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Facts
The assessee, an 89-year-old individual, did not file an Income Tax Return for A.Y. 2012-13. His case was reopened under Section 147 due to unexplained cash deposits and the purchase of immovable property. During reassessment, an unexplained investment of Rs. 8,75,000/- was added to his income under Section 69, leading to the imposition of a penalty under Section 271(1)(c) for concealment of income. The CIT(A) subsequently dismissed the assessee's appeal due to a 30-day delay in filing.
Held
The Tribunal condoned the 763-day delay in filing the appeal before the CIT(A), acknowledging the assessee's advanced age, unfamiliarity with e-proceedings, and communication difficulties, along with the impact of the COVID-19 pandemic on limitation periods. It held that the CIT(A) erred in summarily dismissing the appeal without providing an opportunity of hearing. The matter was remanded to the CIT(A) for fresh adjudication on merits after granting the assessee a full opportunity to present facts and evidence.
Key Issues
Condonation of delay in filing appeal before CIT(A) due to genuine cause and COVID-19 related extensions; procedural fairness and opportunity of hearing by appellate authorities; validity of penalty under Section 271(1)(c) for concealment of income.
Sections Cited
147, 139, 148, 69, 271(1)(c), 249(2)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “SMC” BENCH, AHMEDABAD
Before: DR. BRR KUMAR & SHRI SIDDHARTHA NAUTIYAL
(Assessment Year: 2012-13) Lakhubhai Nathubhai Sisodiya, Vs. Income Tax Officer, 1, Chandisar Chandisar, Dholka, Ward-3(2)(3), Gujarat-387810 (Current Income Tax Officer, Ward-3(1)(2)), Ahmedabad [PAN No.BXNPS7168A] (Appellant) .. (Respondent) Appellant by : Shri P D Shah, AR Respondent by: Shri Prateek Sharma, Sr. DR 05.08.2025 Date of Hearing Date of Pronouncement 13.08.2025 O R D E R
PER SIDDHARTHA NAUTIYAL - JUDICIAL MEMBER:
This appeal has been filed by the Assessee against the order passed by the Ld. Commissioner of Income Tax (Appeals), (in short “Ld. CIT(A)”), National Faceless Appeal Centre (in short “NFAC”), Delhi vide order dated 14.12.2022 passed for A.Y. 2012-13.
The assessee has raised the following grounds of appeal:
“1. That the learned National Faceless Appeal Centre, Delhi has erred in law and facts by confirming the penalty of Rs.1,98,428/-, under section 271(1)(c) of the act, on account of concealment of income, and therefore the learned AO should be directed to delete the said penalty.
2. That your appellant craves leave to add, alter or amend any grounds at the time of hearing.”
The assessee has filed application for condonation of delay of 763 days in filing of the present appeal. In the Affidavit submitted by the assessee, Lakhubhai Nathubhai Sisodiya vs. ITO Asst. Year –2012-13 - 2– he has stated the assessee is 89 years of age and lacked familiarity with the newly introduced e-proceeding system, does not use email himself, and was unaware that the appellate order of the National Faceless Appeal Centre had been served on his son, who resides abroad and was preoccupied with business commitments. It was only in March 2025 that the assessee learnt about the dismissal of his appeal when penalty proceedings brought the matter to light, and the assessee promptly filed the present appeal upon receiving advice from a chartered accountant. On hearing the submissions and examining the facts, we are of the considered view that the substantial delay was neither deliberate nor negligent, but was due to genuine communication difficulties and the assessee’s advanced age. We are of the considered view that it would not be in the interest of justice to allow technical limitations to deprive an elderly taxpayer of his statutory right to appeal. Accordingly, in view of the hardship and inequity that would result from a rigid application of limitation, we hereby condone the delay of 763 days in filing the appeal On merits: 4. The brief facts of the case are that the case of the assessee was reopened under section 147 of the Act for the reason there was the detection of substantial cash deposits in savings bank accounts, amounting to Rs. 36,50,000/- (Rs. 19,50,000/- in Dena Bank and Rs. 17,00,000/- in Bank of India), and the fact that assessee had purchased immovable property during the relevant financial year. The assessee had not filed return of income under section 139 of the Act for the said year, and notice under section 148 was issued on 30.10.2018. In response, the assessee filed a return declaring Lakhubhai Nathubhai Sisodiya vs. ITO Asst. Year –2012-13 - 3– income of Rs. 1,78,290/-. During the reassessment proceedings, the Assessing Officer noted that the assessee had purchased property during the year in which his share amounted to Rs. 8,75,000/-. Since no explanation or supporting documents were submitted by the assessee to explain the source of investment, the said amount was treated as unexplained under section 69 of the Act and added to the income of the assessee. Penalty proceedings under section 271(1)(c) were accordingly initiated for concealment of income. During penalty proceedings, the assessee submitted that the addition was agreed to in order to buy mental peace and avoid prolonged litigation, and the entire demand raised was duly paid. The assessee argued that no penalty should be imposed on this basis alone and relied on various judicial precedents in support of his contention. The assessee submitted that no inaccurate particulars were filed, and the issue was debatable and involved assumptions by the Assessing Officer. The Assessing Officer considered the submissions of the assessee but found them to be untenable. It was noted that the assessee was liable to file a return under section 139 but failed to do so. Upon reopening of the case, the total income was assessed at a figure of Rs. 10,53,290/-, which clearly exceeded the threshold requiring mandatory return filing. The AO held that the assessee deliberately failed to disclose his true income and had not filed any credible documentary evidence in support of investment in immovable property even during the course of penalty proceedings. The Assessing Officer observed that had the case not been reopened, the assessee would have succeeded in concealing the said income, and the addition was made only after it came to light during the reassessment proceedings. Hence, the AO held that this was a fit case for imposition of penalty under section 271(1)(c) for concealment of income. Accordingly, Lakhubhai Nathubhai Sisodiya vs. ITO Asst. Year –2012-13 - 4– penalty under section 271(1)(c) was levied on the amount of Rs. 8,75,000/- which was treated as unexplained investment, and the penalty was computed in accordance with the provisions of the Act.
