ITAT Condones 700-Day Appeal Delay as Notices Were Allegedly Sent to Wrong Address

Nangan Motors Private Limited Vs DCIT (ITAT Chennai)

In this case, the assessee company, engaged in the business of running a car service centre, did not file its return of income for Assessment Year 2018-19 despite having substantial financial transactions, including cash deposits and contract receipts totaling ₹1,30,70,358. The Assessing Officer (AO) issued notices regarding the cash deposits, but no response was received from the assessee. Consequently, the AO computed a penalty under Section 270A at 50% of the tax on the under-reported income and levied a penalty of ₹45,793. A separate penalty under Section 272A was also imposed.

Aggrieved by the AO’s orders, the assessee filed appeals before the Commissioner of Income Tax (Appeals) [CIT(A)] and sought condonation of a delay of 700 days in filing the appeals. The assessee explained that it had not received the physical notices issued by the AO because the notices were delivered to an incorrect address where the company had previously operated. Despite this explanation, the CIT(A), by order dated 21.11.2025, dismissed the appeals in limine on account of the 700-day delay and upheld the AO’s orders.

The assessee then appealed before the Income Tax Appellate Tribunal (ITAT). Before the Tribunal, the assessee argued that the CIT(A) had passed an arbitrary order without properly considering the sufficient cause shown for the delay. It was further contended that no proper opportunity had been provided regarding the issues under consideration. The assessee also relied on an earlier decision of a co-ordinate bench of the Tribunal in its own cases (ITA Nos. 590 to 594/CHNY/2026 dated 27.04.2026), where delays had been condoned and the matters remitted back to the CIT(A) for adjudication on merits after providing an opportunity of hearing.

The Departmental Representative supported the order of the CIT(A) and requested dismissal of the appeals.

The Tribunal examined the submissions, the order of the CIT(A), and the earlier co-ordinate bench decision involving the same assessee. In the earlier case, the Tribunal had considered whether the CIT(A) was justified in refusing to condone a delay of 1,282 days. The assessee had claimed that it was unaware of the assessment order, which was evident from the fact that the assessment had been completed under Section 144. The Tribunal observed that the averments made in the affidavit seeking condonation of delay had remained uncontroverted by the CIT(A). Referring to the Supreme Court’s decision in M. Kalappa Sethi v. M.V. Laxmi Narain Rao (AIR 1973 SC 627), the Tribunal noted that an uncontroverted affidavit must be accepted as evidence of facts stated therein. Accordingly, the earlier bench held that the delay ought to have been condoned and remitted the matter to the CIT(A) for adjudication on merits after granting the assessee an opportunity of being heard.

Considering that the facts and issues in the present appeals were identical to those involved in the assessee’s earlier appeals, the Tribunal followed the co-ordinate bench decision. It held that the delay in filing the appeals deserved to be condoned. Consequently, the Tribunal remitted both matters back to the file of the CIT(A) for adjudication of the issues on merits, with directions to provide the assessee an opportunity of hearing in accordance with law.

As a result, both appeals filed by the assessee were partly allowed for statistical purposes.

FULL TEXT OF THE ORDER OF ITAT CHENNAI

The captioned appeals filed by the Assessee are directed against the orders of the Ld. Commissioner of Income Tax (Appeals), NFAC, Delhi, [CIT(A)] both dated 21.11.2025 for Assessment Years 2018-19 & 2018-19.

2. The appellant company is engaged in the business of running a car service centre which did not file the return of income for 2018­19 despite having substantial financial transactions including cash deposits and contract receipts totaling Rs.1,30,70,358/-. Upon failure of response to the impugned notices related to the cash deposit, the AO computed the penalty at 50% of the tax on the under-reported income and levied penalty of Rs.45,793/- u/s 270A and penalty u/s.272A of the Act.

