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Facts
The assessee's appeal before the ITAT was significantly delayed. The delay was attributed to the demise of the assessee's long-standing Chartered Accountant, requiring a new CA to familiarize themselves with the case, and the assessee's non-residency status which limited their direct involvement. The CIT(A) had passed an ex parte order due to the assessee's non-appearance.
Held
The Tribunal condoned the delay, finding sufficient cause in the circumstances presented, prioritizing substantial justice. The Tribunal set aside the ex parte order of the CIT(A) and remitted the matter back for de novo adjudication on merits, granting the assessee a fresh opportunity to be heard.
Key Issues
Whether the delay in filing the appeal is condonable and if the assessee should be granted a fresh opportunity to present their case before the CIT(A) after an ex parte order was passed.
Sections Cited
250, 57, 234B, 234C, 234D, 270A
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “H(SMC
Before: SHRI VIKRAM SINGH YADAVSHRI SANDEEP SINGH KARHAIL
Date of Hearing – 11/02/2026 Date of Order - 13/02/2026
O R D E R PER SANDEEP SINGH KARHAIL, J.M. The assessee has filed the present appeal against the impugned order dated 11.06.2024, passed under section 250 of the Income Tax Act, 1961 (“the Act”) by the learned Commissioner of Income Tax (Appeals)-56, Mumbai, [“learned CIT(A)”], for the assessment year 2021-22.
The present appeal is delayed by 395 days. Alongwith the appeal, the assessee has filed an application seeking condonation of delay, duly supported by the affidavit of the assessee, submitting as follows: - “1. Against assessment order dated 23/05/2022 for A.Y. 2020-21, I had filed an appeal before Ld. CIT (A), 56 on 17/06/2022 with the help of my C.A.
My entire work related to income-tax matter such as computing total income, tax liability, payment of taxes, preparing and filing income-tax returns, replying and attending income-tax notices, looking after assessments, preparing and filing appeals, if required, replying and attending income-tax appeals, supervising my accounts etc. for past more than 20 years.
I personally was never aware of any of my personal income tax related matters, replying or attending notices etc. I was wholly relying upon my C.A.'s work, advices and attendance.
My C.A. sadly expired at relatively younger age before notices for hearing for first appeal before CIT (A) were received. In view of this, hearing notices received for appeal filed for A.Y. 2020-21 remained unattended and ex-party appellate order was passed.
I personally not being aware of income-tax matter and I also being out of India, had no detailed knowledge of hearing notices and hence, notices remained unattended and ex-party appellate order was passed.
Sometime before, I received penalty notices for AY. 2020-21 for said assessment/appellate order. At that time, I became fully aware of details of such assessment/appeal, demand and penalty matter.
Since C.A. looking after my income-tax matter expired, I had to assign work to new C.A. after receiving penalty notices who naturally would to take some time to study and understand the case and draft documents.
After assigning work to new C.A. sometime back, I was appraised by him that an appeal will be required to be filed before Hon'ble ITAT against ex-party appellate order by CIT(A) for A.Y. 2020-21. Being non-resident and was out of India, recently, came to India, hence giving this affidavit now.
In light above referred circumstances that my C.A. looking after my Income- tax matter for past more than 20 years expired and personally was not conversant of any assessment, appeal, penalty matter and I became properly aware and understood of ex-party appellate order and penalty matter recently and only thereafter, I assigned work to new C.A., there is delay in filing this appeal bona fide reasons mentioned hereinbefore which I humbly pray to condone to provide natural justice.”
We find that the reasons stated by the assessee for seeking condonation 3. of delay fall within the parameters for grant of condonation laid down by the Hon’ble Supreme Court in the case of Collector Land Acquisition, Anantnag v/s MST Katiji and others: 1987 SCR (2) 387. It is well established that rules of procedure are handmaid of justice. When substantial justice and technical considerations are pitted against each other, the cause of substantial justice deserves to be preferred. In the present case, the assessee did not stand to benefit from the late filing of the appeal. In view of the above and having perused the application filed by the assessee, we are of the considered view that there exists sufficient cause for not filing the present appeal within the limitation period and therefore, we condone the delay in filing the appeal by the assessee and proceed to decide the same.
In the appeal, the assessee has raised the following grounds: - “
The Appellant prefers an appeal against the order dated 11/06/2024 passed by Learned Commissioner of Income Tax (Appeals) - 56, Mumbai on the following grounds, each of which is without prejudice to any other:
1. On the facts and circumstances of the case and in law, the Ld. CIT(Appeals) erred in confirming addition made by Ld. ITO Int. Tax Wd. 2(2) (1) to appellant's income by disallowing interest of Rs. 6627268 which in effect is not claimed as an expense u/s 57 by appellant from income from other sources. In fact, in return of income filed, only Rs. 1437455 is claimed as interest expense and in revised computation filed during course of assessment only Rs. 1255298 is claimed as interest expense to the extent of interest income only. Tax Effect – Rs. 131273
2. On the facts and circumstances of the case and in law, the Ld. CIT(Appeals) erred in confirming disallowance of interest expense of Rs. 1255298 against interest income even though interest earned has nexus with interest spent.
3. On the facts and circumstances of the case and in law, the Ld. CIT(Appeals) erred in confirming assessment order issued by Ld. ITO by stating that appellant has carried forward loss of Rs. 4571709 from income from other sources to A.Y. 2021-22. In fact, no loss from other sources is carried forward to A.Y. 2021-22 as per Schedule CFL of return of income filed for A.Y. 2020- 21.
4. On the facts and circumstances of the case and in law, the Ld. CIT(Appeals) erred in confirming levy of interest u/s 234B, 234C and 234D. Interest levied be deleted.
5. On the facts and circumstances of the case and in law, the Ld. CIT(Appeals) erred in not dropping initiation of penalty proceedings. In Para 3 of assessment order is mentioned that "Penalty proceedings under section 270A of the I.T Act, 1961 are initiated separately "for furnishing inaccurate particulars of income." Thus, reason for initiation of penalty proceeding is "furnishing inaccurate particulars of income." There are no wordings in s. 270A that penalty proceedings can be initiated for furnishing inaccurate particulars of income. Thus, it can be said that penalty proceedings are not initiated as per provisions of law. Initiation of penalty proceedings be dropped.”
5. We have considered the submissions of both sides and perused the material available on record. In the present case, at the outset, it is evident that the learned CIT(A) has passed the order ex parte due to the non- appearance of/on behalf of the assessee. Now, in the appeal before us, the assessee is duly represented by the learned AR and wishes to pursue the litigation against the addition made by the AO. Therefore, in view of the above, we are of the considered opinion that, in the interest of justice, the assessee be hereby granted one more opportunity to represent its case on merits before the learned CIT(A). Consequently, we deem it fit and proper to set aside the impugned order and restore the matter to the file of the learned CIT(A) for de novo adjudication of the appeal on merits, after considering all the details/submissions as may be filed by the assessee. Needless to mention, no order shall be passed without affording a reasonable and adequate opportunity of hearing to the parties. Further, the assessee is directed to furnish/update his Email address in the records before the learned CIT(A) so that the hearing notice(s) are sent to the operational email address. Thus, the assessee is directed to appear before the learned CIT(A) on all dates of (A.Y. 2020-21) 5 hearing as may be fixed without any default. Accordingly, the grounds raised by the assessee are allowed for statistical purposes.
In the result, the appeal by the assessee is allowed for statistical purposes. Order pronounced in the open Court on 13/02/2026
Sd/- Sd/- VIKRAM SINGH YADAV SANDEEP SINGH KARHAIL ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED: 13/02/2026 Prabhat