to condone the delay of 336 days, which is subject matter of ITA No. 7504/Del/2025.
Aggrieved by the impugned order of dismissal of the appeal against the quantum order, the assessee filed appeal before us and raises the following grounds of appeal in ITA No. 7502/Del/2025:
1.That the learned CIT(A) has erred in law and on facts in refusing to condone the delay in filing the appeal, without appreciating that the delay was caused due to genuine and reasonable circumstances beyond the control of the appellant.
2.That the learned CIT(A) has further ignored the ratio of N. Balakrishnan v. M. Krishnamurthy (1998) 7 SCC 123, where the Hon'ble Supreme Court held that the length of delay is not material if the explanation is satisfactory, and that refusal to condone delay may result in a meritorious matter being thrown out at the threshold.
3.That by dismissing the appeal without adjudicating the matter on merits, the learned CIT(A) has acted contrary to the principles laid down by the Hon'ble Supreme Court that matters should be decided on merits when sufficient cause is shown for delay.
4.That the learned CIT(A) has failed to consider that the appellant had adequately explained the reasons for delay supported by bona fide justification, and therefore, the delay ought to have been condoned in the interest of substantial justice.
5.That the impugned order rejecting condonation and dismissing the appeal is bad in law, arbitrary, and deserves to be set aside.
6.Whether the Ld. is AO justified in adding the total amount of Fixed Deposit received at the time of redemption of Rs. 1,58,88,319/- in the Income of the assessee?
7.The appellant craves leave to add, alter, amend, or withdraw any ground of appeal at the time of hearing."
The assessee has filed an affidavit seeking condonation of delay of 20 days before Tribunal in all these appeals and in support of this, filed an affidavit, contents of the same is extracted, as under:
AFFIDAVIT
I, SUKHBER TYAGI, S/o SHERA TYAGI, aged about [73] years, residing at Village Noor Nagar, Sihani, Ghaziabad, Uttar Pradesh - 201001, do hereby solemnly affirm and state as under:
1.That I am the Appellant in the above appeal filed before the Hon'ble Income Tax Appellate Tribunal, Delhi, and I am well conversant with the facts of the case. Hence, I am competent to swear this affidavit.
2.That the order under section 250 of the Income Tax Act, 1961, passed by the Ld. CIT(A) was received by me on 07/08/2025. The appeal against the said order was required to be filed on or before 31/10/2025, i.e., within 2 months from the end of the month in which the order was issued or received.
3.That due to a bad health condition, the appeal could not be filed within the stipulated time. (Medical enclosed)
4.That the delay in filing the appeal is 20 days, which is neither intentional nor deliberate, but on account of the circumstances beyond my control.
5.That I have always acted bona fide and with due diligence and there was no intention to cause delay or derive any undue advantage.
6.That I request the Hon'ble Tribunal to kindly condone the delay of 20 days in filing the appeal and admit the appeal for adjudication on merits in the interest of justice.
Verification:
I, Sukhber Tyagi, do hereby verify that the contents of the above affidavit from Paragraphs 1 to 6 are true and correct to the best of my knowledge and belief and nothing material has been concealed therefrom.
Verified at Ghaziabad on this 05/12/2025.
We have heard the Id. DR. None appeared for the assessee at the time of hearing. The Id. DR on behalf of the Revenue while supporting the judgment of the Id. CIT(A) has stated that the assessee has failed to appear and present it's case before the Assessing Officer as well as failed to explain the delay before the Id. CIT(A). Hence, the appeal is devoid of merit and is liable to be dismissed.
We have considered the submissions of the Id. DR and examined the material on record. On perusal of the affidavit seeking condonation of delay before the tribunal, we are satisfied that the explanation given by the assessee who is aged about 72 years and suffering from various ailments, is satisfactory as no material has been brought on record by Revenue to contradict the contents of the affidavit. For that reason, we have no grounds to reject the explanation given by the assessee on oath. Hence, we are satisfied that there is sufficient cause for condonation of delay of 20 days in filing all the appeals before us. The delay in filing the appeal is accordingly condoned and we proceed to consider the appeal on merit.
It is an admitted fact that the assessment order was best judgment assessment u/s 144 of the Act as the assessee failed to present its case before the Assessing Officer. The appeals against the quantum proceedings as well as against penalty proceedings have been dismissed in limine as the Id. CIT(A) has refused to condone the delay of 524 days (ITA No. 7502/Del/2025), 335 days (ITA No. 7503/Del/2025) and 336 days (ITA No. 7504/Del/2025) on the ground that the explanation given by the assessee was not satisfactory.
