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Facts
The assessee filed an appeal against an order by the CIT(A) which dismissed the appeal due to delay in filing. The CIT(A) had sustained an addition of Rs. 1,06,93,000/- made by the AO for AY 2018-19. The assessee admitted the delay was due to the previous tax consultant's negligence.
Held
The Tribunal condoned the delay, stating that it was unintentional and bonafide, and that the CIT(A) should have taken a lenient view. The dismissal solely on the ground of delay was contrary to natural justice. The Tribunal set aside the CIT(A)'s order and restored the matter to the AO for de novo assessment.
Key Issues
Whether the delay in filing the appeal before the CIT(A) was justifiable for condonation, and whether the CIT(A) erred in dismissing the appeal solely on the ground of delay without adjudicating on merits.
Sections Cited
147, 144, 249(2), 246A
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Before: JUSTICE (RETD.) C. V. BHADANG & SHRI PRABHASH SHANKAR
Date of Hearing 12.11.2025 Date of Pronouncement 21.11.2025 आदेश / O R D E R PER PRABHASH SHANKAR [A.M.] :- The present appeal arising from the appellate order dated 23.07.2025 filed by the assessee against the order passed by the Learned Commissioner of Income-tax (Appeals)/National Faceless Appeal Centre, Delhi [hereinafter referred to as “CIT(A)”] pertaining to assessment order passed u/s. 147/144 of the Income-tax Act, 1961 [hereinafter referred to as “Act”] dated 19.03.2024 for the Assessment Year [A.Y.] 2018-19. P a g e | 2 A.Y. 2018-19 Zuzer Fakruddin Motorwala 2. The grounds of appeal are as under:
1. On the facts and in law, learned CIT (Appeals) [NFAC], Delhi has erred in dismissing the appeal and sustenance of impugned addition of Rs.1,06,93,000/- made by the AO without taking cognizance of (a) Submission dated 09/11/2024 filed by my freshly appointed CA with supporting application for condonation of delay in filing the appeal u/s.246A due to negligence on the part of the previous tax consultant/ his staff as supported by his solemn affidavit as well as my solemn affidavit.
(b) Impugned dismissal order is passed mechanically with reference to various irrelevant notings made in Para 1 of the said dismissal order.
On the facts and in law, impugned order may kindly be set-aside and be remanded to First Appellate Authority to decide the appeal on merit under the provisions of the IT Act, 1961.
Briefly stated facts of the case are that in this case, the assessment order was passed u/s 144 of the Act making an addition of Rs 1,06,93,000/-mainly on account of non compliance by the assessee to various statutory notices issued by the AO from time to time. In the subsequent appeal, the ld.CIT(A) noticed that the assessee did not file the appeal within the prescribed time. It was observed that the assessee had admitted the delay in filing of appeal stating that the matter was forwarded to the tax consultant as he was personally being unaware of the legal provisions, assuming that it was being taken care of. The delay was totally bonafide and unintentional and due to the circumstances P a g e | 3 A.Y. 2018-19 Zuzer Fakruddin Motorwala beyond his control. The ld.CIT(A) observed that the appellant was required to file appeal within 30 days as provided vide section 249(2) of the Act on receipt of the assessment order. Therefore, the contention of the appellant was found to be without any substance in it. The cause stated by him for delay was not an extraordinary cause and therefore, it was not a suitable cause for condoning the delay in filing of appeal. Hence, the appeal having not been filed within prescribed time as provided in the section 249(2) of the Act, it was not admitted and the appeal was dismissed in limine.
Before us, the ld.AR has reiterated the same contentions as made before the ld.CIT(A) in respect of the delay and made a request to condone the same and remand the matter back to the lower authorities. The ld.DR however, objected to this proposition stating that the assessee was an habitual defaulter in this regard as the assessment order was also passed in ex parte manner due to his non compliance.
