Income Tax Appellate Tribunal - Ahmedabad
Pinkal Sureshkumar Kothari,Ahmedabad vs The Ito, Ward-5(2)(1), Ahmedabad on 27 August, 2025
IN THE INCOME TAX APPELLATE TRIBUNAL
"SMC" BENCH, AHMEDABAD
BEFORE SMT. ANNAPURNA GUPTA, ACCOUNTANT MEMBER
आयकर अपील सं./I.T.A. No. 1303/Ahd/2025
(िनधारण वष / Assessment Year : 2017-18)
Pinkal Sureshkumar बनाम/ Income Tax Officer
Kothari Vs. Ward-5(2)(1),
4, Nemrajul Flat, Ahmedabad
Navavikas Gruh Ro ad,
Vasna, Ahmedabad, Gujarat
- 380007
थायी ले खा सं ./जीआइआर सं . /PAN/GIR No. : AMLPK3944L
(Appellant) .. (Respondent)
अपीलाथ ओर से /Appellant by : Shri Parth Mehta, A.R.
यथ क ओर से/Respondent by : Shri Nitin Kulkarni, Sr. DR
Date of Hearing 19/08/2025
Date of Pronounceme nt 27/08/2025
ORDER
The present appeal has been filed by the assessee against the order of the Ld. Commissioner of Income Tax (Appeals), (hereinafter referred to as "CIT(A)"), National Faceless Appeal Centre (hereinafter referred to as "NFAC"), Delhi dated 27.01.2025, passed under Section 250 of the Income Tax Act, 1961 (hereinafter referred to as the "Act") and relates to Assessment Year (A.Y.) 2017-18.
2. The Registry has noted the appeal to be time barred by 70 days. The assessee has filed an application for seeking condonation of delay stating as under:
ITA No.1303/Ahd/2025 [PinkalSureshkumar Kothari vs. ITO] A.Y. 2017-18 -2-
"1. Appellant Asse ssee i s a Salaried Individual who has filed hi s Income Tax Retu rn f or the year unde r consideration on 30th March, 2018 vide Acknowledgement Number: 556849120300 318 declaring gross total income of Rs. 9,09,414/- Ap pellant's case was selected for Limi ted Scruti ny and notice u/s 143(2 ) of the Act was issued on 08/08/2018 fo r verification of C ash Depo sits and Tr ansaction in Property
2. During the relevant f inancial year , the Appellant had fulfilled his lifelong aspi ratio n of p urchasin g a re sidential property for ₹60,00,000 i n the cou rse of assessment and appellate proceedings before the Ld. C ommissioner of Income Tax (Appeals ) Nati onal Faceless Appeal Centre ['CIT(A)'), the Appellant had submit ted documenta ry evidence explaining the sources of funds utili sed for the sai d pu rchase
3. The A ppellant ha d p referred his first appeal before the Ld. CIT(A ) on 10.07.2019 and duly filed submi ssions in suppo rt of his grounds of appe al on 17.10. 2019 However, the matter remained pending wit hout adjudicati on for an inordinate peri od of over five and a hal f years. Eventu ally, the Ld. C IT(A) passed an appellate order un der sectio n 250 of t he Act on 27.01.2025 without aff ordi ng opp ortunity of being heard as is mandated u/s 250(2) of the Act.
4. Appellant w as surpri sed to receive appell ate order confirmi ng part demand as the same was a djudicated without opportunity of being heard and with imp roper understanding of the submission
5. Appellant had expl ai ned sou rce of Rs. 6,39,000 utilized f or purchase of hou se to be Rs 3,60,000 out of sal ary income and Rs. 2,79,000 (Stamp Duty) o ut of Cash on hand bala nce However, Ld. CIT (A) erroneously compre hended our submission to mean that a ppellant is trying to prove enti re source f rom cash balance. However, Appellant had clearly mentioned that "So, t he amount of cash deposited and u sed for purchase of property is as above is out of p revious withdrawals and balance built up because of salary inc ome during the year from the bank
6. Appellant was unde r the incorrect i mpression that since it is a mistake apparent f ro m record capable of being rectified in terms of provisio ns of section 154 of the Act appellant had filed the rectification application on 28-01- 2025 (within a day f rom Ld C IT (A) Order) t hrough online I ncome Tax Portal.