3. Being aggrieved with the orders passed by the AO, the assessee preferred an appeal before the Ld. CIT(A) sought condonation of delay of 700 days in filing the appeal on account of reasons that the assessee did not receive the physical notice issued by AO because the notice was delivered at the wrong address where the company previously running. However, Ld.CIT(A), vide its order dated 21.11.2025 dismissed the appeal of the assessee in limine on account delay of 700 days in filing the appeal and confirmed the order of AO.

4. Being aggrieved with the orders passed by the Ld CIT(A), the assessee preferred both appeals before this Tribunal.

5. However, The Ld AR for the assessee stated that the Ld.CIT(A) passed an arbitrary order without appreciating the sufficient cause of delay in filing the appeal and no proper opportunity was served upon related to the issue under consideration. Assessee also pointed out that in similar situation the co-ordinate bench of Tribunal in assessee’s own cases in ITA Nos.590 to 594/CHNY/2026 dated 27/04/2026 has condoned the delay and remitted the matter back to the file of ld.CIT(A) for adjudication of the issues in appeal on merits after affording an opportunity of being heard to the assessee in accordance with law after affording opportunity of hearing to the appellant.

6. The ld. Departmental Representative (DR), on the other hand, supported the order of the ld. CIT(A) and prayed for dismissal of the appeal.

7. We have considered the rival submissions and perused the order of the ld. CIT(A) and order of the co-ordinate bench of Tribunal in assessee’s own cases in ITA Nos.590 to 594/CHNY/2026 dated 27/04/2026 which has held as under:

9. We heard rival submissions and perused the material available on record. The issue that arises for our consideration is whether the ld.CIT(A) was justified in refusing to condone the delay of 1282 days in filing appeal before him. Admittedly, the appellant filed the petition seeking the condonation of delay on the ground that the appellant was not aware of the assessment order passed by the Assessing Officer. This is evident from the fact that the assessment order was passed u/s. 144 of the Act.

10. The averments made in the Affidavit seeking the condonation of delay in filing appeal before the ld.CIT(A), remain uncontroverted by the learned ld.CIT(A). In the absence of any material to the contrary, the averments made in the affidavit cannot be brushed aside. The Hon’ble Supreme Court in the case of M.Kalappa Sethi Vs. M.V.Laxmi Narain Rao AIR 1973 SC 627, it was held that an uncontroverted affidavit shall be taken as an affidavit on fact. Therefore, we are of considered opinion that the ld.CIT(A) ought to have condoned the delay in filing the appeal and admitted the appeal for adjudication on merits. In the circumstances, we remit the matter back to the file of ld.CIT(A) for adjudication of the issues in appeal on merits after affording an opportunity of being heard to the assessee in accordance with law after affording opportunity of hearing to the appellant.

11. In the result, the appeal filed by the assessee in ITA No.590/CHNY/2026 stands partly allowed for statistical purposes.

12. We find that the identical facts and issues are involved in assessee’s appeal bearing Appeal No.590/CHNY/2026 for A.Y.2017-18. Accordingly, our findings given above shall apply mutatis mutandis to these four appeals in ITA Nos.591, 592, 593 & 594/CHNY/2026 also, accordingly, we remit the matter back to the file of ld.CIT(A) for adjudication of the issues in appeal on merits after affording an opportunity of being heard to the assessee in accordance with law after affording opportunity of hearing to the appellant.

13. Accordingly, appeal filed by the assessee in ITA Nos.591, 592, 593 & 594/CHNY/2026 are partly allowed for statistical purpose.

14. To sum up, all appeals of the assessee are partly allowed for statistical purpose.

8. Hence, respectfully following the order of the co-ordinate bench of Tribunal in assessee’s own cases in ITA Nos.590 to 594/CHNY/2026 dated 27/04/2026, we also condone the delay and remit both the matters back to the file of ld.CIT(A) for adjudication of the issues in appeals on merits after affording an opportunity of being heard to the assessee in accordance with law after affording opportunity of hearing to the appellant.

9. In the result, both the appeals filed by the assessee in ITA No.595-596/CHNY/2026 stands partly allowed for statistical purposes.

Order pronounced in the open court on the 19^th day of May 2026, in Chennai.