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Facts
The assessee, a citizen of USA residing abroad since 2007, was unaware of tax proceedings against her until her joint account was frozen. The assessment order was passed ex-parte after re-opening under Section 147 due to foreign remittance. The assessee obtained the order on 15.06.2023 and filed an appeal before the CIT(A) on 10.07.2023, which was dismissed for being delayed and without sufficient cause.
Held
The Tribunal held that the expression "sufficient cause" for condoning delay should be interpreted liberally to advance substantial justice. The assessee's explanation for the delay, considering her residing abroad and lack of awareness of proceedings, was deemed a reasonable cause.
Key Issues
Whether the CIT(A) erred in dismissing the appeal without condoning the delay and providing a reasonable opportunity to the assessee, and whether the assessee's reasons constituted "sufficient cause" for the delay.
Sections Cited
144, 147, 148, 142(1), 69C, 249(3), 249(2)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “C” BENCH MUMBAI
Before: SHRI SANDEEP GOSAIN & SHRI GIRISH AGRAWAL
Assessment Year: 2011-12 Subha Hariharan Income Tax Officer, Plot No. 4 B 503/504, Ward 35(3)(4), Dosti Elite Tower -B Mumbai Vs. Next to Sion Telephone Exchange Sion (W), Mumbai – 400022 (PAN: ACMPH5705R) (Assessee) (Respondent) Present for: Assessee : Mr. Ruturaj Gurjar, Advocate Revenue : Mr. Virabhadra S. Mahajan, Sr. DR (Virtually appeared) Date of Hearing : 30.09.2025 Date of Pronouncement : 13.10.2025 O R D E R
PER GIRISH AGRAWAL, ACCOUNTANT MEMBER:
This appeal filed by the assessee is against the order of Ld. CIT(A), National Faceless Appeal Centre (NFAC), Delhi, vide order no. ITBA/NFAC/S/250/2024-25/1071531320(1), dated 24.12.2024 passed against the assessment order by Income-tax Officer, Ward – 35(3)(4), Mumbai, u/s. 144 r.w.s.147 of the Income-tax Act, 1961 (hereinafter referred to as the “Act”), dated 27.12.2018 for Assessment Year 2011-12.
2. Grounds taken by the assessee are reproduced as under: “1. The Ld. CIT (A) has erred in passing the order dated 24/12/2024 without giving reasonable opportunity to the petitioner to represent its case.
Subha Hariharan AY 2011-12 2. The Ld CIT (A) has also erred in Disposing of the appeal without appreciating the circumstances under which the (Appeal as per Form-35) could not be filed.
3. Without Prejudice to the above grounds: the Ld. CIT (A) has also erred in not appreciating the fact that the Appellant had filed a letter stating Grounds for condonation of Delay: the Ld. CIT(A) ought to have given reasonable opportunity to the explain petitioner's case.
4. Each of the above ground be considered as separate from the other grounds.
5. The appellant reserves its right to add to, alter, amend, modify or delete any of the grounds taken in this appeal..
All the ground nos. 1 to 3 are in respect of dismissal of the first appeal ignoring the submissions made by the assessee for condonation of delay in filing the appeal before the ld. CIT(A) and not giving reasonable opportunity to present the case.
4. From the perusal of the order of ld. CIT(A), we note from para 2.3 that the delay in filing the first appeal was not condoned and the appeal was thus dismissed without dealing with the merits of the case.
5. Assessee had furnished grounds for condonation of delay before the ld. CIT(A) which are extracted below:
1. 1. The assessee is a bonafide citizen of United States of America (USA) and is in the process of filing the appeal against the order passed by the assessing of- ficer.
2. The delay in filing the appeal has been an account of following genuine rea- sons and the appeal may be admitted. a. The assessee is a citizen of USA and had left India in year 2007 for stud- ies and later settled out of India. b. Since the assessee had settled out of India and never had any source of income in India, she was not aware of any income tax proceedings being ini- tiated against her. c. The assessee was opening new NRO account online, wherein she already had one joint account with her father, it was bought to her notice that her joint account was frozen by the Income Tax Department on account of some tax liability to be paid by the assessee.
