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Facts
The assessee's appeals were filed with a substantial delay. The CIT(A) dismissed the appeals without admitting them, citing a lack of sufficient cause for the delay and a lack of due care in prosecution. The assessee contended that the CIT(A) disposed of the appeal prematurely without providing an opportunity to explain the delay.
Held
The Tribunal held that the CIT(A)'s action of disposing of the appeal without affording the assessee a reasonable opportunity to respond to the delay issue violated principles of natural justice. Therefore, the CIT(A)'s order was set aside.
Key Issues
Whether the CIT(A) violated principles of natural justice by dismissing the appeal without providing a reasonable opportunity to the assessee to explain the delay in filing.
Sections Cited
249(3), 5, 249(2)
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Income Tax Appellate Tribunal, MUMBAI BENCH “H (SMC
Before: SHRI OM PRAKASH KANT & SHRI RAHUL CHAUDHARY
ORDER PER OM PRAKASH KANT, AM
These two appeals by the assessee are directed against two separate orders, both dated 20.03.2025 passed by the Ld. Additional/Joint Commissioner of Income-tax (Appeals) – 1, Jaipur [hereinafter shall be referred as ‘Ld. CIT(A)’] for assessment year 2021-22 and 2022-23 respectively.
Shri Siddhachakra Vardhman Tap Jain Shri Siddhachakra Vardhman Tap Jain 2 Ayambilkhata & 3153/MUM/2025 & 3153/MUM/2025
We have heard rival submissions of the parties and perused We have heard rival submissions of the parties and perused We have heard rival submissions of the parties and perused the relevant materials on record the relevant materials on record. The Ld. CIT(A) in the impugned . The Ld. CIT(A) in the impugned orders for both the assessment years has for both the assessment years has not admitted the appeal admitted the appeal for delay in filing the appeal. For for delay in filing the appeal. For ready reference finding of the Ld. ready reference finding of the Ld. CIT(A) in assessment year 2021 CIT(A) in assessment year 2021-22 is reproduced as under: 22 is reproduced as under:
“5. Decision: The facts of the case and the grounds raised by the appellant The facts of the case and the grounds raised by the appellant The facts of the case and the grounds raised by the appellant have been considered carefully. There is a substantial delay in have been considered carefully. There is a substantial delay in have been considered carefully. There is a substantial delay in the filing of appeal the filing of appeal for which no sufficient reason was given by for which no sufficient reason was given by the appellant. The appellant has failed to justify the in ordinate the appellant. The appellant has failed to justify the in ordinate the appellant. The appellant has failed to justify the in ordinate delay in filing appeal. From the factual position which emerges delay in filing appeal. From the factual position which emerges delay in filing appeal. From the factual position which emerges it appears that a conscious and considered decision was taken it appears that a conscious and considered decision was taken it appears that a conscious and considered decision was taken by the assessee at by the assessee at the relevant point of time for not filing of the relevant point of time for not filing of appeal against the impugned order. It is well appeal against the impugned order. It is well-settled law that a settled law that a distinction must be made between a case where the delay is distinction must be made between a case where the delay is distinction must be made between a case where the delay is inordinate and where the delay is of few days only. The inordinate and where the delay is of few days only. The inordinate and where the delay is of few days only. The inordinate delay in the instant inordinate delay in the instant case clearly demonstrates that case clearly demonstrates that this appeal was not prosecuted with due care. this appeal was not prosecuted with due care. The expression 'sufficient cause' is not defined, but it means a The expression 'sufficient cause' is not defined, but it means a The expression 'sufficient cause' is not defined, but it means a cause which is beyond the control of the party. For invoking the cause which is beyond the control of the party. For invoking the cause which is beyond the control of the party. For invoking the aid of the section any cause which prevents a pe aid of the section any cause which prevents a pe aid of the section any cause which prevents a person approaching the POs within time is considered sufficient cause. approaching the POs within time is considered sufficient cause. approaching the POs within time is considered sufficient cause. In doing so, it is the test of reasonable man in normal In doing so, it is the test of reasonable man in normal In doing so, it is the test of reasonable man in normal circumstances which has to be applied. The test whether or not circumstances which has to be applied. The test whether or not circumstances which has to be applied. The test whether or not a cause is sufficient is to see whether it could have been a cause is sufficient is to see whether it could have been a cause is sufficient is to see whether it could have been avoided by the