Atiq Ahmad Vs ITO (ITAT Agra)
Delay Rejected, Merits Decided? ITAT Says CIT(A) Cannot Do Both
Limitation Must Be Decided Before the Merits
The Agra Tribunal held that an appellate authority cannot reject an application for condonation of delay and then proceed to decide the same appeal on merits.
In this case, the CIT(A) had dismissed the assessee’s first appeal as time-barred after refusing to condone a delay of approximately 14 days. Nevertheless, the appellate authority also dismissed the appeal on merits.
The Tribunal found this approach contrary to law. It condoned the delay itself and restored the matter to the CIT(A) for a fresh decision on merits.
The ruling addresses the proper sequence of appellate adjudication: first decide whether the delayed appeal can be admitted; then, if admitted, examine the substantive dispute.
A Short Delay Leads to Rejection of the First Appeal
The assessment order was passed under section 143(3) read with section 144B on 7 March 2024.
The assessee filed his first appeal on 20 April 2024, which the Tribunal described as involving a nominal delay of about 14 days.
The CIT(A), NFAC, rejected the request for condonation, observing that the reasons furnished were not satisfactory. By an order dated 10 March 2026, the appeal was dismissed both as time-barred and on merits.
The assessee challenged that order before the Tribunal.
The Tribunal’s order does not reproduce the specific explanation originally furnished for the delay. Its decision therefore should not be presented as acceptance of any particular medical, professional or personal circumstance.
The Underlying Dispute Remains Undecided
The assessee’s grounds before the Tribunal concerned an addition of ₹71,000 under section 69A, an addition of ₹21,738 towards interest, and denial of deduction under section 80TTA in relation to savings-account interest.
Regarding the ₹71,000 addition, the assessee contended that the authorities had incorrectly read his fund-flow statement and that the amount represented a contra entry.
He also disputed the interest addition and asserted that the relevant facts and evidence had not been properly appreciated.
However, the Tribunal did not adjudicate these contentions on merits. It addressed the procedural defect in the CIT(A)’s order and restored the substantive issues for fresh consideration.
Accordingly, the decision does not establish that the ₹71,000 was a contra entry, delete the interest addition, or finally allow the section 80TTA claim.
Condonation Requires a Reasoned Decision
The Tribunal referred to section 249(2), prescribing the appeal period, and section 249(3), empowering the first appellate authority to admit a delayed appeal where sufficient cause is established.
It observed that procedural requirements are intended to advance justice and that parties should ordinarily have an opportunity to participate in adjudication.
On examining the impugned order, the Tribunal found that the CIT(A) had not passed a speaking order rejecting the request for condonation.
Considering the nominal period of delay and the interests of substantial justice, the Tribunal condoned the approximately 14-day delay in filing the first appeal.
This was a completed condonation decision. The CIT(A) was not asked to reconsider whether the appeal should be admitted.
After Refusing Condonation, CIT(A) Cannot Examine Merits
The Tribunal separately considered the CIT(A)’s decision to examine the merits after refusing condonation.
It held that, unless the delay is condoned, the delayed appeal does not legally come into existence for adjudication on merits. Consequently, the appellate authority lacks jurisdiction to decide the substantive controversy after rejecting the condonation request.
The Tribunal referred to Union of India & Anr. v. Jahangir Byramji Jeejeebhoy (D), 2024 SCC OnLine SC 489.
As discussed in the order, limitation is not merely a technical consideration. It rests on public policy and equitable principles, and the length of delay is relevant. At the same time, consideration of condonation must precede examination of the main dispute.
If delay is condoned, the merits may be decided even on the same day. If condonation is refused, the proceedings fail at that stage.
Fresh Merits Hearing Directed
The Tribunal restored the appeal to the CIT(A) and directed a fresh order in accordance with law after considering the assessee’s submissions.
Since the Tribunal had already condoned the delay, the restored proceedings were to concern the merits of the disputed additions and deduction.
The assessee was directed to remain diligent, cooperate with the proceedings and furnish submissions for an effective and expeditious disposal.
The appeal was allowed for statistical purposes.
Author’s Comments
The decision identifies a fundamental procedural inconsistency: an authority cannot refuse admission of a delayed appeal and simultaneously adjudicate its merits. Condonation is the gateway to merits adjudication.
It also highlights the need for a reasoned order when rejecting an explanation for delay. Here, the Tribunal considered the short delay and the absence of a speaking rejection sufficient to grant relief.
However, the ruling should not be read as making every short delay automatically condonable. The Tribunal itself recognised the importance of limitation and the statutory requirement of sufficient cause.
For the assessee, the immediate benefit is a restored opportunity to establish the contra-entry explanation, contest the interest addition and support the deduction claim. Procedural relief has reopened the hearing; substantive relief still requires adjudication.
Cases Discussed
1. Union of India & Anr. Vs Jahangir Byramji Jeejeebhoy (D) (Supreme Court), 2024 SCC OnLine SC 489 — Relied upon for the principle that limitation is founded on public policy and equity; the length of delay is relevant, but the court must decide condonation before embarking upon the merits of the main proceeding. If delay is not condoned, the time-barred proceeding cannot be adjudicated on merits.
