1439-day delay in Filing Appeal Condoned & Matter Remanded for Fresh Assessment: ITAT Kolkata

Samar Nath Mondal Vs ITO (ITAT Kolkata)

The appeal arose from an order passed by the Commissioner of Income Tax (Appeals)-NFAC under Section 250 of the Income Tax Act, 1961 for AY 2014-15. The assessee challenged the dismissal of his appeal solely on the ground of a delay of 1,439 days in filing the appeal before the CIT(A). He contended that the delay had been sufficiently explained through an affidavit, that the appeal had been rejected without examination on merits, and that the resulting tax demand caused genuine hardship.

The assessee had not filed a return of income for AY 2014-15. Based on information regarding the sale of two parcels of land, the Assessing Officer reopened the assessment under Sections 147 and 148. Despite notices issued under Section 142(1), the assessee did not respond. The Assessing Officer treated the transfer of possession to the developer as a transfer under Section 2(47) read with Section 53A, applied Section 50C, determined the deemed sale consideration, computed long-term capital gains, and completed the assessment ex parte under Sections 144, 147 and 144B by adding the computed capital gains to the assessee’s income.

The CIT(A) noted the delay of approximately 1,439 days in filing the appeal. The assessee attributed the delay to the negligence of his deceased tax consultant, lack of digital knowledge, and unawareness of notices issued through the income tax portal. Relying on the principle that negligence, inaction or lack of diligence cannot constitute sufficient cause, the CIT(A) refused to condone the delay, dismissed the appeal as barred by limitation, and upheld the assessment order.

Before the Tribunal, the assessee submitted that although the assessment had been framed by invoking Section 50C, the Assessing Officer had not allowed indexed cost of acquisition while computing the long-term capital gains. The assessee further claimed that after allowing indexed cost and exemption under Section 54 for the purchase of a flat, the taxable long-term capital gains would be nil.

The assessee explained that he had not filed a return as he believed he had no taxable income. After receiving notices and the assessment order, he handed all documents to his tax consultant for necessary compliance. According to the affidavit, he later discovered, following adjustment of refunds for subsequent assessment years against the outstanding demand, that the consultant had passed away without taking any action on the assessment or filing an appeal. After collecting the papers and the consultant’s death certificate, he engaged another tax consultant and filed the appeal. He maintained that the delay was not deliberate but resulted from circumstances beyond his control and requested that the matter be decided on merits so that the correct tax liability, if any, could be determined.

The written submissions also included a computation showing indexed cost of acquisition for both properties, the assessee’s respective ownership shares, and the claim of exemption under Section 54 for purchase of a flat, resulting in a claim that the total long-term capital gains were nil.

The Tribunal also considered the assessee’s application for condonation of delay, wherein he reiterated that all income tax notices and orders had been entrusted to the tax consultant, who failed to comply with notices or file an appeal. He further explained that, owing to lack of digital knowledge, he relied entirely on the consultant for handling his tax matters. He came to know of the consultant’s death only after enquiring into the adjustment of his income tax refunds. He asserted that the delay was not attributable to him and sought an opportunity to present his case on merits before the Assessing Officer.

After considering the submissions, the Tribunal observed that there had been no proper compliance before the Assessing Officer, resulting in an ex parte assessment, while the appeal before the CIT(A) had been dismissed solely on the ground of delay. The Tribunal held that the delay ought to have been condoned as sufficient cause existed. In the interest of justice and fair play, it set aside the order of the CIT(A) and remanded the matter to the Assessing Officer for a de novo assessment. The Tribunal directed that the assessee be granted a reasonable opportunity of being heard, permitted to make further submissions in support of the relief claimed, and cautioned not to seek unnecessary adjournments. The appeal was partly allowed for statistical purposes.

FULL TEXT OF THE ORDER OF ITAT KOLKATA

This appeal filed by the assessee is against the order of the Commissioner of Income Tax (Appeals)-NFAC, Delhi [hereinafter referred to as Ld. ‘CIT(A)1 passed u/s 250 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) for AY 2014-15 dated 17.11.2025.

