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Facts
The assessee's first appeal against a summary assessment processed u/s 143(1) was dismissed *in limine* by the NFAC as time-barred by 757 days. The NFAC found no condonation petition or affidavit explaining the delay. The assessee contended that the NFAC failed to consider the Supreme Court's extension of limitation periods due to the COVID-19 pandemic.
Held
The Tribunal ruled that the NFAC erroneously computed the delay by not accounting for the Supreme Court's limitation extension, resulting in an actual delay of 206 days instead of 757. It further held that dismissing the appeal *in limine* without providing an opportunity to explain the delay violated natural justice. Consequently, the Tribunal set aside the NFAC's order and remitted the case back for a *de-novo* decision on condonation of delay and then on merits.
Key Issues
1. Whether the NFAC erred in dismissing the appeal *in limine* as time-barred without correctly applying the Supreme Court's extended limitation period. 2. Whether denying the assessee an opportunity to explain the delay violated principles of natural justice.
Sections Cited
250, 143(1), 246A, 249(2), 250(6)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, PANAJI BENCH, GOA
Before: HON’BLE SHRI PAVAN KUMAR GADALE & SHRI G. D. PADMAHSHALI
Assessment Year : 2019-20 V. S. Dempo Holdings Pvt. Ltd. Dempo House, Campal, Panaji, Goa-403001. PAN : AAACE4220P . . . . . . . Appellant V/s Asstt. Commissioner of Income Tax, Circle-1(1), Panaji, Goa. . . . . . . . Respondent Appearances Assessee by : Mr Rohan Deshpande [‘Ld. AR’] Revenue by : Capt. Pradeep Arya [‘Ld. DR’] Date of conclusive Hearing : 12/08/2025 Date of Pronouncement : 13/08/2025 ORDER PER G. D. PADMAHSHALI; The captioned appeal of the assessee impugns DIN & Order ITBA/APL/S/250/2024-25/1074798262(1) dt. 21/03/2025 passed by Addl./Jt. Commissioner of Income Tax Appeals-1, Hyderabad, [‘Ld. NFAC’ hereinafter] u/s 250 of the Income- tax Act, 1961 [‘the Act’ hereinafter] which in turn arisen out of order dt. 25/10/2020 passed u/s 143(1) of the Act by the Central Processing Centre, Bengaluru [‘Ld. CPC’ hereinafter] anent to assessment year 2019-20 [‘AY’ hereinafter]. ITAT-Panaji Page 1 of 6
V. S. Dempo Holdings Pvt. Ltd. Vs ACIT AY: 2019-20 2. 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 company on 31/10/2019 was processed summarily u/s 143(1) of the Act on 25/10/2020 and was received by the appellant 02/11/2020. The rectification application filed by the appellant against the prima-facie adjustment made in summary assessment was rejected by Ld. CPC vide order dt. 06/12/2022. In view thereof against the original summary assessment the appellant filed first appeal u/s 246A of the Act before the Ld. NFAC on 21/12/2022. The Ld. NFAC however dismissed the said appeal in limine on the ground that the said appeal was time barred by 757 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 2 of 6
V. S. Dempo Holdings Pvt. Ltd. Vs ACIT AY: 2019-20 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 assessee received the order of summary assessment on 02/11/2020 and was 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 the time period available for filing appeal for the appellant substantively was by 03/12/2020, whereas the appeal before Ld. NFAC u/s 246A of the Act was filed on 21/12/2022. However in view of the Hon’ble Supreme Court’s decision/direction rendered in suo-motto Writ Petition in WP(CIVIL) 3/2020 [reported 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. As the balance period of limitation available with the appellant after excluding the former period from limitation/extension was less than 90 days, the appellant ITAT-Panaji Page 3 of 6
V. S. Dempo Holdings Pvt. Ltd. Vs ACIT AY: 2019-20 assessee was allowed a period of 90days from 01/04/2022 to file appeal u/s 246A of the Act. The delay (if any) in filing the first appeal by the appellant in the present case, therefore was to be computed not from the date of service of order of original summary 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 the actual delay in instituting the first appeal u/s 246A of the Act in the present case was only 206 days. However losing sight to the said extension granted by the Hon’ble Apex Court (supra) the Ld. NFAC computed the delay as 757 days. The erroneous computation of delay being substantial, inordinate and coupled with absence of petition/affidavit explaining sufficient reasons behind such inordinate delay persuaded the Ld. NFAC to dismiss the appeal in limine on the ground of limitation.
ITAT-Panaji Page 4 of 6
V. S. Dempo Holdings Pvt. Ltd. Vs ACIT AY: 2019-20 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. Thus, prima-facie the impugned order suffered from principle of natural justice hence cannot be allowed to stand.
In our 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 5 of 6 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.