GAUTAM KUMAR SHARMA,AMBALA vs. INCOME TAX OFFICER, WARD 2, AMBALA, AMBALA

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ITA 1531/CHANDI/2025Status: DisposedITAT Chandigarh14 July 2026AY 2012-135 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal condoned the delay in filing the appeal before the CIT(A) on payment of costs, setting aside the CIT(A)'s order. The matter was restored to the CIT(A) for adjudication on merits, emphasizing that the condonation was an exception and not a precedent.

What were the facts?

The assessee failed to file a return of income despite selling a property. Reassessment proceedings were initiated, and an ex-parte assessment was framed due to non-compliance. The assessee's appeal before the CIT(A) was dismissed due to a significant delay, which the CIT(A) found was not sufficiently explained.

What were the issues?

Whether the delay in filing the appeal before the CIT(A) was to be condoned, and whether the reassessment proceedings were validly initiated and conducted.

Which sections of the Income-tax Act were involved?

Section 147,Section 148,Section 144,Section 142(1)

AI-generated summary — verify with the full judgment below

IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BENCHES, “SMC” CHANDIGARH HEARING THROUGH: PHYSICAL MODE BEFORE: SHRI. LALIET KUMAR, JUDICIAL MEMBER आयकर अपील सं./ ITA No. 1531 /Chd/2025 िनधा�रण वष� / Assessment Year : 2012-13 Gautam Kumar Sharma बनाम The ITO C/o Rajiv Goel & Associates, 179, Ward-2, Ambala Bank Road Ambala Cantt, Haryana-133001 �ायी लेखा सं./PAN NO: BORPG7033P अपीलाथ�/Appellant ��थ�/Respondent िनधा�रती की ओर से/Assessee by : Shri Dhruv Goel, C.A राज� की ओर से/ Revenue by : Shri Vivek Vardhan, Addl. CIT, Sr. DR सुनवाई की तारीख/Date of Hearing : 23/06/2026 उदघोषणा की तारीख/Date of Pronouncement : 14/07/2026 आदेश/Order PER LALIET KUMAR, J.M: This is an appeal filed by the Assessee against the order of the Ld. CIT(A), NFAC, Delhi dt. 30/07/2024 for the Assessment Year 2012-13. 2. At the outset, the Registry pointed out that there is a delay of 416 days in filing the present appeal. In response, an application seeking condonation of delay was filed by the Ld. Counsel for the Assessee, which has been taken on record. 3. The Ld. DR opposed the application for condonation of delay. 4. I have heard both the parties and perused the application seeking condonation of delay placed on record. Upon consideration of the facts and circumstances of the case, and the reasons explained therein, I am satisfied that the assessee was prevented by sufficient and reasonable cause from filing the appeal within the prescribed period of limitation. Accordingly, the delay of 416 days in filing the appeal is condoned, and the appeal is admitted for adjudication.

5.

In the present appeal Assessee has raised the following grounds: 1. That the authorities below have erred in law and facts in reopening of assessment proceeding u/s 148. 2. That the learned CIT(A) NFAC has erred in law and on facts in confirming the addition of Rs. 25,95,000/- made by the Assessing Officer on account of capital gain arisen on sale of property.

3.

That the learned CIT(A), NFAC has erred in law and on facts in not granting condonation of delay in filing the appeal, without appreciating the reasonable and sufficient cause explained by the assessee. 4. That the authorities below have erred in making/confirming additions without providing adequate opportunity of being heard to the assessee and without adhering to the principles of natural justice. 5. That the appellant craves leave to add, alter, and amend OR to substitute the above grounds of appeal before disposal of the appeal.

6.

Briefly, the facts of the case are that on the basis of Annual Information Return (AIR) data indicating that the assessee, Sh. Gautam Kumar, had sold a property for Rs. 77,85,000/- during the Financial Year 2011-12 without filing his return of income, the Department initiated reassessment proceedings under Section 147 of the Income Tax Act, 1961. Following due statutory approval, a notice under Section 148 was issued on 29/03/2019, and served via a notice server. Thereafter, the AO issued a succession of statutory notices under Section 142(1) along with detailed questionnaires and a final ex-parte show-cause notice.

6.1 Due to total non-compliance and the failure of the assessee to file a return or attend hearings across all listed timelines, the AO was compelled to frame a best- judgment assessment ex-parte under Section 144 of the Act. Perusing the sale deed, the AO observed that the property was a hotel constructed roughly 10 years prior and that the assessee held a 1/3 share therein. In the absolute absence of any documentary evidence, cost details, or claims of deduction furnished by the assessee, the AO computed the assessee’s 1/3 share of the gross sale consideration, amounting to Rs. 25,95,000/-, and added the entire sum to his total income as unexplained capital gains.

7.

Against the order of the AO the assessee went in appeal before the Ld. CIT(A). The record revealed that the assessment order was served on 12/12/2019, making the statutory limitation period expire on January 10, 2020. However, the appeal was instituted only on 12/03/2021, resulting in an inordinate delay of 416 days. The assessee sought a condonation of this delay, attributing it to his status as a non-resident residing in Germany who visits India infrequently, alongside the logistical disruptions brought about by the COVID-19 pandemic.

