247-Day Delay Not Inordinate Where Sufficient Cause Shown: ITAT Bangalore

Malavagoppa Hallapa Sharath Vs ITO (ITAT Bangalore)

Summary: The assessee, Malavagoppa Hallapa Sharath, challenged the order of the CIT(A)/NFAC, Delhi dated 27.10.2025 for AY 2022-23, whereby the appeal against penalty proceedings under section 271AAC(1) of the Income-tax Act, 1961 was dismissed without condoning a delay of 247 days. The penalty was Rs. 2,48,433 and arose from additions of Rs. 31,85,040 under section 69A.

Before the Tribunal, the assessee submitted that he was a farmer from a rural area and had handed over the matter to an income-tax professional for filing the necessary submissions. According to the assessee, the professional did not file submissions before the Assessing Officer, resulting in a best-judgment assessment. The assessee stated that he became aware of the non-compliance only when his current Chartered Accountant accessed the e-filing portal in April 2025, after which immediate steps were taken to file the appeal. The assessee therefore contended that the delay was neither deliberate nor intended to secure any advantage.

The Revenue opposed condonation, pointing out that the assessee had neither appeared before the Assessing Officer nor filed the appeal before the CIT(A)/NFAC within the prescribed period, which, according to the Revenue, demonstrated carelessness.
The ITAT Bangalore examined whether the assessee had shown sufficient cause for the 247-day delay. It accepted the explanation and found no mala fide intention. The Tribunal emphasised that delay may be condoned where sufficient and reasonable cause is established and that the explanation must be examined pragmatically rather than mechanically.

The Tribunal relied on the Supreme Court decision in Collector, Land Acquisition v. Mst. Katiji and Ors. (167 ITR 471), which lays down principles favouring substantial justice over technical considerations where delay is not deliberate or mala fide. The Tribunal reproduced the six principles from that decision, including that refusal to condone delay may defeat a meritorious matter at the threshold and that “every day’s delay must be explained” does not require a pedantic approach.

The Tribunal further referred to People Education & Economic Development Society v. ITO, 100 ITD 87 (Chennai) (TM), for the proposition that substantial justice should be preferred over technical considerations in cases of non-deliberate delay. It also considered CIT v. K.S.P. Shanmugavel Nadai and Ors., 153 ITR 596 (Madras), where nearly 21 years’ delay had been condoned when sufficient and reasonable cause existed. In comparison, the Tribunal held that 247 days could not be regarded as excessive or inordinate. It noted that the Chennai Tribunal in People Education and Economic Development Society had also condoned a delay exceeding 600 days.

Accordingly, the Tribunal condoned the 247-day delay and admitted the appeal before the CIT(A)/NFAC for adjudication. Since the assessee had also requested a video-conference hearing if an adverse view was proposed, but the CIT(A)/NFAC had not provided such an opportunity, the Tribunal considered it appropriate, in the interest of justice, equity and fair play, to remit the entire disputed issue to the CIT(A)/NFAC for fresh decision on merits in accordance with law. The CIT(A)/NFAC was directed to grant a reasonable opportunity of being heard. The assessee was directed to cooperate and submit all necessary information, evidence and documents.
The appeal was therefore partly allowed for statistical purposes. The Tribunal did not finally adjudicate the merits of the section 271AAC penalty or the underlying section 69A addition; those issues were restored to the CIT(A)/NFAC for fresh adjudication.
Cases Discussed

• Collector, Land Acquisition v. Mst. Katiji and Ors. (167 ITR 471)
• Concord of India Insurance Co. Ltd. Vs. Smt. Nirmala Devi and Others, 118 ITR 507 (SC)
• Radha Krishna Rai Vs. Allahabad Bank & Others, [2009] 9 SCC 733
• People Education & Economic Development Society Vs. ITO, 100 ITD 87 (Chennai) (TM)
• CIT vs. K.S.P. Shanmugavel Nadai and Ors., 153 ITR 596 (Madras)
• CIT v. ISRO Satellite Centre, ITA No. 532 of 2008

FULL TEXT OF THE ORDER OF ITAT BANGALORE

This appeal at the instance of the assessee is directed against the order of the ld. CIT(A)/NFAC, Delhi dated 27.10.2025 vide DIN & Order No. ITBA/NFAC/S/250/2025-26/1082021663(1) passed u/s 250 of the Income Tax Act, 1961 (in short “the Act”) for the assessment year 2022-23.

