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Facts
The assessee filed appeals before the CIT(A) with a significant delay (2 days in one instance and 149 days in another). The CIT(A) dismissed the appeals in limine without deciding on merits due to the delay, which was not condoned. The assessee contended that the delay was due to the AR being out of station.
Held
The Tribunal held that the CIT(A) erred in dismissing the appeal without condoning the delay and adjudicating on merits. The Tribunal directed the CIT(A) to condone the delay, considering the liberal view taken by higher courts, and to decide the appeals on merits.
Key Issues
Whether the CIT(A) was justified in dismissing the appeal in limine without condoning the delay and deciding the case on merits, and whether the penalty proceedings are consequential to the quantum appeal.
Sections Cited
250, 143(2), 142(1), 143(3), 68, 271(1)(c)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “A” BENCH, MUMBAI
Before: AND SHRI OMKARESHWAR CHIDARA, AM
O R D E R Per Kavitha Rajagopal, J M: These captioned appeals filed by the assessee, challenging the order of the learned Commissioner of Income Tax (Appeals) Delhi (‘ld. CIT(A)’ for short), National Faceless Appeal Centre (‘NFAC’ for short) passed u/s. 250 of the Income Tax Act, 1961 (‘the Act'), pertaining to the Assessment Year (‘A.Y.’ for short) 2016-17.
It is observed that the assessee has filed the present appeal with a delay of 2 days beyond the period of limitation for which the assessee has filed an application along with affidavit for condoning the said delay. On perusal of the same, we deem it fit to condone & 2555/Mum/2025 (A.Y. 2016-17) Lalchand Shankarlal Sharma the delay for the reason that the assessee had ‘sufficient cause’ for the said delay. Delay condoned.
As the facts are identical, we hereby pass a consolidated order by taking A.Y. 2016-17 as a lead case.
(Assessment Year: 2016-17) 4. The assessee has raised the following grounds of appeal:
1. The Commissioner of Income-tax (Appeals) at the National Faceless Appeal Centre (hereinafter referred to as the CIT(A)) erred in not condoning a delay of 149 days. The appellant contends that on the facts and in the circumstances of the case and in law, the CIT(A) ought to have condoned the delay of 149 days and admit the appeals.
2. The CIT(A) erred in not deciding the grounds of appeal on merits.” The appellant contends that on the facts and circumstances of the case and in law, CIT(A) ought to have decided the grounds of appeal and ought to have disposed of the case on merits.”
5. Brief facts of the case are that the assessee is an individual and is a contractor under proprietary concern M/s. S. N. Enterprises and is also engaged in the entertainment industry under the name and style of M/s. S. N. Movies in proprietary capacity. The assessee had filed his return of income dated 17.10.2016 declaring total loss at Rs. 1,29,01,359/- for the year under consideration. The assessee’s case was selected for scrutiny under CASS and notices u/s. 143(2) and 142(1) of the Act were duly issued and served upon the assessee. The learned Assessing Officer ('ld. A.O.' for short) had passed the assessment order u/s. 143(3) of the Act dated 29.12.2018, determining total income at Rs. 99,82,555/- after making addition/disallowance of Rs. 2,96,299/- being & 2555/Mum/2025 (A.Y. 2016-17) Lalchand Shankarlal Sharma the difference in the contract receipt as per 26AS and the P & L Account which was not reconciled by the assessee, disallowance of Rs. 10,00,000/- towards expenses claimed, addition of Rs. 15,60,000/- as unexplained credit u/s. 68 of the Act and disallowance of Rs. 2,00,27,615/- towards the loss claimed in the case of M/s. S. N. Movies. The ld. AO also initiated penalty proceedings u/s. 271(1)(c) of the Act, for concealment of particulars of income. The ld. AO then passed the penalty order dated 28.06.2019, u/s. 271(1)(c) of the Act, thereby levying a penalty of Rs. 73,71,705/- as being 100% of the tax sought to be evaded.
Aggrieved the assessee was in appeal before the first appellate authority, who vide order dated 23.03.2024, dismissed the appeal filed by the assessee in limine for the reason that the assessee has filed the appeal with a delay of 149 days which reason was not sufficiently explained by the assessee.
The assessee is in appeal before us, challenging the impugned order of the ld. CIT(A).
We have heard the rival submissions and perused the materials available on record. It is observed that the assessee has filed the appeal before the first appellate authority with a delay of 149 days for which the assessee contends that, the ld. AR was out of station and hence there was delay in filing the appeal and the same was not accepted by the ld. CIT(A). It is further observed that the ld. CIT(A) has dismissed the appeal in limine without getting into the merits of the case and without condoning the said delay. The ld. AR stated that the assessee be given one more opportunity to present his case before the ld. CIT(A) as the assessee has got a good case on the merits in favour of him. & 2555/Mum/2025 (A.Y. 2016-17) Lalchand Shankarlal Sharma 9. The learned Departmental Representative (‘ld. DR’ for short) vehemently opposed to remanding this issue back to the ld. CIT(A) and stated that the assessee has been non- compliant on several occasion even before the Tribunal for which reason the assessee’s case was dismissed ex parte and was subsequently recalled by Miscellaneous Application No. 12/Mum/2025, vide order dated 19.08.2024. The ld. DR relied on the order of the lower authorities.
Upon considering the rival contentions, we deem it fit to hold that the assessee should be given one more opportunity to present his case before the ld. CIT(A) for which we hereby direct the ld. CIT(A) to condone the delay in filing the first appeal before the ld. CIT(A) for the reason that various High Courts and the Hon'ble Apex Courts have taken a liberal view in condoning the delay. We therefore restore this issue back to the file of ld. CIT(A) with the direction that the assessee should make compliance before the first appellate authority without any undue delay on his side and the ld. CIT(A) is directed to decide the issue based on the submissions of the assessee and in the merits of the case in accordance with law.
In the result, the appeal filed by the assessee is allowed for statistical purpose.
(Assessment Year: 2016-17) 12. This appeal is against the penalty levied by the ld. AO and upheld by the ld. CIT(A) for non-condonation of delay in filing the first appeal.
The findings recorded in will apply mutatis mutandis to this appeal also as the penalty proceeding is consequential in nature and since we have & 2555/Mum/2025 (A.Y. 2016-17) Lalchand Shankarlal Sharma remanded the quantum appeal already, the same also has to be remanded back to the ld. CIT(A) for de novo adjudication.
In the result, both the appeals filed by the assessee are hereby allowed for statistical purpose. Order pronounced in the open court on 29.08.2025 Sd/- Sd/- (OMKARESHWAR CHIDARA) (KAVITHA RAJAGOPAL) ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai; Dated: 29.08.2025 Karishma J. Pawar (Stenographer) Copy of the Order forwarded to: 1. The Appellant 2. The Respondent 3. CIT- concerned 4. DR, ITAT, Mumbai 5. Guard File BY ORDER,