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Facts
The assessee's appeal was filed 189 days late due to miscommunication with their CA firm. The appeal was dismissed by the CIT(A) on grounds of non-prosecution without deciding the merits of the case.
Held
The Tribunal condoned the delay in filing the appeal, citing a liberal approach and the need for substantial justice. The Tribunal held that the CIT(A) erred in dismissing the appeal on non-prosecution without deciding the merits, and that such dismissal is not permissible under the Act.
Key Issues
Whether the appeal filed by the assessee was time-barred, and whether the CIT(A) was justified in dismissing the appeal for non-prosecution without adjudicating the merits.
Sections Cited
69A, 115BBE, 143(2), 147, 234A, 234B, 234C, 250, 251, 246A
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Income Tax Appellate Tribunal, “J (SMC
Before: SHRI AMIT SHUKLA & SHRI ARUN KHODPIA
आदेश / ORDER
PER ARUN KHODPIA, AM:
The present appeal filed by the assessee is directed against the order passed by the Ld.CIT(Appeals)/NFAC, Delhi dated 11.07.2024, for the assessment year 2017-18 as per the following grounds of appeal:
“1. In the facts and circumstances of the case, the learned CIT(A) erred in confirming addition of Rs.10,11,858/- made by the learned A.O u/s. 69A in relation to cash deposited in the bank account by the appellant. 2.The learned CIT(A) erred in confirming that provisions of section 115BBE would be attracted to the above addition of Rs.10,11,858/-.
3. In the facts and circumstances of the case and in law, it is submitted that the learned CIT(A) erred in confirming the disallowance of returned business loss of Rs.46,11,735/- made by the learned A.O on filmsy grounds.
4. The learned CIT(A) erred in confirming the disallowance of long term capital loss of Rs.1,17,99,000/- incurred by the Appellant from sale of equity shares of Balaji Tours Pvt. Ltd. 5.The learned CIT(A) erred in not appreciating that the impugned assessment order passed u/s. 147 was bad in law and time barred. The learned CIT(A) also erred in not appreciating that the impugned assessment made without the issue of notice u/s. 143(2) was bad in law.
6. The learned CIT(A) erred in not appreciating that no interest u/s. 234A/B/C could be levied in a reassessment made u/s. 147 of the Act.”
At the very outset, the Ld. Counsel for the assessee submitted that the appeal is time barred by 189 days. Explaining the reasons leading to the said delay, the Ld. Counsel has filed condonation petition a/w. affidavit. It was submitted by the Ld. Counsel that the assessee was under impression that staff of its old CA firm would take up the matter with new CA firm, however, the same was not done by the new CA firm in time and accordingly, the impugned delay was occurred. The Ld. Counsel submitted that when the assessee gets penalty notice for year under consideration then he came to know about the order of the Ld. CIT(Appeals)/NFAC. It was submitted by the Ld. Counsel that there was no deliberate or malafide conduct on the part of the assessee in causing such delay, therefore, the impugned delay may be condoned.
The Ld. Sr. DR did not raise any objection as regards the delay involved in appeal and fairly conceded to the submissions of the Ld. Counsel for the assessee as regards the said delay.
Having heard the parties herein, we are of the considered view that the delay involved in the present appeal was caused due to mis communication of the assessee and its new CA firm and therefore was no deliberate or malafide conduct on the part of the assessee in causing such delay. The Ld. Sr. DR could not place on record any evidence showing malafide or lackadaisical approach on the part of the assessee. In so far the delay is concerned, it would be relevant to point out that the Hon’ble Supreme Court in the case of Vidya Shankar Jaiswal Vs. ITO, Ward-2, Ambikapur, Civil Appeal Nos……………../2025 [Special Leave Petition (Civil) Nos. 26310-26311/2024, dated 31.01.2025, had observed that a justice oriented and liberal approach ought to be adopted while considering the aspect of condoning the delay involved in filing of the appeal. Also, the Hon’ble High Court of Chhattisgarh in the case of Jagdish Prasad Singhania Vs. Additional Commissioner of Income Tax (TDS), Raipur (C.G.), TAX Case No.17/2025, dated 24.02.2025, after relying on the judgment of the Hon’ble Supreme Court in the case of Vidya Shankar Jaiswal Vs. ITO, Ward-2, Ambikapur (supra) had held that a justice oriented and liberal approach be adopted while considering the application filed by the assessee for condonation of delay.
That in the recent judgment of the Hon’ble Supreme Court in the 5. case of Inder Singh Vs. the State of Madhya Pradesh, Civil Appeal No…………/2025, Special Leave Petition (Civil) No.6145 of 2024, dated 21st March, 2025, the Hon’ble Apex Court while interpreting Section 5 of the Limitation Act, 1963 regarding the condonation of delay in respect of case of land acquisition has observed and held on the aspect of delay that although the delay cannot be condoned without sufficient cause, the merits of the case could not be discarded solely on the ground of delay. A liberal approach, therefore, should be taken in condoning the delay when limitation ground undermines the merits of the case and obstructs the substantial justice. In other words, the objective of the court should be to deliver substantial justice coupled with liberal and judicious approach while deciding the issue of limitation and whenever it is found that the case has merits which needs to be addressed substantially, in such case, the delay should be condoned. Accordingly, the said delay of 189 days involved in the present appeal is condoned.
