SUBRAMANIAN SAMPATH KUMAR,CHENNAI vs. ACIT, NON CORPORATE CIRCLE 22, TAMBARAM, CHENNAI

Subsequently, on the basis of information available with the Department, the assessment was reopened by issuance of notice u/s.148 of the Act dated 16.03.2023. However, even in response to the said notice, the assessee did not file any return of income. During the course of reassessment proceedings, the AO issued statutory notices from time to time calling upon the assessee to furnish the return of income as well as the requisite details and supporting documents. The assessee neither complied with the said notices nor furnished any explanation or material in support of his case.

In view of the continued non-compliance on the part of the assessee, the AO proceeded to complete the reassessment proceedings ex parte u/s.144 r.w.s 147 of the Act. The AO determined the total income at Rs.28,97,440/- by bringing to tax the entire gross salary received from the aforesaid employers under the head "Income from Salaries". While doing so, the AO did not grant the deductions otherwise allowable under Chapter VI-A of the Act nor extend credit for the taxes deducted at source as reflected in the departmental records. Accordingly, the impugned order u/s.147 r.w.s 144 of the Act came to be passed on 26.02.2024. 5. Aggrieved by the assessment order, the assessee carried the matter in appeal before the Ld.CIT(A). The Ld.CIT(A), on examination of the records, observed that the appeal had been filed with a delay of 440 days. According to :-3-:

The assessee, before the Ld.CIT(A), sought condonation of the delay by explaining the circumstances which led to the belated filing of the appeal. It was submitted that the assessment order was served upon the assessee on 26.02.2024. The assessee, having initially entrusted the matter to his tax consultant, could not pursue the appellate remedy within the prescribed period on account of the consultant's ill health, as a result of which the matter was not properly attended to. Thereafter, the assessee engaged another tax consultant who, upon examining the assessment records, formed a bona fide opinion that the grievances relating to non-consideration of the deductions reflected in Form No.16 and non-grant of credit for tax deducted at source constituted mistakes apparent from the record amenable to rectification u/s.154 of the Act.

Acting upon such professional advice, the assessee preferred the first rectification petition on 30.08.2024. The said petition came to be disposed of by the AO on 20.01.2025, whereby credit for TDS was granted; however, the claim relating to deduction as reflected in Form No.16 remained unaddressed. Consequently, the assessee filed a second rectification petition on 20.05.2025 seeking rectification of the omission in not allowing the deduction as per Form No.

It was further submitted that the assessee's authorised representatives had been diligently pursuing the rectification proceedings with the AO during the month of May, 2025. However, despite such follow-up, no rectification order was passed on the second application. Finding no effective remedy available under the rectification proceedings, the assessee was ultimately advised to invoke the appellate juri iction of the Ld. CIT(A). Accordingly, the appeal came to be filed on 10.06.2025 with a delay of 440 days.

It was, therefore, contended before the Ld.CIT(A) that the delay had occurred solely on account of the assessee bona fide pursuing an alternate statutory remedy u/s.154 of the Act and that there was neither any deliberate inaction nor any mala fide intention to delay the filing of the appeal. On the aforesaid grounds, the assessee prayed for condonation of the delay.

The Ld.CIT(A), however, was not persuaded by the explanation furnished by the assessee and held that the reasons advanced did not constitute sufficient cause for condonation of the delay. Accordingly, the Ld.CIT(A) declined to condone the delay of 440 days and dismissed the appeal in limine as being barred by limitation. Aggrieved by the said order of the Ld.CIT(A), the assessee is now in further appeal before this Tribunal.

The Ld.AR, appearing on behalf of the assessee, reiterated the submissions advanced before the Ld.CIT(A) and submitted that the delay in filing the appeal before the Ld.CIT(A) had occurred on account of bona fide and reasonable circumstances, as duly explained in the petition for condonation of delay. It was, therefore, pleaded that the delay deserved to be condoned in the interest of substantial justice. On the merits of the case, the Ld.AR submitted that the deductions claimed by the assessee, as evidenced by Form No.16, had not been granted while completing the assessment. It was, therefore, prayed that the matter may be restored to the file of the Juri ictional Assessing Officer (JAO) with a direction to verify the claim of the assessee on the basis of Form No.16 and allow the eligible deductions in accordance with law.

