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Facts
The assessee, a 78-year-old pensioner, e-filed his return for A.Y. 2017-18. His case was selected for scrutiny due to cash deposits of Rs. 28,51,965/- during the demonetization period, leading to a best judgment assessment by the A.O. under Section 144, adding the amount as unexplained money under Section 69A. The assessee filed appeals with the CIT(A) against the assessment order (delayed by 1059 days) and subsequent penalty orders (delayed by 317 and 442 days), claiming unawareness of e-notices due to old age until receiving a physical demand letter.
Held
The Tribunal upheld the CIT(A)'s decision to refuse condonation of the inordinate delays, noting that the assessee's explanation was not plausible as he regularly filed returns for subsequent years and failed to provide sufficient cause or evidence for the delay. Citing Supreme Court precedents, the Tribunal emphasized that the law of limitation and principles of diligence should not be disregarded in cases of inordinate delay and negligence. Consequently, all appeals were dismissed on the grounds of limitation.
Key Issues
Whether the inordinate delay in filing appeals before the CIT(A) against the assessment and penalty orders should be condoned, considering the assessee's explanation of old age and unawareness of e-notices.
Sections Cited
144, 271AAC, 272A(1)(d), 143(2), 69A, 139, 133(6), 249, 248, 146, 201, Limitation Act, 1963 Section 3, Limitation Act, 1963 Section 5
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Income Tax Appellate Tribunal, Hyderabad ‘ A ‘ Bench, Hyderabad
O R D E R प्रनत रवीश सूद, जे.एम./PER BENCH:
The captioned appeals filed by the assessee are directed against the respective orders passed by the Commissioner of Income-Tax (Appeals), National Faceless Appeal Center (NFAC), Delhi, dated 30.08.2024, which in turn arises from the respective orders passed by the Assessing Officer (for short, “A.O.”) under Section 144 of the Income Tax Act, 1961 (for short “the Act”) dated 26.12.2019, u/s 271AAC of the Act, dated 06.01.2022 and u/s 272A(1)(d) of the Act, dated 03.09.2021. As the captioned appeals are inextricably interwoven or interlinked, therefore, the same are taken up and disposed of by this consolidated order.
We shall first take up the appeal filed by the assessee in which in turn arises from the order passed by the CIT(A) dismissing the quantum appeal of the assessee company.
The impugned order has been assailed on the following grounds of appeal before us: Ramulu Bandi, Hyderabad.
“1. The order of the learned Commissioner of Income Tax (Appeals) is against the law, weight of evidence, and probabilities of the case.
2. The learned Commissioner erred in not condoning the delay of 1059 days in spite of submitting a condonation petition and further erred in not adjudicating the issue on merits.
3. The learned Commissioner ought to have considered the age and background of the assessee before rejecting the petition for condonation of delay, therefore, erred in not condoning the delay and further erred for not adjudicating the issue on merits.
4. The learned Commissioner ought to have adjudicated the issues such as jurisdiction of the Assessing Officer to issue notice u/s 143(2) and the fact that the assessee deposited only Rs. 14,000/- during the demonetization period. Therefore, erred in not deciding the issues on merits.
5. The learned Commissioner erred in confirming the order u/s 144 dated 26.12.2019, wherein income is determined at Rs. 28,51,965/- assuming erroneously that assessee deposited a sum of Rs. 28,51,965/- in cash during the demonetization period (09.11.2016 to 30.12.2016).
The appellant craves leave to add to, amend or modify the above grounds of appeal either before or at the time of hearing of the appeal, if it is considered necessary.”
Succinctly stated, the assessee, a pensioner, had e-filed his return of income for A.Y. 2017-18 on 28.03.2018, declaring an income of Rs. 4,20,450/-. Subsequently, the case of the assessee was selected for “limited scrutiny” through CASS to examine the “cash deposits during demonetization period.”
During the course of assessment proceedings, the A.O. observed that the assessee had during the demonetization period, i.e from 09.11.2016 to 30.12.2016 made cash deposits of Rs. Ramulu Bandi, Hyderabad.
28,51,965/- in his bank account. As the assessee despite having been afforded sufficient opportunity, failed to furnish the requisite details, therefore, the A.O. was constrained to frame the assessment to the best of his judgment u/s 144 of the Act. The A.O., in the absence of any explanation of the assessee regarding the source of the cash deposits of Rs. 28,51,965/-, held the entire amount as having been sourced out of his unexplained money u/s 69A of the Act. Accordingly, the A.O. vide his order passed u/s 144 of the Act, dated 26.12.2019, determined the income of the assessee at Rs. 32,72,415/-.
6. Aggrieved, the assessee carried the matter in appeal before the CIT(A). As the appeal filed by the assessee before the CIT(A) involved a delay of 1059 days, therefore, he had in Column no.15 of the memorandum of appeal i.e. “Form No.35”, requested for the condonation of the said delay. For the sake of clarity, the reasons given by the assessee before the CIT(A) for condonation of the delay involved in filing the appeal are culled out as under : Ramulu Bandi, Hyderabad.
