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Facts
The assessee, Hanumant Construction Pvt. Ltd., filed appeals against ex-parte orders from the CIT(Appeals) for assessment years 2013-14 to 2018-19, with a delay of 384 days. The assessee cited acute financial crisis, business termination, and legal proceedings by Union Bank of India as reasons for the delay and non-compliance before the first appellate authority.
Held
The Tribunal condoned the delay, acknowledging the genuine financial difficulties prevented the assessee from timely filing and representation. Citing principles of natural justice and various judicial precedents, the Tribunal remanded the cases back to the CIT(Appeals) for fresh adjudication on merits, providing the assessee a final opportunity to present their case.
Key Issues
The key legal issues were the condonation of a 384-day delay in filing appeals due to financial hardship and whether ex-parte orders passed by the CIT(Appeals) without the assessee's representation violated principles of natural justice.
Sections Cited
Section 33(4) of the Income Tax Act, 1922 (referred to in judgment), Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, Rule 6/8 of the Security Interest (Enforcement) Rules, 2002
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Income Tax Appellate Tribunal, RAIPUR BENCH, RAIPUR
Before: SHRI PARTHA SARATHI CHAUDHURY & SHRI AVDHESH KUMAR MISHRA
आदेश / ORDER PER BENCH: The captioned appeals preferred by the assessee emanates from the respective orders of the Ld.CIT(Appeals), Raipur-3, dated 26.06.2024 for the assessment years 2013-14 to 2018-19 as per the grounds of appeal on record.
Parties herein conceded that the facts and issues involved in all these captioned appeals are substantially similar and therefore, all these cases were heard together and disposed of vide this consolidated order.
At the very outset, it is noted that in each of the year, there is delay of 384 days in filing appeal before the Tribunal. That explaining the said delay, the assessee had filed condonation petition a/w. affidavit, dated 27.09.2025. The relevant paras of the said affidavit executed by Mr.Tejindar Rana, director of the assessee company is made part of this order:
3 Hanumant Construction Pvt. Ltd. Vs. ACIT, CC-2, Raipur to 550/RPR/2025
1. 4 Hanumant Construction Pvt. Ltd. Vs. ACIT, CC-2, Raipur to 550/RPR/2025 3.1 The Ld. Counsel for the assessee in support of his request for condonation of delay has filed synopsis relying various judicial pronouncements which reads as follows:
5 Hanumant Construction Pvt. Ltd. Vs. ACIT, CC-2, Raipur to 550/RPR/2025
6 Hanumant Construction Pvt. Ltd. Vs. ACIT, CC-2, Raipur to 550/RPR/2025
The Revenue on the other hand opposing the condonation of delay submitted that in such organized concern, there cannot be any excuse for late filing of the appeal even in the phase of financial hardship.
We have heard the rival submissions and carefully considered the contents in the condonation petition a/w. affidavit filed by the assessee and reasons reflected therein. There is clear mention that due to acute financial crisis, the assessee company was not carrying on any substantial business activities for the past 3 to 4 years. That all active work orders were in the process of being terminated and a final show cause notice for termination of contracts was issued to the company. That even authorized officers of Union Bank of India had initiated legal proceedings and issued possession notices in respect of the immovable properties regarding the assessee as per Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 read with Rule 6/8 of the Security Interest (Enforcement) Rules, 2002. In fact, since this financial crisis was existing with the assessee for the past 3 to 4 years, for which, the assessee was also not able to comply with the proceedings before the Ld. CIT(Appeals). Considering all these facts and circumstances, we are of the considered view that the assessee was prevented due to genuine difficulties for not filing these appeals in timely manner. The Income Tax Act only comes into relevance when the assessee is having income. That 7 Hanumant Construction Pvt. Ltd. Vs. ACIT, CC-2, Raipur to 550/RPR/2025 when the assessee is bankrupt and there is no income, then there is no question of application of income tax, more so, regarding the application of law of limitation. In such scenario, demanding the assessee to comply with time fame would be something even beyond the human probabilities. Therefore, in our considered view, we find merit in the delay condonation petition and the affidavit filed by the assessee and the said delay is condoned considering the same ethos emanating from the judicial pronouncements viz. (i) Collector, Land Acquisition Vs. Mst. Katiji & Ors, reported in 167 ITR 471 (SC); (ii) Vidya Shankar Jaiswal Vs. ITO, Ward-2, Ambikapur, Civil Appeal Nos……………../2025 [Special Leave Petition (Civil) Nos. 26310-26311/2024, dated 31.01.2025; (iii) Jagdish Prasad Singhania Vs. Additional Commissioner of Income Tax (TDS), Raipur (C.G.), TAX Case No.17/2025, dated 24.02.2025 and (iv) Inder Singh Vs. the State of Madhya Pradesh, Civil Appeal No…………/2025, Special Leave Petition (Civil) No.6145 of 2024, dated 21st March, 2025. As per the aforesaid, the said delay of 384 days involved in each of the appeals is hereby condoned and the matters are heard on merits.
