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Facts
The assessee's appeal was dismissed by the CIT(A) as time-barred due to a delay of 162 days. The assessee attributed the delay to being unfamiliar with tax laws, reliance on a consultant who failed to inform them of the assessment order, and subsequent procedural lapses in filing the appeal. The assessee filed a condonation petition explaining these reasons.
Held
The Tribunal held that the CIT(A) erred in dismissing the appeal without a liberal consideration of the condonation petition. Citing the Supreme Court's decision in Collector of Land Acquisition Vs. Mst. Katiji, the Tribunal emphasized that substantial justice should prevail over technical considerations and that the assessee's explanation, given the circumstances, constituted sufficient cause for delay.
Key Issues
Whether the CIT(A) was justified in dismissing the appeal as time-barred without liberally considering the assessee's reasons for delay and condonation petition.
Sections Cited
147, 249(2), 249(3)
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Income Tax Appellate Tribunal, “SMC” BENCH, MUMBAI
order : 12.12.2025 O R D E R [ Per Rahul Chaudhary, Judicial Member:
1. 1. The present appeal preferred by the Assessee is directed against the order, dated 07/08/2025, passed by the National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as ‘the CIT(A)’] whereby the Ld. CIT(A) had dismissed the appeal against the Assessment Order, dated 22/12/2017, passed under Section 147 of the Income Tax Act, 1961 for the Assessment Year 2020-2021.
2. The Assessee has raised 4 ground (Ground No 1 to 4) in the present appeal. Ground No. 2 to 4 deal with the merits of addition made by the Assessing Officer by Ground No.1 to 1.2 raised by the Assessee [reproduced herein below] are directed against the order passed by Assessment Year 2020-2021 the Learned CIT(A) dismissing the appeal as being barred by limitation: “1. Erroneous Dismissal of Appeal on Grounds of Delay Without Considering Sufficient Cause for Condonation: The learned CIT(A) erred in law and on facts by dismissing the appeal as time-barred under Section 249(2) of the Income Tax Act, 1961, without admitting it, despite the appellant having filed a condonation petition explaining sufficient cause for the delay of 162 days in filing the appeal before the CIT(A). The CIT(A) incorrectly observed that "neither condonation petition has been filed by the appellant nor any reason has been given for delay in filing of appeal," overlooking the attached "Condonation of Delay Letter" submitted along with Form 35 on 02/07/2025. This oversight renders the order perverse and liable to be set aside. 1.1 The delay was attributable to bona fide reasons beyond the appellant's control, including: • The appellant, being an individual not well-versed in tax laws and entirely dependent on professional advice, remained unaware of the appeal deadline until engaging a new tax consultant in June 2025. The initial appeal filed on 02/07/2025 was rejected by NFAC due to inadvertent procedural lapses (e.g., failure to upload condonation letter correctly), leading to a procedural delay of 16 days (from 02/07/2025 to 19/07/2025) for rectification and fresh filing. The appellant had entrusted all income tax matters to a consultant who failed to inform about the assessment order dated 08/01/2025 and notice of demand, despite being responsible for monitoring communications via the e-filing portal. The delay was unintentional and attributable to negligence of the previous consultant, coupled with the appellant's lack of expertise, constituting sufficient cause under Section 249(3). 1.2 The CIT(A) failed to adopt a liberal approach to condonation as mandated by judicial precedents, where delays are condoned if justice demands and there is no willful negligence. Reliance is placed on:
2 Assessment Year 2020-2021 Collector, Land Acquisition v. Mst. Katiji (1987) 167 ITR 471 (SC): The Supreme Court held that courts should adopt a liberal approach to condonation of delay, emphasizing that "sufficient cause" should be interpreted pragmatically to advance substantial justice, especially when no negligence or inaction is attributable to the party. The Court observed: "The doctrine must be applied in a rational common sense pragmatic manner." In the present case, the appellant's reliance on professional advice and subsequent rectification efforts demonstrate bona fide intent. Vedabai alias Vaijayantabai Baburao Patil v. Shantaram Baburao Patil (2001) 253 ITR 798 (SC): Delay condoned where caused by bona fide mistake or negligence of counsel, holding that parties should not suffer for faults of advisors. Improvement Trust v. Ujagar Singh (2010) 6 SCC 786. (SC): Even in the absence of a detailed explanation, delay can be condoned if it serves the ends of justice and no prejudice is caused to the other party. Here, no prejudice to revenue is shown. Phoenix Mills Ltd. v. ACIT (ITAT Mumbai): Delay condoned where caused by 이 이 oversight in filing, emphasizing that technicalities should not defeat substantive rights. Kamyab Television Pvt. Ltd. v. PCIT (2025) (Bom HC): Delay of 886 days condoned due to genuine difficulties in compliance, holding that extraordinary circumstances need not always be proven if bona fide cause exists. Dy. CIT v. SRK Construction Projects (ITAT Hyderabad): Delay of 445 days condoned on grounds of bona fide mistake. 1.3 The CIT(A)'s reliance on Lava International Ltd. v. CBDT (2024) (Del HC) is misplaced, as that case involved no extraordinary circumstances, whereas here, the appellant's procedural errors, consultant's negligence, and timely rectification constitute sufficient cause. The CIT(A) 3 Assessment Year 2020-2021 should have exercised discretion under Section 249(3) liberally, as per Shyam Sundar Sarma v. Pannalal Jaiswal (2004) (SC), where dismissal without condonation was held erroneous if a petition was filed. Prayer on this ground: Direct the CIT(A) to condone the delay, admit the appeal, and adjudicate on merits.
