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Judgment
PER RAJ KUMAR CHAUHAN (J.M.):
The appeal is directed against the order of Learned Commissioner of Income Tax (Appeals)/ NFAC, New Delhi [hereinafter referred to as the “CIT(A)”], passed under section 250 of the Income Tax Act, 1961 [hereinafter referred to as “the Act”] dated 27.09.2023 for the A.Y. 2015-16 wherein the appeal was dismissed ex parte and the assessment order was upheld.
Aggrieved by the impugned order, the assessee is in appeal before us raising following grounds:
“1.That on the facts and circumstances of the case and in law, the ld. Commissioner of Income Tax (Appeals) [CIT(A)] via order dated 27.09.2023 erred in confirming the order dated 24.12.2018 passed u/s 143(3) of the Income Tax Act, 1961 by the Ld. Assessing officer (“the AO”).
2.That on the facts and circumstances of the case and in law, the Ld. CIT(A) erred in dismissing the appeal and confirming the additions of Rs. 20,87,57,916/- made by the Ld. AO without properly appreciating the facts and the submissions of the appellant.
3.That on the facts and circumstances of the case and in law, the Ld. CIT(A) failed to appreciate that the assessment order dated 24.12.2018 was passed in a purely mechanical manner.
4.That on the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in upholding the treatment of bona fide foreign inward remittances received as 'project grants/awards' as non-genuine donations, without appreciating the documentary evidence placed on record.
5.That on the facts and circumstances of the case and in law, the Ld. CIT(A) failed to appreciate the clear distinction between 'grants' and 'donations' and has erroneously treated them as the same.
6.That on the facts and circumstances of the case and in law, the Ld. CIT(A) failed to appreciate that the AO relied on material gathered behind the back of the Appellant without confronting it, contrary to the settled law in Kishanchand Chellaram v. CIT ((1980) 125 ITR 713 (SC)).
7.That on the facts and circumstances of the case and in law, the Ld. CIT(A) erred in sustaining the additions despite no opportunity of cross-examination being the Appellant.
8.That on the facts and circumstances of the case and in law, the L.d. CIT(A) failed to appreciate that the Ld. AO had made the additions without proper inquiry and without due application of mind, rendering the assessment unsustainable.
9.That on the facts and circumstances of the case and in law, the Ld. CIT(A) failed to appreciate that the Ld. AO brought nothing on record to justify treating bona fide project grants as non-genuine donations, and the conclusion is unsupported by any contrary evidence.
10.That on the facts and circumstances of the case and in the law, the Ld. CIT(A) failed to appreciate that the Ld. AO has made impugned additions solely on the basis of suspicion, conjectures and surmises.
11.That the grounds of appeal are independent and without prejudice to each other.
12.That the appellant craves leave to add, alter, clarify, explain, modify, delete or amend any of the grounds of appeal on or before the disposal of the present appeal.”
We have heard the Ld. AR on behalf of the assessee and Ld. DR for the Revenue and examined the material available on record. Ld. AR At the very outset, brought to our notice that there is a delay of filing the appeal before the Tribunal of 674 days and application seeking condonation of delay along with supporting affidavit has been filed. It is argued that the said delay has occurred because the assessee was dependent on consultant engaged by him for statutory compliance of e-filing of the appeal and the said consultant repeatedly informed him that the compliance has been duly completed and no further action was pending. Relying upon such representations, the assessee was under bona fide belief that no appeal was required to be filed. However, subsequently after engaging the new Ld. Counsel in November 2025, the assessee came to know for the first time that the Ld. CIT(A) has already passed the order and the limitation to file the appeal has already been expired. It is therefore submitted that without wasting time, the assessee has filed the appeal, hence, the delay in filing the appeal needs to be condoned.
The Ld. DR on the other hand vehemently opposed the condonation of delay stating that no justified cause has been shown for condonation of delay because the assessee is required to be vigilant to file the appeal in time after receiving the order of the Ld. CIT(A). Hence, Ld. DR prayed for dismissal of the application seeking condonation of delay.
We have considered the rival submission in that regard, the contents of the affidavit are reproduced as under:
We have noticed that the contents of the affidavit seeking condonation of delay in support of application has remained uncontroverted, as no counter affidavit has been filed by the Revenue. There is also no material on record to show that the contents of the affidavit are not correct.
We have 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 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."
In view of these facts and contents of the application seeking condonation of delay supported by affidavit of the Assessee, we are inclined to consider the delay, as the assessee has shown sufficient cause for seeking condonation of delay. The Application seeking condonation of delay is accordingly allowed. On merit, ld. AR submitted that the impugned order is ex parte as no effective opportunity of hearing has been given because the notice allegedly sent to the assessee were neither received by the assessee nor the same were served as per law upon the assessee. It is therefore stated that in the interest of justice, the assessee be given one more opportunity to present its case and the matter to be restored to the file of the ld. CIT(A) for deciding afresh.
Ld. DR on the other hand opposed the submission stating that despite opportunity, the assessee has failed to appear before the Ld. CIT(A), therefore, the appeal be dismissed.
We have considered the rival submission and examined the impugned order. The ld. CIT(A) in the impugned order has observed that for the total non-compliance of the instant appeal on the part of the appellant, the instant appeal is adjudicated and disposed of, as under, ex parte, primarily on the basis of documentation available on record. It is further observed in the concluding para that “I am constrained to concur with the AO’s finding of the fact and decision thereof, more particularly in the absence of any meaningful and worthwhile submission/ documentation even during the instant appeal proceedings”. These observation of the ld. CIT (A) shows that the matter has been decided ex parte. As already noted by us, there is no proof of service of the notice of the appeal sent, as it is simply stated that the notice were issued to the appellant. In the absence of any material before us, with regard to service of the said notices, we are of the considered opinion that the provision of Section 250(2a) of the Act has not been followed and effective opportunity of hearing has not been granted.
In the given facts and circumstances, the assessee is entitled to the opportunity of effective hearing and for that reason, since the impugned order is bereft of concept of effective hearing which is sine qua non of Section 250(2a) of the Act, the same is accordingly set aside and the matter is remitted to the file of ld. CIT (A) for deciding the same afresh after giving effective opportunity of hearing to the assessee/ appellant. The appellant/assessee is directed to present its case within the period of 60 days from this order without any fail on their part.
In the result, the appeal of the assessee is accordingly allowed as above terms for statistical purposes.