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Facts
The assessee's appeal was dismissed by the CIT(A) due to a delay of 141 days, without adjudicating on merits. The assessee cited the demise of his father and his own poor mental state as reasons for the delay.
Held
The Tribunal held that the delay in filing the appeal should be condoned following a justice-oriented and liberal approach, as per the principles laid down by the Apex Court. The matter was restored to the AO for fresh adjudication on capital gains, providing a last opportunity to the assessee.
Key Issues
Whether the delay in filing the appeal before the CIT(A) should be condoned based on the assessee's circumstances, and whether the matter should be remanded for fresh adjudication on merits.
Sections Cited
147, 144, 249(3)
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Income Tax Appellate Tribunal, “D” BENCH, MUMBAI
Before: SHRI AMIT SHUKLA, JM & SHRI ARUN KHODPIA, AM
O R D E R
Per Arun Khodpia, AM:
The captioned appeal is directed against the order of Commissioner of Income Tax (Appeal)/National Faceless Appeal Centre, Delhi (for short “ld. CIT(A)”) dated 07.08.2025 for Assessment Year (AY) 2016-17, which in turn arises from the order passed under section 147 r.w.s. 144 of the Income Tax Act, The grounds of appeal
raised by the assessee, reads as under: “1. The Learned Commissioner of Income Tax Appeals NFAC erred in law and on facts in dismissing the appeal at outset without adjudicating the matter on merits, merely on the ground of delay of 141 days in filing the appeal.
2. The Ld. CIT (A) rejected the appeal and condonation without granting adequate opportunity OR personal hearing violates the principles of natural justice.
3. The Ld. CIT(A) failed to consider the settled legal position 3 that the term sufficient cause under section 249(3) should be construed liberally to advance substantial justice.
4. The learned Assessing Officer as well as the Ld. CIT(A) erred in law and on facts in making and confirming additions under the heads Capital Gain and Salary twice, thereby resulting in double addition of the same income.
5. The Ld. CIT(A) erred in not considering that the underlying assessment order under section 147 r.w.s 144 contained additions of Rs. 94,50,000 as short-term capital gain and Rs. 13,94,187 as salary without proper opportunity OR evidence.
6. The Appellant craves leave to add, amend OR alter any of the grounds herein.
7. For these and other grounds that may be urged at OR before the time of hearing, the Appellant prays for appropriate relief.”
Rahul Ramesh Fadnavis 2. At the outset it is submitted by the ld. Authorised Representative on behalf of the assessee (in Short ‘ld. AR’) that the appeal of assessee has been disposed of by the First Appellate Authority (FAA) in limine without any adjudication on merits, only for the reason that the appeal of assessee was filed with a delay of 141 days. It was the submission that the assessee has mentioned before the CIT(A) that the delay in filing of the appeal was occurred on account of demise of assessee’s father on 21.09.2023 and the assessee was not in a good state of mind to check the notices served and also was unbale to file the appeal on time. The ld. CIT(A) had observed that the impugned order was passed on 16.11.2023,the date after the demise of the father of the assessee. He further noted that the order was served on assessee on 07.01.2024 as per Form-35, however the assessee has not taken necessary step to file the appeal within permissible time and could have filed the appeal only after a delay of 141 days. The plea of the assessee about the ignorance of law was also not accepted by the ld. CIT(A) stating that the ignorance of law cannot be an acceptable ground to justify non-compliance. Consequently, the appeal of assessee has been dismissed, being barred by limitation and does not have the merits to qualify in terms of the provisions of section 249(3) of the Act for condonation of delay. The ld. AR before us submitted that there were valid reasons explained by the assessee to ld. CIT(A) to allow for condonation of delay, however the same was not granted and therefore the appeal of assessee is Rahul Ramesh Fadnavis dismissed on account of delay itself. It was the prayer that the delay before the FAA/Ld. CIT(A)may kindly direct to be condoned following the principle of natural justice and to adhere with the mandate of law, so that the legitimate taxes on the assessee may be paid.
Per contra, the ld. Sr. DR representing the revenue vehemently supported the order of ld. CIT(A), but have not objected if the matter is restored back for fresh adjudication to arrive at a logical conclusion.
We have considered the rival submissions and perused the material available on record. Admittedly in the present case, the appeal filed by the assessee was belated before the ld. CIT(A), however the cause mentioned by the assessee before the Authority that he was not in a good state of mind on account of demise of his father can be taken as a valid reason for delay in filing of the appeal, further following the principle of natural justice and the principle laid down by Hon’ble Apex Court in the case of Vidya Shankar Jaiswal Vs. ITO, Ward-2, Ambikapur, Civil Appeal Nos……………../2025 [Special Leave Petition (Civil) Nos. 26310-26311/2024, dated 31.01.2025, wherein Hon’ble Court had observed that a justice oriented and liberal approach ought to be adopted while considering the aspect of condoning the delay involved in filing of the appeal.
Rahul Ramesh Fadnavis Accordingly, while dealing with the condonation of delay, a justice-oriented and liberal approach has to be followed by the Authorities, following such binding directions, we are of the considered view that the delay in filing of the appeal in present matter should be condoned and we direct the ld. CIT(A) to do so.
Further since the assessee has not filed his return and also had not appeared with submissions before the AO, whereas the assessee has undertaken with a transaction of sale of immovable property amounting to Rs. 94,50,000/- and has certainly earned capital gain in the year under consideration, therefore to arrive at the correct figure of capital gain and tax thereon, in our considered view a last and final opportunity should be allowed to the assessee to represent its matter before the Ld. AO.The matter accordingly restored back to the file of Ld. AO to re-visit the issue of capital gains in the hands of assessee in the relevant year and pass an appropriate order accordingly.
Needless to say, the assessee shall be provided with reasonable opportunity of being heard. The assessee is also directed to assist the Ld. AO in set-aside proceedings proactively without any failure to the notices issued, otherwise the AO would be at liberty to pass an appropriate order in accordance with the mandate of law.
In result, the appeal of assessee is set-aside to the file of AO for fresh adjudication, consequently the appeal is partly allowed for statistical purposes, in terms of our aforesaid observations.
Order pronounced in the open court on 11 -12-2025.