In so far the merits of the case, the Ld. Counsel drew our attention to Para 8.1 of the Ld. CIT(Appeals)’s order and submitted that certain additional evidences were filed before the Ld. CIT(Appeals)/NFAC, which were taken into consideration and accordingly remand report was furnished by the A.O dated 17.02.2024. It is further submitted that the copy of the remand report was made available to the assessee for filing rejoinder with last date of filing on 07.06.2024. However, the assessee was unable to file any rejoinder within the specified date provided by the Ld. CIT(Appeals)/NFAC. Thereafter, the appeal of the assessee was dismissed on this ground alone that the appellant has not eager to prosecute the appeal. It was also submitted by the Ld. Counsel for the assessee that the Ld. CIT(Appeals)/NFAC observed that the assessee appellant did not furnish any details during the assessment proceedings and also during the remand proceedings and accordingly, certain disallowances/addition were made by the A.O are upheld by the Ld. CIT(Appeals)/NFAC. It was submitted by the Ld. Counsel that there was no decision by the Ld. CIT(Appeals)/NFAC about submission of A.O in the remand report as well as on merits of the facts and hence, the assessee may be given one final opportunity to represent its case before the Ld. CIT(Appeals)/NFAC addressing the issue raised by the A.O in the remand report so that the first appellate authority can decide the matter on its merit.
The Ld. Sr. DR vehemently supported the order of the Ld. CIT(Appeals)/NFAC.
We have heard the rival contentions of the parties herein and perused the material available on record and case laws in support of contention raised by the assessee. Admittedly, as per order of the Ld. CIT(Appeals), it is emanated that there was no finding of the Ld. CIT(Appeals)/NFAC on merits and the appeal has been dismissed on account of non prosecution itself, therefore, in the interest of natural justice, it would be appropriate to remand the matter to the file of the Ld. CIT(Appeals) with one final opportunity to the assessee so that it can furnish necessary rejoinder towards the remand report of the A.O. as well as any further submission in defence. Our aforesaid view is fortified by the judgment of the Hon'ble High Court of Bombay in the case of CIT Vs. Premkumar Arjundas Luthra (HUF) (2017) 297 CTR 614 (Bom). In the aforementioned case the Hon’ble High Court had observed as under:
"8. From the aforesaid provisions, it is very clear once an appeal is preferred before the CIT(A), then in disposing of the appeal, he is obliged to make such further inquiry that he thinks fit or direct the AO to make further inquiry and report the result of the same to him as found in Sec. 250 of the Act. Further, Sec. 250(6) of the Act obliges the CIT(A) to dispose of an appeal in writing after stating the points for determination and then render a decision on each of the points which arise for consideration with reasons in support. Sec. 251(1)(a) and (h) of the Act provide that while disposing of appeal the CIT(A) would have the power to confirm, reduce, enhance or annul an assessment and/or penalty. Besides Explanation to sub-s. (2) of s. 251 of the Act also makes it clear that while considering the appeal, the CIT(A) would be entitled to consider and decide any issue arising in the proceedings before him in appeal filed for its consideration, even if the issue is not raised by the appellant in its appeal before the CIT(A). Thus once an assessee files an appeal under s. 246A of the Act, it is not open to him as of right to withdraw or not press the appeal. In fact the CIT(A) is obliged to dispose of the appeal on merits. In fact w.e.f. 1st June, 2001 the power of the CIT(A) to set aside the order of the AO and restore it to the AO for passing a fresh order stands withdrawn. Therefore, it would be noticed that the powers of the CIT(A) are co-terminus with that of the AO i.e. he can do all that A.O could do. Therefore, just as it is not open to the AO to not complete the assessment by allowing the assessee to withdraw its return of income, it is not open to the assessee in appeal to withdraw and/or the CIT(A) to dismiss the appeal on account of non-prosecution of the appeal by the assessee. This is amply clear from the s. 251(1)(a) and (b) and Explanation to Sec. 251(2) of the Act which requires the CIT(A) to apply his mind to all the issues which arise from the impugned order before him whether or not the same has been raised by the appellant before him. Accordingly, the law does not empower the CIT(A) to dismiss the appeal for non-prosecution as is evident from the provisions of the Act.”
Respectfully following the aforesaid order, without going into the merits of the case, we set-aside the order of the Ld. CIT(Appeals)/NFAC and remand the matter back to his file for denovo adjudication while complying with the principles of natural justice. At the same time, it is directed that this being the final opportunity, the assessee shall duly comply with the hearing notices from the Ld.CIT(Appeals)/NFAC, failing which an appropriate order would be passed in accordance with the mandate of law.
In the result, appeal of the assessee is allowed for statistical purposes. Order pronounced in the open court on 21st August, 2025.