Facts of the Case

The assessee filed an appeal against an order of the CIT(A), NFAC, which had arisen from a best-judgment assessment under section 144. The appeal before the Tribunal itself was delayed by 692 days. The assessee explained that he had originally filed Form No. 35 manually along with written submissions and supporting documents before the CIT(A), Lucknow, during physical proceedings. A remand report had also been called for from the Assessing Officer.

Subsequently, the appeal was migrated to the faceless system. Notices issued through the ITBA portal and email were not received by the assessee because the registered email IDs belonged to former tax consultants who did not inform him. The assessee later discovered that his appeal had been dismissed ex parte for non-prosecution and promptly filed an appeal before the Tribunal.

Issues Involved

  1. Whether substantial delay in filing appeal can be condoned when caused by lack of knowledge of faceless proceedings.
  2. Whether dismissal of appeal without considering earlier submissions and remand report violates principles of natural justice.
  3. Whether an appellate authority can decide an appeal ex parte without adjudicating on merits.

Petitioner’s Arguments

The assessee contended that he had already participated in physical appellate proceedings and submitted detailed written submissions along with documentary evidence. He asserted that neither these submissions nor the remand report were considered after the case migrated to the faceless regime.

He further argued that the email IDs on the tax portal belonged to previous consultants, resulting in non-receipt of notices and complete lack of awareness of the proceedings. The delay in filing the appeal was therefore neither intentional nor due to negligence.

Respondent’s Arguments

The Revenue acknowledged that the assessee had not responded to notices issued through the portal but did not dispute that earlier submissions may not have been considered. It was also conceded that adequate opportunity might not have been provided during the faceless proceedings.

Court Order / Findings (ITAT Allahabad)

The Tribunal accepted the explanation for delay, noting absence of willful neglect and relying on principles favoring adjudication on merits. The delay of 692 days was condoned.

  • The assessee had earlier filed written submissions during physical proceedings
  • A remand report had been called for by the CIT(A)
  • These materials were not discussed in the appellate order
  • The appeal was dismissed solely due to non-appearance in faceless proceedings

Such disposal, without considering available records, was held contrary to principles of natural justice.

Important Clarification

The Tribunal emphasized that appellate proceedings must ensure effective opportunity of hearing, especially where earlier submissions exist on record. Faceless procedures cannot override the fundamental requirement of natural justice and reasoned adjudication.

Link to download the order - https://www.mytaxexpert.co.in/uploads/1771062686_ROHITFAIZABADVS.INCOMETAXOFFICERAMBEDKARNAGARAMBEDKARNAGAR.pdf

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