2. The assessee has raised the following grounds of appeal:-

1. The order passed by the Commissioner of Income Tax, National Faceless Appeal Centre (“CIT(A)”), under section 250 of the Income Tax Act, 1961 (“the Act”) dated 27.10.2025 insofar as it is against the Appellant, is opposed to law, weight of evidence, natural justice and preponderance of probabilities on the facts and circumstances of the Appellant’s case.

2. The CIT(A) erred in law and on facts in not condoning the delay which arose in iling the appeal on the facts and circumstances of the case.

3. The notice issued under section 271AAC(1) of the Act is non est and bad in law on the facts and circumstances of the case.

4. The order passed under section 271AAC(1) of the Act non est and bad in law on the facts and circumstances of the case.

5. The order passed under section 271AAC(1) of the Act is barred by limitation on the facts and circumstances of the case.

6. The impugned proceedings are conducted assuming proper jurisdiction on the facts and circumstances of the case.

7. The appropriate sanction necessary for passing the impugned penalty order was not accorded and consequently, the impugned order is vitiated on the facts and circumstances of the case.

8. The appropriate procedure necessary for passing the impugned penalty order was not followed and consequently, the impugned order is vitiated on the facts and circumstances of the case.

9. The Appellant denies himself to be liable to a penalty of Rs. 2,48,433/- under the facts and circumstances of case.

10. The authorities below failed to appreciate that the additions made under section 69A of the Act amounting to Rs. 31,85,040/- is bad in law and consequently, no penalty ought to be levied under section 271AAC(1) of the Act on the facts and circumstances of the case.

The Appellant craves to add, alter, modify, substitute, change and delete any or all of the grounds and to file a paper book at the time of hearing the appeal.

In the view of the above and other grounds that may be urged at the time of the hearing of appeal, the Appellant prays that the appeal may be allowed in the interest of justice and equity.

3. At the outset, the ld. A.R. of the assessee drew our attention to the order of the ld. CIT(A)/NFAC dated 27.10.2025 and vehemently submitted that the ld. CIT(A)/NFAC dismissed the appeal of the assessee by not condoning the delay of 247 days in filing the appeal. The ld. A.R. of the assessee also drew our attention to an application for condonation of delay filed before the ld. CIT(A)/NFAC stating therein the reasons for the delay, which are reproduced below for ease of reference and convenience:-

BEFORE THE HON’BLE COMMISSIONER OF INCOME TAX (APPEALS),

NATIONAL FACELESS APPEALS CENTRE

APPLICATION FOR CONDONATION OF DELAY

The Appellant above named most respectfully submits as follows:

1. An order was passed under section 271AAC(1) of the Income Tax Act, 1961 (“the Act”) by the Assessment Unit, National Faceless Penalty Centre (“the Assessing Officer”) for the impugned Assessment Year (“AY”) 2022-23 on 23.07.2024.

2. It is submitted that the appeal before your honors ought to have been filed within 30 days of the order i.e., on or before 22.08.2024. However, the appeal was filed only on 26.04.2025 and consequently a delay of 247 days, from 23.08.2024 to 26.04.2025 arose in filing the impugned appeal.

3. In this regard, it is submitted that the Appellant had handed over the brief to an Income Tax Professional for filing necessary submissions and had also forwarded the notices received for doing the needful. However, the said professional did not file any submissions before the learned Assessing Officer and the assessment proceedings were concluded under best judgment assessment. A copy of the screenshot for having forwarded the notice is enclosed and marked as Annexure – A.

