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Judgment
PER KRINWANT SAHAY, AM:
Appeal in this case has been filed by the assessee against the order dated 20.02.2026 passed by the ld. CIT(A) NFAC, Delhi for Assessment Year: 2020-21.
Grounds of appeal taken by the assessee are as under:
“The Appellant most respectfully submits the following Grounds of Appeal, which are mutually exclusive and without prejudice to one another. The Appellant prays that the impugned order of the Ld. CIT(A) NFAC, dated 20-02-2026, and the Assessment Order dated 02-01-2025, be quashed and set aside on the following grounds:
A. On the Jurisdictional Error of Refusing to Condone the Delay
1.Gross Error in Rejecting "Sufficient Cause": That on the facts and in the circumstances of the case, and in law, the Ld. CIT(A) grossly erred in dismissing the appeal in limine by refusing to condone the delay of 369 days in filing the appeal. The Ld. CIT(A) failed to appreciate that the delay was occasioned by "sufficient cause" within the meaning of Section 249(3) of the Income Tax Act, 1961, specifically the convergence of gross professional negligence by the engaged counsels and a severe, prolonged medical emergency in the Appellant's family.
2.Violation of Judicial Precedents: That the Ld. CIT(A) erred in adopting a hyper-technical and pedantic approach, contrary to the settled jurisprudence laid down by the Hon'ble Supreme Court of India in Collector, Land Acquisition v. Mst. Katiji (1987) 167 ITR 471 (SC) and Vedabai v. Shantaram Baburao Patil (2001) 253 ITR 798 (SC), which mandate a liberal construction of "sufficient cause" to advance substantial justice, especially when the delay is not deliberate or malafide.
3.Penalizing the Litigant for Counsel's Default: That the Ld. CIT(A) failed to appreciate the trite law that a litigant should not suffer or be deprived of a hearing on merits due to the inaction, inadvertence, or professional misconduct of their authorized representatives. The rejection of the condonation application on the premise of the Appellant's alleged negligence is contrary to the facts on record.
B. On the Invalidity of the Ex-Parte Assessment Order
4.Violation of Principles of Natural Justice: That on the facts and in the circumstances of the case, the Assessment Order passed under Section 144 read with Section 144B of the Act is bad in law and void ab initio, having been passed in a hasty and mechanical manner, in blatant violation of the principles of natural justice (audi alteram partem).
5.Failure to Consider Assessee's Submissions: That the Ld. AO erred in proceeding ex-parte under Section 144 without taking into cognizance the substantive reply submitted by the Appellant on 28-11-2024, wherein it was explicitly clarified that the capital gains in question had already been declared and taxes paid in A.Y. 2023-24.
C. On the Substantive Merits of the Addition and Ignored Facts
6.Erroneous Classification as Short-Term Capital Asset: That the Ld. AO grossly erred in law and on facts by classifying the alienated properties as "Short-Term Capital Assets." The registered purchase deeds explicitly establish that the properties were acquired on 18-04-2015 and sold in July and August 2019, making the holding period exceed 48 months and qualifying them as Long-Term Capital Assets under Section 2(29A) of the Act.
7.Illegal Taxation of Gross Sale Consideration: That the Ld. AO arbitrarily and unlawfully assessed the entire gross sale consideration of Rs. 1,70,00,000 as capital gains, effectively determining the cost of acquisition to be zero, which is factually contradicted by the registered purchase deeds dated 18-04-2015 and further cost of improvement and indexation thereof.
8.Violation of Section 48 and Denial of Indexation: That the AO's methodology of computing capital gains without allowing mandatory statutory deductions for the cost of acquisition, the cost of improvement, and the corresponding indexation benefits is fundamentally flawed and in direct contravention of the computational mechanism prescribed under Section 48 of the Act.
9.Arbitrary Best Judgment Assessment: That the Ld. AO failed to appreciate that the power to frame a Best Judgment Assessment under Section 144 is not an unfettered power to act capriciously. A revised computation of income based on the registered deeds demonstrates that the actual capital gain is entirely contrary to the AO's inflated and fictional assessment.
D. On the Unconstitutional Double Taxation of Income
10.Violation of Article 265: That the Ld. AO grossly erred in taxing the amount of Rs. 1,70,00,000 in A.Y. 2020-21, completely ignoring the fact that the Appellant had already voluntarily disclosed the identical transactions and discharged the corresponding capital gains tax liability in the return of income filed for A.Y. 2023-24. 11. Impermissibility of Double Taxation: That it is a settled proposition of law, established by the Hon'ble Supreme Court in Jain Bros. v. Union of India (1969), that the same income cannot be taxed twice unless explicitly sanctioned by the legislature. The AO's action of taxing the same receipt in A.Y. 2020-21 without reversing the assessment for A.Y. 2023-24 results in impermissible double taxation.
E. General Grounds
12.That the Ld. AO erred in initiating penalty proceedings under Section 270A and Section 272A(1)(d) of the Act on the basis of an invalid and legally unsustainable assessment order.
13.The Appellant craves leave to add, alter, amend, substitute, or withdraw all or any of the grounds of appeal hereinabove at or before the time of the final hearing of this appeal.”
At the very outset, the ld. counsel of the assessee brought it to the notice of the Bench that the ld. CIT(A) dismissed the appeal in limine by refusing to condone the delay of 369 days in filing of the appeal before the ld. CIT(A). The ld. counsel also submitted that there was sufficient cause within the meaning of section 249(3) of the Income Tax Act, 1961 for filing the delayed appeal.
Per contra, the ld. DR relied on the order of the ld. CIT(A).
We have considered the findings given by the ld. CIT(A) in the appellate order for dismissing the appeal but after hearing the ld. counsel and going through various documents filed by him before us. We are of this considered view that keeping in mind, the element of natural justice, the assessee deserves one more opportunity of being heard by the ld. CIT(A). Accordingly, we condone the delay in filing of the appeal before the ld. CIT(A) and the matter may be remanded back to the file of the ld. CIT(A) for fresh adjudication. The ld. CIT(A) is directed to give adequate opportunity to the assessee of being heard as required under law and the assessee is also directed to comply with the notices of the ld. CIT(A) who filed all the relevant documents and details in time.
In the result, the appeal filed by the assessee is allowed for statistical purposes.