JARO INSTITUTE OF TECHNOLOGY MANAGEMENT AND RESEARCH LTD,MUMBAI vs. DY. COMMISSIONER OF INCOME TAX, CIRCLE-4(3)(1), MUMBAI

Brief facts of the case are that the assessee is a company engaged in the business of providing admission related services to educational institution/Universities for online MBA, PGDM and other similar courses to the students and working professionals. The assessee had filed its return of income u/s. 139(4) of the Act, dated 30.12.2022, declaring total income at Rs. 9,28,16,926/-. The assessee’s case was selected for scrutiny and notices u/s. 143(2) and 142(1) of the Act were duly issued and served upon the assessee. Show cause notice dated 08.03.2024 was also issued and served upon the assessee. After perusing the return of income and audit report the ld. AO observed that the assessee has claimed total salary paid to employees at Rs. 27,60,52,840/-, sales and promotion expense of Rs. 23,35,23,301/- and disallowance of Rs. 19,39,268/- u/s. (A.Y. 2022-23) Jaro Institution of Technology Management and Research Ltd. 40(a)(ia) of the Act. The learned Assessing Officer ('ld. A.O.' for short) sought for details pertaining to the same after duly considering the submission of the assessee, passed the assessment order u/s. 143(3) r.w.s. 144B of the Act dated 22.03.2024, determining total income at Rs. 12,07,77,595/- after making addition/disallowance of Rs. 2,73,78,889/- towards sales and promotion expenses and addition/disallowance of Rs. 5,81,780/- u/s. 40(a)(ia) of the Act.

Aggrieved the assessee was in appeal before the first appellate authority, who vide order dated 18.06.2025, dismissed the appeal filed by the assessee in limine for the reason that the assessee had filed the appeal with a delay of 118 days which reason was not sufficiently explained by the assessee.

The assessee is in appeal before us, challenging the impugned order of the ld. CIT(A).

We have heard the rival submissions and perused the materials available on record. It is observed that the assessee has filed the appeal before the first appellate authority with a delay of 118 days for which the learned Authorised Representative (‘ld. AR’ for short) contends that, was due to the reason that the assessee company was mis-construed that since a Nil demand order was issued along with the order being appealed against, they were not liable for any further action and that the matter was resolved. The ld. AR further contended that the Senior Accountant, Mr. Vijay Nadar, handling taxation matters had suddenly quit office without communicating to the assessee company or other staffs to prefer an appeal before the first appellate authority only after receipt of notice of penalty u/s. 270A dated 02.08.2024, the assessee was brought to the knowledge that it ought to have filed an appeal before the ld. CIT(A). Thereafter, the (A.Y. 2022-23) Jaro Institution of Technology Management and Research Ltd. assessee filed an appeal before the first appellate authority with a delay of 118 days along with an affidavit stating the reason for the said delay. The ld. CIT(A) rejected the same on the ground that the assessee has not filed any documentary evidences to substantiate the date when Mr. Vijay Nadar had resigned and the assessee has not filed details of the Name, Designation, Education and Qualification and Experience of other employees specified by the assessee.

The ld. CIT(A) also held that the assessee had preferred the first Appeal as an afterthought without any justifiable reason. The ld. AR prayed that these issues be remanded back to the ld. CIT(A) for adjudicating on the merits of the case by duly condoning the delay in filing the appeal before the first appellate authority.

The learned Departmental Representative (‘ld. DR’ for short) vehemently opposed to remanding this issue back to the ld. CIT(A) for the reason that the assessee has not substantiated the reason for the delay in filing the appeal before the first appellate authority and also stated that it is not a valid reason that the delay was due to the Senior Accountant quitting the office without intimation. The ld. DR relied on the order of the ld. CIT(A).

In the above circumstances of the case, we observe that the appeal filed by the assessee against the assessment order was filed with a delay of 118 days stating the reasons specified in the affidavit. We find no justification in the order of ld. CIT(A) in seeking for the documents pertaining to the resignation of the Senior Accountant, where the assessee itself has stated that the said person has left the office without communicating neither to the assessee nor to any other staffs. Upon considering the rival submissions, (A.Y. 2022-23) Jaro Institution of Technology Management and Research Ltd. we deem it fit to remand this issue back to the file of the ld. CIT(A) for adjudicating the issue on the merits of the case by duly condoning the delay in filing the first appeal by adhering to the principles of natural justice and in the interest of justice dispensation. We also note that various High Courts and the Hon'ble Apex Courts have taken a liberal view in condoning the delay when there is a ‘sufficient cause’ explained by the assessee. We therefore restore this issue back to the file of ld. CIT(A) with the direction that the assessee should make compliance before the first appellate authority without any undue delay on its side and the ld. CIT(A) is directed to decide the issue on the merits of the case and in accordance with law after duly considering the submissions of the assessee.