ITAT Condones Significant Appeal Delay for Elderly Directors Citing Health Concerns Due to Pandemic [Read Order]

The Mumbai bench of the Income Tax Appellate Tribunal (ITAT) has granted relief to an assessee by condoning a substantial delay in their appeal noting the health circumstances of the company's elderly directors. This decision effectively overturns the prior dismissal of the appeal by the National Faceless Appeal Centre (NFAC) which had been based on a significant 937-day delay.

In their detailed explanation and affidavit seeking condonation of delay the assessee along with his spouse Raj Kumari Singh both aged 81 and identified as super senior citizens highlighted their health-related challenges. As the sole directors of the company, their advanced age and deteriorating health prevented them from regularly attending the office causing them to rely heavily on a small support staff.

This case originated from an order passed by the National Faceless Appeal Centre (NFAC) Delhi for the assessment year 2018-19. It was noted that the Hydroair Tectonics PCD PCD Limited had been ex-parte before the Assessing Officer and their subsequent appeal to the Commissioner of Income-tax was dismissed solely on the grounds of being filed beyond the period of limitation.

The reason for the delay was explained that the company's communication including emails are managed by staff members who bring matters to their attention only as needed. The onset of the COVID-19 pandemic in 2020-21 and 2021-22 further affected their situation as they were medically advised to stay home and not attend the office. During this period even staff members were working remotely.

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Consequently, The hearing notices received via company email were not forwarded to the director . A specific instance involved a junior staff member who reportedly received a notice in person but failed to hand it over to the directors thus the notice remained out of knowledge.

The assessee only became aware of the outstanding tax proceedings and the resulting assessment order when their tax consultant navigated the Income Tax portal. Following this discovery they immediately appealed to the tax authorities affirming that the delay in filing was unintentional and beyond their control.

The Tribunal carefully considered the facts and guided by the Supreme Court's principle from Land Acquisition Collector Vs. Mst. Katiji & Ors wherein it has been held that where substantial justice is pitted against technicalities of non-deliberate delay, then in that eventuality substantial justice is to be preferredFinding the assessee's explanation for the delay justifiable and liberally interpreting sufficient cause. It's important to note that the Tribunal's decision to send the case back doesn't reflect any opinion on the merits of the dispute itself.

The bench comprising Sandeep Gosain (Judicial Member) and Prabhash Shankar (Accountant Member) condoned the delay in filing the appeal before the tax authorities. Consequently, the tax authorities are directed to provide both parties a fair opportunity to be heard.

The assessee has been advised to cooperate fully throughout the proceedings and refrain from seeking frivolous adjournments. Ultimately the appeal filed by the assessee was allowed for statistical purposes.

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