On a careful perusal of the reasons given by the assessee explaining the delay in filing of the appeal before the CIT(A), it transpires that it was stated by him that he is a septuagenarian a 78 years old, retired Head Master of a Primary School, drawing only pension from the Government of Telangana. Elaborating on the reasons leading to the delay in filing the appeal, it was stated by him that due to his old age, he had remained unaware of both Ramulu Bandi, Hyderabad. the notices and the assessment order that were sent by the Department through email. The assessee had stated that he had learnt about the order passed by the A.O. u/s 144 of the Act, dated 26.12.2019, only when he was served with a letter dated 13.12.2022 from the ITO, Ward 13(1), Hyderabad on 16.12.2022 by post, wherein he was called upon to deposit the outstanding demand. The assessee has further stated that on learning about the framing of an ex parte order in his case, he had involving no further loss of time, assailed the impugned order before the CIT(A) on 19.12.2022, which, by the time, involved a delay of 1059 days. The assessee in his explanation regarding the delay in filing of the appeal before the CIT(A), had specifically stressed on the fact that the correspondence of the Department through email was not accessible to him, which, thus, had resulted to the framing of the assessment vide an ex parte order, and he had remained unaware about the same till the date recovery proceedings were initiated against him. The assessee submitted before the CIT(A) that as the delay in filing of the appeal was not on account of contumacious conduct or negligence on his part but for bonafide reasons, therefore, the appeal be admitted and disposed of on merits. Ramulu Bandi, Hyderabad.
We find that the CIT(A) did not find favour with the unsubstantiated explanation of the assessee regarding the delay of 1059 days that was involved in the appeal filed before him. For the sake of clarity, the observations of the CIT(A) are culled out as under:
-Left blank intentionally- Ramulu Bandi, Hyderabad. Ramulu Bandi, Hyderabad. Ramulu Bandi, Hyderabad. Ramulu Bandi, Hyderabad. Ramulu Bandi, Hyderabad. Ramulu Bandi, Hyderabad.
The assessee, being aggrieved with the order of CIT(A), has carried the matter in appeal before us.
We may herein observe that the captioned appeals were earlier disposed off by the Tribunal vide its order passed in ITA No(s). 1126, 1139 and 1140/Hyd/2024, dated 27.11.2024, but thereafter on an application filed by the assessee, the same were recalled vide order passed in MA Nos.27 to 29/Hyd/2025, dated 23.06.2025.
We have heard the learned Authorized Representatives of both parties, perused the orders of the lower authorities and the material available on record, as well as considered the judicial Ramulu Bandi, Hyderabad. pronouncements that have been pressed into service by them to drive home their respective contentions.
Admittedly, it is a matter of fact that an inordinate delay of 1059 days was involved in the appeal filed by the assessee before the CIT(A). Although it is the assessee’s claim that as he is a septuagenarian, who not being conversant with the e-proceedings of the Income Tax Department, had remained unaware of the framing of the assessment in his case, but we are unable to persuade ourselves to subscribe to the same. We, say so, for the reason that the claim of the assessee that he had learnt about the framing of the assessment, vide an ex parte order under Section 144 of the Act, dated 26.12.2019 only when he had received a letter dated 13.12.2022 from the ITO, Ward–13(1), Hyderabad on 16.12.2022 by post, whereby he was called upon to deposit the outstanding demand based on the aforementioned impugned assessment framed in his case, is incomprehensible. It is difficult to fathom that the assessee would have remained unaware about the assessment framed in his case for a period of 3 years, i.e., 26.12.2019 (date of framing of assessment) till 16.12.2022 (the date on which it is claimed that a letter was received from the ITO, Ramulu Bandi, Hyderabad.
Ward–13(1), Hyderabad, wherein he was called upon to deposit the outstanding tax payment). We are of the firm conviction that as the assessee would have regularly filed his returns of income for the subsequent years, i.e., A.Y. 2018–19 till A.Y 2021–22, therefore, it is beyond comprehension that he would have remained unaware of the impugned ex-parte assessment framed in his case u/s 144 of the Act, dated 26.12.2019 as well as the consequential demand towards tax/interest raised in his case.
