Facts of the Case

The assessee, Alok Rai, filed an appeal before the Income Tax Appellate Tribunal against the order of the Commissioner of Income Tax (Appeals), NFAC, for Assessment Year 2014-15.The assessment was completed ex-parte under Section 147 read with Sections 144 and 144AB, determining total income at ₹57,10,200 as against returned income of ₹12,29,630. Additions were made towards unexplained investment under Section 69 read with Section 115BBE and income from other sources under Section 56(2)(vii)(b).
The CIT(A) dismissed the assessee’s appeal solely on the ground of limitation without adjudicating the matter on merits. Aggrieved, the assessee preferred an appeal before the ITAT.

 Issues Involved

  1. Whether delay in filing appeal before the CIT(A) due to medical illness and COVID-19 lockdown constitutes sufficient cause under Section 249(3).
  2. Whether dismissal of appeal on limitation without adjudicating merits violates principles of natural justice.

 Petitioner’s Arguments

The assessee contended that he was suffering from a neuropathic disorder, which materially affected his ability to pursue legal remedies within time.
It was further submitted that the nationwide COVID-19 lockdown created unavoidable circumstances leading to delay in filing the appeal. The assessee asserted that there was no mala fide intention behind the delay and that the assessment itself was completed ex-parte without providing reasonable opportunity of being heard.
Accordingly, it was pleaded that the delay deserved to be condoned and the matter restored for adjudication on merits.

 Respondent’s Arguments

The Revenue relied upon the impugned order passed by the CIT(A). However, no substantive rebuttal was placed on record to controvert the factual circumstances relating to illness and pandemic-related disruption.

 Court Order / Findings

The Tribunal observed that the assessee had demonstrated sufficient cause within the meaning of Section 249(3) for not filing the appeal within the prescribed limitation period.
The ITAT held that the CIT(A) ought to have condoned the delay and admitted the appeal for adjudication on merits. Since the appeal was dismissed in limine, the CIT(A) had no occasion to examine issues relating to denial of reasonable opportunity during assessment proceedings.
Accordingly, the impugned appellate order was set aside, and the CIT(A) was directed to condone the delay, admit the appeal, and pass a speaking de novo order on merits after providing reasonable opportunity to the assessee.

 Important Clarification

The Tribunal reiterated that procedural limitations should not override substantive justice, particularly where delay is supported by bona fide reasons such as medical hardship and extraordinary circumstances like a nationwide pandemic. The first appellate authority is duty-bound to decide appeals on merits once sufficient cause for delay is established.

Link to download the order -  https://www.mytaxexpert.co.in/uploads/1770875553_ALOKRAIALLAHBADVS.INCOMETAXOFFICERNFACDELHIALLAHABAD.pdf  

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