What did the Tribunal hold?

The Tribunal condoned the delay, finding sufficient cause for the late filing. It then remitted the matter back to the CIT(A)/NFAC for a fresh decision on merits, as the Vivad se Vishwas settlement did not materialize.

The assessee filed an appeal before the ITAT with a delay of 120 days due to unfamiliarity with e-proceedings and age-related limitations. The CIT(A)/NFAC had dismissed the appeal as withdrawn, assuming it was settled under the Vivad se Vishwas scheme.

What were the issues?

Whether the delay in filing the appeal should be condoned and whether the appeal should be decided on merits after the Vivad se Vishwas scheme failed to conclude.

Narayanaswamy, Bangalore Karnataka vs ITO | ITAT Bangalore 2026

Income Tax Appellate Tribunal, “B’’BENCH: BANGALORE

Before: SHRI WASEEM AHMED & SHRI KESHAV DUBEY

Hearing: 03.06.2026Pronounced: 31.07.2026

PER KESHAV DUBEY, JUDICIAL MEMBER:

This appeal at the instance of the assessee is directed against the order of the ld.CIT(A)/NFAC dated 07.07.2025 vide DIN & Order No. ITBA/NFAC/S/250/2025-26/1078241621(1) passed u/s 250 of the Income Tax Act, 1961 (in short “the Act”) for the assessment year 2018-19.

The assessee has raised the following grounds of appeal:-

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At the outset, the ld. A.R. of the assessee submitted that there is a delay of 120 days in filing the appeal before this Tribunal. The ld. A.R. of the assessee also drew our attention on an application for condonation of delay dated 20.01.2026 along with an affidavit sworn before the notary public stating the reasons for the delay which are reproduced below for ease of reference and convenience:

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Before us, the ld. Ld AR of the assessee reiterated the same as stated in the condonation application & submitted that the assessee could not file the appeal within the prescribed period due to the fact that the assessee is not well versed with the e- proceedings and faceless appeal mechanism having background of

ITA No.283/Bang/2026 Mr. Narayanaswamy, Bengaluru Page 10 of 14 village, lack of awareness and age related limitations could not regularly access or monitor electronic communications issued from Income Tax Department. As a result, the assessee could not notice the impugned order or the consequential requirements within the prescribed period. Further, it is stated that the assessee acted promptly the moment the notice was actually noticed and took immediate steps to engage professional assistance and file the present appeal with a condonation application. The ld. A.R. also submitted that the delay is unintentional and no benefit can be attributed to the assessee in filing the appeal belatedly. He thus prayed to condone the delay and requested to consider the issues raised by the assessee on merits.

On the contrary the ld. D.R. vehemently objected for granting the condonation of delay and submitted that the assessee is very callous in his approach in filing the appeal before this Tribunal.

We have perused the details filed by the assessee to justify the delay and we are satisfied that there is no malafide intention on the part of the assessee in filing the appeal belatedly before us and the assessee has demonstrated sufficient cause in filing the appeal belatedly before us. It is to be noted that u/s 253(5) of the Act the Tribunal may admit the appeal filed beyond the period of limitation where it has established that there exists a sufficient cause on the part of the assessee for not presenting the appeals within the prescribed time. The explanation therefore, becomes relevant to determine whether the same reflect sufficient and reasonable cause on the part of the assessee in not filing these appeals within the prescribed time. We have gone through the reasons explained by the assessee in which the assessee has stated to be not well versed with the e-proceedings and faceless appeal mechanism having village background, lack of awareness and age related limitations

ITA No.283/Bang/2026 Mr. Narayanaswamy, Bengaluru Page 11 of 14 could not regularly access or monitor electronic communications issued from Income Tax Department. As a result, the assessee could not notice the impugned order or the consequential requirements within the prescribed period. Further, it is submitted that the assessee acted promptly the moment the notice was actually noticed and took immediate steps to engage professional assistance and file the present appeal with a condonation application.

6.1 While considering a similar issue the Apex Court in the case of Collector, Land Acquisition v. Mst. Katiji and Ors. (167 ITR 471) laid down six principles. For the purpose of convenience, the principles laid down by the Apex Court are reproduced hereunder:

(1) Ordinarily, a litigant does not stand to benefit by lodging an appeal late.

(2) Refusing to condone delay can result in a meritorious matter being thrown 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, commonsense and pragmatic manner.

(4) When substantial justice and technical consideration are pitted against each other, the 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 nondeliberate delay. (5) 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 the judiciary is respected not on account of its power to legalise injustice on technical grounds but because it is capable of removing injustice and is expected to do so.