2. The assessee is in appeal before the Tribunal raising the following grounds of appeal:

“1. That on the facts and circumstances of the case the Ld. C.I.T (A) erred in rejecting the Appeal of the Appellant as there was delay of 1439 days in filing the Appeal and the person who had represented the Appeal before the Ld. CIT (A) had failed to explain properly the reasons behind the delay in filing the Appeal before the Ld. CIT (A), the same has been fully explained in the enclosed Affidavit duly sworn before the Notary Public explaining therein the reason of delay in filing the Appeal before the Ld. CIT (A). On perusal of the said Affidavit it will be seen that your Appellant was prevented by reasonable causes for non-filing the Appeal within the stipulated time which were not properly explained before the Ld. CIT (A) during the course of hearing. The Affidavit is being submitted herewith may kindly be considered for the sake of justice.

2. That on the facts and circumstances of the case the Ld. C.LT (A) erred in rejecting the Appeal on the ground of delay in filing the Appeal only without considering the merits of the Appeal, thereby causing injustice to the Appellant.

3. That on the facts and circumstances of the case the Ld. C.I.T (A) has caused a genuine hardship in payment of huge alleged tax liability against there may be a nominal tax liability.

4. That the order passed u/ s.250 of the Act by the Ld. C.I.T.(A) is bad in law.

5. That the Appellant craves leave to submit further grounds or alter, amend or modify the grounds already taken before or at the time of hearing of the Appeal.”

3. Brief facts of the case are that the assessee had not filed the return of income for AY 2014-15. Based on the information regarding the sale of two pieces of land to M/s. Goodluck Merchants Pvt. Ltd., the Assessing Officer (hereinafter referred to as the Ld. ‘AO’) reopened the assessment u/s 147 of the Act and issued a notice u/s 148 of the Act on 20.03.2020, requiring the assessee to file the return of income. Despite the issuance of subsequent notices u/s 142(1) of the Act, the assessee remained totally non-compliant and failed to furnish any details. During the assessment proceedings, the Ld. AO determined that the assessee’s share in the sale consideration of the two properties was 235,14,988/- and 227,68,982/- based on the stamp duty valuations of Z1,13,49,656/ – and Z1,59,68,754/ – respectively and observing that the assessee had handed over possession to the developer, which constituted a transfer u/s 2(47) r.w.s. 53A of the Act, the Ld. AO applied section 50C of the Act and determined the deemed sale consideration attributable to the assessee at 262,83,970/- and computed the ‘Long-Term Capital Gains’ which was added to the income and the assessment was completed ex-parte u/s 144 r.w.s. 147 r.w.s. 144B of the Act on 21.09.2021 after adding this amount. Aggrieved with the assessment order, the assessee filed an appeal before the Ld. CIT(A), who noted that there was a delay of approximately 1439 days in filing the appeal before him by the assessee, who attributed the delay to the alleged negligence of a deceased tax consultant, lack of digital knowledge, and being non-aware with the notices issued on the e-portal. The Ld. CIT(A) relied upon the Hon’ble Supreme Court’s ruling in Basawaraj and Another v. Special Land Acquisition Officer (2013) 14 SCC 81 and observed that negligence, inaction, or lack of diligence on the part of an assessee or his representative cannot constitute a sufficient cause for condoning such an inordinate delay and holding that the statutory duty to remain vigilant lay with the assessee and that the explanation offered did not demonstrate reasonable steps taken to supervise his tax affairs over the prolonged period, the Ld. CIT(A) refused to condone the delay of 1439 days and dismissed the appeal in limine as being barred by limitation and confirmed the action of the Ld. AO.

4. Aggrieved with the order of the Ld. CIT(A), the assessee has filed the appeal before the Tribunal.

5. Rival contentions were heard and the submissions made have been examined. It was submitted by the Ld. AR that the assessment was reopened as the assessee was found to have sold 2 pieces of land along with other parties. As there was no compliance to the notice issued, the share of the assessee as per the market value was added to the total income by invoking the provision of section 50C of the Act. The land was sold to M/s Goodluck Merchants Pvt. Ltd. and as the possession had also been handed over to the developers, therefore, the capital gains was charged. However, the entire sale consideration received by the assessee and as worked out on the basis of the market value, was added to the income and apparently no indexed cost of acquisition was allowed. In the course of the appeal, the assessee has filed the written submission in which after claiming the exemption under section 54F for the flat purchase for 9,09,020/-, the long-term capital gain has been worked out at nil. The written submission filed is as under:

BEFORE THE HON’BLE “D” BENCH, I. T.A. T. KOLKATA, IN THE CASE OF
SRI SAMARNATH MOIVDAL IN RESPECT OF I.T.A. NO. 367/ KOL/ 2026
FOR THE ASSESSMENT YEAR 2014-15

BRIEF HISTORY & SUBMISSION

The Appellant above named did not file any Income Tax Return for the above Assessment year as he did not have any taxable income.

