The Ahmedabad Bench of the Income Tax Appellate Tribunal (ITAT) has condoned a delay of 20 days in filing an income-tax appeal and restored the underlying assessment proceedings for fresh adjudication, subject to the taxpayer depositing a cost of ₹5,000 in the Prime Minister’s Relief Fund.
The Bench of Sanjay Garg (Judicial Member) and Annapurna Gupta (Accountant Member) said, “we consider it fit to condone the delay before the Ld.CIT(A), set aside the order passed by him and restore the matter back to the file of the AO for adjudication afresh subject to the assessee paying a cost of Rs.5000/- for the laxity in its approach in dealing with matters relating to law. The cost is to be deposited by the assessee to the Prime Minister’s Relief Fund and proof of the same to be submitted to the AO. The AO is directed to proceed with the matter only after the assessee submits proof of deposit of cost to the Prime Ministers Relief Fund.”
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The taxpayer had challenged an order dated November 25, 2025, passed by the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi, under Section 250 of the Income Tax Act, 1961.
The appeal before the Commissioner (Appeals) had been dismissed as non-maintainable after the appellate authority refused to condone a delay of 20 days. Consequently, the grounds raised by the taxpayer against the assessment were not examined on merits.
The substantive dispute involved an addition of ₹99.70 lakh made by the Assessing Officer under Section 69A of the Income Tax Act. According to the grounds of appeal, the amount represented the gross consideration allegedly received from the sale of shares of SMS Techsoft India Ltd.
The taxpayer contended that the share transactions formed part of a fraudulent activity of which he and 36 other persons were victims. He argued that the Commissioner (Appeals) had effectively upheld the addition without adjudicating the controversy on merits merely because of the short delay in filing the first appeal.
Appearing before the Tribunal, the taxpayer’s counsel submitted that the delay of 20 days was relatively minor and deserved to be condoned. It was pointed out that the taxpayer had not previously filed an income-tax return and that his case had subsequently been reopened under Section 148 of the Act.
The counsel maintained that, being a non-filer, the taxpayer was not well acquainted with income-tax proceedings and procedures. This lack of familiarity was cited as the reason for the delayed filing of the appeal before the Commissioner (Appeals).
A request was therefore made to condone the delay and remit the dispute to the appellate authority for a decision on merits instead of allowing the substantial tax addition to survive solely on a procedural ground.
During the hearing, the Tribunal also noticed that the original assessment order had been passed ex parte because the taxpayer had not participated in the reassessment proceedings. The counsel attributed this non-participation to the same lack of familiarity with income-tax matters.
After considering the facts and circumstances, the ITAT held that it would be appropriate to condone the delay before the Commissioner (Appeals). It accordingly set aside the appellate order that had dismissed the taxpayer’s case as non-maintainable.
However, instead of merely sending the matter back to the Commissioner (Appeals), the Tribunal restored the proceedings to the Assessing Officer for a fresh adjudication.
The relief was made conditional upon the payment of ₹5,000 as costs for the taxpayer’s lax approach in dealing with legal proceedings. The Tribunal directed that the amount be deposited in the Prime Minister’s Relief Fund and that proof of payment be furnished to the Assessing Officer.
Importantly, the Assessing Officer was instructed to proceed with the fresh adjudication only after the taxpayer submits evidence establishing that the prescribed cost has been deposited.
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