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Facts
The assessee's appeal was filed with a delay of 401 days due to non-receipt of timely intimation of the order. The assessee was engaged in developing software products and had its income processed under section 143(1) and later scrutiny under CASS, leading to disallowances under section 143(3).
Held
The Tribunal condoned the delay, finding a reasonable cause for the assessee. It noted that the CIT(A) passed an ex-parte order without sufficient opportunity for the assessee and therefore set aside the CIT(A)'s order, remitting the matter back for fresh adjudication.
Key Issues
Whether there was a reasonable cause for the delay in filing the appeal, and if the CIT(A) erred in passing an ex-parte order without providing sufficient opportunity to the assessee.
Sections Cited
143(1), 43B, 143(3)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, ‘A’ BENCH, CHENNAI
Before: SHRI S.S. VISWANETHRA RAVI & SHRI S. R. RAGHUNATHA
आदेश /O R D E R
PER S. R. RAGHUNATHA, AM :
This appeal by the assessee is filed against the order of the CIT, NFAC, Delhi for the assessment year 2018-19, dated 19.10.2023.
At the outset, we find that there is a delay of 401 days in appeal filed by the assessee, for which an explanation letter dated 14.03.2025 was filed by the assessee. The assessee has submitted that the delay in filing the appeal occurred due to the fact that the details of the order passed by the Respondent were not known to the assessee in a timely manner. The email ID registered
:-2-: ITA. No:372/Chny/2025 on the income tax portal for receiving communications pertains to an old employee who is no longer associated with the company. Consequently, the assessee did not receive timely intimation of the order, and the same came to the knowledge of the assessee only on 12.01.2025, when a subsequent communication was received. After hearing both the parties, we find that there is a reasonable cause for the assessee in not filing appeal on or before the due date prescribed under the law and thus, in the interests of justice, we condone delay in filing of appeal and admit appeal filed by the assessee for adjudication.
The brief facts of the case are that the assessee is engaged in the business of developing software products and multimedia projects for its parent company in the U.S.A had filed its Return of Income for the Assessment Year 2018-19, declaring total income of Rs.1,61,26,950/-. The Return of Income was processed u/s.143(1) of the Income-tax Act, 1961 (hereinafter referred to as 'the Act') and added a disallowance due to a discrepancy between tax audit report and ITR u/s.43B of the Act to the tune of Rs.1,11,02,061/-. Further, the case was selected for scrutiny under CASS and the AO issued statutory notices calling for details. The assessee submitted certain details for and documents called for from time to time electronically, but the AO was not convinced and made certain disallowances on account of gratuity contribution of Rs.73,21,650/- by passing an order u/s.143(3) of the Act on 29.03.2021. Aggrieved by the order of the Assessing Officer, the assessee preferred an appeal before the ld.CIT(A).
The ld.CIT(A) upheld the order of the AO by dismissing the appeal of the assessee stating that considering the assessee’s repeated failure to comply
:-3-: ITA. No:372/Chny/2025 with notices and provide substantive evidence and passed an order dated 19.10.2023.
Aggrieved by the order of the ld.CIT(A), the assessee preferred an appeal before us.
The ld.AR submitted that the assessee has not participated in the proceedings before the first appellate authority and hence prayed for one more opportunity before the ld.CIT(A) in the interest natural justice and assured the bench that if the opportunity is given, the assessee will participate in the proceedings.
Per contra, the ld.DR submitted that the assessee is negligent in responding to the notices of the department and hence prayed for confirming the order of the ld.CIT(A).
We have heard rival contentions and noticed that the ld.CIT(A) has passed an exparte order by considering the information available and based on the AO’s order without the participation of the assessee in the first appellate proceedings. We note the assessee was not provided with sufficient opportunities before the ld.CIT(A). Since the assessee has failed to participate in the appellate proceedings, we levy the cost of Rs.20,000/- to be paid to State Legal Aid Authority, Hon’ble High Court of Madras and produce proof of payment of cost to the Registry within 30 days from the date of receipt of this order.
In the present facts and circumstances of the case and to meet the ends of justice, we are deeming it fit to provide one more opportunity to the :-4-: ITA. No:372/Chny/2025 assessee and hence we set aside the order of the ld.CIT(A) and remit the matter back to the file to ld.CIT(A) to adjudicate the matter afresh in accordance to law, after providing reasonable opportunity to the assessee. Needless to say, assessee to be diligent and file written submissions and relevant documents if advised so.
In the result, appeal filed by the assessee is allowed for statistical purposes.
Order pronounced in the court on 15th July, 2025 at Chennai.