But the Assessing Officer on the basis of information available in the I.T. Department came to know that the Appellant had sold two pieces of lands along with other parties. On the basis of the said information after taking approval from the competent authority, the A.O. issued to the Appellant Notice u/ s. 148 of the LT. Act, 1961 on 20.03.2020, which was although served on him but there was no response. Thereafter as per Assessment Order although various notices and letters were issued and served on the Appellant there was no single response. Finding no other way the A.O. had completed Assessment u/ s.147r.w.s.144r.w.s.144B of the Act on 21.09.2021 determining Assessed Income at Rs.62,83,970/ – and raising a Demand of Rs.34,46,398/-.

The Appellant vide his Affidavit sworn before the Notary Public of India, which has been enclosed along with this Appeal has confessed that all the papers, which were received from the office of the A.O. from time to time were handed over for taking necessary and timely action to one Mr. CHIRANJIB DAS of 4/2A, Raja Ram Mohan Sarani, P.S. Amherst Street, Kolkata-700009, to whom the Appellant believed blindly and who also assured him for doing the needful in the matter for which he was paid his fees, filing fees of Appeal etc. In the middle of June,2025, when the adjustment of Refunds for the Assessments 2023-24 & 2024-25 were made by the Department against the Demand for the A.Y. 2014- 15, the Appellant could understand there was something wrong. To clarify the issue he went to the house of Mr. Chiranjib Das and came to know about his sudden death, collected all the papers given to him and his Death Certificate from his wife. Thereafter he was in search of a reliable Tax Consultant through his friend circle and about after a month he was able to find out a reliable Tax Consultant who had helped him to file an Appeal. Thus there was about 1439 days delay in filing the Appeal for which one Petition for condonation of delay, although was filed, but the Ld. CIT (A) has dismissed the Appeal with the following remarks, “Based on the foregoing the Appeal filed by the appellant stands dismissed and the addition made by the AO is upheld.”

In view of the facts stated herein above, it is prayed that the delay of 1349 days in filing the Appeal before the Ld. CIT (A) was not deliberate, it was due to some unexpected situation which was beyond the imagination and controlled of the Appellant, hence for the sake of justice, the Appellant’s case may kindly be considered sympathetically so that an opportunity may kindly be allowed for determining the correct income and tax, if any payable thereon.

In this connection, your kind attention is drawn to the decision of the Hon’ble Supreme Court in the case of Collector, Land Acquisition, Shri A. Manoharan Vs Katiji and Others (1987) 167ITR 471 (SC) wherein the Apex Court observed as follows:

1. Ordinarily a litigant does not stand to benefit by lodging an appeal late.

2. Refusing to condone delay can result in a meritorious matter being thrown out at the very threshold and cause of justice being defeated. As against this when delay is condoned the highest that can happen is that a cause would be decided on merits after hearing the parties.

3. “Every day’s delay must be explained” does not mean that a pedantic approach should be made. Why not every hour’s delay, every second’s delay? The doctrine must be applied in a rational common sense pragmatic manner.

4. When substantial justice and technical considerations are pitted against each other, cause of substantial justice deserves to be preferred for the other side cannot claim to have vested right in injustice being done because of a non-deliberate delay.

5. There is no presumption that delay is occasioned deliberately, or on account of culpable negligence, or on account of mala fides. A litigant does not stand to benefit by resorting to delay. In fact, he runs a serious risk.

