ITAT Condoned 1,200-Day Delay in Appeal Citing Managing Director’s Illness and Death:

ITAT Condoned 1,200-Day Delay in Appeal Citing Managing Director’s Illness and Death The ITAT condoned a delay of about 1,200 days in the assessee's appeal due to the managing director's serious illness and death, subject to Rs 20,000 costs, and directed the CIT(A) to decide the case on its merits. Eastern Chrome Tanning Corp. P Ltd filed the present appeal against the ACIT, challenging an order dated June 23, 2025, which was passed by the CIT(A) for the AY 2016-17.

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Background of the case

The company had originally filed its income tax return in September 2016, declaring a loss of Rs 23,16,64,045. During scrutiny, the AO observed that the company had claimed Rs 7,46,46,697 as bad debts written off. The AO, on the other hand, said that the company didn't give enough supporting documents. As a result, the AO disallowed the bad debt claim in December 2018 and later imposed a penalty of Rs 22,394,009 in June 2019 for alleged concealment of income under Section 271(1)(c). The company filed an appeal before the CIT(A) in April 2025, resulting in a delay of 2,097 days. The CIT(A) refused to condone the delay and dismissed the appeal. The company then approached the ITAT. During the hearing, the company explained that its former managing director, who was handling tax matters, suffered a severe stroke in July 2018 and became paralysed. Due to a medical issue, he later passed away in May 2021 following Covid-19. The assessee also submitted medical records and an affidavit to support this claim. It further stated that it became aware of the penalty order only after receiving a telephonic demand notice. The Tribunal noted that if the Covid-19 period is considered, the effective delay reduces to around 1,200 days. Taking into account the serious medical condition of the managing director, the tribunal found the reasons genuine.

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The ITAT observed that the company did not gain anything by delaying the appeal and that substantial justice should prevail. Therefore, it decided to condone the delay of approximately 1,200 days, but on the condition that the company pays Rs 20,000 as costs to the State Legal Aid Authority of the Madras High Court within three months. The Tribunal also directed the CIT(A) to hear the case on its merits and decide it properly after allowing the company to present its case. As a result, the appeal was allowed for statistical purposes.