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Facts
The assessee failed to file a return of income for AY 2013-14. The department found significant cash deposits in bank accounts. Proceedings under section 147 were initiated, leading to a best judgment assessment. The assessee's first appeal before the CIT(Appeals) was dismissed ex parte due to delay and on merits.
Held
The tribunal held that the CIT(Appeals) committed a patent illegality by deciding the matter on merits after rejecting the condonation of delay. The tribunal condoned the delay in filing the first appeal, citing that justice should not be denied on technical grounds.
Key Issues
Whether the CIT(Appeals) erred in dismissing the appeal ex parte without condoning the delay and deciding on merits, and whether the delay in filing the first appeal was justifiable.
Sections Cited
250, 147, 148, 133(6), 144, 144B, 69A
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Income Tax Appellate Tribunal, AGRA BENCH, AGRA
Before: SHRI S. RIFAUR RAHMAN & SHRI SUNIL KUMAR SINGH
ORDER PER : SUNIL KUMAR SINGH, JUDICIAL MEMBER:
This appeal has been preferred by assessee against the impugned order dated 24.12.2024 passed in Appeal No. NFAC/2012-13/10269009 by the Ld. Commissioner of Income-tax (Appeals), NFAC, Delhi u/s. 250 of the Income-tax Act, 1961 (hereinafter referred to as “the Act”) for the assessment year 2013-14, wherein the ld. CIT(Appeals) has dismissed assessee’s appeal ex parte upon rejection of assessee’s prayer for the condonation of delay and on merits as well..
At the very outset, we are informed that this second appeal was filed on 21.07.2025 against the impugned order dated 24.12.2024 by a delay of about 148 days. Assessee has stated reason for delay in the delay condonation application that his Advocate Rajesh Chaurasia misplaced his file and did not pursue the matter before learned CIT(Appeals).
Subsequently, this fact was communicated by assessee’s advocate that the case was dismissed on 24.12.2024. Assessee’s advocate handed over the file to the assessee on 30.06.2024. This led the assessee for filing the appeal by a delay of about 148 days. Prayed to condone the delay. The aforesaid reasons for delay are supported by un-rebutted affidavit of the assessee, which are treated to be sufficient cause, preventing the assessee to file the appeal within the period of limitation. Hence, the said delay is condoned.
Briefly stating, the facts are that the assessee did not file return of income for A.Y. 2013-14. According to the information (Multi Year NMS) available with the department, assessee was found to have made huge cash deposits to the tune of Rs.1,09,28,729/- in the saving bank account during the financial year 2012-13 relevant to the assessment year 2013-14, in HDFC bank and ICICI Bank. As per CIB information, assessee made multiple transactions in cash amounting to Rs.22,55,925/-. Proceedings u/s. 2 | P a g e 147 were initiated and case was reopened. Notice u/s. 148 dated 31.03.2021 was issued and served upon the assessee. Assessee offered no explanation. Hence, notice u/s. 133(6) dated 15.03.2022 was issued to ICICI Bank and HDFC Bank. The actual source of cash deposits in the bank accounts was not verifiable and transactions undertaken remained unexplained. Assessing Officer completed the assessment u/s. 147/144 of the Act and assessed total income of assessee at Rs.1,31,84,654/-.
Aggrieved, assessee preferred an appeal before ld. CIT(Appeals), who dismissed assessee’s appeal ex parte upon rejection of assessee’s prayer for condonation of delay caused in filing first appeal and on merit as well.
Appellant assessee has filed this appeal on the ground that ld. CIT(Appeals) has erroneously upheld the said addition u/s. 69A of the Act, contrary to the provisions of the Act.
Perused the records. Heard learned representative for assessee and learned Sr. DR for revenue.
At the very outset, we notice that during the first appellate proceedings, appellant assessee was issued various notices on 01.08.2024, 20.08.2024, 10.10.2024 and 13.12.2024, but for no avail. Perusal of assessment order also shows that due to irresponsive conduct of the assessee, learned
3 | P a g e Assessing Officer was compelled to pass best judgment assessment u/s. 147 r.w.s. 144 and sec. 144B of the Act. Such an irresponsive and reluctant conduct of the assessee is unacceptable.
We further note that the first appeal was filed on 18.08.2023 against the assessment order dated 30.03.2022 by a delay of about 110 days. The cause for the delay was shown to be the illiteracy of assessee, doing vegetable business and unaware of notices.
It is well established principle of law that the substantial justice cannot be denied on technical aberrations. The object of prescribing procedure is to advance the cause of justice. In an adversial justice system like ours, no party should ordinarily be denied the opportunity of participating in the process of justice dispensation. Justice is the goal of jurisprudence. Any interpretation which eludes or frustrates the recipient of justice, is not to be followed. The object of prescribing certain time period for filing of the appeal is to expedite the proceedings before the concerned authorities and to advance the cause of justice. In the facts and circumstances of the case, we find the cause of delay sufficient and condone the delay caused in filing first appeal before the ld. CIT(Appeals).
We are further surprised to note that after refuting assessee’s prayer for condonation of delay, learned CIT(Appeals) proceeded to decide the 4 | P a g e appeal on merit, which is contrary to the law. The law on the subject is well settled that unless the delay is condoned, the appeal does not come into existence legally, and in such absence, the court is wholly without jurisdiction to hear or decide the same on merit.
Hon’ble Supreme Court in Union of India & Anr. v. Jahangir Byramji Jeejeebhoy (D), 2024 SCC online SC 489, has observed that the question of limitation is not merely a technical consideration. The rules of limitation are based on the principles of sound public policy and principles of equity, that the length of delay is a relevant matter, which the court must take into consideration while considering whether the delay should be condoned or not. The Hon’ble Apex Court has been pleased to hold that while considering the plea for condonation of delay, the court must not start with merits of the main matter. However, the courts are required to condone delay on the bedrock of the principle that adjudication of a lis on merits is seminal to justice dispensation system.
Thus, the issue of condonation of delay in the proceedings has to be decided at the first instance before delving into the merits of the case. However, if the delay is condoned, there is no bar on the courts to proceed with the case and decide the same on merits on the very day. In the same manner, if the prayer for condonation of delay is rejected, the proceedings will automatically fail. It is, thus, settled that without condoning the delay in 5 | P a g e filing the appeal, the appellate authority lacks jurisdiction to entertain such time barred appeals.
During the course of arguments, it was forcefully argued that the matter be restored to the file of Assessing Officer. However, Hon’ble Allahabad High Court, vide order dated 25.07.2025 passed in Writ-C No.22221 of 2025, Dinanath Singh & Anr. V. State of U.P. & Ors., held that unless delay is condoned, the appeal does not come into existence legally, and in such absence, the court is wholly without jurisdiction to hear or decide the same on merits. Ld. CIT(Appeals), thus, has committed patent illegality in deciding the matter on merits after rejection of assessee’s prayer for the condonation of delay caused in filing the first appeal. We are, thus, inclined to restore the matter back to the file of ld. CIT(Appeals). Since, we have already condoned the delay in filing the first appeal before ld. CIT(A), learned first appellate authority shall pass order afresh in accordance with law on merits, after taking assessee’s submissions into consideration. We further direct the assessee to be diligent and co-operative in attending the proceedings and making submissions before ld. CIT(Appeals) for expeditious and effective disposal of appeal. Needless to say that learned Assessing Officer shall ensure the observance of the principles of natural justice.
In the result, assessee’s appeal is allowed for statistical purposes. The impugned order dated 24.12.2024 is set aside.
Order pronounced in the open court on 27.10.2025.