Annexure-1 It is only s ub seque ntly, upon obtaining professional legal advice, that the Appellant was made aware that the reme dy of rectification under section 154 may not extend to matters ITA No.1303/Ahd/2025 [Pinkal Sureshkumar Kothari vs. ITO] A.Y. 2017-18 -3- involving inc orrect appreciation of fact s, non -verification of daywise cashbook an d denial of natural j ustice, and that the appropriate remedy lies in prefer ring an appeal before t he Hon'ble Tribunal
7. Appellant herewith appr oaches Hon'ble Tri bunal t o kindly condone the delay of 2 month s in filing of appeal The delay in filing the present appeal is p urely unintenti onal and occasioned solely due to the bonafide but mi staken beli ef in the availability of an alternate remedy. The Appellant has acted diligently and in good faith t hroughout, and the delay of approximately 2 months in fili ng the appeal is neither deliberate nor due to negligence.
8. Appellant has nothing to gain f ro m delaying appellate proceedings. Moreover, Supreme Court ha s in catena of decisions held that Delay in filing appeal shall be condoned if there i s a reasonable cause. Furthe rm ore, Apex Co urt has in case of Collector La nd Acquisition Vs. Mst. Katiji & Othe rs, 1987 AIR 1353 has elaborately held as und er;
1. Ordinarily a litigant does not stand to benefit by lodging an appeal late.
2. Refusing to condon e delay can res ult in a meritorious matter being thrown out at th e very threshold and cause of j ustice being defeated. As against this when delay is condoned t he highe st that can happen is that a cause would be decided on me rits after hearing the parties.
3. "Every day's delay mu st be explai ned" does not mean that a pedantic approach should be made. Why no t every hour's delay, every second's delay? The doctrine must be applied in a rational common sense pr ag matic manner.
4. When substantial justice and technical con siderations are pitted against each other c ause of sub stantial justice deserves to be preferred for th e other side cannot claim to have vested night in injustice being done because of a non-deliberate del ay
5. There i s no p resumption 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 se rious risk e must be grasped t hat judici ary is respected not on account of it s p ower to legalize injustice on technical g rounds but becau se it is capable of re moving i njustice and i s expected to do so."
9. Their Lordships of Hon'ble Supreme Court have in case of N. Balakris hnan Vs M K rish namurt hy ((1 998) 7 SCC 123) promulgated that ITA No.1303/Ahd/2025 [Pinkal Sureshkumar Kothari vs. ITO] A.Y. 2017-18 -4-
"Rule of limitation are not meant to dest roy the right of parties They are meant to see that parties d o not resort t o dilatory tactics, but seek their re medy pr omptly. The object of provi ding a legal remedy is to repair the da mage caus ed by reason of legal injury Law of li mitation fixes a lifespan for such legal remedy for the redress of the legal inj ury so suffered Time is precio us and the wasted time would never revisit . During efflux of time newer causes would sp rout up necessitating newer per sons to seek legal re medy by approachin g the courts So a life span must be fixed for each remedy. Une nding peri od for la unching the remedy may lead to unending uncertainty and consequential anarchy. Law of limit ation is thus fou nded on public policy. It is enshrined in the maxim Interest reipublica up sit fini s litiu m (it is for the general welfare that a period be putt to litigation ). Rules of limitation a re not meant to destroy the right of the partie s. They are me ant to see that parti es do not re sort to dilatory tactic s but seek their remedy promptly. The idea is t hat every legal remedy must be kept alive for a legi slatively fixed period of time. A court knows that refusal to condo ne delay would result f oreclo sing a s uitor from putting fo rth his cause. There is no presumpti on that delay