At the very outset, the Ld. Counsel for the assessee had already submitted that due to bankruptcy and financial hardship, there was no representation before the first appellate authority which resulted in 8 Hanumant Construction Pvt. Ltd. Vs. ACIT, CC-2, Raipur to 550/RPR/2025 passing of an ex-parte order by the Ld. CIT(Appeals). Taking the lead case i.e.
1. for A.Y.2013-14, the Ld. Counsel demonstrates that vide Para 3 of the Ld. CIT(Appeals)’s order, an ex-parte order has been passed. For the sake of clarity, Para 3 of the Ld. CIT(Appeals)’s order is extracted as follows: “3. The appeal was fixed for hearing on 18.08.2022, 02.11.2023 & 27.12.2023. Due to huge pendency of old appeals, further adjournment an e be granted. Therefore, one last opportunity is being given and the final opportunity is accorded by fixing the hearing of the case on 21.05.2024 vide this office notice dt.14.05.2024.When none attended nor any request for adjournment were received. It is quite evident from the chronology of event that despite several opportunities being granted from time to time, there has been absolutely no compliance on part of the appellant to give detailed explanation regarding ground of appeal taken for the year under consideration. This clearly shows that the appellant is not keen to pursue the above-mentioned appeal.”
1. Similarly for other years also i.e.
1. to 550/RPR/2025, A.Ys.2014- 15 to 2018-19, vide Para 3 of the order of the Ld. CIT(Appeals), an ex-parte order has been passed. The same is only referred to and not being extracted for the sake of brevity.
In these facts and circumstances, we refer to the decision of the ITAT, “Division Bench”, Raipur in the cases of Brajesh Singh Bhadoria Vs. Dy./ACIT, Central Circle-2, Naya Raipur, IT(SS)A Nos. 1 to 6, 8 & 9/RPR/2025, dated 20.03.2025. The relevant paras of the aforesaid decision (supra) are extracted as follows:
9 Hanumant Construction Pvt. Ltd. Vs. ACIT, CC-2, Raipur to 550/RPR/2025
“7. We have considered the submissions of the parties herein and analyzed the facts and circumstances involved in all the captioned appeals. After careful perusal of the documents on record, we find that the assessee had assailed the legal ground as aforestated, however, the fact of the matter is that on perusal of the respective orders of the Ld. CIT(Appeals) for all the years before us, it is also evident from Para 3 that there has been no compliance by the assessee before the said authority and as such, an ex-parte order was passed for the concerned years in appeal. Admittedly, as per record, sufficient opportunities had been provided to the assesse, however, there was no compliance by the assessee. In effect, rights and liabilities of the parties herein are yet to be adjudicated substantially at the level of the first appellate authority. Though in the impugned orders, discussion has been done as per material available on record by the Ld.CIT(Appeals) but they are only Form 35, statement of facts, grounds of appeal and the assessment order. However, due to non-compliance by the assessee, there are no submissions, evidence and documents submitted for adjudication by the assessee before the Ld. CIT(Appeals). That as per Para 3 of the Ld. CIT(Appeals) order, there has been no compliance on the part of the assessee for submitting detailed explanations regarding the grounds of appeal for the years under consideration which clearly shows that the grounds of appeal raised before the first appellate authority has not been substantiated on merits through corroborative evidence /submissions.