Subha Hariharan AY 2011-12 d. It was only after such information, the assessee came to know about the case of her being selected for assessment and since no one attended the mat- ter, the case of completed on ex-parte basis leading to such high demand. e. The assessee had approached Income Tax Department to provide the copy of order in order to take further necessary steps for removal of demand. f. On continuous follow up with the Income Tax Department, the assessee could obtain the order only on 15.06.2023. g. The copy of all the letters written by the assessee for obtaining the order is attached herewith. (Pl refer Annexure 1) h. Due to absence of any information of assessment proceedings against the assessee, the assessee could not avail the timely remedy under the Income Tax Act.
3. The aforesaid reasons are genuine reasons and though technically there be- ing no delay, the assessee in order to justify the appeal filing at present date which is almost after 4.5 years from date of order, is making a humble request before your good self to kindly condone the delay, if any, and allow the appeal of the assessee thereby granting her natural justice. Condonation of delay in Filing an Appeal [Section 249(3)] 4. The CIT(A) is empowered under section 249(3) the Act to admit an appeal even after the expiry the limitation period as prescribed u/s. 249(2) the Act, if the CIT(A) is satisfied that the appeal was prevented by reasonable and suffi- cient cause for not presenting the appeal within the limitation period.
5. A delayed appeal should, ordinarily, be accompanied by a application for condonation of delay explaining the cause therein as to why the appellant was not able to file the appeal within the period of limitation and praying for condo- nation of the delay 6. In considering the condonation petition, it is to be remembered that statute conferring a right of appeal must be construed in furtherance of providing sub- stantial justice and the provision limiting the time for filing an appeal must be construed liberally so that a person is not non-suited on mere technicalities. Chamanlal Brothers Pa Ltd. vs Punjab State ((1961)12 STC 643 (Punj)]. The power to condone delay is discretionary, but the discretion either way should be judicially exercised. Adwani & Co. (JB) Ltd. vs. CIT [(1969) 72 ITR 395 (SC)]. In the context of Limitation Act, the Hon'ble Supreme Court in Collector, Land Ac- quisition vs. Khatiji [(1987) 167 ITR 471(SC)] has observed that the expression 'sufficient cause' is adequately elastic to enable the courts to apply the law in a meaningful manner which sub serve the ends of justice.
7. The word 'sufficient cause' appearing in section 249(3) should receive liberal construction, so as to advance substantial justice. The true guide while deciding a condonation petition should be to see whether the uppellant acted with rea- sonable diligence in prosecution of its appeal Brij Indar Singh vs. Kanshi Ram 1917 (PC) 156). [AIR
Brief facts are that case of the assessee was re-opened u/s.148 as assessee had not filed return of income for the year. Ld. Assessing Officer had received information from i-taxnet that assessee had made foreign remittance to a non-resident of Rs.1,73,12,100/-. Notice u/s.148 was issued on 29.03.2018 against which assessee did not file the return of income. Notice u/s. 142(1) was issued twice, one on 29.09.2018 and another on 06.12.2018 which also remained uncompiled. Ld. Assessing Officer thus, completed the assessment ex parte u/s.144 by making an addition of Rs.86,54,100/- u/s. 69C.
6.1. As mentioned by the assessee in the ground for condonation of delay, the impugned assessment order was obtained only on 15.06.2023, after communication with the Department as assessee had left India and had become citizen of USA since the year 2007. Upon receipt of the impugned order on 15.06.2023, assessee took all the necessary actions and filed the first appeal by submitting Form No.35 on 10.07.2023. In row 14 of Form 35, assessee submitted “No”, for delay in filing the appeal. However, ld. CIT(A) took note of the date of passing of order, i.e., 27.12.2018 and thus, held that conditions laid down u/s. 249(3) are not fulfilled. According to him, there being no sufficient cause for delay in filing of first appeal, the same was dismissed by rejecting the grounds of condonation of delay.
We have perused the material on record and the submissions made before us. To address the issue in hand before us, we need to delve into the understanding of the expression “sufficient cause”. Sub- section 3 of Section 249 contemplates that the CIT(A) may admit an appeal after expiry of relevant period, if he is satisfied that there was a Subha Hariharan AY 2011-12 “sufficient cause” for not presenting it within that period. Similarly, it has been used in section 5 of Indian Limitation Act, 1963. Whenever interpretation and construction of this expression has fallen for consideration before Hon'ble High Court as well as before the Hon'ble Supreme Court, then, Hon'ble Court were unanimous in their conclusion that this expression is to be used liberally.