in appr oaching the co urt is always delibe rate. Thi s Court h as held that the wo rd s " sufficient cause" under Section 5 of the Limit ation Act should receive a liberal constructi on so as to a dvance substantial ju stice vide Shakuntal a Devi lain Vs. K untal Kumari [AIR 1969 S C 57 5) and State of West Be ngal Vs. The Ad minist rator, Howrah Municipality [AIR 1972 SC 749] . It must be reme mbere d that in every case of delay there can be some l apse o n the pa rt of the litigant concerned. T hat alone is not enou gh to turn down his plea and to shut the door against him. If t he explan ation doe s not smack of mala fides or it i s not put fort h as part of a dilatory strate gy the cou rt must show utmo st consid eration to the suitor. But when there is reasonable g round to think that t he delay was occasioned by the party deliberately to gai n time then the court shoul d lean against acceptance of the explanation. While condoning delay the Could shoul d not forget the opposite party altogether. It mu st be borne in mi nd that he is a loose r and he too w ould have inc urred quiet a large litigation expe nses. It would be a salutary guideline that when court s condone the delay due to l aches on the part of the applicant the court shall compensate the opposite party for his loss.
It is s uffice to say t hat the Ho n'ble Courts a re unani mous in their approach to propound t hat whenever the rea son s assigned by an applicant for explaining the delay, t hen s uch reasons are to be const rued with a justice oriented approach.
10. It is unde r such ci rcumst ances, we request your goodself to kindly
a) Condone the delay i n filing the appeal under section 253(5) of the Act, a nd ITA No.1303/Ahd/2025 [Pinkal Sureshkumar Kothari vs. ITO] A.Y. 2017-18 -5-
b) Admit the appeal for adjudicatio n on merits, in the interest of justice, eq uity and f air play.
The Appellant furt her undertakes to abide by any directions th at this Hon'ble Tribunal may deem fit to pa ss in this regard."
3. The Ld. DR object to the condonation of delay.
4. Considering the explanation of the assessee for delay of 70 days in filing of the appeal duly supported by an affidavit, I am of the view that the assessee has adduced sufficient cause for the delay in filing of the present appeal, which I, therefore, condone in the interest of justice.
5. Taking up the appeal of the assessee for adjudication, at the outset itself, Ld. Counsel for the assessee contended that the solitary issue in the present appeal relates to addition confirmed by the Ld. CIT(A) on account of investment made by the assessee in immovable property remaining unexplained to the extent of Rs.6,39,000/-. The orders of the authorities below reveal that the assessee was noted to have purchased immovable property, being Flat No.B-15 in Bhumika Apartment, as per conveyance deed on 09.09.2016 for a consideration of Rs.60 Lakhs which was paid from 07.05.2016 to 01.09.2016. The assessee also had paid stamp duty to Rs.2,94,000/-, resulting in total investment made by the assessee amounting to Rs.62,94,000/-.
6. The assessee explained the source of investment in the said property as under:
i. Loan from Axis Bank Rs.35 Lakhs
ii. Borrowing from wife Rs.10 Lakhs
ITA No.1303/Ahd/2025 [Pinkal
Sureshkumar Kothari vs. ITO] A.Y. 2017-18 -6-
iii. Borrowing from Grandfather Rs.4 Lakhs
iv. Borrowing from Mother Rs.2 Lakhs
v. Balance Rs.11,69,000/- from his savings
7. The AO accepted assessee's explanation of the source of the investment made to the tune of Rs.46,55,000/- and treated the balance as unexplained investment made by the assessee, making addition of the same to the income of the assessee. The Ld. CIT(A) accepted further explanation of source to the extent of Rs.10 Lakhs resulting in the investment of Rs.6,39,000/- remaining to be accepted by the authorities below as being from explained sources and which addition made to the income of the assessee, therefore, stood confirmed.
