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Facts
The assessee filed an appeal with a delay of 580 days, citing personal and financial hardships faced by the partners, including business losses, family illness, and health challenges compounded by the COVID-19 pandemic. The assessee also lacked employees and tax consultants during this period, leading to missed deadlines and unfamiliarity with faceless appeal procedures.
Held
The Tribunal condoned the significant delay in filing the appeal, acknowledging the bona fide and unintentional reasons provided by the assessee, despite a cost of Rs. 11,000/-. The Tribunal found that the lower authority had erred by dismissing the appeal on grounds of non-prosecution without adjudicating on the merits.
Key Issues
Whether the delay in filing the appeal should be condoned given the circumstances, and whether the order of the lower authority, which dismissed the appeal on non-prosecution without adjudicating merits, is sustainable.
Sections Cited
250, 144, 68, 253(5), 251(1)(a), 251(1)(b), 251(2)
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Income Tax Appellate Tribunal, MUMBAI BENCH “C”, MUMBAI
Before: SHRI NARENDER KUMAR CHOUDHRY & MS. RENU JAUHRI
For Assessee Shri Karna Thaker, Ld. AR : For Revenue Shri Virabhadra S. Mahajan, Ld. : Sr. DR Date of Hearing : 02-12-2025 Date of Pronouncement : 02-12-2025 O R D E R
Per : Narender Kumar Choudhry, Judicial Member:
This appeal has been preferred by the Assessee against the order dated 26-10-2023, impugned herein, passed by the National Faceless Appeal Center (NFAC)/ Ld. Commissioner of Income Tax (Appeals) (in short Ld. Commissioner) u/s 250 of the Income Tax Act, 1961 (in short ‘the Act’) for the A.Y. 2016-17.
At the outset it is observed that there is delay of 580 days in filing this appeal, on which the Assessee through its partners has demonstrated the reasons for delay, which are duly supported with duly sworn affidavit dated 01-09-2025 and read as under: - 2 M/s. Our Vision Entertainment LLP "We, Mr. Mukesh Girish Gupta, son of Mr. Girish Gupta, aged 62 years, residing at M-1204, Bhoomi Park Phase 3, Off Malad Morve Road, Behind Malad Fire Brigade, Bafhira Nagar, Kharodi, Mumbai 400095, and Mr. Bhaskar Ramdas Chavan, son of Mr. Ramdas Chavan, aged 49 years, residing at A-3/102, Runwal Estate, Ghodbunder Road, Near Lawkim Company, Manpada, Thane (W)-400607, both being Partners of Our Vision Entertainment LLP, PAN: AAEFO8646C, do hereby solemy affirm and state on oath as under:
1. That we are the partners of Our Vision Entertainment LLP and are duly authorized to make and sign this affidavit on behalf of the firm.
2. That for AY 2016-17, the assessment of the firm was completed ex parte under section 144 of the Income-tax Act, 1961 on 28.12.2018. The appeal filed before the Learned CIT(A), NFAC, was disposed ex parte on 26.10.2023 under section 250 of the Act.
3. That the appeal before the Hon'ble Income Tax Appellate Tribunal was filed on 25.07.2025, resulting in delay beyond the prescribed limitation period.
4. That the delay was occasioned due to a series of bona fide and unavoidable circumstances, which we respectfully explain below.
That after 2018, our firm's business faced heavy financial losses and became dormant. We were unable to generate income, and at times we did not even have enough funds to support our own families. This compelled us to seek alternative employment to sustain ourselves.
That one of us, Mr. Bhasker Chavan, after the business setbacks, also had to shoulder family responsibilities. His mother fell seriously ill, and he relocated to Nashik to care for her. Unfortunately, despite all efforts, she passed away in 2024. Only thereafter did he return to Mumbai to resume normal life and review pending affairs.
7. That during this difficult phase, Mr. Mukesh Gupta, the other partner, had to take up employment abroad to support his family due to the firm's collapse and lack of income.
That these personal hardships and geographical separation caused an extended gap in communication between us, further delaying attention to the pending appellate matters.
9. That in addition to these challenges, the LLP had no employees, accountants, or tax consultants during this time. Consequently, statutory notices and electronic communications from the NFAC could not be effectively tracked or complied with
That we were not conversant with the new faceless appellate procedures at that point in time, and remained unaware that the appellate order had been uploaded electronically in October 2023.