When the appeal was taken up for hearing the Learned Authorized Representative for the Assessee submitted that the Ld. CIT(A) has dismissed the appeal preferred by the Assessee as being barred by limitation without considering the application seeking condonation of delay and the reasons stated therein.
Per contra, the Learned Departmental Representative submitted that there was no infirmity in the order passed by the Learned CIT(A). It was submitted that the Learned CIT(A) had rejected the application seeking condoning of delay of 162 days in filing the appeal after taking into consideration the application filed by the Assessee and the reasons stated therein. Reliance in this regard was placed on Paragraph 2.8 of the order passed by the Learned CIT(A).
We have considered the rival submissions and have perused the material on record.
We note that the Learned CIT(A) rejected the application seeking condonation of delay holding that explanation offered by the Assessee was vague and unsupported by verifiable facts. The Learned CIT(A) observed that ignorance of law was no excuse and therefore, the Assessee had failed to meet the threshold the sufficient cause required for condoning delay. Reliance was also placed on Rule 127 of Income Tax Rules, 1962 to contend that Assessment Order was duly served upon the Assessee. On perusal of application seeking condonation of delay filed by the Assessee before the Learned CIT(A) we find that the Assessee had explained that the appeal was dismissed on account of fact that the tax consultant engaged by Assessee and entrusted 4 Assessment Year 2020-2021 that taking care of income tax matters had failed to take necessary steps. It is the case of the Assessee that the Assessee was not familiar with the tax laws procedures and was dependent upon the tax consultant who had failed to inform the Assessee regarding the passing of the assessment order and the limitation of filing the appeal. The Assessee got the knowledge of the assessment order having been passed in June, 2025 on engaging the new tax consultant on 19/07/2025. While the Learned CIT(A) had rejected the aforesaid explanation as being vague and unsupported by verifiable facts, we find that there is nothing on record to doubt the explanation offered by the Assessee. It has not been disputed by the Revenue that the Assessee was dependent upon the previous tax consultancy for taking care of tax matters. We note that even the Learned CIT(A) had not doubted the bonafides of the Assessee and has rejected the explanation observing that ignorance of law is no excuse. In the case of Collector of Land Acquisition Vs. Mst. Katiji & others AIR 1987 1353 (SC) the Hon’ble Supreme Court has, while dealing with the issue of condonation of delay, emphasized that substantial justice should prevail over technical considerations. Every day’s delay must be explained does not mean that a pedantic approach should be taken and that the aforesaid doctrine must be applied in a rational common sense and pragmatic manner, more so in circumstances where a litigant does not stand to benefit by lodging the appeal late (as is the case in appeal before us). Refusing to condone delay can result in a meritorious matter being thrown out at the very threshold. 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. Accepting the explanation given by the Assessee to be reasonable, we hold that in the present case the Assessee was prevented by the sufficient cause from filing the present appeal before the CIT(A) within the prescribed time. Accordingly, we condone the delay of 162 days in filing appeal before the CIT(A). The order, dated 07/08/2025, passed 5 Assessment Year 2020-2021 by Learned CIT(A) set aside with the directions to adjudicate the grounds raised by the Assessee in appeal on merits after granting the Assessee a reasonable opportunity of being heard. The Assessee is also directed to file details, documents & submission in support of its claims/contentions before the Learned CIT(A). The Learned CIT(A) would be at liberty to admit/consider the same as per law. In terms of the aforesaid and without returning any findings on merits, Grounds No.1 to 1.2 raised by the Assessee are allowed and Ground No. 2 to 4.2 are dismissed as having being rendered academic on account of setting aside of the impugned order.
In terms of above, the present appeal is treated as allowed for statistical purpose.