Kerala High Court
The Kannur District Merchants Co-Op. ... vs Income Tax Officer on 28 October, 2025
Author: A.Muhamed Mustaque
Bench: A.Muhamed Mustaque
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ITA No.76 of 2025 2025:KER:80943
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR. JUSTICE A.MUHAMED MUSTAQUE
&
THE HONOURABLE MR. JUSTICE HARISANKAR V. MENON
TUESDAY, THE 28TH DAY OF OCTOBER 2025 / 6TH KARTHIKA, 1947
ITA NO. 76 OF 2025
AGAINST THE ORDER DATED 23.06.2025 IN ITA NO.181/COCH/2025
OF I.T.A. TRIBUNAL, COCHIN BENCH
-------
APPELLANT/APPELLANT/ASSESSEE:
THE KANNUR DISTRICT MERCHANTS CO-OP. SOCIETY LTD.,
NO.C 1728, VYAPARA BHAVAN, PARAKANDY, KANNUR,
REPRESENTED BY ITS SECRETARY - MANOHARAN M.P.,
PIN - 670001.
BY ADVS.
SRI.R.JAIKRISHNA
KUM.NARAYANI HARIKRISHNAN
SRI.C.S.ARUN SHANKAR
SHRI.ANISH P.
SHRI.AKHIL SHAJI
SHRI.K.SURESH CHANDRAN
RESPONDENT/RESPONDENT/RESPONDENT:
INCOME TAX OFFICER, WARD 1 AND TPS,
OFFICE OF INCOME TAX OFFICER,
INCOME TAX DEPARTMENT, KANNUR,
PIN - 670012.
BY ADVS.
SRI.G.KEERTHIVAS
SHRI.HARIKUMAR G. (GOPINATHAN NAIR)
THIS INCOME TAX APPEAL HAVING COME UP FOR ADMISSION ON 28.10.2025,
THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:
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ITA No.76 of 2025 2025:KER:80943
JUDGMENT
Harisankar V. Menon, J.
The appellant, an assessee under the Income Tax Act,
1961 (hereinafter referred to as the 'Act'), was assessed by
Annexure A order dated 26.09.2022, disallowing the
deduction under Section 80P of the Act claimed by it. An
appeal was instituted before the first appellate authority
against the above assessment, with a delay of 343 days in
filing the same. The first appellate authority condoned the
delay of 343 days in filing the appeal. However, since the
appellant did not avail of the various opportunities granted
by the authority for the final hearing, the appeal was rejected
for "non-prosecution" by an order dated 21.05.2024.
Further appeal to the Income Tax Appellate Tribunal was also
a belated one, with a delay of 225 days. The Tribunal, by the
impugned order dated 23.06.2025 (Annexure E), refused to
condone the delay, thereby rejecting the application filed in
that regard along with the appeal. It is challenging the afore
ITA No.76 of 2025 2025:KER:80943
order that the appellant has instituted this appeal.
2. Heard Sri.R.Jaikrishna, the learned counsel for the
appellant-assessee, as well as Sri.Harikumar G., the learned
Standing Counsel for the respondent revenue.
3. Two issues arise for consideration in this appeal: the
legality or otherwise of the rejection of the appeal by the
appellate authorities, including the Tribunal.
4. The appeal to the Tribunal has been admittedly
delayed by 225 days. The affidavit accompanying the
application states that the appellant was unaware of the
service of the first appellate order, as it did not receive any
alert on the registered e-mail or phone number. The delay
has been explained in detail, with reference to various dates
as seen from the affidavit dated 18.02.2025 filed before the
Tribunal. The affidavit also states that it was only when penal
steps were taken subsequent to the rejection by the first
appellate authority that the appellant realized about the
rejection of the appeal. The Tribunal refused to accept the
ITA No.76 of 2025 2025:KER:80943
afore contentions and rejected the appeal in view of the
judgment of the Apex Court in Mrinmoy Maity v. Chhanda
Koley and Others [(2024) SCC OnLine SC 551].
5. In our opinion, sufficient reasons have been
highlighted in the affidavit seeking condonation of the delay.
The judgment of the Apex Court in Collector, Land
Acquisition, Anantnag and Another V. Mst Kaitij and
Others [(1987) 2 SCC 107] advocates for a liberal
approach to the condonation of delay, noting that a litigant
does not stand to benefit by filing an appeal belatedly. It
was also held that when substantial justice and technical
considerations are pitted against each other, the cause of
substantial justice deserves to be preferred, since the other
side cannot claim a vested right in an injustice being done
due to a non-deliberate delay. Similarly, in Esha
Bhattacharjee. V. Managing Committee of
Raghunathpur Nafar Academy and Others [(2013) 12
SCC 649], also, the Apex Court extended a similar
ITA No.76 of 2025 2025:KER:80943
treatment. The reliance placed by the Tribunal on the
judgment of the Apex Court in Mrinmoy Maity (supra) was
not apposite, as the Apex Court in that case was dealing with
the issue of the institution of a writ petition after a lapse of
four years from the date of the cause of action. However,
here the delay was only of 220 days, which ought to have
been condoned by the Tribunal. Hence, the order of the
Tribunal is to be set aside.
6. We further notice that the first appellate
authority has rejected the appeal for non-prosecution. A
reading of the first appellate order states that, although
there were multiple postings before the authority, the
appellant did not appear and therefore, the appeal was
rejected for non-prosecution. In our opinion, the first
appellate authority is not justified in rejecting an appeal for
non-prosecution, since the provisions of Section 250 of the
Act do not entitle the appellate authority to reject an appeal
for non-appearance of the appellant. Therefore, the very
ITA No.76 of 2025 2025:KER:80943
rejection of the appeal by the first appellate authority was
incorrect and arbitrary.
In the result, this appeal is allowed, setting aside the
impugned order of the Tribunal and remitting the matter
back to the first appellate authority for fresh disposal on
merit.
Sd/-
A.MUHAMED MUSTAQUE
JUDGE
Sd/-
HARISANKAR V. MENON
JUDGE
ln
ITA No.76 of 2025 2025:KER:80943
APPELLANT'S ANNEXURES:
ANNEXURE A TRUE COPY OF THE ASSESSMENT ORDER ISSUED BY THE
ASSESSING AUTHORITY DATED 26.09.2022.
ANNEXURE B TRUE COPY OF THE DEMAND NOTICE ISSUED BY THE
ASSESSING AUTHORITY DATED 26.09.2022.
ANNEXURE C TRUE COPY OF THE ORDER PASSED BY THE
COMMISSIONER INCOME TAX (APPEALS), NFAC, NEW
DELHI DATED 21.05.2024.
ANNEXURE D TRUE COPY OF THE DELAY CONDONATION PETITION
ALONG WITH AFFIDAVIT DATED 18.02.2025.
ANNEXURE E CERTIFIED COPY OF THE ORDER PASSED BY THE
TRIBUNAL DATED 23.06.2025.
ANNEXURE F TRUE COPY OF THE SHOW CAUSE NOTICE FOR THE
PENALTY DATED 31.7.2024.