party by the exercise of due care and attention. y the party by the exercise of due care and attention. y the party by the exercise of due care and attention. In other words, whether it is bona fide cause, inasmuch as In other words, whether it is bona fide cause, inasmuch as In other words, whether it is bona fide cause, inasmuch as nothing shall be deemed to be done bona fide or in good faith nothing shall be deemed to be done bona fide or in good faith nothing shall be deemed to be done bona fide or in good faith which is not done with due care and attention. What may be which is not done with due care and attention. What may be which is not done with due care and attention. What may be sufficient cause in o sufficient cause in one case may be otherwise in another. What ne case may be otherwise in another. What is of essence is whether it was an act of prudent or reasonable is of essence is whether it was an act of prudent or reasonable is of essence is whether it was an act of prudent or reasonable man. The term sufficient cause means that the party should not have The term sufficient cause means that the party should not have The term sufficient cause means that the party should not have acted in a negligent manner but must had acted diligently and acted in a negligent manner but must had acted diligently and acted in a negligent manner but must had acted diligently and not remained in acti not remained in active. Reliance is placed on the judgement on Hon'ble High Court in Reliance is placed on the judgement on Hon'ble High Court in Reliance is placed on the judgement on Hon'ble High Court in the case of M Sri Nivasulu vs ACIT(TS the case of M Sri Nivasulu vs ACIT(TS-817-HC-2023(MAD) dated 2023(MAD) dated
Shri Siddhachakra Vardhman Tap Jain Shri Siddhachakra Vardhman Tap Jain 3 Ayambilkhata & 3153/MUM/2025 & 3153/MUM/2025
21.12.2023. The appellant has failed to justify the inordinate 21.12.2023. The appellant has failed to justify the inordinate 21.12.2023. The appellant has failed to justify the inordinate delay in filing appeal. From the factual position which emerges delay in filing appeal. From the factual position which emerges delay in filing appeal. From the factual position which emerges it appears that a conscious and considered decision was taken appears that a conscious and considered decision was taken appears that a conscious and considered decision was taken by the assessee at the relevant point of time for not filing of by the assessee at the relevant point of time for not filing of by the assessee at the relevant point of time for not filing of appeal against the impugned order. It is well appeal against the impugned order. It is well-settled law that a settled law that a distinction must be made between a case where the delay is distinction must be made between a case where the delay is distinction must be made between a case where the delay is inordinate and where the delay is of few days only. The e and where the delay is of few days only. The e and where the delay is of few days only. The inordinate delay in the instant case clearly demonstrates that inordinate delay in the instant case clearly demonstrates that inordinate delay in the instant case clearly demonstrates that this appeal was not prosecuted with due care: this appeal was not prosecuted with due care: On the issue of a routine delay and an inordinate delay, the On the issue of a routine delay and an inordinate delay, the On the issue of a routine delay and an inordinate delay, the Hon'ble Supreme Court in the case of Ve Hon'ble Supreme Court in the case of Vedabhai alias dabhai alias Vaijayantabai Baburao Patil vs. Shantaram Baburao Patil Vaijayantabai Baburao Patil vs. Shantaram Baburao Patil Vaijayantabai Baburao Patil vs. Shantaram Baburao Patil [2002] reported in 122 Taxman 114, has made a distinction [2002] reported in 122 Taxman 114, has made a distinction [2002] reported in 122 Taxman 114, has made a distinction between delays that are trivial and cases where inordinately between delays that are trivial and cases where inordinately between delays that are trivial and cases where inordinately large delays had occurred. The Hon'ble Supreme Court further large delays had occurred. The Hon'ble Supreme Court further large delays had occurred. The Hon'ble Supreme Court further held that the cases of trivial delays have to be liberally at the cases of trivial delays have to be liberally at the cases of trivial delays have to be liberally considered, however the cases of inordinate delays have to be considered, however the cases of inordinate delays have to be considered, however the cases of inordinate delays have to be approached cautiously. The relevant portion of the order of the approached cautiously. The relevant portion of the order of the approached cautiously. The relevant portion of the order of the Hon'ble Supreme Court is reproduced as under: Hon'ble Supreme Court is reproduced as under: - "In exercising discretion, und "In exercising discretion, under section 5 of the Limitation Act er section 5 of the Limitation Act the courts should adopt a pragmatic approach. A distinction the courts should adopt a pragmatic approach. A distinction the courts should adopt a pragmatic approach. A distinction must be made between a case where the