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Facts
The assessee filed an appeal against an intimation under Section 154 with a delay of 353 days, claiming unawareness due to an inaccessible registered email and invalid service modes (SMS/CPC portal). The CIT(A) dismissed the appeal as time-barred, refusing to condone the delay.
Held
The Tribunal held that service via SMS or CPC portal is not a valid mode of service as per Section 282 of the Income Tax Act and Rule 127 of the Income Tax Rules. Finding sufficient cause and adopting a liberal approach for condonation, the Tribunal condoned the delay, set aside the CIT(A)'s order, and remanded the matter for fresh adjudication on merits, imposing a cost of ₹2,000 on the assessee.
Key Issues
Whether the CIT(A) erred in not condoning the delay in filing the appeal, and whether service via SMS/CPC portal constitutes valid service under the Income Tax Act and Rules.
Sections Cited
154, 249(3), 282
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सुनवाई की तारीख/Date of Hearing : 04/08/2025 उदघोषणा की तारीख/Date of Pronouncement : 05 /08/2025 आदेश/Order PER LALIET KUMAR, J.M:
This is an appeal filed by the Assessee against the order dt. 29.01.2025 of the Ld. CIT(A), National Faceless Appeal Centre (NFAC), Delhi pertaining to Assessment Year 2022-23.
2.1 The assessee had filed an appeal before the CIT(A) on 14.12.2024 against the intimation dated 27.11.2023 issued under section 154 of the Income Tax Act, 1961. It was submitted that the assessee was unaware of the said intimation as the registered email address was inaccessible, and the order was not served through any valid mode prescribed under law. The assessee contended that it became aware of the order only upon receipt of a telephonic communication from the Department demanding payment, whereafter the appeal was filed without any deliberate delay or mala fide intent.
2.2 The CIT(A), however, declined to condone the delay of 353 days in filing the appeal, holding that the assessee had failed to demonstrate “sufficient cause” within the meaning of section 249(3) of the Income Tax Act, 1961, read with section 5 of the Limitation Act.
2.3 The CIT(A) placed reliance upon the following judicial precedents to support his findings: I. Ajay Dabra v. Pyare Ram [SLP (C) No. 15793 of 2019 (SC)]: The Hon’ble Supreme Court held that while courts should not adopt a pedantic approach, reasonable and acceptable explanation must be provided for each day's delay.
II. Ram Lal v. Rewa Coalfields Ltd. [AIR 1962 SC 361]: It was held that condonation is not a vested right and is permissible only on proof of sufficient cause.
III. Ornate Traders Pvt. Ltd. v. ITO [Bombay HC]: Emphasized that condonation must be consistent with the bounds of normal human conduct and not granted as a matter of routine.
IV. Majji Sannemma v. Reddy Sridevi [SC, dated 16.12.2021]: Stressed that limitation statutes must be strictly construed, and negligence or inaction cannot be condoned by adopting a liberal approach.
V. Basawaraj v. Spl. Land Acquisition Officer [(2013) 14 SCC 81]: Held that delay cannot be condoned merely by imposing conditions if sufficient cause is not shown.
VI. Collector, Land Acquisition v. Mst. Katiji [(1987) 167 ITR 471 (SC)]: Although relied upon by the CIT(A), this decision supports a liberal approach to condonation where substantial justice is at stake.
VII. State of U.P. v. Satish Chand Shivhare [SLP (C) No. 5301 of 2022 (SC)]: Reaffirmed that unless delay is satisfactorily explained, appeals cannot be adjudicated on merits.
2.4 Relying on the above, the CIT(A) dismissed the appeal as time-barred without adjudicating the matter on merits.
Now the assessee is in appeal before us against the order passed by the Ld. CIT(A) on the grounds mentioned herein in above.
4 The ld. AR for the assessee also specifically objected to the CIT(A)’s reliance on service through SMS and uploading on the CPC portal, contending that such modes are not valid modes of service as per the provisions of section 282 of the Act read with Rule 127 of the Income Tax Rules. It was submitted that valid service must be effected either by physical delivery or via the registered email address as per law. In the absence of valid service, it was urged that the limitation period had not commenced, and hence, the appeal filed was within time. In the light of above it was prayed that delay in filing the appeal before the CIT(A) may be condoned. It was further prayed that the matter may kindly be remanded back to the file of the CIT(A) for fresh adjudication on merit.
Per contra Ld. DR relied upon the order of lower authorities. She submitted that assessee cannot take the benefit of its mistakes.
6.1 We have considered the rival contentions and perused the material on record. The primary issue for adjudication is whether the assessee had shown sufficient cause to warrant condonation of delay in filing the appeal before the CIT(A). It is observed that the delay in filing the appeal was attributed to the assessee's unawareness of the intimation dated 27.11.2023, allegedly due to inaccessibility of the registered email and absence of any valid service of the order.
The assessee claimed that service through SMS and uploading on the CPC portal cannot be considered a valid service under law. We find merit in this contention.
6.2 As per Section 282 of the Act, read with Rule 127 of the Income Tax Rules, service is valid only if effected either physically or through the registered email address. Service through SMS or mere uploading on the CPC portal is not recognised under the statute. In the absence of a valid service, the commencement of limitation is itself in question. For that, we may rely upon the decision of the jurisdictional high court in this regard.
6.3 While it is true that the delay of 353 days is substantial, the explanation furnished by the assessee cannot be said to be entirely lacking in bona fides. Upon becoming aware of the demand, prompt steps were taken to file the appeal. The explanation is not inherently implausible or indicative of negligence, however, we cannot be oblivious to the rules reproduced herein above.
6.4 The reliance placed by the CIT(A) on decisions such as Ram Lal and Basawaraj is distinguishable on facts. In those cases, the delay was found to be due to inaction and lack of bona fides. In contrast, in the present case, the delay has been sufficiently explained through a plausible and consistent explanation.
6.5 The decision in Collector v. Katiji in fact supports the assessee’s stand that courts should adopt a liberal approach where refusal to condone delay may result in miscarriage of justice. The law is fairly settled that the liberal approach should be followed in tax adjudication proceedings, more particularly when assessee is NGO doing good cause for soecity and nation.
6.6 In view of the above, and considering the principle of substantial justice, we are inclined to condone the delay. However, in order to strike a balance and discourage procedural laxity, we impose a cost of ₹2,000/- on the assessee, to be paid to the Prime Minister’s National Relief Fund within 30 days from the receipt of this order and under intimation to the CIT(A).
Accordingly, the delay in filing the appeal before the CIT(A) is hereby condoned.
The impugned order dated 29.01.2025 is set aside. The matter is restored to the file of the CIT(A) with a direction to adjudicate the appeal on merits, in accordance with law, after affording a reasonable opportunity of hearing to the assessee.
The assessee is directed to cooperate in the remand proceedings and refrain from seeking unnecessary adjournments.
Order pronounced in the open Court on 05 / 08/2025.