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Facts
The assessee filed their return for AY 2019-20 which was processed under Section 143(1) by the AO. The AO made disallowances and denied set-off of brought forward losses, creating a demand. The assessee appealed to the CIT(A) but it was rejected as time-barred by 860 days, with a net delay of 140 days after excluding the Covid-19 extension.
Held
The Tribunal held that the CIT(A) was not justified in dismissing the appeal in limine. The Tribunal restored the matter to the CIT(A) for fresh adjudication, directing the CIT(A) to verify the assessee's claim of filing an online response and to decide the issue of delay with a fresh perspective, considering substantial justice over technicalities.
Key Issues
Whether the CIT(A) was justified in dismissing the appeal on the ground of delay without condoning it, and whether the assessee had a "sufficient cause" for the delay.
Sections Cited
143(1), 249(2), 249(3), 5 of the Limitation Act
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, INDORE BENCH, INDORE
Before: SHRI B.M. BIYANI & SHRI PARESH M. JOSHI
आदेश/ O R D E R
Per B.M. Biyani, A.M.:
Feeling aggrieved by order of first-appeal dated 21.02.2025 passed by learned Commissioner of Income-Tax (Appeals)-Addl/JCIT(A)-6, Mumbai [“CIT(A)”], which in turn arises out of intimation of assessment dated 12.05.2020 passed by learned CPC, Bengaluru [“AO”] u/s 143(1) of Income- tax Act, 1961 [“the Act”] for Assessment-Year [“AY”] 2019-20, the assessee has filed this appeal on following grounds:
“1. That on the facts and circumstances of the case and in law, the Ld. ADDL/JCIT (A)-6 Mumbai erred in rejecting the appeal filed by the
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appellant due to delay in filing the appeal which was 1 not condoned by the Ld. ADDL/JCIT (A)-6 Mumbai and treating the appeal as non- est in violation of the principle of natural justice which is unjustified and unlawful and based on incorrect facts of the case. 2. That on the facts and circumstances of the case and in law, the Ld. ADDL/JCIT (A)-6 Mumbai erred in rejecting appeal without passing any comments on the merits of the case and sustaining the order of the A.O. passed under section 143(1)(A) of the Act for the relevant period which was filed on 26.09.2019 at Nil Income vide Receipt No. 177037211260919 after claim of deduction of Rs. 33,05,040/- for B/f losses for AY 2011-12, 2013-14 & 2014-15 respectively and it was sent in which positive income of Rs. 48,86,432/- was taken wrongly as against declared positive income of Rs 33,05,040/- before adjustment of unabsorbed B/f losses of Rs. 33,05,040/- as claimed by assessee. 3. That on the facts and circumstances of the case and in law, the Ld. ADDL/JCIT (A)-6 Mumbai erred in rejecting appeal without passing any comments on the merits of the case and not deciding 3 against no response of objection by appellant against notice of intimation under section 143(1) of the IT Act 1961 dtd. 12.05.2020 which was sent by assessee to the CPC by Trans ID 8601458440 dtd. 23.06.2020. 4. That on the facts and circumstances of the case and in law, the Ld. ADDL/JCIT (A)-6 Mumbai erred in rejecting appeal without passing any comments on the merits of the case that the appellant prayed to condone the delay of Approx 860 days due to bona-fide belief that the objection against the notice of intimation under section 143(1) of the IT Act, 1961 dtd. 12.05.2020 which was sent by assessee to the CPC by Trans ID 8601458440 dtd. 23.06.2020 would have been decided by CPC Bangalore and there after opted for next legal course of action to be taken against the pending settlement of objection by filing the appeal before the competent authority. 5. That appellant craves option to add, alter, delete and amend any of the grounds of appeal given. 6. That appellant craves option to refer to any material, documents, filed records of the appellant.”
The background facts leading to present appeal are such that the
assessee is a co-operative society. For AY 2019-20, the assessee filed return
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which was processed by AO u/s 143(1). According to Ld. AR, the AO made
disallowance on account of late payment of PF/ESI which the assessee had
already made before filing return, hence the AO’s action resulted in double
disallowance. Further, the AO also denied the set off of brought forward
loss/depreciation claimed by assessee. Accordingly, the AO created demand
of tax and interest against assessee. Aggrieved, the assessee carried matter
in first-appeal whereupon the CIT(A) considered assessee’s as time-barred
by 860 days (140 days after exclusion of extension granted by Hon‘ble
Supreme Court on account of Covid-19). The assessee made a submission to
CIT(A) explaining the reason of delay and prayed for condonation of delay
but the CIT(A) was not convinced. Ultimately, the CIT(A) dismissed
assessee’s appeal by concluding thus:
“2.9 In view of above, the delay of about 140 days in filing of appeal in this case is not condoned as no "sufficient cause" has been shown under section 249(3) of the Income Tax Act for the appellants failure to file the appeal within prescribed period of limitation u/s 249(2) of the Income Tax Act r.w.s 5 of the Limitation Act. Since, the delay in filing of appeal has not been condoned, consequently the appeal of the appellant becomes non-est and therefore the same is not admitted. 3. Keeping in view the facts and circumstances and the decision of the Honourable Courts the contentions raised by the appellant in the appeal are not adjudicated on merit and the appeal is rejected. 4. In the result, the appeal is rejected.” 3. Before us, Ld. AR submitted the very same reason as explained by
assessee to CIT(A). It is submitted that immediately after receiving
intimation dated 12.05.2020, the staff of Ld. AR filed online response
“Disagree with demand” on 23.06.2020 through transaction id: 8601458440.