delay is inordinate must be made between a case where the delay is inordinate must be made between a case where the delay is inordinate and a case where the delay is of a few days. Whereas in the and a case where the delay is of a few days. Whereas in the and a case where the delay is of a few days. Whereas in the former case, the consideration of prejudice former case, the consideration of prejudice to the other side will to the other side will be a relevant factor so the case calls for a more cautious be a relevant factor so the case calls for a more cautious be a relevant factor so the case calls for a more cautious approach but in the latter case no such consideration may arise approach but in the latter case no such consideration may arise approach but in the latter case no such consideration may arise and such a case deserves a liberal approach. No hard and fast and such a case deserves a liberal approach. No hard and fast and such a case deserves a liberal approach. No hard and fast rule can be laid down in this regard." rule can be laid down in this regard." In view of the above detailed discussion, it is held that the of the above detailed discussion, it is held that the of the above detailed discussion, it is held that the appellant has no "sufficient cause" in terms of section 249(3) of appellant has no "sufficient cause" in terms of section 249(3) of appellant has no "sufficient cause" in terms of section 249(3) of the Act, for not presenting the appeal within the prescribed the Act, for not presenting the appeal within the prescribed the Act, for not presenting the appeal within the prescribed period. It is well period. It is well-settled law that an appellant is not entitled to settled law that an appellant is not entitled to the condonation as a matter of right. For an appellant to donation as a matter of right. For an appellant to donation as a matter of right. For an appellant to succeed, the existence of sufficient cause is sine qua non and a succeed, the existence of sufficient cause is sine qua non and a succeed, the existence of sufficient cause is sine qua non and a condition precedent. It is manifestly evident that this ingredient condition precedent. It is manifestly evident that this ingredient condition precedent. It is manifestly evident that this ingredient is woefully lacking in this belated appeal filed by the appellant. is woefully lacking in this belated appeal filed by the appellant. is woefully lacking in this belated appeal filed by the appellant. Thus, the delay in filing the appeal by the appellant, is not the delay in filing the appeal by the appellant, is not the delay in filing the appeal by the appellant, is not considered as sufficient cause and delay is therefore, not considered as sufficient cause and delay is therefore, not considered as sufficient cause and delay is therefore, not condoned. Accordingly, the appeal is dismissed without any condoned. Accordingly, the appeal is dismissed without any condoned. Accordingly, the appeal is dismissed without any discussion on merits or on any other aspect. discussion on merits or on any other aspect. Considering the above discussion and Considering the above discussion and facts, the appeal filed is facts, the appeal filed is not in conformity with the provisions of Sec 249(2) of the Act, not in conformity with the provisions of Sec 249(2) of the Act, not in conformity with the provisions of Sec 249(2) of the Act,
Shri Siddhachakra Vardhman Tap Jain Shri Siddhachakra Vardhman Tap Jain 4 Ayambilkhata & 3153/MUM/2025 & 3153/MUM/2025 and there is no sufficient cause for condonation of the delay in and there is no sufficient cause for condonation of the delay in and there is no sufficient cause for condonation of the delay in filing of the appeal, the present appeal is dismissed as filing of the appeal, the present appeal is dismissed as filing of the appeal, the present appeal is dismissed as not maintainable. maintainable.” 2.1 Before us, the learned counsel for the assessee drew our Before us, the learned counsel for the assessee drew our Before us, the learned counsel for the assessee drew our attention to page 14 of the Paper Book and submitted that the attention to page 14 of the Paper Book and submitted that the attention to page 14 of the Paper Book and submitted that the appeal was instituted on 12.03.2025. The learned CIT(A) thereafter appeal was instituted on 12.03.2025. The learned CIT(A) thereafter appeal was instituted on 12.03.2025. The learned CIT(A) thereafter issued a notice on 17.03.2025 fixing the date of hearing for issued a notice on 17.03.2025 fixing the date of hearing for issued a notice on 17.03.2025 fixing the date of hearing for 24.03.2025. However, before the assessee could file an explanation 5. However, before the assessee could file an explanation 5. However, before the assessee could file an explanation in support of the application for condonation of delay, the appeal in support of the application for condonation of delay, the appeal in support of the application for condonation of delay, the appeal was disposed of by the CIT(A) on 20.03.2025, without waiting for was disposed of by the CIT(A) on 20.03.2025, without was disposed of by the CIT(A) on 20.03.2025, without response of the assessee response of the assessee.
