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Facts
The assessee, a partnership firm, filed its return for AY 2015-16. The AO reopened the assessment and made an addition of Rs.1,32,92,649 under section 40(a)(ia) for non-deduction of TDS. The assessee's appeal before the CIT(A) was dismissed in limine due to a significant delay of 1248 days.
Held
The Tribunal noted that the delay in filing the appeal was due to the assessee not being aware of the reassessment completion, as communications were sent to an erstwhile tax consultant. Considering the peculiar facts, the Tribunal decided to give the assessee another opportunity in the interest of natural justice.
Key Issues
Whether the CIT(A) was justified in dismissing the appeal in limine without condoning the delay, and whether the reassessment proceedings were valid.
Sections Cited
40(a)(ia), 250, 148, 143(3)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, ‘A’ BENCH: CHENNAI
Before: SHRI SS VISWANETHRA RAVI & MS. PADMAVATHY.S
आदेश / O R D E R
PER PADMAVATHY.S, A.M: This appeal by the assessee is against the order of the Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre (NFAC), Delhi, (in short "CIT(A)") passed u/s. 250 of the Income Tax Act, 1961 ( in short "the Act") dated 16.08.2025 for Assessment Year (AY) 2015-16. The assessee raised the following grounds of appeal –
1. 1. The order of the ld. CIT(A) is without jurisdiction, contrary to law, facts and circumstances of the case and is opposed to the principles of natural justice.
1. 2. The learned CIT(A) erred in upholding the reassessment proceedings, which are bad in law and void ab initio, as they were initiated merely on the Apex Civil Engineering :- 2 -: basis of the Tax Audit Report already on record during original assessment, amounting to a change of opinion.
The learned CIT(A) erred in not examining the merits of the disallowance u/s 40(a)(ia), which was excessive and unjustified, particularly in view of the appellant's claim that TDS was either deducted, not applicable, or Payments were below threshold / exempted and without affording a fair opportunity to demonstrate the same.
That the appellant craves leave to add, amend, alter, or withdraw any of the above grounds at the time of hearing.
For the above reasons and reasons that may be adduced at the time of hearing it is prayed that the addition made u/s 40(a)(ia) be deleted in full to meet justice.”
The assessee is a partnership firm engaged in the business of contract work to Government and filed the return of income for AY 2015-16 declaring total income of Rs.1,72,33,900. The AO reopened the assessment by issue of notice u/s.148 of the Act and the assessee filed the return in response declaring the same income. The AO noticed from the perusal of the Tax Audit report that the assessee has made certain payments where no tax is deducted at source. Since the assessee did not file any response the AO made an addition u/s.40(1)(ia) to the tune of Rs.1,32,92,649. Aggrieved the assessee filed further appeal before the CIT(A). There was a delay of 1248 days in filing the appeal before the CIT(A). The assessee submitted before the CIT(A) that the assessee was not aware of the AO having completed the assessment and that the mail regarding the assessment was received by the erstwhile tax consultant. However the CIT(A) did not accept the submissions of the assessee and dismissed the appeal in limine without condoning the delay. The assessee is in appeal before the Tribunal against the order of the CIT(A).
We have heard the both the parities, perused the material available on record. We notice from the perusal of the order of the CIT(A) that the assessee had filed a petition for condonation of delay stating that the assessee Apex Civil Engineering :- 3 -: did not know about the completion of reassessment since the communications regarding the same was sent to the email id of the erstwhile tax consultant who did not keep the assessee informed. It was further stated that only when the demand notice was received in the updated email id, the assessee came to know of the completion of reassessment and the appeal was filed immediately. However, we notice that the CIT(A) has dismissed the appeal in limine on the ground that there is no sufficient cause. During the course of hearing the ld AR submitted that the scrutiny assessment for the year under consideration was completed u/s.143(3) and the assessee has submitted details as called for by the AO. Accordingly the ld AR submitted that the delay in filing the appeal before CIT(A) was not intentional and beyond the control of the assessee. Considering the facts and circumstances peculiar to the assessee's case, we are inclined to give one more opportunity to the assessee in the interest of natural justice and fair play. Accordingly, we are remitting the appeal back to the CIT(A) with a direction to condone the delay and decide the appeal on merits afresh in accordance with law. The assessee is directed to submit the required details as may be called for and cooperate with the appellate proceedings. It is ordered accordingly. The assessee also raised certain legal contentions and the CIT(A) is directed to consider the same while deciding the appeal.
Further, we also levy a cost of Rs.10,000/- (Ten thousand only) in the appeal since considerable time and efforts have been spent by the Exchequer and for the reason that the assessee being delinquent before the lower authorities. The same shall be paid by the assessee to Tamil Nadu State Legal Services Authority at Hon’ble High Court of Madras within a period of one month from the date of receipt of this order and produce the receipt before the CIT(A).
In the result, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced on 07th day of January, 2026 at Chennai.