Income Tax: ITAT condones delay of 400 days in filing appeal, imposes cost on Taxpayer

The ITAT restored the appeal to the CIT(A) for a fresh decision on merits after condoning the delay, allowing the assessee’s appeal for statistical purposes.

Piyush Vinod Shah filed the present appeal against the ITO, challenging the impugned order dated May 07, 2024, passed by CIT(A) under section 250 of the Income Tax Act, 1961.

Background of the case

The Assessing Officer (AO) examined the taxpayer’s capital gains calculation related to a property transaction. The AO found a difference between the declared sale value and the government reckoner value. The AO recalculated the Long-Term Capital Gains (LTCG).

As a result, the AO made an addition of Rs. 6,993,413 to the taxpayer’s income, increasing his tax liability.

The taxpayer challenged the AO’s decision before the CIT(A). However, the taxpayer failed to appear or properly pursue the appeal. Due to this non–prosecution, the CIT(A) dismissed the appeal without examining the merits of the case.

The taxpayer then approached the ITAT, although there was a delay of about 400 days in filing the appeal. The ITAT condoned the delay but imposed a cost of Rs 5,000 to be paid to the Prime Minister’s Relief Fund within 30 days, along with proof.

The Tribunal said that the CIT(A) should not have dismissed the appeal merely for non-prosecution and should have decided it on its merits.

The ITAT set aside the CIT(A)’s order. The case has been sent back to the CIT(A) for a fresh decision.

As a result, it allowed the assessees for statistical purposes.