Facts of the Case

The assessee, an individual, filed an appeal for Assessment Year 2018-19. The case was selected under CASS, and the Assessing Officer completed the assessment under section 144 of the Income-tax Act, determining total income at ₹3,78,75,170 as against the returned income of ₹23,74,120. An addition of ₹3,55,01,049 was made as unexplained money.

Aggrieved, the assessee preferred an appeal before the Commissioner of Income Tax (Appeals). However, the appeal was dismissed solely on the ground of limitation, without adjudicating the issues on merits.

Issues Involved

Whether the CIT(A) was justified in dismissing the appeal on the ground of limitation without considering the directions issued by the Supreme Court extending limitation periods during the COVID-19 pandemic.

Petitioner’s Arguments

The assessee contended that the delay in filing the appeal occurred due to the COVID-19 pandemic. Reliance was placed on the Supreme Court’s order dated 21 September 2021 passed in In Re: Cognizance for Extension of Limitation, wherein the period from 15 March 2020 to 2 October 2021 was directed to be excluded while computing limitation.

It was submitted that had the CIT(A) considered the said binding order, the appeal would have been held to be within the prescribed limitation period.

 Respondent’s Arguments

The Departmental Representative raised no objection to the submission made by the  assessee regarding reconsideration of the limitation issue in light of the Supreme Court’s directions.

Court Order / Findings

The Income Tax Appellate Tribunal, Allahabad Bench, observed that the CIT(A) failed to consider the Supreme Court’s order extending the limitation period due to the COVID-19 pandemic.

Accordingly, the Tribunal set aside the impugned appellate order dated 14 November 2024 and directed the CIT(A) to re-examine the issue of limitation afresh after giving due consideration to the Supreme Court’s directions. If the appeal is admitted upon such reconsideration, the CIT(A) was further directed to decide the appeal on merits after providing reasonable opportunity to the assessee.

Important Clarification

The Tribunal did not adjudicate the additions made under section 144 on merits. The order is confined strictly to the issue of limitation and reiterates the mandatory nature of the Supreme Court’s COVID-19 limitation extension directions, which are binding on all appellate authorities.

Link to download the order -  https://www.mytaxexpert.co.in/uploads/1770710137_KRISHNANANDSINGHFATEHPURVS.NFACDELHIDELHI.pdf 

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