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Facts
The assessee filed an appeal against an ex-parte order of the CIT(A), which arose from an assessment order. The appeal was filed with a significant delay of 516 days.
Held
The Tribunal condoned the delay, finding sufficient cause due to lack of proper service of notices and the order on the assessee. The matter was remanded to the CIT(A) for a fresh adjudication to ensure principles of natural justice.
Key Issues
Whether the delay in filing the appeal is condonable due to lack of proper service and sufficient cause; and whether the matter should be remanded for fresh adjudication.
Sections Cited
143(3), 144, 253(5)
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Income Tax Appellate Tribunal, INDORE BENCH, INDORE
Before: SHRI B.M. BIYANI & SHRI PARESH M. JOSHI
आदेश/ O R D E R
Per B.M. Biyani, A.M.:
Feeling aggrieved by order of first-appeal dated 26.06.2023 passed by learned Commissioner of Income-Tax (Appeals)-NFAC, Delhi [“CIT(A)”] which in turn arises out of assessment-order dated 29.12.2018 passed by learned ACIT-1(1), Indore [“AO”] u/s 143(3) of Income-tax Act, 1961 [“the Act”] for Assessment-Year [“AY”] 2016-17, the assessee has filed this appeal on following grounds:
Page 1 of 5 - AY 2016-17 “1. That the Ld. CIT (A) erred in law and facts of the case and confirmed the assessed total Income as determined by AO at Rs. 3,95,43,599/- as against Returned Income of Rs. 10,44,820/-.
2. That the Ld. CIT (A) erred in law and facts of the case and 2 confirmed the learned A.O. order us 144 of the Income Tax Act, 1961, ex-parte without providing due opportunity to be heard.
3. That the Ld. CIT (A) erred in law and on the facts of the case in passing an ex parte order. It is, therefore, prayed that the case be restored for a fresh hearing and assessment, considering the merit of the case."
4. The assessee craves to add, alter and amend any ground of appeal.”
The registry has informed that the present appeal is delayed by 516 days and therefore time-barred. Ld. AR for assessee submitted that the assessee has filed a condonation-application supported by an affidavit.
Referring to same, Ld. AR explained that the delay has occurred due to the reason that neither the notices of hearing nor the impugned order of first- appeal passed by CIT(A) was physically served upon assessee. He further referred Para No. 4.0 of impugned order to demonstrate that the CIT(A) has given initial four notices during 23.01.2020 to 16.01.2021 falling within Covid-19 pandemic and subsequent four notices within a short time span of 16.05.2023 to 14.06.2023. He submitted that the impugned order ultimately came to the notice of assessee only when the AO issued penalty notice dated 30.12.2024 and the assessee started digging up the matter. Immediately thereafter the assessee paid appeal fee on 11.01.2025 and arranged to file this appeal on 21.01.2025. Ld. AR very humbly submitted that there is no lethargy, negligence, mala fide intention or ulterior motive of assessee in Page 2 of 5 - AY 2016-17 making delay and the assessee does not stand to derive any benefit because of delay. He further submitted that the sole reason of delay is as explained in the condonation-application. He prayed that there is “sufficient cause” for delay and in the interest of justice, the delay needs to be condoned.
Ld. DR for revenue opposed the submissions of Ld. AR. He submitted that the CIT(A) must have sent notices of hearing and order to assessee through online mode. He submitted that the delay of 516 days is not normal; it is inordinate. He submitted that the affidavit filed by assessee does not substantiate the delay.
We have considered the rival arguments of both sides and perused the case record. Admittedly, there is a delay of 516 days in filing present appeal.
The assessee is submitting that the neither the notices of hearing nor the impugned order passed by CIT(A) was physically served and therefore he was not aware of impugned order having been passed by CIT(A). He has further submitted that it is only when the AO issued penalty notice on 30.12.2024 that he searched the matter and came to know of impugned order having been passed ex-parte by CIT(A). A copy of on-line reply dated 25.01.2025 filed by assessee to AO in response to the penalty notice is also placed before bench. Ld. AR demonstrated that in “remark” column of reply, the assessee informed the AO about filing of appeal to ITAT on 21.01.2025 against ex-parte order of CIT(A) and requested the AO to keep penalty proceedings in abeyance. The Ld. DR is only submitting that the notices of hearing and impugned order may have been served upon assessee through
Page 3 of 5 - AY 2016-17 online mode but not able to support this claim and moreover not able to controvert assessee’s submission that no service was made through physical mode. We find that there is an explanation given by assessee that in absence of physical service, the impugned order could not come to his knowledge, which ultimate came to his knowledge only when penalty notice was sent by department. In absence of any contrary fact or material on record, the explanation given by assessee is taken as a “sufficient cause” for 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 provision of section 253(5), the decision of Hon’ble Supreme Court and in the interest of justice, we take a judicious view, condone delay, admit appeal and proceed with hearing.
Ld. AR next submits that since the notices of hearings of first-appeal sent by Ld. CIT(A) were not received, the assessee could not attend the hearings fixed by CIT(A) which has led to the passing of ex-parte order by CIT(A). Ld. AR acknowledges that the assessee is ready and willing to make a proper representation before CIT(A) if an opportunity is given and prays
Page 4 of 5 - AY 2016-17 that the present matter should be remanded to the file of CIT(A) for a proper adjudication of the grounds/issues raised by assessee in first-appeal.
Having regard to these submissions and the principle of natural justice, we remand this matter back to the file of CIT(A) for adjudication afresh. The CIT(A) 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 CIT(A) and do not seek unnecessary adjournments failing which the CIT(A) shall be at liberty to pass appropriate order in accordance with law. Ordered accordingly.
Resultantly, this appeal is allowed for statistical purpose.
Order pronounced in open court on 10/07/2025