4. The Appellant came to be aware of the said non-compliance only when the current Chartered Accountant of the Appellant logged in to the e-filing portal in the month of April, 2025, pursuant to which immediate steps were taken to file the present appeal.

5. In view of the above submissions, it is contended that the delay was neither intentional nor deliberate and arose due to the aforementioned circumstances which were beyond the appellant’s control, and consequently, it is prayed that the delay be condoned and the appeal be adjudicated on the merits of the matter in the interest of justice and equity.

6. It is humbly submitted that if this application for condonation of delay in filing the appeal is not allowed, the appellant would be put to great hardship and irreparable injury and on the other hand no hardship or injury would be caused to the Respondents if this application of condonation of delay is allowed. Reliance is placed on the decision of the Hon’ble Apex Court in the case of Collector, Land Acquisition vs. MST Katiji and Others [1987] 167 ITR 471 and also in the case of Concord of India Insurance Co. Ltd., Vs Smt. Nirmala Devi and Others 118 ITR 507. Further the appellant relies on another decision of the Hon’ble Apex Court in the case of Radha Krishna Rai Vs. Allahabad Bank & Others [2000] 9 Supreme Court Cases 733.

7. Reliance is also placed on the unreported decision of the Hon’ble Jurisdictional High Court in the case of CIT & Another Vs. ISRO Satellite Center, in ITA No. 532 of 2008 and other batch of appeal order dated 28.10.2011 has condoned the delay of 5 years in filing the appeal before the CIT(A), the relevant observation is at para 28 page 72 of the order.

8. Wherefore, it is once again humbly prayed that the delay of 247 days may kindly be condoned for the advancement of substantial cause of justice and equity. It is further prayed if an adverse view were to be taken, an opportunity of hearing be granted in the interest of equity, justice and principles of natural justice.

Date: 29.09.2025
Place: Shivamogga

Sd/-
Appellant

4. Before us, the ld. AR of the assessee reiterated the same as stated in the condonation application & vehemently submitted that the assessee could not file the appeal within the prescribed period for the reason that the assessee being a farmer & belongs to rural area had handed over the case to an I.Tax professional for filing the necessary submissions and had also forwarded the notices received for doing the needful. However, the said professional did not file any submissions before the A.O. and the assessment proceedings were concluded under the best judgment assessment. Further, the ld. AR of the assessee stated that the assessee came to be aware of the said non-compliance only when the current Chartered Accountant of the assessee logged into the e-filing portal in the month of April, 2025, pursuant to which immediate steps were taken to file the present appeal. The ld. A.R. also submitted that the delay is unintentional and no benefit can be attributed to the assessee in filing the appeal belatedly. He thus prayed to condone the delay and requested to consider the issues raised by the assessee on merits.

5. On the contrary the ld. D.R. objected for granting the condonation of delay and submitted that the assessee had neither appeared before the AO nor filed the appeal before the ld. CIT(A)/NFAC within the prescribed period which clearly demonstrate the careless attitude of the assessee.

6. We have perused the details filed by the assessee to justify the delay and we are satisfied that there is no malafide intention on the part of the assessee in filing the appeal belatedly before the ld. CIT(A)/NFAC. In our considered opinion, the assessee had demonstrated sufficient cause in filing the appeal belatedly before the ld. CIT(A)/NFAC. It is to be noted that delay in filing the appeal may be condoned where it has established that there exists a sufficient cause on the part of the assessee for not presenting the appeal within the prescribed time. The explanation therefore, becomes relevant to determine whether the same reflect sufficient and reasonable cause on the part of the assessee in not filing the appeal within the prescribed time. We have gone through the reasons explained by the assessee in which the main contention of the assessee is that the assessee being a farmer & hailed from Rural area had handed over the case to an income tax professional for filing the necessary submissions and had also forwarded the notices received for doing the needful. However, the said professional did not file any submissions before the A.O. and the assessment proceedings were concluded under the best judgment assessment. Further, the ld. AR of the assessee stated that the assessee came to be aware of the said non-compliance only when the current Chartered Accountant of the assessee logged into the e-filing portal in the month of April, 2025, pursuant to which immediate steps were taken to file the present appeal.