7.1 The Ld. CIT(A) evaluated the condonation application but found the explanation legally and factually deficient. The CIT(A) observed that the deadline to file the appeal (January 10, 2020) fell well before the national outbreak of COVID-19,

3 meaning the pandemic could not serve as a justification for the initial default. Emphasizing that the law requires a litigant to explain each day’s delay with credible material particulars, the learned CIT(A) deemed the lapse an outcome of sheer negligence. Relying upon various judicial precedents, the CIT(A) concluded that the assessee failed to establish "sufficient cause" or provide supporting evidence, and consequently dismissed the appeal in limine without entering into the merits of the addition.

8.

Against the order of the Ld. CIT(A) the assessee preferred in appeal before the Tribunal.

9.

During the course of hearing the Ld. AR argued that the lower authorities erred in both law and facts while executing the reassessment and appellate mechanisms. It was submitted that since the assessee is a non-resident individual residing in Germany with no active source of income in India, the assumption of tax escapement is misplaced. The AR challenged the validity of the Section 148 reopening, asserting a violation of natural justice as the domestic address used for notices did not belong to the assessee and his relatives were structurally incompetent to respond.

9.1 On the issue of limitation, the Ld. AR implored the Bench to adopt a pragmatic view, stating that the practical constraints of being stationed abroad compounded by subsequent pandemic disruptions created genuine hardships in filing the appeal on time. On the merits, the Ld. AR argued that the lower authorities erred by treating the raw, gross sale consideration as absolute capital gains. It was maintained that had an adequate opportunity been granted, the assessee would have proven that after factoring in indexation and the cost of improvement of the hotel structure, no real taxable capital gains survived. The Ld. AR requested that the delay be condoned and the matter be restored for a de novo adjudication.

10.

Per contra, the Ld. DR robustly defended the orders of the lower revenue authorities and urged the Tribunal to dismiss the appeal. The Ld. DR stated that the AO was in possession of definitive, tangible AIR info regarding a high-value real estate transaction that had escaped tax assessment. The DR pointed out that multiple statutory notices were issued over a span of several months and properly served at the known recorded address, yet the assessee chose to remain

4 completely non-compliant. Therefore, the invocation of Section 147 and the framing of the assessment under Section 144 were perfectly valid and lawful.

10.1 Regarding the appellate stage, the Ld. DR supported the CIT(A)’s findings, asserting that the 416 day delay was an unmitigated outcome of negligence. The DR highlighted that because the limitation period expired well before the arrival of COVID-19 in India, the pandemic could not be used as a convenient cover for a voluntary default. It was maintained that the law of limitation is based on sound public policy, and since the assessee failed to back his claims with an iota of evidence, the CIT(A) had no option but to reject the appeal in limine. The DR concluded that a non-compliant assessee cannot claim a violation of natural justice when they voluntarily stay away from statutory timeline.

11.

I have heard the rival contention and perused the material available on the record. Although I am not inclined to condone such an inordinate delay in filing the appeal before the learned CIT(A) as a matter of course, the peculiar facts and circumstances of the present case persuade us to adopt a justice-oriented approach. Accordingly, the delay in filing the appeal before the learned CIT(A) is condoned, subject to the condition that the assessee shall deposit costs of Rs. 5,000/- with the Poor Patient Relief Fund, PGIMER, Chandigarh, within a period of four weeks from the date of receipt of this order and shall furnish proof of such deposit before the learned CIT(A). Upon compliance with the aforesaid condition, the impugned order is set aside and the matter is restored to the file of the learned CIT(A) for adjudication afresh on merits in accordance with law after affording adequate opportunity of hearing to the assessee.

11.1 Before parting, I consider it necessary to observe that statutory timelines prescribed under the Act are required to be scrupulously adhered to. The condonation granted in the present case is an exception founded on the peculiar facts of the case and shall not be treated as a precedent for adopting a casual or negligent approach towards limitation. The obligation to comply with the law applies uniformly, irrespective of whether the assessee is a resident or a non-resident. In the present case, the assessee was residing in Germany, a jurisdiction where compliance with statutory timelines is expected and strictly enforced. Therefore, residence abroad cannot, by itself, be accepted as a justification for a casual or indifferent approach towards compliance with the provisions of the Income-tax Act.

5 The concession extended by this Tribunal is solely in the interest of substantial justice and should not be construed as diluting the mandatory requirement of adhering to the statutory period of limitation.

11.2 Accordingly, the impugned order is set aside, and the matter is restored to the file of the learned CIT(A) for fresh adjudication in accordance with law.

12.

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

Order pronounced on 14/07/2026 Sd/- ( LALIET KUMAR) JUDICIAL MEMBER AG आदेश की �ितिलिप अ�ेिषत/ Copy of the order forwarded to : अपीलाथ�/ The Appellant 1. ��थ�/ The Respondent 2. आयकर आयु�/ CIT 3. आयकर आयु� (अपील)/ The CIT(A) 4. िवभागीय �ितिनिध, आयकर अपीलीय आिधकरण, च�ीगढ़/ DR, ITAT, CHANDIGARH 5. गाड� फाईल/ Guard File 6.

BY ORDER, ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL KENDRIYA SADAN, SECTOR-9A CHANDIGARH

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