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Judgment
PER SANJAY AWASTHI, ACCOUNTANT MEMBER:
In this case, there is a delay of 370 days in the filing of the present appeal. The delay has been explained through an affidavit as under: -
“1.I am filing the accompanying appeal before this Hon'ble Tribunal against the order passed by the learned Commissioner of Income Tax (Appeals) under section 250 of the Income-tax Act, 1961 dated 20.01.2025 for Assessment Year 2012-13.
2.There has occurred a delay of 11 months (Approx.) in filing the present appeal. The delay is bona fide and has occurred due to circumstances beyond my control. During the relevant period, serious family disputes led to separation between me and my brother resulting in complete disruption of business and residence. Further, my mother had been diagnosed with cancer in the year 2023 and has been undergoing continuous treatment. Owing to the family separation, the responsibility of her ongoing treatment and care has been entirely upon me. These circumstances together caused severe personal and financial strain and substantially affected my ability to attend to litigation matters within time.
3.I state that earlier I, along with my brother, was jointly engaged in business under the name and style of R.S. Tiles & Sanitation, a proprietary concern of our father's HUF formed around the year 2004. Towards the end of 2024, disputes arose which led to complete separation of business operations and residence. Thereafter, I had to independently stabilize my business operations, accounts, statutory compliances and personal affairs. This period involved significant disruption and mental stress.
4.My mother, who was diagnosed with cancer in 2023, continues to undergo medical treatment and supervision. She resides with me and I have been primarily responsible for managing her treatment, hospital visits and day-to-day care. The continuing medical circumstances within the family placed substantial emotional and physical demands upon me and affected my ability to regularly attend to professional and litigation-related matters.
5.I further submit that I was not well aware about the passing of the order by the learned Commissioner of Income Tax (Appeals). Due to the aforesaid the income-tax portal of monitor electronic communications. There was no personal exigencies and business disruption, I could not regularly log in to deliberate inaction on my part.
6.During the course of remand-related proceedings and upon consultation with my Chartered Accountant, I was advised that the order of the learned Commissioner of Income Tax (Appeals) had already been passed and that an appeal before this Hon'ble Tribunal was required to be filed immediately as certain legal issues had been decided against me.
7.Upon receiving this advice, I immediately checked email and records. Initially, we could not find any communication regarding the appellate order. However, upon detailed verification, it was gathered that the communication had been received electronically and had been placed in the spam/junk folder of my email account, due to which I remained unaware of the passing of the order. Because of the personal circumstances explained above, I was also not in a position to regularly check the portal or email communications.
8.Immediately upon becoming aware of the appellate order and after taking proper professional advice, I instructed my AR to file the present appeal before this Hon'ble Tribunal without any further delay. The delay has thus occurred due to bona fide reasons and circumstances beyond my control and not due to any negligence or mala fide intent.
9.It is respectfully submitted that the Hon'ble Supreme Court in the case of Collector, Land Acquisition vs. Mst. Katiji & Ors. [(1987) 167 ITR 471 (SC)] has laid down that a liberal approach ought to be adopted while considering applications for condonation of delay and that substantial justice should prevail over technical considerations. The Hon'ble Court has held that when substantial justice and technical considerations are pitted against each other, the cause of substantial justice deserves to be preferred and that a litigant does not stand to benefit by lodging an appeal belatedly. It has further been held that the expression "sufficient cause" should receive a liberal construction so as to advance justice. In the present case, the delay has occurred due to genuine and unavoidable circumstances as explained above and therefore deserves to be condoned in the interest of substantial justice.
10.I respectfully submit that the delay is neither deliberate nor intentional. It is a settled principle that matters should be decided on merits rather than dismissed on technical grounds of limitation, particularly when the delay is sufficiently explained and bona fide.
11.In view of the facts and circumstances stated above, I most respectfully pray that this Hon'ble Tribunal may kindly condone the delay in filing the accompanying appeal and hear the same for adjudication on merits in the interest of justice.”
Considering the reasons given in the said affidavit, the delay is hereby condoned and the appeal is admitted for adjudication.
The present appeal arises from order dated 20.01.2025, passed u/s 250 of the Income Tax Act, 1961 (hereafter as “the Act”), by NFAC.