2.2 The learned Departmental Represent The learned Departmental Representative did not dispute the ative did not dispute the factual narrative as submitted by the learned counsel for the factual narrative as submitted by the learned counsel for the factual narrative as submitted by the learned counsel for the assessee.
2.3 On a careful consideration of the facts, we are of the opinion On a careful consideration of the facts, we are of the opinion On a careful consideration of the facts, we are of the opinion that the action of the learned CIT(A) is in clear violation of the that the action of the learned CIT(A) is in clear violation of the that the action of the learned CIT(A) is in clear violation of the principles of natural j principles of natural justice. Once the appellate authority had ustice. Once the appellate authority had issued notice proposing to fix a date of hearing, it was incumbent issued notice proposing to fix a date of hearing, it was incumbent issued notice proposing to fix a date of hearing, it was incumbent upon him to provide the assessee a reasonable opportunity to upon him to provide the assessee a reasonable opportunity to upon him to provide the assessee a reasonable opportunity to respond before deciding the issue, particularly when the matter respond before deciding the issue, particularly when the matter respond before deciding the issue, particularly when the matter involved condonation of involved condonation of delay—a matter where judicial discretion a matter where judicial discretion not only be exercised cautiously, but fairly. exercised cautiously, but fairly. In view of the above, we In view of the above, we find it appropriate to set aside the impugned order of the learned find it appropriate to set aside the impugned order of the learned find it appropriate to set aside the impugned order of the learned CIT(A) and remand the matter back to his file for adjudication CIT(A) and remand the matter back to his file for adjudication CIT(A) and remand the matter back to his file for adjudication
Shri Siddhachakra Vardhman Tap Jain Shri Siddhachakra Vardhman Tap Jain 5 Ayambilkhata & 3153/MUM/2025 & 3153/MUM/2025 afresh. The learned CIT(A) shall decide the matter de novo, earned CIT(A) shall decide the matter de novo, earned CIT(A) shall decide the matter de novo, including the issue of condonation of delay, after affording adequate including the issue of condonation of delay, after affording adequate including the issue of condonation of delay, after affording adequate and effective opportunity of being heard to the assessee. and effective opportunity of being heard to the assessee. and effective opportunity of being heard to the assessee.
3 It is further noted that the facts pertaining to the assessment It is further noted that the facts pertaining to the assessment It is further noted that the facts pertaining to the assessment year 2022–23 are identical to those in assessment year 2021 e identical to those in assessment year 2021 e identical to those in assessment year 2021–22. Accordingly, our directions hereinabove shall apply mutatis Accordingly, our directions hereinabove shall apply Accordingly, our directions hereinabove shall apply mutandis to the said year as well. As the matter is restored for fresh to the said year as well. As the matter is restored for fresh to the said year as well. As the matter is restored for fresh adjudication, we do not deem it necessary to adjudicate the adjudication, we do not deem it necessary to adjudicate the adjudication, we do not deem it necessary to adjudicate the remaining grounds raised in the appeal at this stage. s raised in the appeal at this stage. s raised in the appeal at this stage.
In the result, both the appeals of the assessee are allowed for In the result, both the appeals of the assessee are allowed for In the result, both the appeals of the assessee are allowed for statistical purposes. statistical purposes.