3 M/s. Our Vision Entertainment LLP
That the aftermath of the COVID-19 pandemic further compounded the situation, as we were personally burdened with health, financial and family challenges
That the business of the LLP had become dormant after the relevant assessment year. With no ongoing projects or revenue, there was no systematic mechanism to track legal or compliance deadlines.
That these circumstances together resulted in the delay in filing the appeal. The delay was not due to negligence, disregard for law, or any attempt to evade tax
That once the firm engaged professional advisors in mid-2025 and the lapse came to our knowledge, immediate steps were taken, and the appeal was filed without any further delay.
That the delay has not conferred any benefit upon us. On the contrary, it has severely prejudiced us, as the additions made in the assessment remained unchallenged until the appeal was filed.
That we sincerely regret the lapse and humbly submit that it arose due to genuine difficulties which were beyond our control. We respectfully state that the circumstances explained above constitute "sufficient cause" within the meaning of section 253(5) of the Income-tax Act. 1961
That we now undertake to diligently pursue this appeal and to fully cooperate with the Department and this Hon'ble Tribunal in all further proceedings.
That we verily believe that principles of substantial justice should prevail over technicalities of limitation, and we therefore most humbly pray that the delay may be condoned so that our appeal can be decided on its merits.
That the statements made hereinabove are true and correct to the best of our knowledge and belief, and nothing material has been concealed therefrom."
On the contrary, the Ld. DR refuted the aforesaid claim of the assessee.
We have given thoughtful consideration to the peculiar facts and circumstances of the case, specific to the delay occurred in filing of this appeal and reasons stated and demonstrated for the cause of delay, which are duly supported with a duly sworn affidavit and appears to be reasonable, bonafide and unintentional, thus we deem it appropriate to condone the delay. Thus, for substantial justice and fair play, the delay is condoned, however, subject to deposit of Rs. 11,000/- in the Revenue Department under "Other Heads" , within thirty days of this order.
4 M/s. Our Vision Entertainment LLP 5. Coming to the merits of the case, we observe that in this case admittedly, the Ld. Commissioner vide impugned decided the appeal filed by the Assessee against the Assessment order dated 28-12-2018 u/s 144 of the Act, whereby the AO has made the additions of Rs. 1,14,62,761/- and Rs. 6993/- respectively on account of unexplained cash credit u/s 68 of the Act and unexplained expenditure, as ex-parte on non-prosecution by the Assessee and without condoning the delay of 99 days in filing 1st appeal, however proceeded further with the appeal and dismissed the same on non-prosecution and therefore eventually condoned the delay, specifically in view of judgment by Hon'ble High Court of Madras in the case of All Angels Educational Society vs. Chief Commissioner of Income Tax, Chennai-III (2016) 72 taxmann.com 251 (Madras) wherein it has been held that having rejected the application on the ground of limitation, the question of examining the merits of the matter, would not arise, as it is a superseded exercise.
6. Coming to the merits of the case, we observe that admittedly the Ld. Commissioner though declined to condone the delay but still proceeded with the merits of the case and ultimately dismissed the appeal of the Assessee for non-prosecution, without adjudicating the issues on merits finally and therefore, on this count as well, the impugned order is liable to be set aside for passing the order on merits, specifically in view of the judgment of Hon’ble Jurisdictional High Court in CIT v. Premkumar Arjunda (2107) 297 CTR 614 (Bombay), wherein it has been held as under: - “Section 251(1)(a) and (b), along with the explanation in Section 251(2) of the Act, mandates that the CIT(A) must apply their mind to all issues arising from the order being appealed, regardless of whether the appellant specifically raised them [1]. …………………………………………...The law does not empower the CIT(Appeal) to dismiss the appeal for non-prosecution as is evident from the provisions of the Act”.
Thus, the impugned order is set aside and the case is remanded to the file of Ld. Commissioner for decision on merit, suffice to by affording reasonable opportunity of being heard to the Assessee.
5 M/s. Our Vision Entertainment LLP 8. The Assessee is also directed to comply with the notices to be issued by Ld. Commissioner and shall file relevant submissions and documents. In case of default, the Assessee shall not be entitled for any leniency.
In the result, appeal filed by the assessee is allowed for statistical purposes. Order pronounced in the open court on 02.12.2025.