8. The Ld. Counsel for the assessee during the course of hearing before me, assisted by the assessee himself in the open Court, explained that out of the total investment made in the flat by the assessee of Rs.62.94 lacs, except for an amount of Rs.2.94 Lakhs for stamp duty purposes which was paid in cash, the entire remaining amount was paid through banking channels from his savings bank account. That even the cash paid was out of withdrawals from this bank account. That therefore the credits in the bank account itself explained the source of investment in the impugned property. The credits in the bank account, it was contended pertained to all borrowings from the assesee's wife, Grandfather, mother and also salary earned by him during the year, which was returned to tax also by the assessee. The source of investment, it was contended, stood clearly explained and the authorities below having accepted source of investment from ITA No.1303/Ahd/2025 [Pinkal Sureshkumar Kothari vs. ITO] A.Y. 2017-18 -7- borrowings from the assesses family, the balance amount of Rs.6.39 Lakhs clearly was out of his own savings from the salary earned by him. There was no reason, therefore it was stated, for treating any amount of investment made as unexplained vis a vis source.
9. These facts were demonstrated to us from the documents on record before the AO and the Ld. CIT(A) which included the copy of bank statement of the assessee from where the entire investment was shown to have been made by the assessee. The Ld.DR was unable to controvert the said facts. The Ld. CIT(A), I have noted, completely misunderstood the pleadings of the assessee. He has noted that the balance amount of Rs.6.39 Lakhs as from the cash withdrawals made on different occasions and finding the AO to have already given a credit of Rs.11.50 Lakhs for cash deposits out of cash withdrawals, he rejected the assessee's explanation. The records before us demonstrate that it was only investment to the tune of Rs.2.94 Lakhs on account of stamp duty paid for acquiring property, which was made in cash. Therefore, finding of the Ld.CIT(A) that investment to the extent of Rs.6.39 Lakhs was made from cash withdrawals is incorrect. Further, the cash paid for stamp duty purposes was the only component funded from cash withdrawals. Cop y of cash book furnished by the assessee to the authorities below reveals that there was more than sufficient cash withdrawals made by the assessee for the said purposes, which, the Ld. Counsel for the assessee pointed out amounted in all to Rs.16.98 Lakhs, out of which, even after giving credit of Rs.11.50 Lakhs for cash deposited in bank, which credit was given b y the AO, there ITA No.1303/Ahd/2025 [Pinkal Sureshkumar Kothari vs. ITO] A.Y. 2017-18 -8- remains sufficient amount available with the assessee for investment in purchase of impugned property on account of stamp duty paid thereon amounting to Rs.2.94 Lakhs. Therefore, I hold that the source of investment in the propert y purchased by the assessee during the impugned year to the tune of Rs.62.94 Lakhs stands fully explained and the addition, therefore, confirmed by the Ld. CIT(A) to the tune of Rs.6.39 Lakhs is not sustainable and is directed to be deleted.
10. In the result, the appeal filed by the assessee is allowed.
This Order pronounced on 27/08/2025
Sd/-
(ANNAPURNA GUPTA)
ACCOUNTANT MEMBER
Ahmedabad; Dated 27/08/2025
S. K. SINHA True Copy
आदेश क ितिल प अ े षत/Copy of the Order forwarded to :
1. अपीलाथ / The Appellant
2. यथ / The Respondent.
3. संबंिधत आयकर आयु / Concerned CIT
4. आयकर आयु (अपील) / The CIT(A)-
5. वभागीय ितिनिध, आयकर अपीलीय अिधकरण, अहमदाबाद / DR, ITAT, Ahmedabad
6. गाड फाईल / Guard file.
आदे शानुसार/ BY ORDER, उप/सहायक पंजीकार (Dy./Asstt. Registrar) आयकर अपीलीय अिधकरण, अहमदाबाद / ITAT, Ahmedabad