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Judgment
PER VIKAS AWASTHY, JM:
This appeal by the assessee is directed against the order of the Additional/Joint Commissioner of Income Tax (Appeals), Panaji [in short ‘the CIT(A)’] dated 25.02.2026, for Assessment Year 2020-21.
The appeal of assessee was dismissed in limine by the CIT(A) on account of delay. There was delay of 888 days in filing of appeal before the CIT(A). The assessee explained that the delay occurred due to his medical condition. It is stated that the assessee was employed with BSNL and had sought voluntary retirement on medical grounds. Though no separate application for condonation of delay was filed before the CIT(A), the reasons for delay were duly mentioned by the assessee in Form No. 35.
A perusal of the impugned order shows that no notice was issued by the CIT(A) before dismissing the appeal in limine. The CIT(A) did not allow opportunity to the assessee/appellant to substantiate reasons for delay or to file affidavit.
The Hon’ble Apex Court in an unequivocal manner has repeatedly held that acceptance of reason given by the appellant/petitioner explaining delay should be the rule and refusal an exception. By taking a pedantic and hyper technical view the explanation furnished should not be rejected, causing loss and irreparable injury to the party against whom the lis terminates. The expression “sufficient cause” should be liberally construed so as to sub-serve the ends of justice.
The Hon’ble Apex Court in the case of Collector Land Acquisition vs. Mst. Katiji & Ors. 167 ITR 471 has held that liberal approach should be adopted while dealing with an application praying for condonation of delay. Refusing to condone delay can result in meritorious matter being thrown out at the very threshold and cause of justice being defeated. Pedantic and hyper technical approach should not be adopted while dealing with an application for condonation of delay.
The Hon’ble Apex Court in the case of Ram Nath Sao @ Ram Nath Sahu & Others vs Gobardhan Sao and Others, 2002 SCC (3) 195/2002 SCR (2) 77 has held that the expression “sufficient cause” within the meaning of Section 5 of the Limitation Act or Order 22 Rule 9 of Civil Procedure Code or any other similar provision should receive a liberal construction so as to advance substantial justice. The courts should not proceed with the tendency of finding fault with cause shown and reject the petition by a slipshod order in over jubilation of disposal drive. Acceptance of explanation furnished should be the rule and refusal, an exception, more so when no negligence or inaction or want of bonafide can be imputed to the defaulting party.
I find that the First Appellate Authority has dismissed appeal of the assessee in violation of principles of natural justice. Hence, the impugned order is unsustainable, is liable to be set aside.
On merits, Tte ld. Counsel for the assessee submits that the assessee had filed return of income on 22.10.2020 declaring total income of Rs.8,11,950/-. The income includes retiral benefits received from BSNL, i.e., leave encashment Rs.2,76,090/- and compensation on voluntary retirement Rs.4,32,754/-. It is contended that both the aforesaid amounts are exempt under the provisions of the Act. The ld. Counsel fairly submitted that the exemption in respect of leave encashment was claimed as exempt u/s. 10(10AA) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’), however, the same was disallowed by CPC. As regards compensation received on voluntary retirement, the exemption was not claimed in the return of income, the assessee has now raised this claim before the Tribunal. Considering entire facts, I deem it appropriate to restore the matter to the Assessing Officer for fresh consideration.
The Assessing Officer shall examine the claim of exemption in respect of compensation received on voluntary retirement and shall allow the benefit of exemption already claimed in respect of leave encashment u/s. 10(10AA) of the Act, in accordance with law.
In the result, impugned order is set aside and appeal of the assessee is allowed for statistical purposes in the aforesaid terms.