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Facts
The assessee filed an appeal challenging a CIT(A) order from 2023, with a significant delay of 541 days. The delay was attributed to the company's cessation of business operations since 2008 due to financial crisis, resulting in continuous losses, no staff, and directors losing access to official communications. The assessee became aware of the quantum appeal's dismissal only after receiving a penalty order under Section 270A.
Held
The Tribunal condoned the delay of 541 days, finding sufficient cause for the delay. The matter was restored to the Assessing Officer for fresh adjudication, providing the assessee another opportunity to represent its case, considering it was ex-parte previously. A total cost of Rs. 10,000 was imposed on the assessee, to be deposited in the Prime Minister Relief Fund.
Key Issues
The key issues were the condonation of a 541-day delay in filing the appeal and whether to provide the assessee a fresh opportunity to represent its case before the Assessing Officer.
Sections Cited
250, 143(3), 270A
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “E” BENCH MUMBAI
Before: HON’BLE SHRI SANDEEP GOSAIN & SHRI OMKARESHWAR CHIDARA
Date of Hearing 13.10.2025 Date of Pronouncement 25.11.2025 आदेश / ORDER PER SANDEEP GOSAIN, JM:
The present appeal has been filed by the assessee challenging the impugned order dt. 17.11.2023 passed under section 250 of the Income Tax Act, 1961 (‘the Act’), by the National Faceless Appeal Centre (NFAC) / CIT(A) for the assessment year 2017-18.
At the very outset, we noticed that there is delay of 541 days in filing present appeal and in this regard an 2 Hindesh Yarns Pvt Ltd, Mumbai. application for seeking condonation of delay has been filed by the assessee, wherein it has been mentioned as under:
In the captioned matter, the order passed under section (u/s) 250 of the Act dated 23.11.2023 arising out of the assessment order passed u/s 143(3) of the Act was served on the Appellant on the same day and hence the due date for filing the appeal against the said order was 22.01.2024. Hence, there is a delay 500 of days in filing the appeal.
The facts leading to the delay are as follows:
The Appellant was incorporated in the year 2005 as a Joint Venture with a foreign partner, operating as an Export House. Owing to the 2008 global financial crisis, the foreign JV partner withdrew from the venture, resulting in the complete cessation of the Appellant's business operations since around more than ten years. Consequently, the company faced continuous financial losses due to idle capacity and lack of capital infusion.
Following the closure of business operations and paucity of funds, the company neither has staff nor was any authorised representative appointed, also, the Directors no longer had access to the official email addresses on record with R Department, to which various statutory notices and orders are claimed to have been sent. As a result, the Directors remained unaware of the Appellate proceedings initiated and conducted in the interim.
It is submitted that the penalty order u/s 270A dated 25.03.2025 was passed which was handed over to the Appellant by the erstwhile Authorised Representative on 1 st July 2025. Upon receipt and perusal of the said order, it came to the Appellant's knowledge that the quantum appeal had been dismissed by the Hon'ble CIT(A) on 17.11.2023. As the Appellant has neither ongoing business nor employees nor funds, the Directors took some time in getting assistance in 3 Hindesh Yarns Pvt Ltd, Mumbai. getting the appeal papers finalised. It is further submitted that whenever notices were received by the AR, due responses were filed by the Appellant without delay. However, the CIT(A) order dated 17.11.2023 was not received on the registered email ID of the AR, and therefore, the Appellant remained unaware of the said order until the impugned penalty order u/s 270A of the Act was served.
Under the circumstances, it is humbly submitted that the appeal against the assessment order, which is being filed along with this letter, was delayed. We respectfully request that Your Honours to condone the delay in filing the appeal and admit it for adjudication. 3. On the other hand Ld. DR refuted the contents contained in the application and requested for dismissal of the same.
Considering the entire factual position as explained before us wherein the assessee has specifically mentioned that the assessee company was facing continuous financial losses due to ideal capacity and lack of capital infusion following the closure of business operations and paucity of funds. It was further submitted that the company neither has staff nor was any authorized representative appointed and assessee was having neither ongoing business nor employees nor funds and because of this reason there was a communication gap, assessee could not know the passing of the impugned order and also keeping in view, the principles laid down by Hon’ble Supreme Court in the case of Land Acquisition Collector Vs. Mst. Katiji& Ors., [1987] AIR 1353 (SC),wherein it has been held that where 4 Hindesh Yarns Pvt Ltd, Mumbai. substantial justice is pitted against technicalities of non- deliberate delay, then in that eventuality substantial justice is to be preferred. In our view the principals of advancing substantial justice is of prime importance. Hence considering the explanation put forth by the Assessee by justifiably and properly explaining the delay which occurred in filing the appeal and construing the expression "sufficient cause" liberally we are inclined to condone the delay in filing the appeal before the Tribunal, subject cost of Rs. 5,000/- upon the assessee. Therefore we condone the delay and admit the appeal to be heard on merits.
We also noticed that assessee was ex-parte before AO and Ld. CIT(A). In this regard Ld. AR explained the circumstances before the bench that there was ‘sufficient cause’ which prevented the assessee to represent properly before AO and Ld. CIT(A). On the other hand DR relied upon the orders passed by the revenue authorities.
Be that as it may, without going into the merits of the issues raised by the assessee and considering the fact that there were circumstances, because of which assessee could not put effective representation before revenue authorities. Hence the Bench is of the view that one more opportunity be given to the assessee to represent his case before AO. Therefore considering the overall circumstances of the 5 Hindesh Yarns Pvt Ltd, Mumbai. present case, we deem it proper to restore the matter back to the file of AO for deciding the matter afresh by providing one more opportunity to the assessee. Since there was non cooperation on behalf of the assessee during the proceedings before the revenue authorities therefore additional cost of Rs. 5,000/- is imposed upon the assessee. In all total cost of Rs. 10,000/- be deposited in the Prime Minister Relief Fund and a copy of the receipt shall be placed on file before AO within 30 days from the date of receipt of this order.
Before parting, we make it clear that our decision to restore the matter back to the file of the AO shall in no way be construed as having any reflection or expression on the merits of the dispute which shall be adjudicated by the AO independently in accordance with law.
In the result the appeal filed by the assessee is allowed for statistical purposes.