2024 (7) TMI 21 - AT - Income Tax

Condonation of delay - delay in filing this appeal is 1100 days - HELD THAT - We note that in assessee s case under consideration the appeal was filed late as the income tax practitioner (Shri Sanjay Gandhi) of assessee did not advise the assessee to file appeal against the order u/s 263 of the Act under the bona fide belief that the order u/s 263 was not appealable. We note that the power to condone the delay is discretionary and the discretion must be judicially exercised. The words sufficient cause should receive a liberal construction so as to advance substantial justice where no negligence nor inaction nor want of bona- fide is imputable to the applicant. Thus mistake of the lawyer or accountant may be a good reason for condoning delay. In the case of Radha Krishna Rai v. Allahabad Bank 1999 (8) TMI 975 - SUPREME COURT as it has been held that though the period of delay (1418 days) is unduly long for condonation of delay in preferring the appeal the circumstances are also very unusual. The petitioner has been a victim of misrepresentation of facts by his own advocate and was kept under the impression that the appeal is pending before the High Court whereas no appeal was in fact filed by the advocate. It cannot be said that the appellant has not been vigilant in prosecuting the appeal. The cause shown by the petitioner is sufficient to justify condoning the delay in filing the appeal. Therefore having regard to the reasons given in the petition we condone the delay and admit the appeal for hearing. Ex-parte order passed by CIT u/s 263 is an ex parte order and non-speaking order - violation of principle of natural justice - HELD THAT - The above facts we note that assessee has not given sufficient opportunity of being heard and could not plead his case successfully before the PCIT. Therefore we deem it fit and proper to set aside the order of the ld. PCIT and remit the matter back to the file of the ld. PCIT to adjudicate the issue afresh on merits. For statistical purposes the appeal of the assessee is treated as allowed.

Summary

Issues:
1. Condonation of delay in filing the appeal.
2. Validity of the order passed by the Principal Commissioner of Income Tax under section 263 of the Income Tax Act, 1961.

Detailed Analysis:

1. Condonation of Delay:
The appellant challenged the order passed by the Principal Commissioner of Income Tax (PCIT) under section 263 of the Income Tax Act, 1961. The appeal was filed for Assessment Year 2008-09, but it was barred by a delay of 1740 days. The appellant sought condonation of the delay, arguing that the effective delay was only 1100 days if the Covid-19 Pandemic period was excluded. An affidavit was submitted explaining the reasons for the delay, including the belief that the order under section 263 was not appealable initially. The appellant's counsel contended that the delay should be condoned due to the mistake made by the income tax practitioner and the honest belief that the appeal was filed before the CIT(A). The Tribunal considered the reasons provided and relied on precedents where delays were condoned due to similar circumstances involving mistakes by professionals. The Tribunal exercised its discretion to condone the delay and admitted the appeal for hearing.

2. Validity of PCIT's Order:
The appellant argued that the order passed by the PCIT was ex parte and violated the principles of natural justice as the appellant could not represent their case during the revision proceedings under section 263 of the Act. The appellant requested another opportunity to contest the appeal before the PCIT. The Tribunal noted that the PCIT's order was non-speaking and ex parte, indicating that the appellant was not given a sufficient opportunity to be heard. Consequently, the Tribunal set aside the PCIT's order and remitted the matter back to the PCIT for fresh adjudication on merits. The appeal was treated as allowed for statistical purposes.

In conclusion, the Tribunal allowed the appeal for statistical purposes, condoning the delay in filing the appeal and setting aside the PCIT's order for fresh adjudication, emphasizing the importance of providing a fair opportunity to be heard in such proceedings.