ITAT Condones 2157-Days Delay, Criticises CIT(A) For Not Hearing Case on Merits and Dismissing Appeal Ex-parte

The ITAT Kolkata, in a recent significant case, held in favour of the taxpayer and criticised the CIT(A) for not hearing the case on its merits, not properly examining the reason behind the delay and simply dismissing the appeal for being time-barred by 2157 days. Since the appeal before the CIT(A) was dismissed ex-parte, the tribunal sent the case back to the CIT(A) for fresh consideration, granting the taxpayer another opportunity.

The assessee, Tapan Kumar Lenka, is a salaried employee who works in a firm named Indiaideas.com Limited. During the Assessment Year 2018-2019, the assessee received his annual salary amounting to Rs 23.31 lakh from his employer. While filing the return of income for the year under consideration, he failed to claim a loss from house property of Rs 2 lakh that arose due to a housing interest loan, which was taken into account in Form 16 and also disclosed to his employer.

Additionally, the assessee missed claiming tax exemption on conveyance allowance of Rs 19,200, leave travel allowance of Rs 51,308, medical reimbursement of Rs 15,000 and deduction of tax on employment of Rs 2,400. Considering these mistakes in ITAT, the Centralised Processing Centre (CPC) levied a demand amounting to Rs 1.02 lakh (including Rs 8,890 and Rs 4,490 in interest) on the assessee and completed the assessment.

The dissatisfied assessee thereafter filed an appeal before the Commissioner of Income Tax (Appeals) [CIT(A)]. However, his appeal was dismissed for being time-barred by 2157 days. Additionally, the assessee had not filed an application seeking condonation of delay within the statutory time limit. The assessee claimed the delay was due to ignorance of law and lack of awareness or knowledge about the law. The CIT(A) held that “ignorance of law cannot be considered as a good and sufficient cause for the delay in filing of appeal. The maxim ‘Ignorantia juris non-excusat’, or ‘ignorance of law is no excuse’.”

After that, the assessee approached the ITAT Kolkata, arguing that timely filing an appeal before the CIT(A) was not under his control and he is not negligent towards the law. Further argued that the first appellate authorities had dismissed his appeal merely treating it as time-barred and did not even decide the case on its merits. Consequently, the assessee requested the tribunal to grant a second opportunity.

When the tribunal examined the case, it noted that the assessee had no intention to evade tax or misrepresent income. The assessee possessed substantial evidence in support of the claim of exemption. It was observed that the intimation dated January 23, 2019 under Section 143(1) of the Act was sent to the assessee via email address; however, due to oversight of email and non-serving of the assessment order physically at the address, the assessee was not aware of the proceedings, which ultimately led to an unwilling delay in filing an appeal before the CIT(A).

Considering the aforesaid findings, the tribunal found it legitimate to condone the delay for 2157 days. Since the CIT(A) had dismissed the assessee’s appeal ex parte, without hearing the case on merits, the tribunal remanded the case back to the CIT(A) for fresh consideration. Accordingly, the appeal was partly allowed for statistical purposes.