Per contra, the Ld.DR strongly supported the impugned order passed by the Ld. CIT(A). It was submitted that the findings recorded by the Ld.CIT(A) are based on proper appreciation of the facts and the applicable provisions of law and, therefore, do not warrant any interference by this Tribunal. The Ld.DR further contended that the contentions advanced on behalf of the assessee are devoid of merit and are liable to be rejected. Accordingly, it was prayed that the appeal preferred by the assessee be dismissed.

We have heard the rival submissions, perused the orders of the authorities below and carefully examined the material available on record. It is an undisputed fact that the appeal before the Ld.CIT(A) was filed with a delay of 440 days. The explanation furnished by the assessee for the said delay is that the matter was initially handled by the earlier tax consultant, who failed to take appropriate steps within the prescribed time, and that the assessee was simultaneously pursuing the alternate statutory remedy by way of rectification proceedings u/s.154 of the Act. Since the relief granted in the rectification proceedings was only partial and did not redress the entire grievance of the assessee, the assessee thereafter preferred the appeal before the first appellate authority. However, the Ld.CIT(A), not being satisfied with the reasons adduced for the delay, declined to condone the same and dismissed the appeal in limine without adjudicating the issues on merits.

We have given our thoughtful consideration to the explanation tendered by the assessee in support of the petition for condonation of delay. Upon an overall appreciation of the facts and circumstances of the case, we find that the delay cannot be said to have arisen on account of any deliberate inaction, wilful negligence or lack of bona fides on the part of the assessee. The explanation offered demonstrates that the delay was occasioned partly due to the manner in which the matter was handled by the earlier consultant and partly because the assessee was bona fide pursuing an alternative statutory remedy u/s.154 of the Act. In our considered opinion, the conduct of the assessee does not reflect any intention to disregard the statutory timelines, but rather reveals a genuine attempt to seek redressal of the grievance through available legal remedies.

It is now well-settled that the expression “sufficient cause” employed in limitation provisions is required to receive a liberal and justice-oriented interpretation so as to advance substantial justice. The Hon’ble Supreme Court, in a catena of decisions, has consistently held that where the explanation for :-6-:

In this regard, we derive support from the celebrated judgment of the Hon’ble Supreme Court in Collector, Land Acquisition v. Mst. Katiji & Others (167 ITR 471), wherein the Hon’ble Supreme Court emphasized that a liberal approach should be adopted while considering applications for condonation of delay and that substantial justice should prevail over technical considerations. Similar principles have been reiterated by the Hon’ble Supreme Court in Ram Nath Sao @ Ram Nath Sahu & Others v. Gobardhan Sao & Others [AIR 2002 SC 1201], wherein it was held that courts should avoid rejecting matters on technical grounds where no mala fides or deliberate negligence can be attributed to the litigant.

We further note that the Hon’ble Supreme Court in Vidya Shankar Jaiswal v. Income Tax Officer, Ward-2, Ambikapur (SLP (Civil) Nos. 26310–26311 of 2024, order dated 31.01.2025) has once again reiterated that applications seeking condonation of delay are required to be considered in a liberal manner so that substantive rights are not defeated on account of procedural technicalities.

Having regard to the totality of the facts and circumstances of the case, and respectfully following the aforesaid binding judicial precedents, we are of the considered view that the assessee has shown a reasonable and sufficient cause for the delay in filing the appeal before the Ld.CIT(A). In our opinion, the Ld.CIT(A) was not justified in dismissing the appeal in limine without affording an opportunity for adjudication of the issues on merits. We, therefore, condone

Since the issue involved requires factual verification, instead of restoring the matter to the file of the Ld.CIT(A), we deem it appropriate, in the peculiar facts of the case, to remit the matter to the file of the JAO. The JAO shall examine the assessee's contention that the eligible deductions, as reflected in the Form No.16 issued by the employer(s), were not duly granted while completing the assessment. The JAO shall call for and examine all relevant records, including Form No.16, salary particulars, supporting documentary evidence, and such other material as may be considered necessary, and thereafter verify the correctness of the assessee's claim. Upon such verification, the JAO shall grant the eligible deductions found admissible in accordance with the provisions of the Act after affording the assessee a reasonable and effective opportunity of being heard. The assessee is also directed to extend full cooperation and furnish all requisite details and evidences as may be called for by the JAO. Ordered accordingly.

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