Not Length but Cause of Delay Matters – 353-Day Delay Condoned

Jinnagara Eraiah Lakshmidevi Vs ITO (ITAT Bangalore)

Bangalore ITAT has taken a liberal approach in condoning a long delay of 353 days in filing appeal & set aside an ex parte order passed by CIT(A), restoring the matter for fresh adjudication on merits.

Assessee, an individual hailing from a rural background with limited education, had deposited ₹10.50 lakh in cash during the demonetisation period. The source of deposit was explained as agricultural income. AO, however, rejected the explanation & made addition treating the deposit as unexplained. On appeal, CIT(A) dismissed the case ex parte without considering evidence furnished by Assessee.

When the matter reached Tribunal, there was a delay of 353 days in filing appeal. Assessee explained that due to personal circumstances, including the marriage of her daughter & lack of proper guidance, she could not pursue the matter in time. Tribunal observed that while the delay was indeed long, what mattered was the reasonable cause behind such delay rather than its length. It referred to the ruling of coordinate bench in Prashanth Projects Ltd. vs. DCIT where distinction was drawn between corporate entities & individuals in matters of delay, & emphasized that a pragmatic approach must be taken when dealing with cases of individual taxpayers.

On merits, Tribunal found that CIT(A) had merely reproduced the order of AO without giving independent findings or appreciation of evidence. It reminded that u/s 250(6) it is mandatory for CIT(A) to pass a speaking order addressing the issues raised. Failure to do so amounted to denial of justice.

Accordingly, Tribunal condoned the delay, set aside the order of CIT(A) & restored the matter back for fresh adjudication on merits after granting meaningful opportunity of hearing to Assessee. The appeal was allowed for statistical purposes.

This ruling highlights that justice cannot be denied merely on technical grounds of delay & appellate authorities must give reasoned findings on merits rather than dismiss appeals ex parte.

FULL TEXT OF THE ORDER OF ITAT BANGALORE

The present appeal of the assessee is arising from the order of the Learned Commissioner of Income Tax (Appeals) (in short “Ld. CIT(A)”), dated 24/04/2024 and relates to Asst. Year 2017-18 having DIN & Order No. ITBA/NFAC/S/250/2024-25/1064317639(1).

2. There is a delay of 353 days in filing of this appeal before the Tribunal. The Ld. Counsel appearing on behalf of the assessee drawn the attention of the Bench towards the application for condonation of delay supported with duly sworn affidavit. In a nutshell, the Ld. Counsel for the assessee argued that since the assessee was busy in the marriage of her daughter could not be able to contact with the professional who was handling the taxation matters and that is why there is a delay of 353 days in filing this appeal. It has further been submitted by the Ld. AR that the assessee hails from the rural background with a limited High School education. Averting to the merits of the case, the Ld. Counsel for the assessee argued that it is a case where an amount of Rs. 10,50,000/- as been deposited in cash during the demonetization period. The Ld. Counsel for the assessee contended that the source of this cash was agricultural income earned by the assessee. Further, it has been pointed out that the evidence in support of the agricultural claim has not been properly appreciated by the Ld. CIT(A), as the Ld. CIT(A) has dismissed the appeal of the assessee ex-parte without appreciating the replies of the assessee in a judicious manner.

3. The Ld. DR appearing on behalf of the Revenue vehemently argued that the explanation submitted by the assessee vis-à-vis condonation of delay is not a plausible explanation and hence, the appeal of the assessee may be dismissed as barred by limitation.

4. We have heard the rival submissions and perused the material available on record. We observed that it is a case of ordinate delay (as per the law propounded by Hon’ble Bombay High Court in the case of Ornate Traders reported 312 ITR 193). The Ld. DR could not refute the submission of the Ld. AR that the assessee hails from a rural background with limited High School education. It is a settled position of law that it is not the length of the delay rather the reasonable cause behind the delay is to be considered. Here we are dealing with a case of an Individual assessee.

5. We would like to refer to the decision of the Coordinate Bench in the case of M/s. Prashanth Projects Ltd vs DCIT, ITA No. 7167/Mum/2011, dated 04/09/2013 wherein the Mumbai Bench of the Tribunal in para 3.1 of their order has made a distinction between the case of the corporate entity and the case of the individual. Therefore, considering the facts of the present case i.e., ordinate delay of 353 days and the background of the assessee, we hereby condone the delay of 353 days and adjudicate the appeal on merits.

6. So far as the merits of the case are concerned, on a perusal of the order of the Ld. CIT(A), it appears that the Ld. CIT(A) has just reproduced the order of the Ld. Ld. AO, while discussing the merits of the case, which in our view is not a judicious manner to decide the appeal. We are of the firm opinion that the Ld. CIT(A) has not at all appreciated the evidence furnished by the assessee before the Ld. CIT(A) and hence, in the interest of justice, we restore this matter to the file of the Ld. CIT(A) for deciding the matter afresh in accordance with law.

7. As per the provisions of section 250(6) of the Act, it is incumbent upon the Ld. CIT(A) to pass a speaking order with respect to the grounds raised before him. In view of these facts and circumstances of the case, we restore this matter to the file of the Ld. CIT(A) for examining the appeal in accordance with law. Needless to say that the Ld. CIT(A) shall grant a meaningful opportunity of being heard to the assessee before passing any order.

8. In the result, appeal of the assessee is allowed for statistical purposes.

Order pronounced in the open court on 21^st August, 2025