The Chandigarh Bench of the Income Tax Appellate Tribunal (ITAT) has condoned a delay of one year and fifteen days in filing an appeal and set aside both the appellate and reassessment orders passed against a taxpayer.
The bench of Laliet Kumar (Judicial Member) and Manoj Kumar Aggarwal (Accountant Member) held that where an assessment has been framed ex parte and the merits of the case have not been examined, a liberal approach is warranted while considering an application for condonation of delay.
The Bench observed that denial of an opportunity to contest the matter on merits would defeat the cause of justice, particularly when the taxpayer had presented a plausible explanation for the delay.
The case pertained to Assessment Year 2015-16. The reassessment proceedings were initiated under Sections 147, 144 and 144B of the Income Tax Act, 1961, and were ultimately completed ex parte. The Assessing Officer assessed the taxpayer’s income at ₹47.03 lakh, significantly higher than the returned income.
Aggrieved by the reassessment order, the taxpayer approached the Commissioner of Income Tax (Appeals). However, the appeal was filed beyond the prescribed limitation period, resulting in a delay of one year and fifteen days. The taxpayer simultaneously filed an application seeking condonation of delay.
According to the taxpayer, he was an agriculturist residing in a rural area and was not conversant with the technical requirements of the faceless assessment and e-filing regime. He contended that he became aware of the assessment proceedings only after receiving a recovery notice and thereafter immediately contacted a tax consultant to pursue the appellate remedy.
The Commissioner (Appeals) rejected the condonation application and dismissed the appeal in limine. The appellate authority noted that departmental notices had been served on the registered e-mail address of the taxpayer and held that no convincing evidence had been produced to establish sufficient cause for the delay. Consequently, the appeal was dismissed without examining the merits of the additions made during reassessment.
Before the Tribunal, counsel for the taxpayer argued that the delay was neither deliberate nor intentional. It was submitted that the taxpayer was a small agriculturist who lacked familiarity with faceless proceedings and electronic compliance mechanisms.
The taxpayer further contended that the reassessment itself had been framed ex parte and substantial additions had been made without proper examination of relevant facts and supporting evidence. It was argued that the taxpayer had a strong case on merits and that refusal to condone the delay would result in irreparable hardship. The taxpayer therefore requested restoration of the matter for fresh adjudication after granting an adequate opportunity of hearing.
After considering the rival submissions, the Tribunal noted that the appeal had been dismissed solely on the ground of limitation and that neither the Assessing Officer nor the appellate authority had examined the dispute on merits after effective participation of the taxpayer.
The Bench reiterated the settled legal principle that while deciding applications for condonation of delay, authorities should adopt a pragmatic and justice-oriented approach. It observed that ordinarily no litigant stands to gain by filing an appeal belatedly and that refusal to condone delay may result in denial of a fair opportunity to contest the matter.
The Tribunal found that the reassessment had been framed ex parte and concluded that the ends of substantial justice would be better served by granting one more opportunity to the taxpayer to present his case. Accordingly, the delay was condoned and the order of the Commissioner (Appeals) was set aside.
Going a step further, the Tribunal also set aside the reassessment order itself and restored the entire matter to the file of the Assessing Officer for de novo adjudication. The Assessing Officer was directed to provide reasonable and sufficient opportunity of hearing and to consider all documents, explanations and legal submissions that may be furnished by the taxpayer before passing a fresh speaking order in accordance with law.
The Tribunal imposed a condition requiring the taxpayer to deposit ₹15,000 towards plantation of trees of Indian origin as a pre-condition for setting aside the orders and restoring the matter. The amount is to be deposited with a Chandigarh-based trust engaged in plantation activities along the Yamuna riverbank in Haryana. The taxpayer was also directed to furnish documentary proof, including photographs and certification from the concerned authority or nursery, within the stipulated period.
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