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Facts
The assessee's rectification application against a summary assessment under Section 143(1) was rejected by the Central Processing Centre. The subsequent first appeal filed under Section 246A before the NFAC was dismissed *in limine* as time-barred by 60 days, without providing an opportunity to explain the delay. This current appeal is against that dismissal.
Held
The tribunal condoned the 483-day delay in filing the present appeal, finding sufficient cause and relying on judicial precedents. It held that the NFAC erred in computing the delay for the first appeal by overlooking the Supreme Court's extension of the limitation period during the pandemic, which would have rendered the delay as NIL. Additionally, the tribunal found a violation of natural justice as the NFAC dismissed the appeal without a hearing opportunity. The *ex-parte* order of the NFAC was set aside, and the matter was remitted back to the NFAC for *de-novo* consideration, including the condonation of delay and merits.
Key Issues
Whether the NFAC was justified in dismissing the first appeal *in limine* on grounds of limitation without considering the Supreme Court's general extension of limitation period and without providing an opportunity of hearing, thereby violating natural justice.
Sections Cited
Income Tax Act, 1961: Section 250, Income Tax Act, 1961: Section 154, Income Tax Act, 1961: Section 253(3), Income Tax Act, 1961: Section 143(1), Income Tax Act, 1961: Section 246A, Income Tax Act, 1961: Section 249(2), Income Tax Act, 1961: Section 250(6), ITAT Rules, 1963: Rule 18, ITAT Rules, 1963: Rule 34
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Income Tax Appellate Tribunal, PANAJI BENCH, GOA
Before: HON’BLE SHRI PAVAN KUMAR GADALE & SHRI G. D. PADMAHSHALI
ORDER PER G. D. PADMAHSHALI; The captioned appeal of the assessee impugns DIN & Order ITBA/APL/S/250/2023-24/1057730634(1) dt. 06/11/2023 passed by Addl./Jt. Commissioner of Income Tax Appeals-1, Coimbatore, [‘Ld. NFAC’] u/s 250 of the Income-tax Act, 1961 [‘the Act’] which in turn arisen out of rectification order dt. 28/05/2021 passed u/s 154 of the Act by the Central Processing Centre, Bengaluru [‘Ld. CPC’] anent to assessment year 2018-19 [‘AY’]. ITAT-Panaji Page 1 of 7
The Karnataka Multipurpose Souharda Sahakari Niyamit. Vs NFeAC AY: 2018-19 2. The present appeal is time barred by 483 days. The appellant’s application for condonation of delay is supported by an affidavit dt. 03/05/2025 whereby reasons in not filing appeal within time allowed u/s 253(3) of the Act are explained. The explanation dilated in the course of hearing were noted and reasons stated in the affidavit perused. After vouching sufficiency of reasons explained, we are satisfied that the appellant was for sufficient cause prevented from filing present in time allowed and the case of the assessee falls within the parameter set by Hon’ble Courts in ‘Vijay Vishin Meghani Vs. DCIT & Anr’ [2017, 398 ITR 250 (Bom)] and ‘Collector, Land Acquisition, Anantnag and Anr. Vs Ms Katiji and Others’ [1987, 167 ITR 5 (SC)], thus requiring us to condone the delay in the larger interest of justice. In view thereof the undeliberate delay occurred in instituting present appeal by the appellant assessee, after placing reliance on former judicial precedents, in the larger interest of justice we condone the same and advanced for adjudication. ITAT-Panaji Page 2 of 7
The Karnataka Multipurpose Souharda Sahakari Niyamit. Vs NFeAC AY: 2018-19 3. Without touching merits of the case we have heard the rival party’s submission on limited issue of ex-parte dismissal of first appeal by the Ld. NFAC and subject to rule 18 of ITAT-Rules 1963 perused material placed on record. We note that, the return of income filed by the appellant assessee society on 17/09/2018 was processed summarily u/s 143(1) of the Act on 30/09/2018 and was received by the appellant on the very same day. The rectification application filed by the appellant against the prima-facie adjustment made in summary assessment was rejected by Ld. CPC on 28/05/2021. Against such order of rectification the appellant filed first appeal u/s 246A of the Act before the Ld. NFAC on 29/08/2021. The Ld. NFAC however dismissed the said appeal in limine on the ground that the said appeal was time barred by 60 day and the appeal was neither accompanied therewith a petition for condonation nor an affidavit stating therein circumstance due to which such substantial or inordinate delay was occurred. ITAT-Panaji Page 3 of 7
The Karnataka Multipurpose Souharda Sahakari Niyamit. Vs NFeAC AY: 2018-19 4. Faced with the situation, the appellant assessee came in present appeal with a prayer to remand the matter back to the file of Ld. NFAC for violation of natural justice.
