The Next Automotive Era Pvt. Ltd. vs ITO, Ward 2(1), Faridabad

This appeal by the assessee is directed against the order of Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre(NFAC) [in short ‘CIT(A)’] dated 19.2.2026, for assessment year 2020-21.

Shri S.K. Jain, appearing on behalf of assessee, submits that CIT(A) without condoning delay of 134 days in filing of appeal has dismissed appeal of the assessee in limine. Explaining the reasons for delay in filing appeal, the ld. Counsel submits that there were some mistakes in the assessment order, the assessee had filed an application u/s. 154 of the Act for rectification of mistakes before the AO. The assessment order was passed on 31.3.2025 and the assessee immediately filed an application for rectification on 7.4.2025. Assessee was waiting for the outcome of rectification application. He submits if the rectification application would have been allowed by the AO, there would have no need to file appeal before the CIT(A). The assessee received rectification order on 08.07.2025, the AO had rejected assessee’s rectification application. Immediately thereafter, the assessee filed appeal before the CIT(A). This resulted in delay of 134 days in filing of appeal. The ld. Counsel pointed the reasons causing delay were duly recorded in Form 35.

Both sides heard. The assessee has explained the reasons for delay in filing of appeal before the First Appellate Authority. The assessee was purportedly waiting for the outcome of rectification application filed before the AO, that caused delay in filing of appeal before the First Appellate Authority. I am satisfied that the delay in filing of appeal before the First Appellate Authority was for bonafide reasons. The Hon’ble Apex Court in the case of Ram Nath Sao @ Ram Nath Sahu & Others vs. Gobardhan Sao and others, 2002 SCC (3) 195/2022 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 derive. 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. The delay in filing of appeal before the First Appellate Authority is condoned and the appeal is restored back to the CIT(A) for deciding the appeal on merits after allowing opportunity to the assessee to make submissions, in accordance with law.

In the result, the impugned order is set aside and the appeal of the assessee is allowed for statistical purpose.