6.2 When substantial justice and technical consideration are pitted against each other, the cause of substantial justice deserves

ITA No.283/Bang/2026 Mr. Narayanaswamy, Bengaluru Page 12 of 14 to be preferred, for the other side cannot claim to have vested right for injustice being done because of nondeliberate delay. Therefore, we have to prefer substantial justice rather than technicality in deciding the issue. As observed by Apex Court, if the application of the assessee for condoning the delay is rejected, it would amount to legalize injustice on technical ground when the Tribunal is capable of removing injustice and to do justice. Therefore, this Tribunal is bound to remove the injustice by condoning the delay on technicalities. If the delay is not condoned, it would amount to legalizing an illegal order which would result in unjust enrichment on the part of the State by retaining the tax relatable thereto. Under the scheme of Constitution, the Government cannot retain even a single pie of the individual citizen as tax, when it is not authorized by an authority of law. Therefore, if we refuse to condone the delay, that would amount to legalize an illegal and unconstitutional order passed by the lower authority.

6.3 Further, in the case of People Education & Economic Development Society Vs/ ITO reported in 100 ITD 87 (TM) (Chen), wherein held that “when substantial justice and technical consultation are pitted against each other, the cause of substantial justice deserves to be preferred for the other side cannot claim to have vested right in injustice being done because of non-deliberate delay”.

6.4 The next question may arise whether delay was excessive or inordinate. There is no question of any excessive or inordinate when the reason stated by the assessee was a reasonable cause for not filing the appeal. We have to see the cause for the delay. When there was a reasonable cause, the period of delay may not be relevant factor. In fact, the Madras High Court in the case of CIT vs. K.S.P. Shanmugavel Nadai and Ors. (153 ITR 596) considered the

ITA No.283/Bang/2026 Mr. Narayanaswamy, Bengaluru Page 13 of 14 condonation of delay and held that there was sufficient and reasonable cause on the part of the assessee for not filing the appeal within the period of limitation. Accordingly, the Madras High Court condoned nearly 21 years of delay in filing the appeal. When compared to 21 years, 120 days cannot be considered to be inordinate or excessive. Furthermore, the Chennai Tribunal by majority opinion in the case of People Education and Economic Development Society (PEEDS) v. ITO (100 ITD 87) (Chennai) (TM) condoned more than six hundred days delay. Therefore, in our opinion, by preferring the substantial justice, the delay of 120 days has to be condoned and accordingly we condone the delay and admit the appeal for adjudication.

Now having condoned the delay of 120 days in filing the appeal before us, we observed that the ld. CIT(A)/NFAC dismissed the appeal of the assessee as withdrawn since the assessee had opted for Direct Tax Vivad Se Vishwas, 2024 Scheme and Form 2 had also been issued by the competent authority. However, before us, the ld. AR of the assessee vehemently submitted that owing to unavoidable circumstances, the assessee could not remit the amount determined under the scheme within the prescribed statutory time limit of 15 days from the date of issuance of form No. 2. It is also submitted that as the requisite payment was not made within the time prescribed under the scheme, the declaration filed by the assessee did not attain finality and the settlement contemplated under the scheme could not be concluded. Consequently, by operation of the provisions of the scheme itself, the declaration filed under VSVS stood lapsed/ invalidated automatically and the proceedings under the scheme came to an end without any settlement being effectuated. Lastly, it is submitted that the ld. CIT(A)/NFAC appears to have proceeded on the

ITA No.283/Bang/2026 Mr. Narayanaswamy, Bengaluru Page 14 of 14 assumption that the subject matter of the appeal stood settled under the provisions of VSVS, 2024 & accordingly dismissed the appeal of the assessee as withdrawn. This being so, in our opinion, in the interest of justice, equity and fair play and as requested by the ld. A.R. of the assessee, we remit the entire issue in dispute to the file of ld. CIT(A)/NFAC for deciding afresh on the merits of the case in accordance with law. Needless to say, a reasonable opportunity of being heard must be granted to the assessee. It is ordered accordingly.

10.

In the result, appeal filed by the assessee is partly allowed for statistical purposes.

Order pronounced in the open court on 31st July, 2026

Sd/- Sd/- (Waseem Ahmed) (Keshav Dubey) Accountant Member Judicial Member

Bangalore, Dated 31st July, 2026. VG/SPS

Copy to:

The Applicant 2. The Respondent 3. The CIT 4. The DR, ITAT, Bangalore. 5 Guard file By order

Asst. Registrar, ITAT, Bangalore.

NARAYANASWAMY,BANGALORE KARNATAKA vs. INCOME TAX OFFICER WARD 4(3)(3) BANAGLORE, KARNATAKA BANGALORE

What did the Tribunal hold?

What were the facts?

What were the issues?

Which sections of the Income-tax Act were involved?

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