We are of a firm conviction that as the assessee in the present case had delayed the filing of the appeal before the CIT(A) by a period of 1059 days, i.e. (approximately 3 years), which is beyond doubt an inordinate delay, therefore, in the absence of any plausible explanation the CIT(A) had rightly declined to condone the same. At this stage, it will be apposite to observe that the fact that the assessee had earlier also adopted a lackadaisical approach regarding his income tax matters, can safely be gathered from his non-cooperation in the course of the assessment proceedings, which, thus, had resulted to framing of an ex parte order by the A.O under Section 144 of the Act, dated 26.12.2019. Our aforesaid view that the CIT(A) had rightly declined to condone Ramulu Bandi, Hyderabad. the inordinate delay of 1089 days involved in the appeal filed before him is fortified by the judgment of the Hon’ble Supreme Court in the case of Pathapati Subba Reddy (Died) by L.Rs. & Ors. Vs. The Special Deputy Collector (LA), Special Leave Petition (Civil) No. 31248 of 2018, dated 08th April, 2024. The Hon’ble Supreme Court in its aforesaid order, based on a harmonious consideration of the provisions of law, had laid down a set of conditions on the touchstone of which the delay involved in the filing of an appeal is to be looked into, as under:
26. On a harmonious consideration of the provisions of the law, as aforesaid, and the law laid down by this Court, it is evident that: (i) Law of limitation is based upon public policy that there should be an end to litigation by forfeiting the right to remedy rather than the right itself; (ii) A right or the remedy that has not been exercised or availed of for a long time must come to an end or cease to exist after a fixed period of time; (iii) The provisions of the Limitation Act have to be construed differently, such as Section 3 has to be construed in a strict sense whereas Section 5 has to be construed liberally; (iv) In order to advance substantial justice, though liberal approach, justice-oriented approach or cause of substantial justice may be kept in mind but the same cannot be used to defeat the substantial law of limitation contained in Section 3 of the Limitation Act; (v) Courts are empowered to exercise discretion to condone the delay if sufficient cause had been explained, but that exercise of power is discretionary in nature and may not be exercised even if sufficient Ramulu Bandi, Hyderabad. cause is established for various factors such as, where there is inordinate delay, negligence and want of due diligence; (vi) Merely some persons obtained relief in similar matter, it does not mean that others are also entitled to the same benefit if the court is not satisfied with the cause shown for the delay in filing the appeal; (vii) Merits of the case are not required to be considered in condoning the delay; and (viii) Delay condonation application has to be decided on the parameters laid down for condoning the delay and condoning the delay for the reason that the conditions have been imposed, tantamounts to disregarding the statutory provision.
We thus, in terms of our aforesaid observations, are of the firm conviction, that as the assessee had failed to exercise the remedy that was available with him i.e to assail the assessment order before the CIT(A) for a long time i.e. 3 years (approx.), and had filed the appeal involving an inordinate delay, therefore, the CIT(A) in exercise of the discretion vested with him under sub- section (3) of Section 249 of the Act had rightly refused to condone the same. We thus, finding no infirmity in the well-reasoned order of the CIT(A), uphold the same.
Before parting, we may herein observe that in case the delay involved in filing the appeal would not have been inordinate, and supported by justifiable reason, then, the same, in all fairness Ramulu Bandi, Hyderabad. ought to have been condoned. However, we observe that in the present case, not only delay involved in the appeal filed before the CIT(A) was inordinate, but the same was also not backed by any justifiable reason. We thus, based on our aforesaid deliberations, uphold the order of the CIT(A), who, in our view, had rightly declined to condone the inordinate delay involved in the appeal filed before him and dismissed the same in limine on the ground of limitation.
Resultantly, the appeal filed by the assessee is dismissed.
On a perusal of the record, we find that in both the aforementioned matters, there was a delay in filing the respective appeals by the assessee before the CIT(A).
Apropos wherein the assessee has assailed the penalty imposed upon him by the A.O. under Section 271AAC(1) of the Act, dated 06.01.2022, there was a delay of 317 days in the appeal filed before the CIT(A). On the other hand, the assessee had delayed his appeal against the penalty imposed upon Ramulu Bandi, Hyderabad. him under Section 272A(1)(d) of the Act, dated 03.09.2021, before the CIT(A), by a period of 442 days.
Ostensibly, a perusal of the record before us reveals that the assessee had attributed the delay in filing the captioned appeals to the same reason that he had come forth with for explaining the delay that was involved in the quantum appeal filed before the CIT(A). As was the claim of the assessee in his quantum appeal, it is the case of the assessee in the captioned appeals, that he had remained unaware about the imposition of the aforementioned respective penalties by the A.O., viz., (i). under Section 271AAC(1), dated 06.01.2022; and (ii) under Section 272A(1)(d), dated 03.09.2021, and had gathered about the same only when he had received a letter dated 13.12.2022 from the ITO, Ward–13(1), Hyderabad on 16.12.2022 by post, wherein he was called upon to deposit the outstanding tax demand.
As we have declined to accept the explanation of the assessee, which he had tried to press before us in his attempt to justify the delay involved in the appeal filed by him before the CIT(A) against the order passed by the A.O. under Section 144, dated Ramulu Bandi, Hyderabad.
26.12.2019, therefore, for the same reason, the said explanation which he had come forth with in the captioned appeals in his attempt to explain the delay in filing of the captioned appeals against the respective penalties imposed before the CIT(A), we herein reject the same. We, thus, find no infirmity in the view taken by the CIT(A), who had rightly refused to condone the inordinate delay involved in the respective captioned appeals filed by the assessee before him, and uphold the same.
Resultantly, the captioned appeals of the assessee are dismissed.
To sum up, all the appeals of assessee are dismissed.
Order pronounced in the Open Court on 06th August, 2025. (मंजूनाथ जी) (श्री रवीश सूद) (MANJUNATHA G.) (RAVISH SOOD) लेखा सदस्य/ACCOUNTANT MEMBER न्यायिक सदस्य/JUDICIAL MEMBER Hyderabad, dated 06.08.2025. *TYNM/sps Ramulu Bandi, Hyderabad.