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Facts
The assessee's returned income was processed under Section 143(1) of the Income Tax Act, resulting in an adjustment and addition. The assessee's appeal to the Commissioner of Income Tax (Appeals) [CIT(A)] was dismissed on limitation grounds, as the delay in filing the appeal was not condoned under Section 249(3). The assessee subsequently filed an appeal before the Income Tax Appellate Tribunal (ITAT) challenging the CIT(A)'s refusal to condone the delay, arguing that it had pursued a remedy under Section 154 before filing the appeal.
Held
The ITAT found that the assessee had adduced reasonable grounds for the delay, noting that the pursuit of a remedy under Section 154 indicated no negligence or mala fide intention. The Tribunal set aside the impugned appellate order of the CIT(A) and restored the matter, directing the CIT(A) to condone the delay in filing the appeal and decide the appeal on merits after providing a reasonable opportunity to the assessee.
Key Issues
Whether the CIT(A) erred in not condoning the delay in filing the appeal and refusing to admit the appeal on merits.
Sections Cited
143(1), 249(3), 154
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Income Tax Appellate Tribunal, LUCKNOW ‘B’ BENCH, LUCKNOW
Before: SHRISUDHANSHU SRIVASTAVA & SHRI ANADEE NATH MISSHRA
Assessment Year 2019-20 against impugned appellate order dated 24/06/2024(Appeal No.ITBA/APL/S/250/2024-25/1065960585(1)of Commissioner of Income Tax (Appeals), Mumbai [“CIT(A)” for short].
(B) In this case, assessee’s returned income was processed under Section 143(1) of the Act whereby adjustment was made, making addition to the returned income. The assessee’s appeal was dismissed by the learned CIT(A) vide impugned appellate order dated 24.06.2024 whereby the assessee’s appeal was not admitted on limitation ground.
The assessee’s appeal was dismissed without going into the merits of the case, as the delay in filing of the appeal was not condoned u/s. 249(3) of the Act by the learned CIT(A). Present appeal has been filed by the assessee against the aforesaid impugned appellate order dated 24.06.2024 of . The grounds of appeal are as under:
“1 That the L.d. Addl./Joint Commissioner of Income Tax (Appeals)-10, Mumbai has erred in law and on facts in not accepting the Application of Condonation of Delay filed by the appellant along with Form-35 without appreciating and considering the correct facts of the case 2 That the Ld. Addl./Joint Commissioner of Income Tax (Appeals)-10, Mumbai has erred in law and on facts in arbitrarily not admitting the Appeal filed by the appellant due to delay in filing of appeal, even when the appellant is prevented by sufficient and reasonable cause. 3 That the Ld. Addl./Joint Commissioner of Income Tax (Appeals)-10, Mumbai has erred in law and on facts in arbitrarily rejecting the Application of Condonation of Delay filed by the appellant without proper basis and ignoring the correct facts of the case. 4 That the rejection of Application of Condonation of delay filed by the appellant is wholly unjustified and contrary to the principles of Natural Justice and Equity 5 On the facts and circumstances of the case and in law, the Order of the Ld. Addl./Joint Commissioner of Income Tax (Appeals)-10, Mumbai erroneously disallowed the condonation of delay, overlooking the correct facts of the case that the appellant is prevented by reasonable and sufficient cause. 6 On the facts and in the circumstances of the case and in law, the order of the Ld. Addl./Joint Commissioner of Income Tax (Appeals)-10, Mumbai, erroneously disallowed the condonationof delay without acknowledging that the appellant was prevented by a reasonable cause from filing the appeal in time. The delay was not due to dilatory tactics, lack of bona fide, deliberate inaction, or negligence on the part of the appellant, who always acted diligently and remained active. 