6.1 While considering a similar issue the Apex Court in the case of Collector, Land Acquisition v. Mst. Katiji and Ors. (167 ITR 471) laid down six principles. For the purpose of convenience, the principles laid down by the Apex Court are reproduced hereunder:

(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 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, commonsense and pragmatic manner.

(4) When substantial justice and technical consideration are pitted against each other, the 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 nondeliberate 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) It must be grasped that the judiciary is respected not on account of its power to legalise injustice on technical grounds but because it is capable of removing injustice and is expected to do so.

6.2 When substantial justice and technical consideration are pitted against each other, the cause of substantial justice deserves to be preferred, for the other side cannot claim to have vested right for injustice being done because of nondeliberate delay. Therefore, we have to prefer substantial justice rather than technicality in deciding the issue. As observed by Apex Court, if the application of the assessee for condoning the delay is rejected, it would amount to legalize injustice on technical ground when the Tribunal is capable of removing injustice and to do justice. Therefore, this Tribunal is bound to remove the injustice by condoning the delay on technicalities. If the delay is not condoned, it would amount to legalizing an illegal order which would result in unjust enrichment on the part of the State by retaining the tax relatable thereto. Under the scheme of Constitution, the Government cannot retain even a single pie of the individual citizen as tax, when it is not authorized by an authority of law. Therefore, if we refuse to condone the delay, that would amount to legalize an illegal and unconstitutional order passed by the lower authority.

6.3 Further, in the case of People Education & Economic Development Society Vs/ ITO reported in 100 ITD 87 (TM) (Chen), wherein held that “when substantial justice and technical consultation are pitted against each other, the cause of substantial justice deserves to be preferred for the other side cannot claim to have vested right in injustice being done because of non-deliberate delay”.

6.4 The next question may arise whether delay was excessive or inordinate. There is no question of any excessive or inordinate when the reason stated by the assessee was a reasonable cause for not filing the appeal. We have to see the cause for the delay. When there was a reasonable cause, the period of delay may not be relevant factor. In fact, the Madras High Court in the case of CIT vs. K.S.P. Shanmugavel Nadai and Ors. (153 ITR 596) considered the condonation of delay and held that there was sufficient and reasonable cause on the part of the assessee for not filing the appeal within the period of limitation. Accordingly, the Madras High Court condoned nearly 21 years of delay in filing the appeal. When compared to 21 years, 247 days cannot be considered to be inordinate or excessive. Furthermore, the Chennai Tribunal by majority opinion in the case of People Education and Economic Development Society (PEEDS) v. ITO (100 ITD 87) (Chennai) (TM) condoned more than six hundred days delay. Therefore, in our opinion, by preferring the substantial justice, the delay of 247 days has to be condoned and accordingly we condone the delay in filing the appeal before the ld. CIT(A)/NFAC and admit the appeal for adjudication.

7. Now having condoned the delay in filing the appeal before the ld. CIT(A)/NFAC, we also observed that the assessee had categorically requested for VC if any adverse view is taken by the ld. CIT(A)/NFAC while passing the Appellate Order, however, the same was also not provided by the ld. CIT(A)/NFAC stating that the assessee cannot make such conditional request. This being so, in the interest of justice, equity and fair play and as requested by ld. A.R. of the assessee, we deem it fit and proper to remit the entire issue in dispute to the file of ld. CIT(A)/NFAC to decide afresh on merit of the case in accordance with the law. Needless to say, a reasonable opportunity of being heard must be granted to the assessee. The assessee is also directed to cooperate with the appellate proceedings and submit all the necessary information/evidences/documents to substantiate his claim. It is ordered accordingly.

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

Order pronounced in the open court on 17th Aug, 2026