ITAT Condoned 140-Day Delay, Says Substantial Justice Must Prevail Over Technicalities

The ITAT Bangalore condoned a 140-day delay in filing the appeal, holding that substantial justice should prevail over technical limitations. Observing the assessment was high-pitched, the Tribunal set aside the CIT(A)’s order and remanded the matter for fresh adjudication on merits after hearing the assessee.

During the assessment year 2016-17, the assessee had jointly purchased land worth Rs 6.64 crore, while the guideline value was Rs 8.50 crore. The tax authorities treated this difference as undisclosed income under Section 56(2)(vii)(b)(ii) of the Income Tax Act. The tax authorities additionally questioned the source of investment, including gifts received from the assessee’s father, unsecured loans, and advances. However, since the assessee failed at submitting the supporting documents, these amounts were treated as unexplained cash credits under Section 68 of the Act and added to its taxable income.

Subsequently, the assessee filed an appeal before the Commissioner of Income Tax (Appeals) [CIT(A)] with a delay of 140 days. The assessee sought condonation of delay, claiming that due to some health issues, medical treatment requiring bed rest, and the expiry of the digital signature certificate, it could not timely file the appeal before the statutory time limit. However, the CIT(A) denied accepting the explained reasons and dismissed the appeal as time-barred.

Thereafter, the case was taken to the ITAT Bangalore. The tribunal observed that the assessee would not gain any advantage by filing the appeal late and that substantial justice should prevail over technical issues. The Tribunal also noted that the assessment appeared to be a high-pitched one and deserved consideration on its merits. Accordingly, the ITAT condoned the delay of 140 days, set aside the order of the CIT(A), and sent the matter back for fresh adjudication after giving the assessee an opportunity to present evidence and arguments.

The tribunal held that “it seems that the assessment is also a high-pitched assessment, and therefore it should be decided on merits instead of dismissing the appeal on the ground of limitation. Therefore, we are inclined to condone the said delay of 140 days by accepting the reasons given by the assessee as a valid one. We, therefore, set aside the order of the Ld.CIT(A) and remit this issue to its file for deciding the issue afresh after hearing the assessee. In the result, the appeal filed by the assessee is partly allowed for statistical purposes.”