In this case, the Ld. AO passed an order u/s 144 of the Act dated 20.12.2019. Through this assessment order an amount of Rs.89,25,000/-was added in an ex parte manner, on account of investment in immovable property of Rs.85,00,000/-.
The assessee approached the Ld. CIT(A), where after some discussion, the Ld. CIT(A) exercised powers u/s 251(1)(a) of the Act to remit the matter to the Ld.AO. The relevant findings are at pages 14 to 16 of the impugned order.
It is important to note that the orders of authorities below are as under: -
CIT(A) order dated 20.01.20125 (impugned order);
ii) AO’s order passed u/s 144 dated 20.12.2019, is the assessment order against which the Ld. CIT(A) has passed the impugned order.
These facts have some bearing on the decision in this case and are thus, emphasized for their relevance.
The aggrieved assessee has now approached the ITAT with grounds challenging the assumption of jurisdiction on the basis that the reopening was done on wrong facts and was done without any application of mind. It has also been challenged that the Ld. CIT(A) did not adjudicate on the legal grounds and simply remanded the case back to the file of Ld. AO.
Before us the Ld. AR took us through the reasons recorded and the orders of authorities below. The Ld. AR pointed out that in the second-round proceedings the Ld. AO has, vide order dated 09.03.2026, accepted the assessee’s contention regarding the original reason for reopening and thereafter treated Rs.19,95,507/- only as taxable long term capital gains. It was argued by the Ld. AR that once the original reasons recorded for issuance of notice u/s 148 of the Act did not survive in the consequential assessment order then there were a plethora of judgments which consider an assessment order passed under those circumstances as being invalid. The Ld. AR relied on the case of Jet Airways (I) Ltd. reported in 331 ITR 236 (Bom.) and also the case of ATS Infrastructure Limited reported in 473 ITR 595 (Del.). It was argued that the Ld. CIT(A) should have adjudicated on the jurisdictional grounds and not simply set aside the case and remanded the matter back to the file of Ld. AO.
The Ld. DR, on the other hand, stated that the Ld. CIT(A) had correctly utilized the provisions of Section 251(1)(a) of the Act to remand the matter back to the file of Ld. AO since the assessee did not participate in the assessment proceedings and therefore the Ld. AO had no occasion to consider any of the arguments of the assessee. It was pointed out by the Ld. DR that anything happening in second round proceedings, i.e. through order dated 09.03.2026 (as passed by the Ld. AO), cannot be adjudicated at this stage since the impugned order itself has actually adjudicated order dated 20.12.2019 passed by the Ld. AO.
We have considered the rival submissions and have gone through the records before us. We find that the admitted facts are that the Ld. AO passed an order u/s 144 r.w.s. 147 of the Act on 20.12.2019. This order was passed in an ex parte manner since the assessee did not participate in the said proceedings. Thereafter, the Ld. CIT(A) passed an order dated 20.01.2025 through which he remitted back the matter under the provisions of Section 251(1)(a) of the Act. Admittedly the Ld. AO has passed another assessment order dated 09.03.2026 through which apparently some of the contentions of the assessee have been admitted and the amount for which the notice u/s 148 was issued did not survive for consideration. At this stage, legally speaking, we are concerned with the Ld. AO’s order dated 20.12.2019 and the consequential Ld. CIT(A)’s order dated 20.01.2025. We find that the Ld. CIT(A), through the impugned order has correctly applied the law to the facts of the case. It is felt that the assessee has every chance to agitate the jurisdictional grounds before the Ld. AO and presumably this is what would be done. As far as the Ld. AO’s order dated 09.03.2026 is concerned, we cannot take cognizance for deciding on the basis of the cases of Jet Airways (supra) and ATS Infrastructure (supra) to hold that the notice u/s 148 of the Act was wrongly issued. Considering the totality of facts and circumstances of the case, we uphold the action of Ld. CIT(A) in principle, however, considering that the second round assessment order is also available, hence, we deem it fit to set aside the impugned order and remit this matter back to the file of Ld. CIT(A) for considering all the grounds raised by the assessee and taking a holistic view on the basis of the second-round assessment order dated 09.03.2026, which deserves to be adjudicated along with these remand back proceedings.
In the result, the appeal is partly allowed for statistical purposes.