Xerago E-Biz Services Pvt. Ltd. Vs ITO (ITAT Chennai)
In this case, the assessee’s appeal was dismissed by the CIT(A) as time-barred with a delay of 615 days. The issue involved denial of Foreign Tax Credit (FTC) of ₹26.17 lakh.
Before the ITAT, the assessee demonstrated a detailed chronology showing that:
- Immediately after intimation u/s 143(1), it filed rectification applications.
- It continuously pursued the remedy u/s 154 before CPC and AO.
- The final rejection of rectification and confirmation of demand became known only upon receipt of demand notices in October 2024, after which appeal was promptly filed.
The Tribunal held:
- The delay was not deliberate or due to negligence, but because the assessee was bonafide pursuing an alternative remedy.
- When an assessee is actively pursuing rectification, it constitutes a reasonable cause for delay.
- Moreover, the assessee had a prima facie strong case on merits (claiming FTC and filing Form 67 before intimation).
Accordingly, the ITAT:
- Condoned the delay of 615 days,
- Set aside the CIT(A)’s order, and
- Restored the matter to CIT(A) for adjudication on merits.
FULL TEXT OF THE ORDER OF ITAT CHENNAI
This appeal filed by the assessee is directed against the Addl./JCIT(A), Varanasi order dated 31.10.2025 passed under section 250 of the Income Tax Act, 1961 (hereinafter called ‘the Act’). The relevant Assessment Year is 2021-22.
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