Admittedly, the appellant received order of rectification on 28/05/2021 and was undisputedly under obligation to file first appeal thereagainst within 30 days therefrom in terms of s/s (2) to section 249 of the Act. In normal course/circumstance time period available for filing appeal for the appellant substantively was by 28/06/2021, whereas appeal before Ld. NFAC u/s 246A of the Act was filed on 29/08/2021. However in view of the Hon’ble Supreme Court’s decision/direction rendered in suo-motto Writ Petition in WP(CIVIL) 3/2020 [2020, 117 taxmann.com 66 (SC)] a period of two years commencing from 15/03/2020 to 28/02/2022 was to be excluded from period limitation. And if balance period of limitation available to the present appellant after excluding the former period from limitation/extension comes to less ITAT-Panaji Page 4 of 7
The Karnataka Multipurpose Souharda Sahakari Niyamit. Vs NFeAC AY: 2018-19 than 90 days, the appellant was allowed a period of 90 days from 01/04/2022 to file appeal u/s 246A of the Act. The delay (if any) in filing first appeal by the appellant in the present case, therefore was to be computed not from date of service of order of rectification assessment but from the expiry of 90days from 28/02/2022.
In the course of hearing, the rival parties commonly assisted the bench with computation & harmoniously submitted that actually the delay in instituting the first appeal u/s 246A of the Act in the present case was NIL days. However losing sight to the said extension granted by the Hon’ble Apex Court (supra) the Ld. NFAC computed the delay as 60 days. The erroneous computation of delay being devoid of facts and law as stands in view of the Hon’ble Apex Court’s former decision (supra) therefore the impugned order passed by the Ld. NFAC dismissing the first appeal in limine on the ground of limitation has no legs to stand.
ITAT-Panaji Page 5 of 7
The Karnataka Multipurpose Souharda Sahakari Niyamit. Vs NFeAC AY: 2018-19 7. Further we also note that, while disposing the appeal on the grounds of limitation, the Ld. NFAC did provide no opportunity to the appellant assessee to explain the reasons behind such delay. On the other hand there is much less evidence to showcase or suggest that any notice vis-a-vis hearing opportunity was actually granted before the appeal was dismissed in limine by the Ld. NFAC. On this score the impugned order prima-facie also suffered from natural justice hence cannot be allowed to stand. In our mindful view, the appellate remedy or forum is created by the statute is to rest the dispute and not to accelerate for higher forum perfunctorily. Having regard to present facts and circumstances, placing reliance on the judgement of Hon’ble Supreme Court rendered in ‘Raheem Shah & ANR Vs Govind Singh & Ors’ [2023, LiveLaw (SC) 572], we are heedful to state that, while dealing with tax litigation, the Ld. NFAC being a quasi-judicial authority was expected to adopt justice oriented approach rather resorting to iron-cast technical one ITAT-Panaji Page 6 of 7
The Karnataka Multipurpose Souharda Sahakari Niyamit. Vs NFeAC AY: 2018-19 wherein the Ld. NFAC came to dismiss the appeal of the appellant in limine on a hyper-technical ground without even according single opportunity of hearing to the appellant assessee. In view of this, without offering any comments, we set-aside the impugned ex-parte order and remit the file to Ld.
NFAC at the stage of its institution with a direction to deal therewith de-novo and decide on (i) condonation of delay in instituting appeal u/s 246A of the Act & consequential admission or dismissal of appeal (ii) if admitted deal therewith de-novo on merits in accordance with applicable law and pass a speaking order in terms of section 250(6) of the Act.
The appeal in result stands allowed for statistical purposes. In terms of rule 34 of ITAT Rules, 1963 the order pronounced in the open court on date mentioned herein before.