UMESH KUMAR MOTWANI,INDORE vs. CIT(A), INDORE
What did the Tribunal hold?
The Tribunal condoned the delay of 109 days in filing the appeal, finding that the assessee had demonstrated "sufficient cause" for the delay. The Tribunal relied on Section 253(5) of the Act and the Supreme Court's decision in Collector, Land Acquisition Vs Mst. Katiji and others, emphasizing a justice-oriented approach. On the merits, the Tribunal observed that the assessee had filed a detailed reply with evidence before the CIT(A)-II, Indore, which was likely missed by the CIT(A), NFAC, due to the migration of the case to the faceless system. Consequently, the order of the CIT(A), NFAC, dismissing the appeal on the footing of non-prosecution was deemed incorrect. Given that the AO had also passed an ex-parte assessment order u/s 144 for non-representation, and both parties agreed, the Tribunal decided to remand the matter back to the file of the AO for fresh adjudication. The AO was directed to provide an opportunity of hearing and pass an order uninfluenced by the earlier order. The assessee was directed to cooperate and ensure participation without seeking unnecessary adjournments.
What were the facts?
The assessee, Umesh Kumar Motwani, filed an appeal before the Income Tax Appellate Tribunal (ITAT), Indore Bench, against an order dated 26.12.2024 passed by the Commissioner of Income-Tax (Appeals)-Addl/JCIT(A)-3, Ahmedabad (NFAC). This order arose from an assessment order dated 15.12.2017 passed by the Assessing Officer (AO) u/s 144 of the Income-tax Act, 1961, for Assessment Year 2015-16. The appeal was filed with a delay of 109 days. The assessee sought condonation of delay, citing ill-health, family challenges, financial difficulties, and issues with the previous authorized representative. The assessee also contended that the AO erred in disregarding submissions during the transition to the faceless assessment scheme and that the suggestion of complete non-compliance was factually inaccurate. The revenue did not object to the condonation of delay. The ITAT noted that the first appeal was initially filed physically with CIT(A)-II, Indore, and a reply with evidence was submitted on 14.11.2018. However, due to migration to the faceless system, this reply was missed by the NFAC.
What were the issues?
1. Whether the delay of 109 days in filing the appeal before the ITAT is liable to be condoned under Section 253(5) of the Income-tax Act, 1961, in light of the "sufficient cause" presented by the assessee? Assessee's Contention: The delay was not deliberate but occurred due to unavoidable and genuine reasons beyond the assessee's control, including ill-health, mental distress, family challenges, financial difficulties, and issues with the previous authorized representative. The assessee also highlighted the prolonged assessment proceedings and lack of proper communication. Revenue's Contention: The Senior Departmental Representative (Sr. DR) did not object to the condonation of delay and left it to the wisdom of the bench. 2. Whether the order passed by the CIT(A), NFAC, dismissing the assessee's first appeal on the grounds of non-prosecution, is correct, considering the migration of the appeal from the physical to the faceless regime and the prior submission of a detailed reply? Assessee's Contention: The AO erred in disregarding submissions made in physical form without considering them during the transition to the faceless assessment scheme. The suggestion of complete non-compliance is factually inaccurate as replies were submitted and adjournments sought. Revenue's Contention: Not explicitly recorded, but the Sr. DR agreed to the remand to the AO.
Which sections of the Income-tax Act were involved?
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, INDORE BENCH, INDORE
Before: MS. SUCHITRA R. KAMBLE & SHRI B.M. BIYANI
आदेश/ O R D E R
Per B.M. Biyani, A.M.:
Feeling aggrieved by order of first-appeal dated 26.12.2024 passed by learned Commissioner of Income-Tax (Appeals)-Addl/JCIT(A)-3, Ahmedabad [“CIT(A), NFAC”] which in turn arises out of assessment-order dated 15.12.2017 passed by learned ITO-4(2), Indore [“AO”] u/s 144 of Income-tax Act, 1961 [“the Act”] for Assessment-Year [“AY”] 2015-16, the assessee has filed this appeal on the grounds mentioned in Appeal Memo (Form No. 36).
The registry has informed that the present appeal is delayed by 109 days and therefore time-barred. Ld. AR for assessee submitted that the assessee has filed an application for condonation of delay; the same is scanned and re-produced for an immediate reference:
The averments made by assessee in above application, which are self- explanatory and which do not require repetition, were discussed and the Ld. DR for revenue does not have any objection if the bench condones delay and accordingly left it to the wisdom of bench. We have considered the explanation advanced by assessee and in absence of any contrary fact or material on record, the assessee is found to have a “sufficient cause” for Page 4 of 7 delay in filing present appeal. We find that section 253(5) of the Act empowers the ITAT to admit an appeal after expiry of prescribed time, if there is a “sufficient cause” for not presenting appeal within prescribed time.
It is also a settled position by Hon’ble Supreme Court in Collector, Land Acquisition Vs Mst. Katiji and others 1987 AIR 1353, 1987 2 SCC 387 that whenever substantial justice and technical considerations are opposed to each other, the cause of substantial justice must be preferred by adopting a justice-oriented approach. Thus, taking into account the facts of case, the provision of section 253(5) and the decision of Hon’ble Supreme Court, we take a judicious view, condone delay, admit appeal and proceed with hearing.
On merit of case, it emerged during hearing that the assessee filed first-appeal to CIT(A)-II, Indore on 13.01.2018 under “physical mode” then prevailing. Thereafter, the CIT(A)-II, Indore conducted proceedings of first- appeal and issued notice of hearing to assessee and the assessee filed a detailed reply accompanied by evidences on 14.11.2018 to CIT(A)-II, Indore, the reply filed by assessee duly acknowledged by official seal of CIT(A)-II, Indore is available in Paper-Book at Pages 14 onwards. Subsequently, the proceeding of first-appeal was migrated to Faceless System and the CIT(A), NFAC passed impugned order dated 26.12.2024. Thus, it appears that the due to migration of assessee’s first appeal from physical regime to faceless regime, there was a change from CIT(A)-II, Indore to CIT(A), NFAC and hence the reply earlier filed by assessee to CIT(A)-II, Indore has missed attention of Page 5 of 7 new CIT(A), NFAC. Therefore, in the situation, the impugned order passed by CIT(A), NFAC dismissing assessee’s first-appeal on the footing of non- prosecution is not correct and hence the impugned order must be set aside.
During discussion, it further emerged that the AO has also passed ex-parte assessment-order u/s 144 for non-representation by assessee and therefore it would be better to remand this case to the file of AO for a fresh adjudication instead of CIT(A). Both sides agreed to this. Ld. DR, however, made a request to give specific direction to assessee for co-operation and representation before AO without seeking unnecessary adjournments.
In view of above facts and considering the submissions of parties; having regard to the principle of natural justice and also bearing in mind that no prejudice would be caused to revenue if the present matter is restored at the level of AO, we remand this matter back to the file of AO for adjudication afresh, at the risk and responsibility of assessee. The AO shall give necessary opportunity of hearing to assessee and pass an appropriate order uninfluenced by his earlier order. The assessee is also directed to remain vigilant and ensure participation in the hearings as may be fixed by AO and do not seek unnecessary adjournments failing which the AO shall be at liberty to pass appropriate order in accordance with law. Ordered accordingly.
Resultantly, this appeal is allowed for statistical purpose.
Order pronounced by putting up on notice board in terms of Rule 34 of ITAT Rules, 1963 on 22/12/2025
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