Kishore Kashinath Koli Vs ITO (ITAT Pune)
Delay in Filing Appeal Must Yield to Substantial Justice: ITAT Pune Directs Condonation and Merits Adjudication
The Pune Bench of the ITAT allowed the assessee’s appeal for AY 2018-19 for statistical purposes, holding that the CIT(A), NFAC erred in dismissing the appeal solely on the ground of a 125-day delay, without examining whether sufficient cause existed.
The assessee, an individual, had not filed a return of income and was assessed under sections 147/144B with additions of ₹1.08 crore as short-term capital gains and ₹11.27 lakh as unexplained investment u/s 69. The appeal before the CIT(A) was dismissed as time-barred, as no formal condonation application was filed.
Before the Tribunal, the assessee filed an affidavit and medical evidence explaining that the delay occurred due to the serious illness of his mother. The ITAT held that such circumstances constitute a reasonable cause and relied on the Supreme Court decisions in Collector, Land Acquisition v. Mst. Katiji (167 ITR 471) and Inder Singh v. State of Madhya Pradesh (2025 LiveLaw SC 339), reiterating that technicalities of limitation should not defeat adjudication on merits.
Accordingly, the ITAT set aside the CIT(A)’s order, directed condonation of delay, and remanded the matter for fresh adjudication on merits, with a caution to the assessee to cooperate and avoid unnecessary adjournments. The appeal was thus allowed for statistical purposes.
FULL TEXT OF THE ORDER OF ITAT PUNE
This appeal filed by the assessee is directed against the order dated 29.07.2025 of the Ld. CIT(A) / NFAC, Delhi relating to assessment year 2018-19.
2. Although a number of grounds have been raised by the assessee, however, these all relate to the order of the Ld. CIT(A) / NFAC in dismissing the appeal on account of delay in filing of the appeal by 125 days and thereby sustaining the addition of Rs.1,08,20,000/- made by the Assessing Officer on account of short term capital gain and Rs.11,27,000/- made by the Assessing Officer as unexplained investment u/s 69 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’).
3. Facts of the case, in brief, are that the assessee is an individual and has not filed his return of income for the assessment year 2018-19. Information was received on Insight portal as per Risk Management Strategy formulated by CBDT that the assessee along with others sold immovable property for a consideration of Rs.5,41,00,000/- on 21.04.2017 wherein the assessee’s share is Rs.1,08,20,000/-. Further the assessee had deposited cash of Rs. 11,27,000/- in the bank account maintained with Karnala Nagri Sahakari Bank Ltd. The Assessing Officer, therefore, passed an order u/s 148A(d) of the Act on 05.04.2022. Accordingly, statutory notice u/s 148 of the Act was issued on 05.04.2022 asking the assessee to file return of income within 30 days. However, no return was filed. Subsequently a notice u/s 142(1) of the Act also remained un-complied with. The Assessing Officer, therefore, completed the assessment u/s 147 r.w.s. 144B of the Act determining the total income of the assessee at Rs. 1,19,47,000/- wherein he made addition of Rs.1,08,20,000/- on account of short term capital gain and Rs.11,27,000/- as unexplained investment u/s 69 of the Act.
4. Since the assessee filed an appeal with a delay of 125 days before the Ld. CIT(A) / NFAC, the Ld. CIT(A) / NFAC dismissed the appeal by not condoning the delay on the ground that the assessee has not filed any application for condonation of delay.
5. Aggrieved with such order of the Ld. CIT(A) / NFAC, the assessee is in appeal before the Tribunal.
6. The Ld. Counsel for the assessee at the outset filed an affidavit along with medical certificates explaining the reasons for such delay in filing of the appeal before the Ld. CIT(A) / NFAC which is due to illness of the mother of the assessee. Referring to the decision of Hon’ble Supreme Court in the case of Collector, Land Acquisition vs. Mst. Katiji & Ors. reported in 167 ITR 471 (SC) and various other decisions, she submitted that the delay should have been condoned and the appeal should have been decided on merit.
7. The Ld. DR on the other hand submitted that the assessee has not proved justifiable reasons for such delay in filing of the appeal before the Ld. CIT(A) / NFAC. He submitted that the Ld. CIT(A) / NFAC has rightly dismissed the appeals on account of delay in filing of the same.
8. We have heard the rival arguments made by both the sides, perused the orders of the Assessing Officer and the Ld. CIT(A) / NFAC and the paper book filed on behalf of the assessee. We have also considered the various decisions cited before us. It is an admitted fact that there was a delay of 125 days in filing of the appeal before the Ld. CIT(A) / NFAC. We find the assessee before the Ld. CIT(A) / NFAC explained the reasons for such delay which is due to illness of the mother of the assessee. It is the submission of the Ld. Counsel for the assessee that the Ld. CIT(A) / NFAC should have considered the same as reasonable cause and condoned the delay and decided the appeal on merit.
9. We find the Hon’ble Supreme Court in the case of Collector, Land Acquisition vs. Mst. Katiji & Ors. (supra) has held that 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. 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.
10. We find recently the Hon’ble Supreme Court in the case of Inder Singh Vs. The State of Madhya Pradesh reported in 2025 LiveLaw (SC) 339 has held as under:
“14. There can be no quarrel on the settled principle of law that delay cannot be condoned without sufficient cause, but a major aspect which has to be kept in mind is that, if in a particular case, the merits have to be examined, it should not be scuttled merely on the basis of limitation.”
11. In the light of the above decisions of Hon’ble Supreme Court cited (supra), we deem it proper to restore the issue to the file of the Ld. CIT(A) / NFAC with a direction to condone the delay and decide the issue on merit as per fact and law after giving due opportunity of being heard to the assessee. The assessee is also hereby directed to make his submissions, if any, on the appointed date without seeking any adjournment under any pretext failing which the Ld. CIT(A) / NFAC is at liberty to pass appropriate order as per law. We hold and direct accordingly. The grounds raised by the assessee are accordingly allowed for statistical purposes.
12. In the result, the appeal filed by the assessee is allowed for statistical purposes.
Order pronounced in the open Court on 9th January, 2026.
