ITAT Takes Liberal View on 783-Day Delay, Allows Appeal Against Rs 1.87 Lakh Penalty to Be Heard on Merits:

The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) has allowed an appeal filed by Ajay Kumar and condoned a delay of 783 days in filing his appeal before the CIT(A).

The case relates to Assessment Year 2012-13. Kumar, who is a non-resident living in the United States, had challenged a penalty order passed under Section 271(1)(c) of the Income Tax Act. The penalty of Rs. 1,87,460 was imposed in connection with an ex-parte reassessment involving a cash deposit of Rs. 11 lakh.

The CIT(A), NFAC, had dismissed Kumar's appeal on March 20, 2025, after refusing to condone the 783-day delay. The CIT(A) was not satisfied with the reasons given by Kumar for filing the appeal late.

Before the ITAT, Kumar appeared in person and requested that the delay be condoned and the matter be sent back to the CIT(A) for a fresh decision. He explained that he had been a non-resident since 2005 and was living in the US, where he was unable to obtain professional tax assistance. He said that during a visit to India, he consulted a tax professional and was advised to file an appeal.

Kumar also submitted that by the time he received professional advice, the normal limitation period for filing the appeal had already expired. He therefore filed the appeal along with an application seeking condonation of the delay. He said the delay was due to real hardship because of his non-resident status and inability to get proper legal help.

The Revenue objected the request on the ground that Kumar has not established the sufficient cause for the inordinate delay and the CIT(A) was justified in rejecting the appeal.

However, the ITAT took a lenient view. The Bench relied on the landmark judgment of the Supreme Court in Collector, Land Acquisition v. MST. Katiji & Ors. which held that the courts should adopt a justice-oriented approach in dealing with applications for condonation of delay.

The Tribunal observed that a litigant normally has no benefit in deliberately filing an appeal late. It also noted that refusing to condone a delay could result in a potentially meritorious case being rejected without examination on merits, whereas condoning the delay would only allow the dispute to be decided after hearing both sides.

The ITAT found Kumar's explanation to be sufficient and noted that the Revenue had not brought any material on record to contradict his explanation. The Bench also observed that technicalities should not defeat the substantive rights of an assessee.

Accordingly, the ITAT set aside the order of the CIT(A), condoned the delay of 783 days and restored the matter to the CIT(A) for fresh adjudication. The CIT(A) has been directed to give Kumar an effective opportunity of being heard before deciding the matter.

The Tribunal further directed Kumar to present his case before the CIT(A) within 60 days from the date of the ITAT's order.

The appeal was accordingly allowed for statistical purposes.