Delay in Filing Appeal Due to Illiteracy and Email Issues: ITAT Condones 349-Day Delay, Restores Ex-Parte Assessment to AO for Verification [Read Order]

Ningaiah Siddu,The Bangalore Bench of the Income Tax Appellate Tribunal (ITAT) condoned a 349-day delay in filing the appeal before the Commissioner of Income Tax (Appeals) [CIT(A)], attributing it to the assessee’s illiteracy, lack of email access, and reliance on a former auditor and restored the ex-parte assessment for verification of deductions claimed under Section 57 of the Income Tax Act, 1961.

Ningaiah Sidddu (assessee), an individual, filed his return of income for Assessment Year (AY) 2020-21 on 31.03.2021, declaring total income of Rs. 43,01,340, primarily from bank interest and contract receipts. The assessee disclosed contract receipts of Rs. 3,47,83,048 and claimed deductions of Rs. 3,16,52,500 under Section 57.

The case was selected for complete scrutiny to verify cash withdrawals, contract receipts, and sales turnover ratio. The AO issued multiple notices under Sections 142(1) and 144 via the ITBA portal to the email, which belonged to the assessee’s former auditor.

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Due to non-compliance, an ex-parte assessment was completed under Section 144 on 05.09.2022, disallowing the Section 57 deductions as unexplained expenditure under Section 69C, and assessing total income at Rs. 3,59,53,840.

Aggrieved by the AO’s order, the assessee appealed to the CIT(A), but the appeal was filed with a delay of 349 days. In Form 35, the assessee cited illiteracy, inability to read/write English, lack of personal email or access to the ITBA portal, and that the registered email belonged to the former auditor who failed to inform him of the notices or assessment order.

The CIT(A) dismissed the appeal without condoning the delay, holding the reasons unsubstantiated and relying on judicial precedents, without addressing the merits.

Aggrieved by the CIT(A)’s order, the assessee appealed to the ITAT. The assessee’s counsel argued that the delay was due to sufficient cause, as the assessee entrusted matters to the auditor, who neglected to communicate about the notice.

The two-member bench, comprising Prashant Maharishi (Vice President) and Keshav Dubey (Judicial Member), observed that notices were issued to an email not belonging to the assessee, and the assessment order was not received by him through other means. The bench noted the assessee’s illiterate status and lack of ITBA access constituted sufficient cause for the delay.

The bench condoned the delay and restored the matter to the AO with directions to allow the assessee 90 days to submit details for verification of the Section 57 deductions, after providing due opportunity. The tribunal allowed the assessee’s appeal for statistical purposes.

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