ITAT Holds Bona Fide Belief and Lack of Technical Knowledge Constitute Sufficient Cause, Condones 972-Day Delay by 71-Year-Old Assessee [Read Order]

The Tribunal found that the Commissioner of Income Tax (Appeals) (CIT(A)) erred in dismissing the appeal without granting an effective opportunity of being heard on the issue of limitation and that the circumstances explained by the assessee constituted sufficient cause for the delay.

The appeal arose from the order of the CIT(A) dated 24 April 2025 for Assessment Year (AY) 2021–22, which dismissed the assessee’s appeal against the intimation issued under Section 143(1) of the Income Tax Act, 1961, treating it as time-barred.

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The intimation had determined the total income at ₹21,40,950 and raised a demand of ₹3,50,980 on the ground that the rental income of ₹12,75,750, reported separately in Form 3CD, was not routed through the Profit & Loss Account and was therefore added as business income, resulting in double taxation of the same income.

The assessee explained that upon receiving the intimation from the Centralized Processing Centre (CPC) on 4 July 2022, he filed a “disagreement response” on the income tax portal on 25 August 2022, stating that the rental income had already been offered to tax under the head “Income from House Property.”

The assessee, being a senior citizen aged 71 years and not conversant with online procedures and electronic notices, genuinely believed that his disagreement response was sufficient compliance. The refunds for AYs 2022–23 and 2023–24 were subsequently issued to him on 7 December 2022 and 6 December 2023, the assessee presumed the demand issue stood resolved and that no further action was required.

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The assessee became aware of the unresolved issue only upon receipt of an email from CPC on 20 March 2025, intimating that the demand for AY 2021-22 was still outstanding. He immediately consulted a chartered accountant and filed an appeal before the CIT(A) on 2 April 2025, along with an explanation for the delay.

However, the CIT(A) refused to condone the delay, holding that the reasons advanced were not tenable and that the assessee had failed to demonstrate sufficient cause or hardship for such an extensive delay.

Before the Tribunal, the assessee filed an affidavit reiterating that the delay was unintentional and not motivated by any mala fides, and that no advantage was gained from the lapse.

The Bench comprising Rahul Chaudhary (Judicial Member) and Vikram Singh Yadav (Accountant Member) noted that the explanation was reasonable, given the assessee’s age, unfamiliarity with electronic filing systems, and his bona fide belief that the issue had been resolved upon receipt of refunds for subsequent years.

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The tribunal held that the assessee was prevented by sufficient cause from filing the appeal within the prescribed period, the ITAT condoned the delay of 972 days, and set aside the CIT(A)’s order. The Tribunal directed the CIT(A) to adjudicate the grounds of appeal on merits after granting the assessee a reasonable opportunity of being heard, and to consider all documents and submissions in accordance with law.

Accordingly, the appeal of the assessee was allowed for statistical purposes

The assessee was represented by Vihit Shah, while Bhagirath Ramawat appeared for the Revenue.

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