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Facts
The assessee filed an appeal before the Tribunal with a delay of 174 days. The assessee claimed to have not received the order from the Ld. CIT(A) and only came to know about it when their bank account was attached. The Revenue opposed the condonation of delay, citing the assessee's admission of "oversight and lack of communication".
Held
The Tribunal condoned the delay of 174 days, finding the assessee's explanation plausible and supported by affidavit. The Tribunal noted that procedural delays should not defeat substantive justice, especially when there's no malafide intent or negligence. The CIT(A) had dismissed the appeal without adjudicating on merits, which was against the statutory mandate.
Key Issues
Whether the delay in filing the appeal should be condoned and whether the CIT(A) order dismissing the appeal without adjudication on merits is valid.
Sections Cited
226(3), 143(2), 143(3), 143(3A), 143(3B), 44AD, 250, 250(6), 56(2)(ii)
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Income Tax Appellate Tribunal, Hyderabad ‘B’ Bench, Hyderabad
Before: SHRI VIJAY PAL RAO & SHRI MADHUSUDAN SAWDIA
आदेश/ORDER PER MADHUSUDAN SAWDIA, A.M. : This appeal is filed by M/s. HRM Interiors (“the assessee”), feeling aggrieved by the order passed by the Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi (“Ld. CIT(A)”), dated 05.06.2024 for the A.Y. 2018-19. 2. At the outset, it is seen that there is a delay of 174 days in filing the appeal before the Tribunal. The assessee has filed a petition for condonation of delay along with an affidavit explaining the reasons for such delay. In this regard, the Learned Authorised Representative (“Ld. AR”) submitted that the assessee did not receive the order of the Ld. CIT(A). The assessee came to know about the passing of the said impugned order only when his bank account was attached by the Revenue vide notice issued under section 226(3) of the Income Tax Act, 1961 (“the Act”) dated 28.01.2025. Upon coming to know of the same, the assessee immediately filed the appeal before the Tribunal. It was contended that there was no deliberate or mala fide intention on the part of the assessee to delay the filing of the appeal. The Ld. AR, therefore, prayed for condonation of the delay.
Per contra, the Learned Departmental Representative (“Ld. DR”) opposed the condonation petition and submitted that the order of the Ld. CIT(A) was sent to the assessee through the email ID provided by the assessee in Form No. 35 (appeal memo). The Ld. DR further invited our attention to para 5 of the condonation petition filed by the assessee, wherein it was admitted that the delay was purely due to “oversight and lack of communication”. According to the Ld. DR, this reflects negligence and a casual approach on the part of the assessee, and therefore the delay should not be condoned. In support of his submission, the Ld. DR placed reliance on the decision of the Hon’ble Supreme Court in the case of Jharkhand Urja Utpadan Nigam Ltd.
& Anr. vs. M/s. Bharat Heavy Electricals Ltd. [Special Leave Petition (C) No.9580/2025, order dated 15.04.2025].
We have heard the rival contentions and carefully considered the facts of the case. The explanation offered by the assessee for the delay of 174 days is plausible and duly supported by affidavit. It is an established principle that procedural delays must not defeat substantive justice, especially where no malafide intent or negligence is demonstrated. In this context, we found that the Hon’ble Supreme Court in the case of Vidya Shankar Jaiswal Vs. ITO in Special Leave Petition (Civil) Nos.26310-26311/2024 dated 31.01.2025 has held that a justice oriented and liberal approach must be adopted in condoning delay if the explanation is bona fide and sufficient cause is shown. As regards the objection raised by the Ld. DR based on Jharkhand Urja Utpadan Nigam Ltd. (supra), we find the factual matrix of that case to be materially different. There, the assessee was a government corporation with robust administrative infrastructure and legal departments, and yet failed to pursue its own case. In contrast, the present assessee, a private entity, not having any such infrastructure. Therefore, in the interest of justice and fair play, we are inclined to condone the delay of 174 days in filing the appeal before this Tribunal. Accordingly, the delay of 174 days in filing the appeal is condoned and the appeal is hereby admitted for adjudication.
The assessee has raised the following grounds of appeal :
The brief facts of the case are that, the assessee is a partnership firm engaged in the business of renting of furniture and fixtures. It filed its return of income on 22.08.2018, declaring a total income of Rs.4,36,110/- by applying the provisions of section 44AD of the Act. The case of the assessee was selected for scrutiny, and accordingly, notice under section 143(2) of the Act was issued by the Learned Assessing Officer (“Ld. AO”). After considering the submissions of the assessee, the Ld. AO completed the assessment under section 143(3) read with sections 143(3A) and 143(3B) of the Act on 24.03.2021, determining the total income at Rs.72,73,000/-.
Aggrieved with the order of Ld. AO, the assessee filed an appeal before the Ld. CIT(A). However, the assessee could not make compliance to the notices issued by the Ld. CIT(A). Consequently, the Ld. CIT(A) dismissed the appeal.
Aggrieved by the order of the Ld. CIT(A), the assessee is in appeal before the Tribunal. The Ld. AR submitted that the assessee did not receive the notices issued by the Ld. CIT(A) and hence could not make compliance. It was contended that the Ld. CIT(A) has not decided the issue on merits, which is contrary to law. The Ld. AR argued that the assessee does not get any benefit by delaying the proceedings and, in the interest of justice, should be given one more opportunity to present the case on merits before the Ld. CIT(A). The Ld. AR prayed that the matter be restored to the file of the Ld. CIT(A) with a direction to re- adjudicate the issue after affording reasonable opportunity of being heard to the assessee and granting liberty to file all necessary evidence and submissions in support of the claim.
Per contra, the Ld. DR opposed the remand and submitted that adequate opportunities were already given by the Ld. CIT(A) which the assessee failed to avail. It was argued that there is no requirement to pass an order on merits when the assessee does not appear before the appellate authority. In support of this contention, the Ld. DR placed reliance on the decision of the Hon’ble Supreme Court in Benny D’Souza & Ors. Vs. Melwin D’Souza & Ors. [SLP No. 23809/2023, order dated 04.11.2023], wherein it was held that if the appellant does not appear when the appeal is called for hearing, it can be dismissed for non- prosecution and not on merits.
We have considered the rival submissions and perused the material available on record. The reliance placed by the Ld. DR on Benny D’Souza (supra) is distinguishable on facts. The decision of the Hon’ble Supreme Court in the case of Benny D’Souza & Ors. Vs. Melwin D’Souza & Ors. (supra) was rendered in the context of an appeal before the Hon’ble High Court, whereas in the present case the order under challenge is passed by the Ld. CIT(A). It is pertinent to note that section 250(6) of the Act mandates that the order of the Ld. CIT(A) disposing of an appeal shall be in writing and shall state the points for determination, the decision thereon, and the reasons for the decision. Therefore, even in the absence of appearance by the assessee, the Ld. CIT(A) is bound to adjudicate the appeal on merits and pass a speaking order. In the present case, the Ld. CIT(A) has dismissed the appeal without adjudicating on merits, which is not in accordance with the statutory mandate under section 250(6) of the Act. Therefore, in the interest of natural justice, we deem it fit to set aside the impugned order and restore the matter to the file of the Ld. CIT(A) with a direction to re-adjudicate the appeal on merits, after affording due opportunity of being heard to the assessee, and granting liberty to the assessee to file all necessary evidence/submissions in support of its claim.
In the result, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced in the open Court on 20th Aug., 2025.