6. The A.O. has computed the Long Term Capital Gain of the Appellant at Rs.62,83,970/ – against his share of sales proceeds on sale of 2 plots of ancestral properties. While computing the said income the A.O. had not allowed the Indexation Cost of Acquisition, which he is legally entitled. After taking into consideration the Index Cost of Acquisition his share of LTCG, as per Approved Valuer’s Report works out as under:

5.1 The Ld. AR submitted that since no capital gains is chargeable and the delay had occurred on account of circumstances as mentioned in the application seeking condonation of delay; therefore, the same maybe condoned for appeal filed before the Ld. CIT(A) and the matter may be remanded to the Ld. AO for fresh adjudication. The Ld. DR relied upon the order of the Ld. CIT(A) and requested that the same may be upheld. The assessee has filed an application along with an affidavit justifying the condonation of delay before the Ld. CIT(A). The contents of the application are as under:

Condonation of delay
SAMAR NATH MONDAL BMSPM8601A AY-2014-15

1. That appellant has no taxable income so that he did not file any return for A.Y 2014-15. The appellant had filed its IT return for the AY-2015-16 for the first time on 14.03.2016 through a tax consultant since then he was authorized to deal with your appellant’s IT matter and handed over all income tax notices, order, etc received from IT Department for necessary compliance in due time but the said consultant had not complied any notices keeping me in dark. The impugned assessment was received on 21.09.2021 which was handed over to him but he did not file any appeal or even represented the case before the Id AO resulting ex-parte order u/s 144/147. Thus, the cause for delay was beyond the control of the appellant.

2. That your appellant due to lack of digital knowledge was not following the e-portal where all the notices and assessment were served. All the notices were issued by IT Department and on receiving of the same notices were forwarded to my Tax consultant for necessary compliance to the I.T department.

3. That your appellant had received the hard copy of the assessment order or demand notice u/s 156 of the Act through registered post and handed over to the Tax consultant who was authorized to deal with the same. Few days before I went to the Tax consultant office to enquire about my IT matters position and wanted to know why my IT refunds for the AY- 2023-24 & AY 2024-25 have been adjusted with demand but his wife told me that he has expired and given me the copy of the demand notice and penalty orders. It is evident from the order that the Tax consultant had not moved my case either to appeal nor complied to all notices during scrutiny proceedings. I have no option than to depend on a legal consultant as I am not aware of I.T. matters and if the Tax consultant does not do his job, the appellant cannot be held responsible. Thus, there is a delay in filing the present appeal which is not attributable to your appellant and hence may be condoned for 1470 days.

That appellant further prays before your good self that due to negligence of the earlier consultant, the receipt of the impugned assessment order and notices, shall not be penalized and allow to submit his arguments regarding the addition so made for investment so deposited into his bank account. Thus, it is preyed that delay in filing the appeal against the impugned assessment order maybe condoned as your appellant could not make any representation before the ld AO at the time of assessment proceedings. It is well settled in law that if the tax is not legitimately due, an assessee cannot be made to pay the tax. It is the AO’s responsibility to collect tax as per the Income Tax Act. It must only collect legitimate tax due, not what is not due. In order to be fair and follow the principle of natural justice, your appellant seek a chance to explain the sources of the deposits which can only be done if the appeal is admitted and the delay is condoned.

6. We have considered the submissions made, gone through the facts of the case and perused the record and the order of the Ld. CIT(A). Since there was no proper compliance before both the Ld. AO as the assessment order is ex parte and the appeal was dismissed by the Ld. CIT(A) on account of delay which ought to have been condoned as there was sufficient cause; therefore, in the interest of justice and fair play it was considered by the Bench that the request of the assessee to set aside the order of the Ld. CIT(A) and remand the assessment proceeding before the Ld. AO may be allowed so that a proper opportunity of being heard may be provided. Hence, after examining the facts of the case, we deem it appropriate to set aside the order of the Ld. CIT(A) and remand the matter to the Ld. AO for making the assessment de novo. Needless to say, the assessee shall be given a reasonable opportunity of being heard to make any further submission he wants to make in support of the relief claimed and shall not seek unnecessary adjournments. Accordingly, the grounds taken by the assessee in the appeal are partly allowed for statistical purposes.

7. In the result, the appeal filed by the assessee is partly allowed for statistical purposes.

Order pronounced in the open Court on 9th June, 2026.