1. 8. That in such scenario we are of the considered view that the Income tax Act is within the ambit of welfare legislation which are completely different from that of the penal legislation, therefore, benefit of doubt whenever arises, it has to be interpreted in favour of the assessee tax payer within the parameters of law and facts. There may be circumstances beyond control of the assessee because of which, the assessee may not have been able to represent his case on the given dates of hearing before the Ld. CIT(Appeals). Though it is correct that there was no compliance from the side of the assessee, however, nothing is there on record which suggests any deliberate non-compliance or malafide conduct of the assessee. That further, if one final opportunity is provided to the assessee to represent his case before the first appellate authority, the position of the revenue will also not be jeopardized. Recently, the Hon’ble High Court of Bombay in the 9. Vijay Shrinivasrao Kulkarni Vs. Income-tax case of Appellate Tribunal (2025) 171 taxmann.com 696 (Bom.),
10 Hanumant Construction Pvt. Ltd. Vs. ACIT, CC-2, Raipur to 550/RPR/2025 dated 04.02.2025 observed that in the case the Assessing Officer had passed an ex-parte order and when the matter went on appeal before the Ld. CIT(Appeals)/NFAC, it had also dismissed the matter ex-parte due to non-compliance by the assessee’s authorized representative, when the matter came up before the ITAT, it had failed to address the infirmity regarding the fact that the assessee was not afforded proper opportunity of being heard and the matter was dismissed ex-parte by the Ld. CIT(Appeals)/NFAC which amounted to violation of principles of natural justice, and instead ITAT decided the case on merits, in such circumstances, the Hon’ble High Court of Bombay held that passing of an order on merits by the ITAT even when the impugned order was passed ex-parte amounts to violation of principles of natural justice and accordingly, the said matter was remanded to ITAT for passing a fresh order in accordance with law after hearing the parties. The legal principle as enshrined in the present judgment is crystal clear that the principles of natural justice i.e. the right to be heard is to be provided and accordingly, the matter had to be substantially adjudicated by the appellate authority. Therefore, if the impugned order of the Ld. CIT(Appeals)/NFAC is an ex- parte order, the only recourse in conformity with the aforesaid judicial pronouncement is to remand the matter back to the file of the Ld. CIT(Appeals)/NFAC for fresh adjudication in terms with the principles of natural justice providing one final opportunity to the assessee.
In the aforesaid case, the Hon’ble High Court of Bombay had referred to a judgment of the Hon’ble Supreme Court in the case of Delhi Transport Corporation vs. DTC Mazdoor Union AIR 1999 SC 564, wherein the Supreme Court inter-alia held that Article 14 guarantees a right of hearing to a person who is adversely affected by an administrative order. The principle of audi-alteram partem is a part of Article 14 of the Constitution of India. In light of such decision, the petitioner ought to have been granted an opportunity of being heard which, partakes the characteristic of the fundamental right under Article 14 of the Constitution of India.
The Hon’ble High Court of Bombay in the aforesaid case had referred to a decision of the Hon’ble Supreme Court in the case of Commissioner of Income Tax Madras v. Chenniyappa Mudiliar 1969 1 SCC 591, wherein the Supreme Court in interpreting the section 33(4) of the Income Tax Act, 1922 has held that the appellate tribunal was bound to give a proper decision on question of fact as well as law, which can only be done if the appeal is disposed off on merits
11 Hanumant Construction Pvt. Ltd. Vs. ACIT, CC-2, Raipur to 550/RPR/2025 and not dismissed owing to the absence of the appellant. Reverting to the facts of the present case the grounds of appeal were simply filed before the Ld.CIT(Appeals) they were not substantiated or corroborated through submissions and filing of documentary evidences since the assessee had not complied before the Ld.CIT(Appeals) on the dates of hearing. Therefore, as per framework of the Act there must be adjudication on merits by the first appellate authority and one final opportunity be provided to the assessee to represent his matter on merits in the interest of natural justice.
