648-Day Delay Condoned, Income Tax Appeal Restored to CIT(A): ITAT Bangalore

Ravipati Sunil Kumar Vs ITO (ITAT Bangalore)

Summary

The Income Tax Appellate Tribunal (ITAT), Bangalore, SMC Bench, decided the appeal filed by the assessee against the order dated 10.01.2024 passed by the Addl./JCIT(A)-2, Delhi under Section 250 of the Income Tax Act, 1961 for Assessment Year 2014-15. The appeal before the Tribunal arose from an assessment order passed under Sections 143(3) read with 147 of the Act.

Material Facts

The assessee challenged the reassessment and the appellate order on several grounds. The grounds included objections to the reopening under Sections 147 and 148, the alleged absence of valid “reason to believe,” and the addition of ₹4,14,94,367/- made by the Assessing Officer. The assessee contended that the addition represented capital introduced while he was residing and working in the United Arab Emirates and that he possessed sufficient sources of investment. The assessee also challenged the addition of 30% of the capital introduced, contending that it was made without proper legal basis and without supporting evidence, and alleged violation of principles of natural justice.

Before the Tribunal, however, the primary issue initially considered was the delay of 648 days in filing the appeal.

Procedural Background

The assessee submitted an application dated 22.12.2025 seeking condonation of the delay of 648 days. Along with the application, death certificates relating to the assessee’s father and father-in-law were produced.

In the condonation application, the assessee stated that:

• the COVID-19 pandemic severely affected his business and normal functioning;
• he suffered personal losses due to the deaths of close family members during the pandemic;
• he was mentally disturbed and unable to concentrate on income-tax proceedings;
• secured creditors initiated recovery proceedings and bank auction proceedings;
• he opted for settlement under DTVSVS-2021 and believed the tax liability had been settled;
• due to mistakes and lack of communication by the consultant’s office, the tax determined under the settlement scheme was allegedly not paid and the appeal remained unattended;
• recovery proceedings later commenced through freezing of his bank account;
• upon learning of the position, he immediately engaged another counsel to pursue the appeal; and
• the delay was neither deliberate nor intentional and deserved to be condoned in the interest of justice.

The assessee also relied upon several judicial decisions in support of liberal condonation of delay.

Key Legal Issues

The Tribunal considered:

• whether the delay of 648 days in filing the appeal before the Tribunal should be condoned; and
• whether the matter required restoration to the first appellate authority for fresh adjudication.

The merits of the reassessment and additions were not adjudicated by the Tribunal.

Principal Submissions

Assessee’s submissions

The assessee argued that sufficient cause existed for condonation of delay owing to:

• disruption caused by the COVID-19 pandemic;
• deaths in the immediate family;
• financial and business difficulties;
• proceedings initiated by secured creditors;
• reliance upon consultants while availing benefits under the Direct Tax Vivad se Vishwas Scheme;
• mistakes committed by the consultant’s office;
• bona fide belief that the tax dispute had been settled; and
• absence of any deliberate intention to delay the appeal.

The assessee further requested that one additional opportunity be granted before the Addl./JCIT(A) because he could not effectively represent his case before the first appellate authority.

Department’s submissions

The Department fairly conceded that the assessee could not properly represent the case before the Addl./JCIT(A). However, it submitted that some cost should be imposed considering the negligence shown by the assessee before the first appellate authority.

Findings

The Tribunal found that the explanation contained in the condonation application was plausible and constituted “sufficient cause” preventing the assessee from filing the appeal within the prescribed period. Accordingly, it condoned the delay of 648 days.

The Tribunal further observed that:

• the Addl./JCIT(A) had granted five opportunities to the assessee;
• no submissions had been filed by the assessee before the first appellate authority;
• the assessee’s appeal before the Addl./JCIT(A) had itself been filed belatedly; and
• according to the assessee, the first appellate authority dismissed the appeal without considering the application for condonation of delay.

Considering the circumstances, the Tribunal held that the matter should be remitted to the Addl./JCIT(A) in the interest of justice, equity and fair play.

Judicial Reasoning

The Tribunal accepted the explanation offered for the delay and concluded that sufficient cause had been established.

While restoring the matter, the Tribunal also noted the negligence displayed by the assessee in responding to statutory notices before the first appellate authority. To account for such negligence, it considered it appropriate to impose a token cost of ₹1,000.

Directions

The Tribunal directed that:

• the delay of 648 days in filing the appeal before the Tribunal stood condoned;
• the entire dispute be restored to the file of the Addl./JCIT(A) for fresh adjudication;
• the Addl./JCIT(A) first consider the assessee’s application for condonation of delay before the first appellate authority and thereafter decide the appeal on merits in accordance with law;
• the assessee deposit ₹1,000 as token cost in favour of the Prime Minister Relief Fund and furnish the receipt before the Addl./JCIT(A);
• reasonable opportunity of hearing be granted to the assessee;
• the assessee produce all relevant documents, records, submissions and information in support of the claim; and
• no further leniency would be available in the event of any subsequent default.

Final Ruling

The Tribunal:

• condoned the delay of 648 days;
• restored the appeal to the file of the Addl./JCIT(A) for de novo adjudication in accordance with law after considering the condonation application;
• imposed token costs of ₹1,000 payable to the Prime Minister Relief Fund; and
• partly allowed the appeal for statistical purposes.

Cases Discussed

• Tejas Karshanbhai Dari Vs. ITO, Ward-5(1)(1), 123 taxmann.com 5 (ITAT Ahmedabad)
• B. Balakrishnan v. M. Krishnamurthy (Supreme Court of India), AIR 1998 SC 3222
• Vijay Vishan Meghani vs. DCIT (Bombay High Court), (2017) 398 ITR 250
• Satvinder Singh vs. Income Tax Officer, Ward-50(4), New Delhi (ITAT Delhi)
• Arova T and D India Ltd. Vs. JCIT, [2006] 287 ITR 555 (Madras High Court)
• Just Steels vs DCIT (2012) 74 DTR (MA) 86
• Oracle India Pvt Ltd vs. Deputy Commissioner of Income Tax (2008) 13 DTR 371
• Darib Deer Mart (P) Ltd. vs. ITO, Ward-6(3), Kolkata (ITAT Kolkata)
• Voltas Ltd. Vs. DCIT [2000] 241 ITR 471 (AP)
• Anant B. Shinde (HUF) Vs. ITO [2014] 42 SOT 12 (Bombay)
• CIT Vs. S. Durairajan [2014] 52 taxmann.com 90 (Madras High Court)

FULL TEXT OF THE ORDER OF ITAT BANGALORE