WAHEEDA MOHAMMEDIKRAM MALEK,MUMBAI vs. INCOME TAX OFFICER WARD 33(1)(1), MUMBAI

The effective grievance of the assessee in the present appeal is against the action of the Ld. CIT(A) in dismissing the appeal in limine on account of a delay of 136 days in filing the appeal, without condoning the delay and without adjudicating the grounds of appeal on merits.

Briefly stated, the relevant facts are that the assessee is an individual and senior citizen. The assessment proceedings were reopened by the Assessing Officer under section 147 of the Act by issuance of notice under section 148 on the basis of information relating to the sale of an ancestral property situated at Kandivali, Mumbai. It is stated that the assessee, along with other co-heirs, had executed a Deed of Conveyance dated 20.06.2016 in respect of the said property for a total consideration of ₹1,15,00,000/-, whereas the value adopted by the Stamp Valuation Authority was stated to be ₹4,35,97,000/-.

It is further borne out from the record that the assessee did not comply with the notices issued during the reassessment proceedings, including the notices issued under sections 148A, 148 and 142(1) of the Act. Consequently, the Assessing Officer proceeded to complete the assessment ex parte under section 147 read with section 144 of the Act vide order dated 26.05.2023, making the additions as set out therein.

Aggrieved by the aforesaid assessment order, the assessee preferred an appeal before the Ld. CIT(A). There was, however, a delay of 136 days in filing the appeal. Along with the appeal, the assessee filed an application seeking condonation of the said delay.

In the application for condonation, it was explained that the statutory notices as well as the assessment order had been sent to the assessee's earlier address at Wadala, Mumbai, whereas the assessee had shifted her residence to Andheri (West), Mumbai. It was submitted that, being an elderly housewife and not being conversant with income-tax proceedings, the assessee was not aware of the proceedings and came to know of the assessment order subsequently, whereafter steps were taken to obtain professional advice and file the appeal. 2

The Ld. CIT(A), however, did not accept the explanation furnished by the assessee and declined to condone the delay of 136 days. Consequently, the appeal was dismissed at the threshold without adjudication of the grounds raised by the assessee on merits.

Before us, the Ld. AR submitted that the delay was neither intentional nor deliberate. He submitted that the assessee held only a 25% share in the inherited property and that her share in the actual sale consideration was ₹28,75,000/-. It was contended that the reassessment proceedings as well as the assessment order had been completed ex parte and that the assessee was not aware of the proceedings as the notices had been sent to her earlier address.

The Ld. AR submitted that, upon acquiring knowledge of the assessment order, the assessee took steps to pursue the appellate remedy and the delay was accordingly neither mala fide nor attributable to any deliberate or calculated attempt to delay the proceedings. Reliance was placed, inter alia, upon the judgments of the Hon'ble Supreme Court in Collector, Land Acquisition v. Mst. Katiji & Ors., 167 ITR 471 (SC) and N. Balakrishnan v. M. Krishnamurthy, (1998) 7 SCC 123.

The Ld. DR, on the other hand, relied upon the order of the Ld. CIT(A) and submitted that the assessee had failed to furnish a satisfactory explanation for the delay. It was submitted that the assessee was required to keep her address updated and that the delay was rightly not condoned by the Ld. CIT(A).

We have heard the rival submissions and perused the material available on record. The issue requiring our consideration at this stage is whether, on the facts and circumstances of the present case, the delay of 136 days in filing the appeal before the Ld. CIT(A) deserves to be condoned.

The Hon'ble Supreme Court in Collector, Land Acquisition v. Mst. Katiji & Ors. (supra) has laid down the broad principles governing the consideration of an application for condonation of delay. The Hon'ble Court emphasized that ordinarily a litigant does not stand to benefit by filing an appeal belatedly and that refusal to condone delay may result in a meritorious matter being shut out at the threshold. It was further held that the expression “sufficient cause” should receive a liberal, pragmatic and justice-oriented construction, rather than a pedantic approach.

Similarly, in N. Balakrishnan v. M. Krishnamurthy (supra), the Hon'ble Supreme Court observed that the length of delay is not decisive; acceptability of the explanation is the relevant consideration. The Hon'ble Court further held that rules of limitation are intended to prevent dilatory tactics and not to destroy the rights of parties, and that where the explanation does not smack of mala fides or a deliberate dilatory strategy, a liberal approach may be adopted in advancing substantial justice.

In the present case, the delay is of 136 days. The assessee has attributed the delay principally to the fact that the notices and the assessment order were sent to her earlier address, while she had shifted her residence to another address. The assessee has also explained that she was an elderly housewife and was not conversant with income-tax proceedings.

We find that the assessment itself was completed ex parte under section 147 read with section 144 of the Act. It is also not the case of the Revenue that the assessee derived any advantage by deliberately allowing the appellate limitation period to expire. Nothing has been brought before us to establish that the delay of 136 days was occasioned by mala fides or was part of any deliberate strategy to prolong the proceedings.

At the same time, the assessee cannot be said to be entirely free from lapse, particularly since the assessee was expected to exercise due diligence in keeping her address updated and in responding to statutory proceedings. However, such lapse, in the facts and circumstances of the present case, cannot by itself justify shutting out the assessee's statutory appellate remedy without examination of the issues raised on merits.

We are, therefore, of the considered view that the explanation furnished by the assessee, considered in the totality of the facts and circumstances of the case, constitutes sufficient cause for the purpose of condoning the delay of 136 days. The approach to condonation of delay has to balance procedural discipline with the requirement that an assessee should ordinarily have an opportunity of having the dispute adjudicated on merits, particularly where the first appellate authority has not examined the substantive grounds raised in the appeal.

Accordingly, we condone the delay of 136 days in filing the appeal before the Ld. CIT(A).

Having condoned the delay, we note that the Ld. CIT(A) dismissed the appeal at the threshold and, consequently, the grounds raised by the assessee challenging the additions made in the assessment order have not been adjudicated upon on merits.

In these circumstances, and in the interest of substantial justice, we deem it appropriate to set aside the impugned order of the Ld. CIT(A) dated 05.02.2026 and restore the matter to his file for adjudication afresh on merits in accordance with law. This restoration, however, shall be subject to a cost of Rs.5,000/- (Rupees Five Thousand only) imposed upon the assessee, which shall be deposited in the Prime Minister's National Relief Fund. A copy of the receipt evidencing such deposit shall be placed on record before the Ld. CIT(A) within 30 days from the date of receipt of this order. 5

Needless to mention, the Ld. CIT(A) shall afford reasonable and effective opportunity of being heard to the assessee. The assessee shall also extend full cooperation in the appellate proceedings and furnish the requisite documents, explanations and evidences as may be called for by the Ld. CIT(A).

The Ld. CIT(A) shall thereafter adjudicate the grounds raised by the assessee on merits in accordance with law, without being influenced by any observation made by us herein on the merits of the additions.

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