12. There may even be a situation where the Ld. Counsel for the assessee may assail a legal ground before the Tribunal following the decision of the Hon’ble Supreme Court in the case of National Thermal Power Company Ltd. Ltd. Vs. CIT (1998) 229 ITR 383 (SC) with a contention that irrespective of the order of the Ld. CIT(Appeals) being ex-parte, the Tribunal may decide the legal issue that has been raised by the Ld. Counsel. In our view, the decision of the Hon’ble Supreme Court in the case of National Thermal Power Company Ltd. Ltd. Vs. CIT (supra) provides that any legal issue which goes to the root of the matter and is established through legal principles, the assessee can take up and raise such legal issue at any appellate forum irrespective of whether the assessee had raised such legal issue at the sub-ordinate level or not, however, it always depends on facts and circumstances of each case whether the Tribunal would decide the legal ground or in a case where the question is of natural justice and ex-parte order by the Ld. CIT(Appeals) the Tribunal would remand it back to Ld.CIT(Appeals) providing final opportunity to a bonafide assessee. The Tribunal as the highest fact finding authority must be certain enough that the impugned order before it has been passed on merits and is a speaking order where the assessee has also complied during the process of litigation. In case, where the order of the Ld. CIT(Appeals) itself is ex-parte and some legal ground is raised and if the Tribunal decides such legal ground where in fact principles of natural justice is left unanswered due to the fact that the impugned order before the Tribunal is ex-parte and there was no compliance by the assessee in such scenario the Tribunal would also be usurping the power of the Ld. CIT(Appeals) which is also a statutory authority as per the Act. This is due to the reason that as per framework of the Act, Ld.CIT(Appeals) is the first appellate authority where an appeal by assessee it would be substantially decided through a speaking order by the Ld.CIT(Appeals). When this part is over and either party is aggrieved second appeal lies before the ITAT. Now if for every ex-parte order passed by the Ld. CIT(Appeals), of course due to 12 Hanumant Construction Pvt. Ltd. Vs. ACIT, CC-2, Raipur to 550/RPR/2025 non-compliance by the assessee, if the Tribunal adjudicates a legal ground, for instance validity of assessment or reassessment order and answers it in favour of the assessee then it would create an easy route for assessee getting redressal from Tribunal even without bothering to comply with hearing notices before the Ld. CIT(Appeals). This would dismantle the structure of the Act which is definitely not the intention of the legislature. Here in this situation, where the benefit of doubt is given to the assessee since he had not complied with the hearing notices before the Ld. CIT(Appeals) which resulted in passing of an ex-parte order by the Ld. CIT(Appeals), in such scenario, as per the scheme of the Act and following the principles of natural justice, the only course of action is to remand the matter back to the file of the Ld. CIT(Appeals) for adjudication on merits providing one final opportunity to the assessee.
In view thereof, we set aside the respective orders of the Ld. CIT(Appeals) for all the years and remand the same to their file for denovo adjudication on merits. At the same time, we direct the assessee that this being the final opportunity, there must be compliance on merits before the first appellate authority. Needless to say, the Ld. CIT(Appeals) shall provide reasonable opportunity of being heard to the assessee and pass an order in terms of Section 250(4) and (6) of the Act within three months from receipt of this order.”
Respectfully following the aforesaid order, we set-aside the respective orders of the Ld. CIT(Appeals) and remand the matters back to their file for denovo adjudication while complying with the principles of natural justice. At the same time, it is directed that this being the final opportunity, the assessee shall duly comply with the hearing notices from the Ld.CIT(Appeals).
13 Hanumant Construction Pvt. Ltd. Vs. ACIT, CC-2, Raipur to 550/RPR/2025
In the result, all the appeals filed by the assessee are allowed for statistical purposes.
Order pronounced in the open court on 06th February, 2026.