Ajay Kumar Vs ITO (ITAT Delhi)
Abroad Without Tax Advice: ITAT Condones 783-Day Appeal Delay
Non-Resident Gets an Opportunity to Contest Penalty
The Delhi Tribunal condoned a 783-day delay in filing a first appeal after accepting the assessee’s explanation that he had been living abroad and had not obtained professional advice concerning the appeal.
The CIT(A) had refused condonation and dismissed the appeal without admitting it. The Tribunal found that the explanation constituted sufficient cause, particularly because the Revenue had brought no contrary material to rebut the circumstances stated by the assessee.
The matter was restored to the CIT(A) for fresh adjudication after providing an effective opportunity of hearing.
The relief concerns admission and hearing of the delayed appeal. The Tribunal did not decide whether the underlying penalty was justified.
Cash Deposit Assessment Followed by Penalty
According to the assessee’s affidavit reproduced in the order, an ex-parte reassessment under section 147 had been made on the basis of a cash deposit of ₹11 lakh.
The affidavit referred to a consequential tax demand of ₹1,87,460 and a penalty under section 271(1)(c) at 100% of that tax, amounting to another ₹1,87,460.
The penalty order was dated 15 March 2022.
The assessee sought to challenge the penalty before the CIT(A), but the appeal was filed after a delay of 783 days. By an order dated 20 March 2025, the CIT(A), NFAC, Delhi, refused to condone the delay and dismissed the appeal.
The assessee then approached the Tribunal, where he appeared in person.
Residence Abroad and Lack of Counsel Explain the Delay
The assessee stated on oath that he had been a non-resident since 2005 and was living in the United States.
He explained that he had not obtained professional assistance while abroad. During a visit to India in March, he consulted a tax professional and was advised to file an appeal for relief.
By then, the appeal period had expired. He therefore filed the appeal along with an application seeking condonation.
His explanation attributed the delay to the hardship of being a non-resident and lack of legal counsel concerning the appeal. He also stated that he had no intention of prejudicing the Revenue by delaying the proceedings.
The Tribunal’s order does not specify the year of the March visit in the reproduced affidavit. The explanation should therefore be reported without supplying an assumed date.
CIT(A) Finds the Explanation Insufficient
The CIT(A) was not satisfied that the circumstances explained the delay and refused to admit the appeal.
Before the Tribunal, the assessee requested that the delay be condoned and the matter returned to the first appellate authority for consideration after a proper hearing.
The Revenue supported the CIT(A)’s order. It argued that the assessee had not established sufficient cause for filing the appeal so late and that the rejection required no interference.
The dispute before the Tribunal was consequently whether the explanation warranted condonation of the delayed first appeal.
Katiji Principles Support Consideration on Merits
The Tribunal referred to the Supreme Court’s decision in Collector, Land Acquisition v. Mst. Katiji & Ors. (1987) 167 ITR 471 (SC).
It drew support from the principle that “sufficient cause” should be understood in a manner that advances substantial justice. The order also referred to the considerations that a litigant ordinarily gains no advantage by filing an appeal late and that refusing condonation may prevent a potentially meritorious dispute from being heard.
The Tribunal emphasised that procedural technicalities should serve the administration of justice and should not defeat substantive rights in an appropriate case.
These principles were applied to the assessee’s explanation and the evidentiary position before the Bench.
Unrebutted Explanation Accepted as Sufficient Cause
The Tribunal expressly found that the explanation furnished by the assessee constituted sufficient cause for condoning the delay.
It noted that the Revenue had placed no contrary material on record to rebut the assessee’s assertions concerning the circumstances responsible for the delayed filing.
Considering the facts and the legal principles discussed, the Tribunal held that this was a fit case for condonation.
It therefore set aside the CIT(A)’s order, condoned the 783-day delay, and restored the matter for a fresh decision after effective opportunities of hearing.
The assessee was directed to present his case before the CIT(A) within 60 days of the Tribunal’s order. The appeal was allowed for statistical purposes.
Author’s Comments
The decision provides relief against a procedural rejection, while leaving the penalty dispute open. Condonation does not amount to cancellation of the penalty or acceptance of the explanation for the ₹11 lakh cash deposit.
The ruling is also fact-specific. It should not be read as establishing that residence abroad automatically excuses every delayed appeal. The Tribunal accepted the particular sworn explanation before it and noted the absence of contrary material.
For the restored proceedings, the assessee must now substantiate his case concerning the penalty and comply with the 60-day direction. The opportunity secured through condonation must be followed by timely participation and supporting evidence.
The delay was forgiven; the merits still have to be established.
Cases Discussed
- Collector, Land Acquisition, Anantnag v. Mst. Katiji & Ors., (1987) 167 ITR 471 (SC); Civil Appeal No. 460 of 1987; Supreme Court; judgment dated 19.02.1987 — relied upon for the liberal, justice-oriented interpretation of “sufficient cause” and for condoning delay so that the dispute may be decided on merits.