In appeal, CIT(Appeals) dismissed the appeal of the assessee on account of delay in filing of appeal, with the following observations:
“The facts of the case and the grounds raised by the appellant have been considered carefully. It is noticed that there is a delay in filing of appeal. The appeal is to be filed within 30 days of the date of the service of the order. During the appellate proceedings, it is found from the Form No. 35, the appellant filed the appeal on 26.02.2022 whereas the date of order u/s 200A on 11.11.2021 and as per Form No. 35 date of service for order was 11.11.2021. As per the dates given in Form 35 it appears that the appeal is filed beyond the prescribed due date by 30 days. There is a lapse on the part of the assessee regarding filing of the appeal within stipulated time. This shows that there is a delay of filing of the appeal in terms of section 249 (2) of the Act. In such a situation section 249(2) of the Act envisages that there should be sufficient cause for not prosecuting the appeal within the period prescribed. There is a substantial delay in the filing of appeal for which no reason was given by the appellant. The appellant has failed to explain the delay in filing appeal.”
6. The assessee is in further appeal before us. Before us, the Counsel for the assessee submitted that CIT(Appeals) erred in dismissing the appeal solely on grounds of delay, particularly when that the penalty order dated 11 November 2021 was passed during the COVID‑19 pandemic period. The appeal was filed on 26 February 2022, beyond the 30‑day statutory period, but this was justifiable because the Supreme Court and relevant authorities had extended the limitation period in view of the covid pandemic. It was further argued that the CIT(Appeals) dismissed the appeal without granting the assessee an effective opportunity of being heard, thereby depriving him of the chance to bring all facts and evidence on record. On merits, the Counsel for the assessee submitted in the penalty order passed under section 271(1)(c) of the Act there is no specific finding with regards to any concealment or Lakhubhai Nathubhai Sisodiya vs. ITO Asst. Year –2012-13 - 5– furnishing of inaccurate particulars of income by the assessee. In the e‑proceeding dated 22 October 2019 before the Assessing Officer, the assessee had submitted that the ₹8,75,000/- investment in agricultural land was made by his friend, Mr. Jaydeepsingh Vijaysingh Dodhiya, to whom he had earlier provided a loan of ₹9,00,000/- from personal savings; a copy of the purchase deed and an undertaking from Mr. Dodhiya were also furnished. The assessee had clarified that only ₹1,21,250/- out of the total ₹35 lakh payments were made in cash, with the rest via cheques from various banks with which the assessee held no account, clearly pointing out to the fact that the purchase was made on his behalf. The assessee sought an adjournment before the Assessing Officer due to a religious festival, which was not granted, and accordingly, the assessee had agreed to the addition merely to avoid hardship given his old age, holding only a 1/4th share in the joint property in question. The assessee submitted that the assessment and penalty orders were issued long after the transaction i.e. seven and ten years respectively, making it practically difficult to obtain necessary documentation. In light of these circumstances, he prayed for the full deletion of the penalty under section 271(1)(c).
We have considered the submissions of both parties and perused the records. In our considered view, the action of the CIT(Appeals) in dismissing the appeal summarily for delay, without affording an opportunity of hearing to the assessee or considering the impact of the Covid-19 pandemic, is not in accordance with the principles of natural justice. The Hon’ble Supreme Court and various High Courts have held that delay should be liberally construed when sufficient cause is shown and the matter should be decided on merits.
Lakhubhai Nathubhai Sisodiya vs. ITO Asst. Year –2012-13 - 6– Accordingly, in the interest of justice, we are of the view that the delay in filing the appeal before the CIT(Appeals) ought to have been condoned. The CIT(Appeals) should have allowed the assessee a reasonable opportunity to present his case on merits and allowed the assessee to bring complete facts on record, particularly when levy of penalty under section 271(1)(c) of the Act was in question. In view of the above, we set aside the order passed by the CIT(Appeals) and restore the matter to his file for fresh adjudication of the appeal on merits after condoning the delay. The CIT(Appeals) shall grant the assessee an opportunity of being heard and bring all available material on record and thereafter pass a reasoned and speaking order in accordance with law.
In the result, the appeal of the assessee is allowed for statistical purposes. This Order pronounced in Open Court on 13/08/2025
Sd/- Sd/- (DR. BRR KUMAR) (SIDDHARTHA NAUTIYAL) VICE PRESIDENT JUDICIAL MEMBER Ahmedabad; Dated 13/08/2025 TANMAY, Sr. PS TRUE COPY आदेश की �ितिलिप अ�ेिषत/Copy of the Order forwarded to : 1. अपीलाथ� / The Appellant 2. ��थ� / The Respondent. 3. संबंिधत आयकर आयु� / Concerned CIT 4. आयकर आयु�(अपील) / The CIT(A)- 5. िवभागीय �ितिनिध, आयकर अपीलीय अिधकरण, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाड� फाईल / Guard file. आदेशानुसार/ BY ORDER,