SRI TIRUMALA ESTATES AND FARMLANDS,VISAKHAPATNAM vs. ACIT, CENTRAL CIRCLE-1, VISAKHAPATNAM

Facts

The assessee, a real estate firm, did not file an income tax return for AY 2017-18. A survey revealed undisclosed income from plot sales and disallowable expenses, leading to a reopened best judgment assessment. The assessee filed appeals before the CIT(A) against the assessment and penalty orders with a significant delay of 965 days, citing unfamiliarity with the online portal, non-communication from a previous practitioner, and delayed physical receipt of the order.

Held

The CIT(A) dismissed the appeals `in limine` without condoning the delay, ruling that the reasons provided by the assessee did not constitute "sufficient cause" under Section 249 of the Income Tax Act. The Tribunal upheld this decision, stating that the assessee's explanations reflected negligence and a casual approach, and emphasized that the law of limitation must be applied rigorously, especially in cases of gross negligence. Both the assessment and penalty appeals were accordingly dismissed by the Tribunal.

Key Issues

Whether the CIT(A) was justified in dismissing the assessee's appeals `in limine` for an inordinate delay of 965 days in filing, and whether the reasons provided for condonation of delay constituted "sufficient cause" under Section 249 of the Income Tax Act, 1961.