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Income Tax Appellate Tribunal, GUWAHATI BENCH, GUWAHATI
Appearances by: Assessee represented by : Priyanka Das & Nishant Ahmed, ARs Department represented by : Kausik Ray, JCIT Date of concluding the hearing : 30.07.2025 Date of pronouncing the order : 06.08.2025
ORDER
PER SANJAY AWASTHI, ACCOUNTANT MEMBER:
The present appeal emanates from the order under Section 250 of Income Tax Act, 1961 (hereafter “the Act”) passed by the Ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi [hereafter “the Ld. CIT(A)”], dated 02.01.2025.
1.1 In this case, the assessee was aggrieved by the action of Ld. AO whereby he had passed an order u/s 154 through which upward adjustment of Rs. 68,39,923/- was made as business income. Before the Areca Global Associates Private Limited Ld. CIT(A), it is seen that the appeal was filed with a delay of 179 days, admittedly without any petition seeking condonation of the said delay. Thereafter, the Ld. CIT(A) has recorded the following findings and dismissed the appeal:
“1.2 The pertinent question is whether there was any delay in filing of the objections and if so whether the same has been satisfactorily explained. There was a delay in filing appeal and the appellant is bound to explain delay of 179 days, which is the delay in filing of this appeal, on day-to-day basis. The appellant was given the opportunity of being heard and even explain the delay in filing of the instant appeal with documentary evidence. The appellant in Form-35 had stated that it would file the condonation of delay petition and explain with reasons for filing the appeal in delay during the appellate proceedings, however, the appellant did not file any reasons for the delay in filing the appeal. The appellant claims that it was not aware of the next course of action to be done, further it claimed that it was seeking for professional guidance regarding the matter. The appellant's claim is not acceptable as it was seeking for professional guidance for 179 days is very long in nature.…… 1.8 It is also true that appeals having merits should not be thrown away merely because there is some delay in filing the appeal and the appellant should be allowed to press its case on merits in the interest of justice and for the cause of Justice. But in the instant case there is a delay of 179 days in filing of appeal, for which the appellant has not proved any "sufficient cause" which could justify or properly explain the delay which occurred from last day of filing appeal as per statutory provisions of the Act. Here in the case, after considering the grounds, it is found that there is delay which is having no sufficient cause. 1.9 In view of the above, I am of the considered opinion that the appellant has failed to give sufficient reason. Since the condonation of delay is not granted, the Appeal filed is not maintainable on the grounds of delay.” 1.9 In view of the above, I am of the considered opinion that the appellant has failed to give sufficient reason. Since the condonation of delay is not granted, the Appeal filed is not maintainable on the grounds of delay.” 1.2 Further, aggrieved with this action, the assessee has approached the ITAT with the following grounds:
“A. Substantial Justice Over Procedural Lapses: The Supreme Court in N. Balakrishnan v. M. Krishnamurthy (1998) 7 SCC 123 observed that a litigant should not suffer due to a professional's negligence and that procedural delays should not override the cause of justice. B. Financial Impact of Erroneous Tax Demand:
I.T.A. No. 22/GTY/2025 Areca Global Associates Private Limited The unjustified tax addition significantly affects the financial position of the Appellant Company. In Sri Channabasaveshwara Swamy Rural v. ITO (Exemptions)
592/Bang/2023, the Bangalore ITAT held that delays should be condoned when the assessment involves a substantial financial burden. C. Principles of Natural Justice Violated: The Supreme Court in Suraj Mall Mohta & Co. v. A.V. Visvanathasastri held that income tax proceedings are quasi-judicial and must adhere to the principles of natural justice. Further, in Sanjay Aggarwal v. National Faceless Assessment Centre (Delhi High Court), it was reiterated that the assessee has a right to a fair hearing in cases of variation of income. Because of these exceptional circumstances, it is an humble reequest to the Hon'ble Authority to take a compassionate view of the matter and provide the Appellant Company with an opportunity to present its case. Denial of this opportunity would result in undue hardship and injustice, especially as the delay was caused by factors beyond the company's control. D. Premature Pronouncement of Order Without Allowing Adequate Opportunity for Submission The impugned order passed under Section 250 of the Income Tax Act, 1961, on 02.01.2025 is fundamentally flawed and in clear violation of the principles of natural justice, as it was issued prematurely without affording the Appellant a fair and reasonable opportunity to present its case. The Appellant had specifically mentioned in Form No. 35 that the explanation for the delay would be provided at the time of the hearing. However, despite this the order was pronounced well before the due dates of 08.01.2025 and 07.01.2025, which were explicitly stated in the notices issued by the NFAC, dated 24.12.2024 and 31.12.2024 respectively. By adjudicating the matter on 02.01.2025, the NFAC acted arbitrarily, disregarding its own timelines and effectively denying the Appellant the right to a proper hearing. Furthermore, the order was passed without any prior intimation to the Appellant, leaving them with no opportunity to present their reasons for the delay, as they had indicated in Form No.
Such an approach is wholly unjust and goes against the fundamental principle that no adverse order should be passed against a party without giving them a fair chance to be heard. The premature pronouncement of the order has, therefore, caused serious prejudice to the Appellant and undermined the fairness of the appellate proceedings.” 1.3 Before us, the Ld. AR argued that no opportunity was provided by the Ld. CIT(A) even though it was clearly mentioned in Form 35 that the reasons for seeking condonation of delay would be tendered at the time of hearing before the Ld. CIT(A). The Ld. AR argued that the assessee was Areca Global Associates Private Limited not aware of his responsibility after an adverse order u/s 154 of the Act was passed against him. The Ld. AR further mentioned that since no opportunity was provided by the Ld. CIT(A) hence there was no opportunity to remedy the defect. The Ld. AR pleaded that if another opportunity was to be provided then they could make a presentation of facts before the Ld. CIT(A).
2.1 The Ld. DR relied on the orders of authorities below.
We have carefully considered the submissions of the Ld. AR/DR and have also gone through the records. It is seen that there is a discussion in the impugned order that the notices were issued to the assessee but for whatever reason the same could not be complied with. We are aware of the fact that condonation of delay is the primary step after which only the merit can be looked into. In this case, since the Ld. CIT(A) has recorded a finding that as per section 249(3) of the Act, good and sufficient reasons were not presented before him for condoning the said delay and hence, he has dismissed the appeal in limine. Considering the totality of facts and circumstances, we are persuaded by the arguments of Ld. AR that in the interests of substantive justice, another opportunity should be provided to the assessee for presenting the facts. However, since even before us there is no written submission about the reasons for the assessee’s inability to file the first appeal in time at first appeal stage, hence we are constrained to remand this matter back to the file of Ld. CIT(A) with the expectation that the assessee would file an affidavit detailing the circumstances which resulted in the delay of 179 days in filing of the first appeal. We would expect the Ld. CIT(A) would consider the reasons for delay within the purview of section 249(3) of the Act and thereafter, in case he deems fit, then the appeal would be admitted for adjudication on merit. To this extent, we set aside the impugned order and remand the same back to the file of Ld. CIT(A).
In result, this appeal is allowed for statistical purposes. 4 Areca Global Associates Private Limited Order pronounced on 06.08.2025
Sd/- Sd/- [Manomohan Das] [Sanjay Awasthi] Judicial Member Accountant Member Dated: 06.08.2025 AK, Sr. PS Copy of the order forwarded to: 1. The Appellant 2. The Respondent 3. CIT(A)- 4. CIT- 5. CIT(DR)