UPENDRA SINGH CHAUHAN vs. INCOME TAX OFFICER

Facts

The appellant, Upendra Singh Chauhan, filed an appeal before the Income-Tax Appellate Tribunal (ITAT) challenging an order of the Commissioner of Income Tax (Appeals) [CIT(A)] dated 24.03.2015 for assessment year 2009-10. The ITAT dismissed the appeal on 20.10.2023, holding it to be barred by limitation due to an approximately 8-year delay. The appellant contended that he was not served with the CIT(A) order and only came to know about it when a recovery notice was received on 25.11.2022. He obtained a certified copy of the CIT(A) order and filed the appeal before the ITAT thereafter, along with an application for condonation of delay. The revenue argued that the delay was inordinate and unexplained, and the ITAT had correctly dismissed the appeal.

Held

The High Court held that the impugned order of the ITAT was not sustainable. The Court noted that Section 253(3) of the Income Tax Act, 1961, mandates that the period of limitation for filing an appeal before the Tribunal is two months from the end of the month in which the order sought to be appealed against is communicated to the assessee. The ITAT had failed to consider the appellant's specific pleading that the CIT(A) order was not served upon him and that he only came to know about it upon receiving a recovery notice. The Court relied on Supreme Court decisions emphasizing that the starting point for limitation is the date of communication or knowledge of the order. In the absence of proof that the order was communicated to the assessee, and considering the appellant's claim of non-receipt and subsequent discovery of the order, the ITAT's conclusion that sufficient cause was not shown for condoning the delay was erroneous. The Court found that the appeal was filed within the prescribed period from the date of receipt of the copy of the order, as the appellant obtained knowledge of the order on 25.11.2022 and filed the appeal thereafter. Therefore, the ITAT's order was set aside, and the matter was remitted back to the ITAT for deciding the appeal on merits.

Key Issues

1. Whether the appeal filed before the Income-Tax Appellate Tribunal (ITAT) was barred by limitation, considering the delay of approximately 8 years in filing the appeal against the CIT(A) order dated 24.03.2015. Assessee's Arguments: - The appeal was filed immediately after the appellant gained knowledge of the CIT(A) order, which was not served upon him. - He came to know about the order only upon receiving a recovery notice on 25.11.2022. - The appeal was filed within the prescribed period from the date of receipt of the order's copy. - The ITAT failed to consider the specific pleadings supported by an affidavit that the appeal was filed from the date of knowledge and that the CIT(A) order was not served. - Reliance was placed on Supreme Court judgments in Transport Commr. V. Nand Singh and Senior Bhosale Estate (HUR) V. The Assistant Commissioner of Income Tax, emphasizing that limitation starts from the date of communication or knowledge of the order. Revenue's Arguments: - The delay of approximately 8 years in filing the appeal before the ITAT was inordinate and unexplained. - The ITAT had considered all facts and grounds pleaded by the appellant and correctly concluded that sufficient cause was not shown to condone the delay. - The ITAT's rejection of the condonation application and dismissal of the appeal as barred by limitation was justified.