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Facts
The assessee filed his return of income for AY 2020-21. The AO made a significant addition of Rs. 9,02,21,100/- by invoking Section 56(2)(x) of the IT Act. The assessee filed an appeal before the NFAC with a delay of 140 days.
Held
The Tribunal held that the assessee's explanation for the delay, attributing it to lack of communication from his Chartered Accountant, was plausible given the substantial addition and demand. The Tribunal found the delay of 140 days not to be inordinate.
Key Issues
Whether the delay of 140 days in filing the appeal before the First Appellate Authority should be condoned.
Sections Cited
56(2)(x), 270A
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Income Tax Appellate Tribunal, “B” BENCH, MUMBAI
O R D E R
Per Saktijit Dey, Vice President:
This is an appeal by the assessee against order dated 05.01.2026 passed by National Faceless Appeal Centre (‘NFAC’ for short), Delhi for the assessment year (A.Y. for short) 2020-21.
The sole grievance of the assessee is against dismissal of its appeal in limine without condoning delay.
Briefly the facts are, the assessee is a resident individual. For the assessment year under dispute, the assessee filed his return of income on 07.01.2021, declaring income of Rs.6,02,620/-. The return of income filed by the assessee was selected for scrutiny. Ultimately, the Assessing Officer (A.O. for short) completed the assessment adding back an amount of Rs.9,02,21,100/-, being the difference between the actual sale consideration declared by the assessee and stamp duty value of the property determined by the Stamp Valuation Authority, invoking the provisions of section 56(2)(x) of the Act.
However, the appeal was filed with delay of 140 days. While explaining the cause of delay and seeking condonation thereof, the assessee stated that though the assessee had entrusted the tax matter to a Chartered Accountant, however, he never intimated the assessee regarding the finalization of the assessment proceeding. It was submitted, only after the assessee received a call from the Income Tax Department regarding the outstanding demand and penally order passed u/s. 270A of the Act, he could come to know regarding the completion of assessment. He submitted, in absence of any communication through either email or physically from the Income Tax Department, the assessee remained unaware about the completion of assessment, hence, could not take steps for filing the appeal in time.
Learned first appellate authority, however, was not convinced with the submissions of the assessee. Ultimately, he dismissed the appeal in limine without condoning the delay.
We have heard the parties and perused the materials on record. It is evident, before ld. First appellate authority, the assessee did furnish an explanation regarding the cause of delay in filing the appeal. It is the say of the assessee that due to lack of any information from the concerned Chartered Accountant who was handling his case, he remained unaware about the completion of assessment, hence, could not take steps in time to file the appeal. This explanation of assessee, in our view, is capable of being accepted keeping in view the attending facts and circumstances. Undisputedly, the assessee is an individual and has been fastened with a huge addition of more than Rs.9 crores, which in case of an Samsher Hasankhan Dalwai vs. NFAC/ITO individual is quite substantial. The resultant demand is also huge. Therefore, it is unbelievable that an individual assessee fastened with such huge addition and demand would take the matter casually and deliberately try to defer the steps to be taken for contesting the addition. Furthermore, the delay is of 140 days and not inordinate so as to require scrutiny of assessee’s intent in not prosecuting the litigation. Thus, on over-all consideration of facts and materials on record, we are of the view that the assessee deserves to be given the benefit of doubt. Accordingly, we direct ld. First appellate authority to condone the delay and adjudicate assessee’s appeal on merits after providing due and reasonable opportunity of being heard to the assessee. Grounds are allowed for statistical purpose.