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Facts
The assessee company faced a significant delay in filing its appeal with the CIT(A). The company cited reasons such as internal fraud, disruption of business, and the death of a director for the delay. The CIT(A) dismissed the appeal due to this delay.
Held
The Tribunal condoned the delay in filing the appeal before the ITAT, finding merit in the reasons provided. The Tribunal also set aside the CIT(A)'s order and remanded the matter back for fresh adjudication after condoning the delay before the CIT(A).
Key Issues
Whether the delay in filing the appeal before the CIT(A) was to be condoned and the appeal to be decided on merits. Whether the CIT(A) erred in dismissing the appeal in limine without considering the reasons for the delay.
Sections Cited
144, 69A, 250, 271AAC(1), 249(3)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCH “B”NEW DELHI
Before: SHRIMAHAVIR SINGH, HON’BLE & SHRISANJAY AWASTHI
आदेश /O R D E R PER SANJAY AWASTHI, ACCOUNTANT MEMBER:
In this case the ITAT Registry has reported a delay of 109 days in the filing of this appeal. This delay has been requested to be condoned as under: -
AFFIDAVIT I, Anuj Kapoor S/o late jawahar Lal Kapoor, R/o D-26, South City-1, Gurgaon (Haryana), do hereby solemnly affirms and state on oath as under: 1. I am one of the directors of Kapsons Engineers Pvt. Ltd. (PAN: AADCK1513A) and as such, I am aware of the affairs of the said company.
The said company used to run sales showrooms & service centers of prestigious automobile (car) brands till part of FY 2016- 17. Thereafter in the same year i.e. in FY 2016-17, the said company had lost its dealerships, business, capital etc. Few of the group employees had robbed the said company and left it in a helpless situation by creating mess of the accounts, perhaps to hide the manipulations caused by them and to create hurdles in chasing them for fraud/embezzlement/misappropriation etc. The said company has been contesting against them in the courts/ different forums, for quite few years. Under such compelling circumstances, the said company could not finalize its accounts for FY 2016-17 and draw its balance sheet.
3. On the basis of information relating to cash deposited in the bank accounts, the AO had issued notice to the said company asking it to explain the source of cash. Upon not getting response, the learned AO had issued notices which remained un-compiled and finally passed the assessment order u/s 144 on 05.12.2019 while determining total income at Rs.7742000/- (being the amount of addition made u/s 69A).
4. Upon coming to know about the said assessment order, the said company had applied for and obtained certified true copy of the assessment order from the AOon 07.08.2020. Thereafter the said company had filed an appeal in prescribedForm No.35 on 01.09.2020 i.e. well within the prescribed time of 30 days.
During the course of appellate proceedings, the said company had offered its explanation to the CIT(A)/NFAC vide letter uploaded on 13.01.2025. Vide notice dt.14.01.2025 u/s 250, the CIT(A)/NFAC had asked to explain as to why the appeal be not dismissed by not condoning the delay in filing the appeal. In response thereto, the said company had explained that it could obtain certified true copies of the assessment order, notice of demand and computation sheet on 07.08.2020. Since the said company had filed an appeal in prescribed Form No.35 on 01.09.2020 i.e. well within the prescribed time of 30 days, it had requested the CIT(A)/NFAC to kindly condone the delay.
After getting the notice dt.10.06.2025 u/s 271AAC(1) for AY 2017-18, the said company had shockingly found from the portal that the CIT(A)/NFAC had dismissed its appeal on 23.01.2025 while not condoning the delay. Should the said company timely come to know about the said appeal order dt.23.01.2025, it would have already filed an appeal within the prescribed time of 60 days (counted from 23.01.2025). The said company was genuinely prevented by reasonable cause for such purely unintentional delay.
DEPONENT
Verification: Verified at on this …day of July 2025 that the contents of para 1 to 6 are true & correct to the best of my knowledge. DEPONENT 1.1 The contents of the affidavit have been carefully perused and the Ld. AR has been heard on the issue of delay. We find merit in the reasons advanced for the said delay and condone the same. This appeal is, accordingly, admitted for adjudication.
2. This appeal arises from order dated 23.01.2025, passed u/s 250 of the Income Tax Act, 1961 (hereafter as “the Act”), by Ld. CIT(A). It is seen that the Ld. CIT(A)has not condoned a delay of 245 days in the filing of first appeal. It is recorded in the impugned order that “sufficient cause” has not been demonstrated, as required u/s 249(3) of the Act.
Hence, the appeal was dismissed in limine by the Ld. CIT(A). The Ld. AR was asked to address the Bench about the reasons for said delay before Ld. CIT(A), especially in light of the fact that even before the ITAT there was a delay, which we have already condoned.
2.1 The Ld. AR prayed that the assessee may be given another chance to present this case before the Ld. CIT(A) through remitting back the matter to him. It was averred that the reasons for delay in filing of first appeal were given at that stage and the same could be perused at pages 3, 4 & 5 of the impugned order. It was the submission that the assessee was made aware of the Ld. AO’s order at a very late stage as there were difficulties in running the company on a day-to-day basis due to theft and 3 embezzelment by some employees. It was the further submission that the company had stopped to function and even the Director had died in between. It was again prayed for a second chance to the assessee to present the facts before the Ld. CIT(A).
2.2 The Ld. DR, on the other hand, left it to the Bench to take an appropriate decision about remanding this matter back.
We have perused the documents before us and have heard the Ld. AR/DR. While we are convinced about the delay before us, as already indicated above, it is felt that the assessee being a company cannot be equated with an individual, who may have the kind of problems that have been put forth before us. Thus, considering the totality of facts and circumstances of this case, we deem it fit to levy a cost of Rs.5,000/- payable to Delhi High Court Legal Services Committee, by 31.01.2026.
Thereafter, we set aside the impugned order and remand this mater back to the file of Ld. CIT(A) for fresh adjudication, after condoning the delay before him.
In the result, this appeal is allowed for statistical purposes.
Order pronounced in the open court on 17.12.2025