A long delay in filing an appeal can be condoned if the original assessment order being challenged was passed ex-parte and without proper service of notice.

By | September 26, 2025
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A long delay in filing an appeal can be condoned if the original assessment order being challenged was passed ex-parte and without proper service of notice.

Issue

Should a significant delay in filing a statutory appeal be condoned when the taxpayer argues that the original assessment and penalty orders they are appealing were themselves passed ex-parte and without proper service of notice, thus violating the principles of natural justice?

Facts

  • The Assessing Officer (AO) passed an ex-parte assessment order against the assessee under Section 144 of the Income-tax Act, 1961, along with several penalty orders.
  • The assessee filed an appeal against these orders before the Commissioner (Appeals) but did so after a very long delay of 1,386 days.
  • The Commissioner (Appeals) dismissed the appeal at the threshold, solely on the ground of this inordinate delay, refusing to condone it.
  • In their defense, the assessee contended that they were unable to participate in the original proceedings because their father was in jail, and the notices were sent to the Jail Superintendent. The core of their argument was that they were never properly served with the notices, which led to the ex-parte orders being passed in the first place.

Decision

The Tribunal/Court ruled in favour of the assessee.

  • The court focused on the fundamental flaw in the original proceedings. It held that since the assessment and penalty orders were passed ex-parte and without proper service of notice on the assessee, they were passed in violation of the principles of natural justice.
  • Because the very orders being challenged were legally infirm, the subsequent delay in filing the appeal against them had to be viewed with leniency.
  • The court condoned the 1,386-day delay and remanded the matter back to the Commissioner (Appeals) with a direction to hear and decide the appeal afresh on its merits.

Key Takeways

  • Natural Justice is a Foundational Principle: The right to be properly served with a notice and given a fair opportunity to be heard is a cornerstone of the legal process. An order passed in violation of this principle is fundamentally weak.
  • A Flawed Order Can Justify a Delayed Appeal: An exceptionally long delay in filing an appeal, which would normally be fatal to a case, may be condoned if the taxpayer can successfully demonstrate that the order they are appealing was itself passed without due process.
  • “Sufficient Cause” is Interpreted Liberally: The term “sufficient cause” for condoning a delay is a flexible concept. Courts often interpret it liberally to advance substantive justice, especially when a refusal to condone the delay would mean upholding an order that was passed unfairly.
  • Substance Over Procedural Timelines: The court prioritized the substantive issue of a fair hearing over the procedural deadline for filing an appeal. This ensures that a taxpayer is not ultimately penalized by an order that they never had a fair chance to contest in the first place.
IN THE ITAT DEHRADUN BENCH ‘DB’
Rishabh Dev
v.
Income-tax Officer
Yogesh Kumar U.S., Judicial Member
and Manish Agarwal, Accountant Member
IT Appeal Nos. 133 to 136 (DDN) of 2025
[Assessment year 2017-18]
SEPTEMBER  17, 2025
Pankaj Goel, Adv. for the Appellant. A.S. Rana, Sr. DR for the Respondent.
ORDER
Yogesh Kumar U.S., Judicial Member.- The captioned appeals are filed by the Assessee challenging the orders of Ld. Commissioner of Income Tax (Appeals)/NFAC, Delhi (‘Ld. CIT(A) for short), dated 16.06.2025 and 17.06.2025 for the A.Y. 201718, wherein the ld. CIT(A) dismiss the quantum appeal and also appeals filed challenging the penalty orders passed by the A.O.
2. Brief facts of the case are that,an assessment order has been framed against the assessee u/s 144 of the Income Tax Act, 1961 (‘Act’ for short) and passed order of penalty u/s 272A(1)(d), u/s 271B and u/s 271AAC(1) of the Act which were called in question by the assessee before the ld. CIT(A) with delay of 1386 days in all the appeals. The ld. CIT(A) dismissed the appeals on delay in latches vide impugned orders dated 16.06.2025 (quantum appeal) and 17.06.2025 (penalty appeals), which are called in question before us.
3. The ld. Counsel for the assessee submitted that as the father of the assessee was lodged in jail,therefore no compliance of the notices issued by the A.O. could be made and the notices were issued to the jail Superintendent which resulted in passing the ex-parte assessment order as well as order of penalty. The appellant came to know about passing the order belatedly, thereafter approached the ld. CIT(A) and filed the appeals with delay which was not intentional. Thus, submitted that the delay in filing the first appeals may be condoned and further prayed for restoring the first appeal to the file of the ld. CIT(A) for adjudicating the appeals on merits.
4. Per contra, the ld. DR relying on the orders of the lower authorities, sought for dismissal of the appeal.
5. We have heard both the parties and perused the material available on the record. As could be seen from the order of the CIT(A), the Assessee contended that his father was lodged in jail and the notices were issued to Superintendent of Police, further contended that no notice has been served on the appellant. Thus, it is clear that the ex-parte orders have been passed by the AO without serving the notice to the appellant.
6. The Hon’ble Supreme Court time and again clarified that the delay in filing the Appeal with sufficient cause should be looked into in a liberal way and shall condone the delay. In the landmark decision in Collector, Land & Acquisition v. Mst. Katiji 167 ITR 471 (SC), the Hon’ble Supreme Court settled the law that the delay when supported by justifiable reasons, must make way for the cause of substantial justice. Considering the above facts and circumstances, we condone the delay of 1386 days in filing the first appeals and remand the appeals to the file of the ld. CIT(A) to decide afresh on merits in accordance with law. Needless to say, assessee shall be provided with opportunities of being heard.
7. In the result, the appeals in ITA Nos. 134, 133, 135, & 136/DDN/2025 of the assessee arepartly allowed for statistical purposes.