SHRADDHA GLOBE LLP,MUMBAI vs. INCOME TAX OFFICER, VASHI

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ITA 3762/MUM/2026Status: DisposedITAT Mumbai24 July 2026AY 2022-235 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal condoned the delay of 408 days, finding sufficient cause and no mala fide intention. The appeal was restored to the CIT(A) for adjudication on merits.

What were the facts?

The assessee filed an appeal with a delay of 408 days against a penalty order. The CIT(A) dismissed the appeal without condoning the delay, citing exceptional circumstances arising from a search action and disruption of administrative functions.

What were the issues?

Whether the delay in filing the appeal should be condoned due to exceptional circumstances and whether the CIT(A) erred in dismissing the appeal without a proper hearing on merits.

Which sections of the Income-tax Act were involved?

Section 271D

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, MUMBAI

Before: SHRI CHALLA NAGENDRA PRASAD & SHRI MAKARAND VASANT MAHADEOKAR

Pronounced: 24/07/2026

PER SHRI CHALLA NAGENDRA PRASAD, JUDICIAL MEMBER: This appeal is filed by the assessee against the order of the learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi [“Ld. CIT(A)”], dated 18.03.2026 for the assessment year 2022-23 in sustaining the penalty levied u/s 271D of the Act and dismissing the appeal of the assessee in limine without condoning the delay.

2.

Ld. Counsel for the assessee, at the outset, submitted that the Ld. CIT(A) was not justified in rejecting the application for condonation of delay of 408 days and dismissing the appeal of the assessee without properly appreciating the exceptional circumstances and sufficient cause demonstrated by the assessee in filing the appeal with delay. Ld. Counsel for the assessee submitted that the Ld. CIT(A) without issuing a single notice dismissed the appeal of the assessee. The Ld. CIT(A) should have provided one opportunity to the assessee to explain the delay which he failed to do and dismissed the appeal of the assessee on technical grounds. Ld. Counsel for the assessee submitted that the delay in filing the appeal may be condoned and the appeal may be restored to the file of the Ld. CIT(A) for disposing of the appeal afresh on merits.

3.

Heard rival submissions and perused the orders of the authorities below and the petition for condonation of delay filed by the assessee, as under:

“The appellant respectfully submits that the delay in filing the appeal against the penalty order dated 23.09.2024 passed under section 271D deserves to be condoned for the following bona fide reasons. The delay of 407 days is neither intentional nor deliberate but has occurred due to circumstances completely beyond the control of the appellant. A search action conducted in May 2024 on the entities and partners of the Shraddha Group to which the appellant belongs. As a result of the search and the extensive post search proceedings the appellants accounts administrative systems digital records and compliance functions were severely disrupted. Key staff members handling taxation and statutory matters resigned or were unavailable leaving no one responsible for monitoring e filing notices emails or departmental communications. Due to this situation the appellant remained unaware of the penalty proceedings initiated by the FAC and of the subsequent notices that were issued. The appellant first became aware of the existence of the penalty order and the pending proceedings only upon receipt of the bank attachment notice from the Department. This was the first effective intimation that orders had been passed and recovery had commenced. Immediately thereafter the appellant took corrective steps engaged professional assistance accessed the income tax portal obtained copies of all orders retrieved records and initiated the filing of the present appeal. During the assessment stage the appellant had already submitted partiál replies and supporting documents. However because of the disruption caused by the search and the absence of responsible staff further compliance could not be completed which led to ex parte proceedings. The appellant has a strong case on merits as the assessment was completed ex parte under section 144 read with section 144B and material evidences such as partner capital introduction inter LLP loans bank statements creditor details and working capital movements were not examined. The delay is fully attributable to exceptional circumstances arising out of the search and the ensuing breakdown of the appellants administrative functioning. There was no malafide intent no willful default and no deliberate non compliance. The appellant has always been compliant with tax laws and has acted promptly upon gaining knowledge of the proceedings. It is a settled legal principle that substantial justice must prevail over technical considerations and delays caused by circumstances beyond the assessee control should be condoned liberally. The Hon’ble Supreme Court in Collector vs Katiji 167 ITR 471 has held that a liberal approach is required while considering delay condonation where no mala fide intention is demonstrated. Similarly the courts have repeatedly emphasised that matters should be decided on merits rather than rejected on procedural delays. In these circumstances the appellant humbly prays that the delay be condoned in the interest of justice equity and fair play as no prejudice will be caused to the Revenue and the issues require adjudication on merits.” 4. On going through the reasons explained by the assessee in its petition for condonation of delay, we find that the assessee had sufficient cause for not filing the appeal within time and there is no mala fide intention in delaying the filing of the appeal. Following the decision of the Hon'ble Supreme Court in the case of Collector 3 of Land Acquisition, Anantnag v. Mst. Katiji & Others as reported in (1987) 167 ITR 471 (SC), the delay of 408 days is hereby condoned.

5.

Since the Ld. CIT(A) did not dispose of the appeal on merits, this appeal is restored to the file of the Ld. CIT(A), who shall dispose of the grounds of appeal on merits after providing adequate opportunity of hearing to the assessee.

6.

In the result, the appeal of the assessee is allowed for statistical purposes.

Order pronounced in the open court on 24/07/2026

Sd/- Sd/- MAKARAND VASANT MAHADEOKAR CHALLA NAGENDRA PRASAD ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai, Dated: 24/07/2026 Prabhat Copy to: SHRADDHA GLOBE LLP, MANISHA HEIGHTS COMMERCIAL COMPLEX, BAL RAJESHWAR MARG, 1 VAISHALI NAGAR, MULUND WEST, MUMBAI-400080, MAHARASHTRA

INCOME TAX OFFICER, 3RD & 4TH FLOOR, TOWER NO 6, VASHI 2 RAILWAY STATION, NAVI MUMBAI-400705, MAHARASHTRA

3 THE PCIT / CIT, 4 THE D.R., ITAT, MUMBAI BENCH 5 GUARD FILE

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