7.1. We may make reference to the following observations of the Hon'ble Supreme Court from the decision in the case of Collector Land Acquisition Vs. Mst. Katiji & Others, 1987 AIR 1353: "1. 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. 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. 3. "Every day's delay must be explained" does not mean that a pedantic approach should be made. Why not every hour's delay, every second's delay? The doctrine must be applied in a rational common sense pragmatic manner.
When substantial justice and technical considerations are pitted against each other, cause of substantial justice deserves to be preferred for the other side cannot claim to have vested right in injustice being done because of a non-deliberate delay.
There is no presumption that delay is occasioned deliberately, or on account of culpable negligence, or on account of mala fides. A litigant does not stand to benefit by resorting to delay. In fact he runs a serious risk.
6. It must be grasped that judiciary is respected not on account of its power to legalize injustice on technical grounds but because it is capable of removing injustice and is expected to do so." 7.2. Similarly, we would like to make reference to authoritative pronouncement of Hon'ble Supreme Court in the case of N. Balakrishnan Vs. M. Krishnamurthy (supra). It reads as under: "Rule of limitation are not meant to destroy the right of parties. They are meant to see that parties do not resort to dilatory tactics, but seek their remedy promptly. The object of providing a legal remedy is to repair the damage caused by reason of legal injury. Law of limitation fixes a life-span for such legal remedy for the redress of the legal injury so suffered. Time is precious and the wasted time would never revisit. During efflux of time newer causes Subha Hariharan AY 2011-12 would sprout up necessitating newer persons to seek legal remedy by approaching the courts. So a life span must be fixed for each remedy. Unending period for launching the remedy may lead to unending uncertainty and consequential anarchy. Law of limitation is thus founded on public policy. It is enshrined in the maxim Interest reipublicae up sit finis litium (it is for the general welfare that a period be putt to litigation). Rules of limitation are not meant to destroy the right of the parties. They are meant to see that parties do not resort to dilatory tactics but seek their remedy promptly. The idea is that every legal remedy must be kept alive for a legislatively fixed period of time. A court knows that refusal to condone delay would result foreclosing a suitor from putting forth his cause. There is no presumption that delay in approaching the court is always deliberate. This Court has held that the words "sufficient cause" under Section 5 of the Limitation Act should receive a liberal construction so as to advance substantial justice vide Shakuntala Devi lain Vs. Kuntal Kumari [AIR 1969 SC 575] and State of West Bengal Vs. The Administrator, Howrah Municipality [AIR 1972 SC 749]. It must be remembered that in every case of delay there can be some lapse on the part of the litigant concerned. That alone is not enough to turn down his plea and to shut the door against him. If the explanation does not smack of mala fides or it is not put forth as part of a dilatory strategy the court must show utmost consideration to the suitor. But when there is reasonable ground to think that the delay was occasioned by the party deliberately to gain time then the court should lean against acceptance of the explanation. While condoning delay the Could should not forget the opposite party altogether. It must be borne in mind that he is a looser and he too would have incurred quiet a large litigation expenses. It would be a salutary guideline that when courts condone the delay due to laches on the part of the applicant the court shall compensate the opposite party for his loss."
We do not deem it necessary to re-cite or recapitulate the proposition laid down in other decisions. It is suffice to say that the Hon'ble Courts are unanimous in their approach to propound that whenever the reasons assigned by an applicant for explaining the delay, then such reasons are to be construed with a justice oriented approach.
In light of the above, if we examine the facts, then it would reveal that there is a delay of more than 50 months in filing of the first appeal by the assessee before the ld. CIT(A). In her submissions as Subha Hariharan AY 2011-12 reproduced in the order of ld. CIT(A), assessee has explained the reasons which prevented her in filing the appeal withing the prescribed limitation. Therefore, for the just decision of the controversy, it is incumbent upon us to condone the delay. Considering the said explanation of the assessee, we condone the same.
Accordingly, in the given set of facts, by condoning the delay in filing the first appeal before ld. CIT(A), we remit the matter back to the file of ld. CIT(A) for meritorious adjudication of the grounds raised by the assessee at the first appellate stage by passing a speaking order. Needless to say, assessee be given reasonable opportunity of being heard and to make all the relevant submissions as required to substantiate the claim made by it.