FULL TEXT OF THE ORDER OF ITAT DELHI
The appeal of the assessee is directed against the order dated 20.03.2025 of ld. CIT(A)/NFAC, Delhi passed u/s 250 of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’) wherein the appeal has been dismissed while refusing condonation of delay of 783 days in filing the appeal by the assessee/appellant.
2. At the time of hearing, ld. AR for the assessee submitted that ld. CIT(A) has dismissed the appeal of the assessee on account of limitation. However, the assessee filed the application for condonation of delay before the ld. CIT(A) stating that sufficient cause has been shown by the assessee in filing the belated appeal, but the ld. CIT(A) was not satisfied with the explanation given for the delay and concluded that the assessee/appellant has failed to show sufficient cause for condonation of delay and accordingly the appeal was dismissed. Therefore, ld. AR for the assessee requested to condone the delay of 783 days and remit back the issues to the file of the ld. CIT(A) for fresh adjudication, after giving adequate opportunity of being heard to the assessee.
3. Per contra, Ld. DR relied upon the orders of the authorities below and submitted that the no sufficient cause has been attributed to the assessee for filing the belated appeal before the ld. CIT(A), hence, the ld. CIT(A) did not condone the delay in dispute and rightly dismissed the appeal of the assessee, which does not need any interference.
4. We have heard both the parties and perused the material available on record. We noticed that the Hon’ble Supreme Court in the case of Collector, Land Acquisition Vs. MST. Katiji & Ors. (1987) 167 ITR 471 (SC), was pleased to hold regarding the condonation of delay as under:
“The Legislature has conferred the power to condone delay by enacting section 51 of the Limitation Act of 1963 in order to enable the courts to do substantial justice to parties by disposing of matters on de merits”. The expression “sufficient cause” employed by the Legislature is adequately elastic to enable the courts to apply the law in a meaningful manner which subserves the ends of justice that being the life-purpose of the existence of the institution of courts. It is common knowledge that this court has been making of justifiably liberal approach in matters instituted in this court. But the message does not appear to have percolated down to all the other courts in the hierarchy.
And such a liberal approach is adopted on principle as it is realized that:
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.”
5. It is an admitted fact that the delay of 783 days was not condoned by the ld. CIT(A) and thus the appeal of the assessee was dismissed being not admitted by the ld. CIT(A).
6. We now proceed to extract the explanation furnished by the assessee seeking condonation of delay before the first appellate authority, which finds mention in para 4 of the impugned order and is extracted below as under:
“I, Ajay Kumar identified by PAN BFBPK6212B do solemnly affirm and state on oath as under:
2) That I received a Penalty Order for the assessment year 2012-13 under section 271(1)(c) of the Income Tax Act 1961 dated 15-03-2022.
3) That as per the said order, ex-parte assessment u/s 147 based on cash deposit of11,00,000 was made and a consequential demand of Rs. 1,87,460 has been computed and penalty @ 100 percent of Tax i.e. Rs.1,87,460 has been raised.
4) That I was Non-resident since 2005 and hence I could not seek any professional help while I was in USA. This year I visited India in March and consulted Tax consultant to file an appeal before the Hon’ble CIT(A) for relief.
5) That I was advised by the legal consultant to file an appeal before the Hon’ble CIT(A) for relief but the appeal has already become barred by time limitation. Nevertheless the appeal was filed before this Hon’ble CIT(A) on date accompanied by an application for condonation of delay as provided under section 5 of the LIMITATION ACT, 1963.
6) That in this way there is a delay two years for which an application under Section 5of the Limitation Act has been filed along with memorandum of appeal.
7) That delay in filing the appeal is because of a genuine hardship of being non-resident and lack of legal counsel related to appeal.
8) That I had no intention of jeopardizing the interest of the revenue by delaying the filing of the appeal.”
7. It is settled law that the technicalities are hand-made of justice and the substantial rights of an assessee should not be defeated because of the technicalities. In our opinion, the explanation given by the assessee was sufficient cause for condoning the delay in filing the appeal as no contrary material is brought on record by the Revenue to the assertion made by the assessee regarding condoning the delay in filing the appeal.
8. In the given facts and circumstances and in view of the settled legal position, we are of the considered view that it was a fit case for condonation of delay because the explanation given by assessee before the ld. CIT(A) was sufficient and justified. For these reasons, the impugned appellate order is set aside. Hence, we deem it expedient to condone the delay in dispute and restore the matter back to the file of the ld. CIT(A) for deciding the issues afresh, after giving effective opportunities of hearing to the assessee. The assessee/appellant is directed to present its case within 60 days of passing of this order before the Ld. CIT(A).
9. In the result, the appeal of the assessee is allowed for statistical purposes.
Order Pronounced in the Open Court on 05/10/2026.