We now proceed to extract the explanation seeking condonation of delay before the first appellate authority which find mentions in para 2.7 (ITA No. 7502/Del/2025), as under:
'2.7 In this case the appeal is filed by delay of 524 days. The appellant has given the following reasons for delay in filing of the appeal:
"The appellant is aged 72 years and an agriculturist. He is not literate and not very familiar with email or mobile. He was not medically fit to take the necessary action to file an objection against the assessment order passed by the Ld. AO under Section 147 r.w.s 144 of Income Tax Act 1961. Further, the email for communication on the portal belonged to his tax consultant due to which he missed all the communication related to the assessment proceedings and assessment order. Further, his tax consultant who received such communications did not inform him regarding the order passed by the Ld. AO and hence, he failed to file an appeal before you within the stipulated period."
The Id. CIT(A) while dismissing the appeal in limine has rejected the explanation of the assessee that he could not file the appeal in time as he is an aged and un-educated agriculturists and not medically fit on the ground that the appellant did not submit any medical certificate. The further explanation of the assessee that the e-mail for communication on the portal belonged to tax consultant and his tax consultant did not inform him regarding the order, was also not accepted on the ground that the said explanation was not sufficient for condonation of delay.
It is settled law that the technicalities are hand-made of justice and the substantial rights of an assessee should not be defeated because of the technicalities. In our opinion, the explanation given by a person aged about 72 years suffering from various ailments, was sufficient cause for condoning the delay in filing the appeal as no contrary material is brought on record by the Revenue to the assertion made by the assessee regarding his age and illness and lack of information by the tax consultant to him.
We have noticed that the judgment of the Hon'ble Supreme Court in the case of Collector, Land Acquisition Vs. MST. Katiji & Ors., (1987) 167 ITR 471 (SC), was pleased to hold regarding the condonation of delay as under:
"The Legislature has conferred the power to condone delay by enacting section 51 of the Limitation Act of 1963 in order to enable the courts to do substantial justice to parties by disposing of matters on de merits". The expression "sufficient cause" employed by the Legislature is adequately elastic to enable the courts to apply the law in a meaningful manner which subserves the ends of justice that being the life-purpose of the existence of the institution of courts. It is common knowledge that this court has been making of justifiably liberal approach in matters instituted in this court. But the message does not appear to have percolated down to all the other courts in the hierarchy.
And such a liberal approach is adopted on principle as it is realized that:
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."
The Ld. DR on the other hand supported the judgment of the Ld. CIT(A) and submitted that the assessee has not pursued its case before the lower authorities, effectively in limine and the Ld. CIT(A) has rights to dismiss the appeal of the assessee in limine.
We have considered the arguments of Ld. DR for Revenue and examined the record. Since the assessee has filed affidavit in support of condonation of delay and no contradictory facts has been brought on record by the revenue to the effect that contents of the affidavit are false, we find it expedient in the interest of justice that the assessee has shown sufficient cause for condonation of delay in filing the appeal before the Ld. CIT(A). Hence, the delay in filing the appeal was required to be condoned by the Ld. CIT(A).
In the given facts and circumstances and in view of the settled legal position, we are of the considered view that it was a fit case for condonation of delay because the explanation given by assessee to the ld. CIT(A) was sufficient and justified in the given facts and circumstances of the case. Dismissal of the appeal in limine against the quantum proceedings as well as against the penalty proceedings, in our opinion has resulted into miscarriage of justice. For these reasons, the impugned appellate order dated 07.08.2025 against the quantum proceeding is set aside. Since the assessment order was also passed u/s 144 without effective representation by the assessee, we deem it expedient to restore the matter to the file of the Assessing Officer for deciding the same after giving effective opportunities of hearing. Since the quantum proceeding has been set aside, the subsequent penalty proceedings also stands quashed as a consequence of setting aside of the quantum assessment order and the subsequent appellate order. The assessee/appellant is directed to present this case within 60 days of passing of this order.
In the result, the quantum appeal ITA No. 7502/Del/2025 is allowed for statistical purpose. The appeals in ITA Nos. 7503 & 7504/Del/2025 are allowed.