7 On the facts and in the circumstances of the case and in law, the order of the Ld. Addl./Joint Commissioner of Income Tax (Appeals)-10, Mumbai, erroneously disallowed the condonation of delay, failing to recognize that the term "Sufficient Cause" for condonation of delay should be interpreted liberally to advance substantial justice. 8 That any other relief or reliefs as your honour may deem fit in the facts and circumstances of the case, be granted. 9 your humble appellant craves leave to add, amend or withdraw of any Grounds of Appeal on/or before hearing of appeal.” (C) In the course of appellate proceeding in Income Tax Appellate Tribunal (ITAT), paper book containing the following particulars was filed from the assessee’s side. In addition, copies of the following orders of ITAT were also filed from the assessee’s side:
1. ‘Vishal Infraglobal Pvt. Ltd. vs. DCIT’ & 2081/Ahd/2024, (Trib-Ahmedabad) order dated 01.04.2025. 2. ‘Chandra Goswami vs. ITO, Delhi’ (Trib-Delhi) (D) At the time of hearing, the learned Authorized Representative (AR) for the assessee submitted that the assessee had adduced reasonable grounds for delay in filing of the appeal in the office of learned CIT(A). He further clarified that the delay arose because the assessee had pursued remedy through application u/s. 154 of the I.T. Act. However, realizing that the more appropriate remedy was to file appeal before the learned CIT(A), the assessee had separately filed appeal in the Office of the learned CIT(A) also. He further submitted that the application for rectification u/s. 154 of the Act was filed by the assessee within prescribed time limit without any delay, which established that the assessee was not negligent, and that the assessee had no mala fide intention. The act of the assessee in pursuing remedy through application u/s 154 of the I. T. Act within good time, should be accepted as a reasonable cause for delay in condonation of filing of appeal in the office of the learned CIT(A), the learned AR for the assessee submitted. The learned A.R. for the assessee submitted that the learned CIT(A) should be directed to decide assessee’s appeal on merits after condoning delay in filing of appeal in the office of the learned CIT(A). For this purpose, he relied on the aforesaid decided precedents in the cases of: 1. Writ Petition (C) No. 3 of 2020[suomoto] No. 3 of 2020.
Subhash Malik vs. CIT, Meerut [2010] 187 taxman 88 (Alld) 3. Cheminor Drugs Ltd. vs. DCIT, Hyderabad [2007] 105 ITD 613 (Hyd).
Prominent Builders & Investors (P) Ltd. vs. Inspecting Assistant Commissioner [1985] 11 Income Tax Department 327 (Del).
HemlataVerma vs. M/s ICICI Prudential Life Insurance Co. Ltd. and Another, Civil Appeal No. 5131 of 2019. (SC).
HemlataVerma vs. M/a ICICI Prudential Life Insurance Co. Ltd. Special Leave petition (Civil) Diary No.(s) 11379 of 2019. (SC).
M/s Model Exim vs. PCIT (Central) ITA No. 137/Lkw/2022.
Collector, Land Acquision vs. Mst. Katiji and Ors. [1987] 167 ITR 471 (SC).
AnuragRastogi vs. ITO, (Trib-Lko) 10. ‘Vishal Infraglobal Pvt. Ltd. vs. DCIT’ (Supra). 11. ‘Chandra Goswami vs. ITO, (Supra) (D.1) Learned Departmental Representative (DR) relied on the impugned order of the learned CIT(A), but left the matter to the discretion of the Bench.
(D.2) We are satisfied in the facts and circumstances of this specific case, having regard to the submissions made by the learned AR for the assessee, and having due regard to materials on record including the aforesaid paper book filed from the assessee’s side; this was a fit case for condonation of delay by the learned CIT(A).
(D.2.1) In view of foregoing, we set aside the impugned appellate order of the learned CIT(A) and restore the disputed matter regarding addition made u/s. 143(1) of the Act, back to the file of the learned CIT(A) with the direction to condone the delay in filing of the appeal, and to decide the appeal on merits, in accordance with law, after providing reasonable opportunity to the assessee. All grounds of appeal are treated as disposed of in accordance with aforesaid directions and order.
(E) Appeal of the assessee is partly allowed for statistical purposes.
(Order pronounced in the open court on 05/01/2026)