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In such online response, the demand created by AO was denied. The
assessee bonafidely believed that the issue would be resolved at the level of
AO and was waiting a positive outcome. But ultimately when the ITO, Ward-
1, Dewas being the Jurisdictional Assessing Officer (JAO) sent a follow-up
letter dated 27.09.2022 for payment of demand, the assessee filed another
response dated 14.10.2022 to AO and simultaneously filed appeal to CIT(A)
on 19.10.2022 to CIT(A). Thus, Ld. AR very humbly submitted that there is
no lethargy, negligence, mala fide intention or ulterior motive of assessee in
making delay and the assessee does not stand to derive any benefit because
of delay. He submitted that the case of assessee is quite meritorious also
since the dispute is with respect to double disallowance and not giving set
off of brought forward losses. Ld. AR submitted that there is a “sufficient
cause” for delay and hence the CIT(A) ought to have condoned the delay.
At that stage, the bench demand proof of response “Disagree with
demand” claimed to have been filed by Ld. AR’s staff on 23.06.2020 through
transaction id: 8601458440. In response, Ld. AR submitted that there is a
noting made by his staff Mr. Shashank Gupta, on back of the intimation u/s
143(1); the same is scanned and extracted below:
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Ld. AR submitted that he would have filed a confirmatory affidavit of his
staff, Mr. Shashank Gupta, also but unfortunately Mr. Shashank Gupta has
already expired during Covid-19 period and hence there is inability on his
part to submit affidavit.
Replying to same, Ld. DR for revenue defended the order of CIT(A) but,
however, left the matter for wisdom of bench.
We have heard rival submissions and perused the material available
on record. The short issue involved in the present appeal is whether the Ld.
CIT(A) was justified in dismissing the appeal of the assessee in limine on
account of delay of 860 days (net delay of 140 days after exclusion of
extension granted by Hon’ble Supreme Court on account of Covid-19). From
the submissions made before us, we find that the assessee has explained
the delay by stating that immediately after receipt of intimation u/s 143(1),
it had filed an online response “Disagree with demand” on 23.06.2020 and
was under a bonafide belief that the issue would be resolved at the level of
the department. It is only upon receipt of follow-up communication from the
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Jurisdictional AO in September, 2022 that the assessee realised that no
action had been taken, whereafter the assessee promptly filed appeal before
the Ld. CIT(A). We further note that the Ld. AR has attempted to
substantiate its claim by producing a contemporaneous noting made by its
staff, though formal evidentiary support in the nature of affidavit could not
be furnished due to the unfortunate demise of the concerned person during
Covid-19 period. In our considered view, the explanation offered by the
assessee cannot be outrightly brushed aside without proper verification,
particularly when the claim relates to filing of an online response on the
income-tax portal, which is verifiable from departmental records. Further, it
is a settled principle that “substantial justice” should prevail over “technical
considerations”, especially when the assessee does not stand to gain by
delaying the filing of appeal. At the same time, we are also conscious that
the veracity of the assessee’s claim regarding filing of response dated
23.06.2020 requires proper verification from official records. In that view of
matter, we deem it fit and proper to set aside the impugned order of the Ld.
CIT(A) and restore the matter to his file for fresh adjudication. The Ld. CIT(A)
is directed to verify, from the departmental records/ITBA system/online
portal data, whether the assessee had in fact filed response “Disagree with
demand” on 23.06.2020 as claimed. The Ld. CIT(A) may also, if considered
necessary, call for a remand report from the AO/JAO in this regard.
Thereafter, the CIT(A) shall firstly adjudicate the issue of delay. We make it
clear that the CIT(A) shall have full liberty to look at the issue of delay with a
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fresh mind taking into account the claim of filing of Response by assessee
and/or the fact that the delay after exclusion of Covid-19 period was just
140 days and the assessee is a co-operative society. After resolving the issue
of delay, the Ld. CIT(A) shall pass a reasoned order in accordance with law.
Needless to mention that the CIT(A) shall give full opportunity to assessee
and the assessee shall extend full co-operation to CIT(A).
Resultantly, this appeal is allowed for statistical purposes.
Order pronounced in open court on 17/04/2026
Sd/- Sd/-
(PARESH M. JOSHI) (B.M. BIYANI) JUDICIAL MEMBER ACCOUNTANT MEMBER
Indore
िदनांक/Dated : 14/04/2026
Patel/Sr. PS Copies to: (1) The appellant (2) The respondent (3) CIT (4) CIT(A) (5) Departmental Representative (6) Guard File By order UE COPYAssistant Registrar Income Tax Appellate Tribunal Indore Bench, Indore
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