FULL TEXT OF THE JUDGMENT/ORDER OF ITAT AGRA
This appeal is directed against the impugned order dated 10.03.2026 passed in appeal No. NFAC/2021-22/10361068 by the ld. Commissioner of Income Tax(Appeals), NFAC, DELHI (hereinafter referred to as the “CIT(A)) u/s. 250 of the Income Tax Act, 1961 (hereinafter referred to as the “Act”) for the A.Y. 2022-23, wherein ld. CIT(A) has dismissed assessee’s appeal as time barred and on merits as well.
2. At the very outset, without going on merits and after hearing the parties, it is noticed that first appeal was filed on 20.04.2024 against the assessment order dated 07.03.2024 passed 143(3) r.w.s. 144B of the Act by a nominal delay of about 14 days. The learned first appellate authority rejected assessee’s prayer for condonation of delay, observing that the reasons stated for condoning the delay are not satisfactory. The learned CIT(A) also proceeded to dismiss the appeal on merits.
2.1 The limitation period for filing appeal before Id CIT(A) u/s 249(2) of the Act is 30 days, however, section 249(3) of the Act empowers the first appellate authority to condone the delay if satisfied that the appellant had sufficient cause for not presenting it within the prescribed period. Ld. CIT(A), however. did not find any sufficient cause to condone the said delay and dismissed assessee’s appeal as time barred and on merits.
3. Aggrieved with the said order, the assessee is in appeal before us on the following grounds:
“1. The CIT(A) has erred in confirming the addition u/s 69A of Rs. 71,000/- (Rupees Seventy One Thousand only) based on erroneous reading of the fund flow statement that clearly showed the said amount as contra entry.
2. The CIT(A) has erred in confirming the addition of interest of Rs. 21,738/- (Rupees Twenty One Thousand Seven Hundred and Thirty Eight only) without appreciation the facts and evidences submitted.
3. The CIT(A) has erred in disallowing the claim of deduction u/s 80TTA for the addition made for interest on saving account.
4. The Appellant craves liberty to add, amend, alter vary and withdraw of any ground of appeal as the circumstances of the case may require at the time of hearing.”
3.1 It is well established principle of law that the substantial justice cannot be denied on technical aberrations. The object of prescribing procedure is to advance the cause of justice. In an adversial justice system like ours, no party should ordinarily be denied the opportunity of participating in the process of justice dispensation. Justice is the goal of jurisprudence. Any interpretation which eludes or frustrates the recipient of justice, is not to be followed. The object of prescribing certain time period for filing of the appeal is to expedite the proceedings before the concerned authorities and to advance the cause of justice. A perusal of the impugned order shows that the learned CIT(A) has not passed a speaking order rejecting the assessee’s request for condonation of nominal delay of about 14 days. Therefore, in the interest of substantial justice and taking into account nominal period of delay in filing the first appeal, we condone the delay caused in filing first appeal before the ld. CIT(Appeals).
4. Further, we note that after declining assessee’s prayer for condonation of delay, learned CIT(Appeals) proceeded to decide the appeal on merit, which is contrary to the law. The law on the subject is well settled that unless the delay is condoned, the appeal does not come into existence legally, and in such absence, the court is wholly without jurisdiction to hear or decide the same on merit.
4.1 Hon’ble Supreme Court in Union of India & Anr. v. Jahangir Byramji Jeejeebhoy (D), 2024 SCC online SC 489, has observed that the question of limitation is not merely a technical consideration. The rules of limitation are based on the principles of sound public policy and principles of equity, that the length of delay is a relevant matter, which the court must take into consideration while considering whether the delay should be condoned or not. The Hon’ble Apex Court has been pleased to hold that while considering the plea for condonation of delay, the court must not start with merits of the main matter. However, the courts are required to condone delay on the bedrock of the principle that adjudication of a lis on merits is seminal to justice dispensation system.
4.2 Thus, the issue of condonation of delay in the proceedings has to be decided at the first instance before delving into the merits of the case. However, if the delay is condoned, there is no bar on the courts to proceed with the case and decide the same on merits on the very day. In the same manner, if the prayer for condonation of delay is rejected, the proceedings will automatically fail. It is, thus, settled that without condoning the delay in filing the appeal, the appellate authority lacks jurisdiction to entertain such time barred appeals.
5. In view of above discussion, we observe that ld. CIT(A) has erred in deciding the matter on merits after declining assessee’s prayer for the condonation of delay caused in filing the first appeal. We thus, restore the matter back to the file of ld. CIT(Appeals). Since, we have already condoned the delay in filing the first appeal before ld. CIT(A), learned first appellate authority shall pass order afresh in accordance with law on merits after taking assessee’s submissions into consideration. We further direct the assessee to be diligent and co-operative in attending the proceedings and making submissions before ld. CIT(Appeals) for expeditious and effective disposal of appeal. Needless to say that learned Assessing Officer shall ensure the observance of the principles of natural justice.
6. In the result, assessee’s appeal is allowed for statistical purposes.
Order pronounced in the Open Court on 21.07.2026.
