DHARAMVIR KUMAR,BANGALORE vs. ITO, WARD 3(1)(1), BANGALORE, BANGALORE

The assessee is in appeal before us, contending that the learned CIT(A) erred in not condoning the delay of 302 days in filing the appeal. It was submitted before the learned CIT(A) that the delay arose from a bona fide confusion regarding the distinction between financial year 2017-18 and assessment year 2018-19. The assessee was under the honest belief that, since the full tax liability of ₹4,65,889 had been withheld at source, no further compliance was required.

Briefly stated, the assessee is an individual and a salaried employee. During the relevant year, he received salary income of ₹26,70,368 but did not file a return of income under section 139(1) of the Act. Consequently, the learned Assessing Officer issued notice under section 148A(b) of the Act. Since the assessee did not respond to the notice, the assessment was reopened. Despite being granted several opportunities, the assessee failed to comply. The learned Assessing Officer therefore issued notice under section 133(6) of the Act to Sankalp & KPIT Semiconductor Private Limited to verify the salary details. The company confirmed that the assessee was its employee during the relevant year, that salary had been paid to him, and furnished Form No. 16 issued by the employer. Based on Form No. 16, the learned Assessing Officer found that the assessee had received salary of ₹26,70,368 and had not filed any return of income. Accordingly, the assessment was completed by determining the total income at ₹26,70,368. The assessment order was passed on 18 December 2023 under section 143(3) read with sections 144, 147 and 144B of the Income Tax Act.

Aggrieved by the assessment order, the assessee preferred an appeal before the learned CIT(A) on 13 November 2024 against the assessment order dated 18 December 2023. The learned CIT(A) noted that, as per Form No. 35, the assessee had received the assessment order on 18 December 2023 and, therefore, the appeal was filed beyond the prescribed time. He also referred to column No. 14 of Form No. 35, wherein the assessee had admitted that there was a delay in filing the appeal. The reason stated in Form No. 35 was that the assessee was unaware of the legal implications and was in the process of engaging a professional to assist in filing the appeal. The assessee was also in continuous contact with the employer to obtain a copy of Form No. 16. On this basis, the assessee explained the delay and requested that the appeal be admitted.

The learned CIT(A) noted that, as per the record, the appeal had not been filed within the time prescribed under section 249(2) of the Act. The order under appeal was dated 18 December 2023, whereas the appeal was filed on 13 November 2024. In Form No. 35 and the accompanying attachment, the appellant explained that he was unaware of the legal implications, was in the process of engaging a professional to assist with filing the appeal and was also continuously following up with the employer to obtain a copy of Form No. 16. On that basis, the appellant requested admission of the delayed appeal.

After considering the submissions made by the appellant in Form No. 35 and the reasons given for the delay, the learned CIT(A) held that the appeal was time-barred and could not be admitted. The assessment order under section 147 read with sections 144 and 144B of the Income Tax Act, 1961, was passed on 18 December 2023, and the appellant acknowledged that the appeal should have been filed on or before 16 January 2024 in terms of section 249(2) of the Act. However, the appeal was filed only on 13 November 2024, resulting in a delay of about 302 days. The appellant sought condonation on the grounds that he was unaware of the legal implications and was in the process of engaging a professional to assist in filing the appeal. The learned CIT(A) observed that these reasons did not constitute sufficient cause for condoning such a substantial delay, particularly in the absence of supporting documentary evidence. Referring to the decision of the Hon’ble Supreme Court in Collector, Land Acquisition v. Mst. Katiji [1987] 167 ITR 471, the learned CIT(A) noted that although a liberal approach is warranted, the explanation for delay must be reasonable and bona fide and must not indicate mala fides or dilatory conduct. Accordingly, the appeal was dismissed in limine.

Aggrieved by the appellate order, the assessee is in appeal before us. The assessee submits that the learned CIT(A) erred in not condoning the delay in filing the appeal. The assessee has also filed an application under rule 29 of the Income Tax Appellate Tribunal Rules, 1963, seeking admission of additional evidence, comprising printouts of email correspondence relating to Form No. 16 and tax deduction at source, along with transcripts and printouts of WhatsApp communications with the employer. The principal contention of the assessee is that, despite continuous follow-up with the employer, Form No. 16 was not issued to him because his former employer, Sankalp & KPIT Semiconductor Private Limited, was undergoing an administrative transition following its acquisition by HCL Technologies Limited, which substantially delayed issuance of Form No. 16 and related clarifications. The assessee further submits that the additional evidence goes to the root of the issue concerning condonation of the 302-day delay and that its admission is necessary in the interest of substantial justice so that the appeal may be heard on merits. The assessee also points out that Form No. 16 reflects tax deduction at source of ₹4,65,889; therefore, the entire tax liability on the salary income had been deducted by the employer. Further, the learned Assessing Officer assessed the assessee’s income at the same amount as reflected in Form No. 16, which was fully covered by the tax deducted at source.

We have heard Shri Mahendra Kumar Jain, Chartered Accountant, for the assessee and Shri Ganesh R. Ghale, Standing Counsel, for the Department.

We have carefully considered the rival contentions and perused the orders of the lower authorities available on the electronic record. In the present case, the assessee did not file his return of income under section 139(1) of the Income Tax Act. The assessment was therefore reopened based on Form No. 16 available with the Assessing Officer. Even during the reassessment proceedings, the assessee remained unrepresented. The Assessing Officer obtained Form No. 16 from the employer by issuing an inquiry letter under section 133(6) of the Act. The employer furnished details of the salary paid to the assessee and the tax deducted at source. Accordingly, the assessment was completed under section 144 of the Act. When the assessee preferred an appeal before the learned CIT(A), it was found to be delayed by 302 days. In Form No. 35, the assessee stated the reasons for the delay, as noted above. Before us, however, the assessee has filed additional evidence to show that Form No. 16 was not available to him due to administrative changes in his employer following the acquisition by HCL Technologies. This explains both his non-appearance before the learned Assessing Officer and the delay of 302 days in filing the appeal before the learned CIT(A).

On considering the material placed in the application for admission of additional evidence, we find that the assessee had reasonable cause for the delay in filing the appeal before the learned CIT(A). The delay was therefore supported by sufficient cause and is accordingly condoned.

As regards the assessment, the assessee was also unable to represent himself before the learned Assessing Officer, and the assessment was made at the same income as reflected in Form No. 16 issued by the employer. We therefore restore the entire matter to the file of the learned Assessing Officer, with directions to the assessee to substantiate the income earned by him and establish the claim of tax deducted at source available to him. The learned Assessing Officer shall verify the same and thereafter decide the issue afresh in accordance with law.

In view of the above facts, the appeal of the assessee is allowed for statistical purposes in the terms indicated above.