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Judgment
ORDER
PER SUDHIR KUMAR, JUDICIAL MEMBER: This appeal is preferred by the assessee against the order dated 18.11.2025 of the National Faceless Appeal Centre (NFAC) Delhi [hereinafter referred to as “Ld. NFAC)”] against the penalty order dated 10.02.2022 for the assessment year 2018-19 u/s 270A of the Income Tax Act 1961[hereinafter referred to as “the Act”]
The assessee has raised the ground no. 2 which reads as under:-
2.The Ld. CIT(Appels) has grossly erred in law and on facts in rejecting the appellant’s application for condonation of delay in filing the appeal, without appreciating that the delay was neither deliberate nor intentional but occurred due to Bonafide and reasonable cause and therefore deserved liberal consideration in accordance with settled judicial principles.
The brief facts of the case are that the assessee filed his return of income for the A.Y.2018-19 on 31-03-2019 declaring total loss of Rs.45,20,115/-. The case was selected under CASS for examining the details of TDS and disallowance for such default and for verification of claim of Business Loss. Thereafter notice under section 143(2) of the Act was issued on 24-12-2020. After examining the detail furnishing by assessee, the Assessing Officer completed the assessment after making the following additions:
Disallowed of late remittance of employee fund Rs. 16,74,760/-
Disallowance of interest expenses on TDS Rs. 50,635/-
Disallowance under section 40(a)(ia) @30 % on the amount Rs.1,55,57,560/- Rs. 46,67,268/-
Disallowance of expenses under section 37 for not paying GST Rs. 1,21,80,403/-
Penalty proceedings under section 270A of the Act also initiated against the assessee for under reporting of income inconsequence of misreporting. Show cause notice was issued to the assessee. The Assessing officer levied the penalty @ 200 % of Rs. 1,28,64,414/-
Aggrieved the order of the Assessing Officer, the assessee filed the time barred appeal before the Ld. NFAC, who vide its order dated 18-11-2025 dismissed the appeal on the count in limine. The Ld. NFAC has observed that the assessee has failed to explain the sufficient cause for condonation.
Aggrieved the order of the Ld. NFAC the assessee filed this appeal before the Tribunal.
Ld. AR for the assessee submitted that the appeal was dismissed treating time barred by the first appellate authority. The assessee has moved the application for condonation of delay of 973 days showing the sufficient cause. He prayed that the appeal be admitted for adjudication on merits and delay be condoned.
On the other hand, Ld. CIT DR submitted that no sufficient cause has been shown by the assessee for condone the delay in filling the appeal. He further stated that the appeal was rightly dismissed by the Ld. NFAC.
We have heard the rival contention and perused the material available on record.
The assessee has filed the application for condonation the delay in filing the appeal. In the application the assessee has stated that during the pending of assessment proceedings the entire nation was suffering from the hardships of Lockdown restrictions imposed due to Covid-19 pandemic. The employees of the assessee could not attend the offices and the routine day-to- day activities were adversely impacted. The notices/ assessment orders which the department had passed against the assessee company never got served on the assessee. However, it was for the first time on 15-10-2024 that a notice u/s 221(1) of the Act for the recovery of demands were came in the knowledge. For this reason, the appeal was filed delayed by 973 days. The assessee has shown the sufficient cause not to file the appeal with in time. The Ld. NFAC should have condoned the delay in filing the appeal and should have heard the appeal on merit because the assessee has shown the sufficient cause not to file the appeal with in time. Thus, keeping in view, the entire aspects of the matter, we condoned the delay in preferring the appeal before the Ld. NFAC having been satisfied with the explanation so rendered by the assessee before the said authority. The order passed by the Ld. NFAC is setting side, the issue to the file is restored before the Ld. NFAC who decide the matter to the file after giving the opportunity of being heard to the assessee. The assessee is directed to co-operate with the appellate authority. The grounds raised by the assessee are accordingly allowed for statistical purposes.
In the result, the appeal of the assessee is allowed for statistical purpose.