On careful consideration of the submissions of the assessee, we are of the considered opinion that the delay in filing of the present appeal was not intentional but due to certain unavoidable mainly attributable to inaction on part of the dealing Consultant. Moreover, the said delay of 30 days could not be considered as inordinate. We are of P a g e | 4 A.Y. 2018-19 Zuzer Fakruddin Motorwala the opinion that the ld.CIT(A) should have taken a lenient view of the matter. Rejection of the request for condonation would cause genuine hardship to the assessee. In this connection, reliance could be placed on the landmark decision of hon’ble Supreme Court which inter alia held in Collector, Land Acquisition v Mst. Katiji And Others- 167 ITR 471 (SC) that “ordinarily, a litigant does not stand to benefit by lodging an appeal late……..Refusing to condone delay can result in a meritorious matter being thrown out at the very threshold and cause of justice being defeated….Any appeal or any application, other than an application under any of the provisions of Order XXI of the Code of Civil Procedure, 1908, may be admitted after the prescribed period if the appellant or the applicant satisfies the court that he had sufficient cause for not preferring the appeal or making the application within such period…. A litigant does not stand to benefit by resorting to delay. In fact, he runs serious risk.” Accordingly, in the interest of justice, we condone the delay.
We further observe that the ld.CIT(A) dismissed the appeal solely on the ground of delay. He failed to adjudicate the issues raised in the grounds of appeal
and did not examine the materials available on record. Such dismissal without deciding the appeal on merits is contrary P a g e |
5. A.Y. 2018-19 Zuzer Fakruddin Motorwala to the principles of natural justice. It is settled law that it is the duty of the appellate authority to dispose of an appeal on merits after considering the material on record, even if the appellant fails to appear. However, it is equally important that it is a fundamental duty of the assessee to diligently pursue the appeal and comply with the notices and proceedings initiated by the Revenue authorities. Moreover, the assessee’s contention of inaction on part of the CA cannot absolve him of his duty to follow up on its appeal, more so in the light of the fact that the ld.AR could not cite any cogent reasons for non-compliance even in assessment proceedings. The failure of the assessee to take any initiative reflects gross negligence and an indifference which is unacceptable, particularly when the appeal involves significant additions and disallowances. It is pertinent to note that the principles of natural justice operate both ways, while the revenue authorities are required to provide a reasonable opportunity of being heard, the taxpayer is equally obligated to co-operate with the authorities and utilize the opportunities extended. In the present case, despite receiving adequate opportunities, the assessee displayed a casual approach and indifference which delayed the assessment and appellate proceedings. Taxpayers are expected to act responsibly, especially when significant sums and complex issues are under dispute.
P a g e | 6 A.Y. 2018-19 Zuzer Fakruddin Motorwala 6.1 In light of the above, levy of cost would be fully justified. The cost serves as a necessary deterrent to ensure that taxpayers act with due diligence in pursuing the proceedings and adhering to the timelines and processes laid down under the law. It also emphasizes the principle that while justice must be ensured, the system cannot cater to indolence or negligence on the part of the assessee.
In view of the above, following the principles of natural justice and fair play, we set aside the order of the ld.CIT(A) and restore the matter to the AO. He is directed to make de novo assessment after providing a reasonable opportunity of being heard to the assessee who, in turn, would ensure due compliance.
7.1 Considering the assessee’s lack of diligence in pursuing the assessment and also appeal and his failure to take timely measures respecting timeline laid down in the Act, we impose a cost of Rs.10,000/- on the assessee. The cost shall be deposited to the credit of the Prime Minister’s Relief Fund within 15 days of the receipt of this order and proof of payment shall be submitted before the ld.AO.
P a g e | 7 A.Y. 2018-19 Zuzer Fakruddin Motorwala 8. In the result, the appeal of the assessee is allowed for statistical purposes, subject to the levy of costs as specified above.
Order pronounced in the open court on 21/11/2025. [Justice (Retd. )C.V. BHADANG] [PRABHASH SHANKAR] PRESIDENT A ACCOUNTANT MEMBER