Ex-parte assessment order set aside and remanded for fresh

Ex-parte assessment order set aside and remanded for fresh hearing after condoning a 1439-day delay.

Issue

Whether a substantial delay of 1,439 days in filing an appeal before the CIT(A) should be condoned, and the matter remanded for fresh assessment, when the original assessment order was passed ex-parte and the delay was caused by the negligence of a deceased tax consultant and the assessee’s lack of digital knowledge.

Facts

The assessee did not file a voluntary return of income for the Assessment Year 2014-15.
Based on information regarding the sale of two pieces of land, the Assessing Officer issued a notice under Section 148 to reopen the assessment.
The assessee remained non-compliant despite the issuance of multiple subsequent statutory notices.
The Assessing Officer invoked Section 50C, calculated the long-term capital gains based on stamp duty valuation, and completed the assessment ex-parte.
The assessee filed an appeal before the CIT(A) with a delay of approximately 1,439 days, explaining that the delay arose due to the negligence of their deceased tax consultant and their own lack of digital operating knowledge.
The CIT(A) refused to condone the delay and dismissed the appeal in limine (at the threshold) as time-barred.

Decision

Held that since the assessment order was passed ex-parte, the assessee did not have a proper opportunity to present their case before the Assessing Officer.
Held that the CIT(A) ought to have condoned the delay because the reasons provided by the assessee constituted “sufficient cause” in the interest of justice and fair play.
The order of the CIT(A) was set aside, the delay was condoned, and the entire matter was remanded back to the Assessing Officer for a de novo (fresh) assessment.

Key Takeaways

Substance and Justice Prevail Over Technical Delay: Where substantial justice is pitted against technical considerations, courts and tribunals prefer to condone even lengthy delays (such as 1,439 days) to ensure a taxpayer is not left without a remedy.
Professional Negligence as Sufficient Cause: The death or gross negligence of a tax consultant, coupled with an assessee’s lack of digital literacy, is recognized as a valid and sufficient cause for a delay in filing an appeal.
Preference for Merits Over Dismissal In Limine: Tax authorities are encouraged to decide cases on their financial and legal merits rather than disposing of them on hyper-technical procedural grounds, especially when the initial assessment was structured without the taxpayer’s input.

IN THE ITAT KOLKATA BENCH ‘D’

Samar Nath Mondal

Income-tax Officer

George Mathan, Judicial Member
and Rakesh Mishra, Accountant Member

IT Appeal No(s). 367 (KOL) OF 2026
[Assessment year 2014-15]

JUNE 9, 2026

B.B. Payara, Adv. for the Appellant. S.B. Chakraborthy, Sr. DR for the Respondent.

ORDER

Rakesh Mishra, Accountant Member. – This appeal filed by the assessee is against the order of the Commissioner of Income Tax (Appeals)-NFAC, Delhi [hereinafter referred to as Ld. ‘CIT(A)’] passed u/s 250 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) for AY 2014-15 dated 17.11.2025.

2. The assessee is in appeal before the Tribunal raising the following grounds of appeal:

“1. That on the facts and circumstances of the case the Ld. C.I.T (A) erred in rejecting the Appeal of the Appellant as there was delay of 1439 days in filing the Appeal and the person who had represented the Appeal before the Ld. CIT (A) had failed to explain properly the reasons behind the delay in filing the Appeal before the Ld. CIT (A), the same has been fully explained in the enclosed Affidavit duly sworn before the Notary Public explaining therein the reason of delay in filing the Appeal before the Ld. CIT (A). On perusal of the said Affidavit it will be seen that your Appellant was prevented by reasonable causes for non-filing the Appeal within the stipulated time which were not properly explained before the Ld. CIT (A) during the course of hearing. The Affidavit is being submitted herewith may kindly be considered for the sake of justice.

2. That on the facts and circumstances of the case the Ld. C.I.T (A) erred in rejecting the Appeal on the ground of delay in filing the Appeal only without considering the merits of the Appeal, thereby causing injustice to the Appellant.

3. That on the facts and circumstances of the case the Ld. C.I.T (A) has caused a genuine hardship in payment of huge alleged tax liability against there may be a nominal tax liability.

4. That the order passed u/s.250 of the Act by the Ld. C.I.T.(A) is bad in law.

5. That the Appellant craves leave to submit further grounds or alter, amend or modify the grounds already taken before or at the time of hearing of the Appeal.”

3. Brief facts of the case are that the assessee had not filed the return of income for AY 2014-15. Based on the information regarding the sale of two pieces of land to M/s. Goodluck Merchants Pvt. Ltd., the Assessing Officer (hereinafter referred to as the Ld. ‘AO’) reopened the assessment u/s 147 of the Act and issued a notice u/s 148 of the Act on 20.03.2020, requiring the assessee to file the return of income. Despite the issuance of subsequent notices u/s 142(1) of the Act, the assessee remained totally non-compliant and failed to furnish any details. During the assessment proceedings, the Ld. AO determined that the assessee’s share in the sale consideration of the two properties was Rs. 35,14,988/- and Rs. 27,68,982/- based on the stamp duty valuations of Rs. 1,13,49,656/- and Rs. 1,59,68,754/- respectively and observing that the assessee had handed over possession to the developer, which constituted a transfer u/s 2(47) r.w.s. 53A of the Act, the Ld. AO applied section 50C of the Act and determined the deemed sale consideration attributable to the assessee at Rs. 62,83,970/- and computed the ‘LongTerm Capital Gains’ which was added to the income and the assessment was completed ex-parte u/s 144 r.w.s. 147 r.w.s. 144B of the Act on 21.09.2021 after adding this amount. Aggrieved with the assessment order, the assessee filed an appeal before the Ld. CIT(A), who noted that there was a delay of approximately 1439 days in filing the appeal before him by the assessee, who attributed the delay to the alleged negligence of a deceased tax consultant, lack of digital knowledge, and being nonaware with the notices issued on the e-portal. The Ld. CIT(A) relied upon the Hon’ble Supreme Court’s ruling in Basawaraj v. Land Acquisition Officer (2013) 14 SCC 81 and observed that negligence, inaction, or lack of diligence on the part of an assessee or his representative cannot constitute a sufficient cause for condoning such an inordinate delay and holding that the statutory duty to remain vigilant lay with the assessee and that the explanation offered did not demonstrate reasonable steps taken to supervise his tax affairs over the prolonged period, the Ld. CIT(A) refused to condone the delay of 1439 days and dismissed the appeal in limine as being barred by limitation and confirmed the action of the Ld. AO.

4. Aggrieved with the order of the Ld. CIT(A), the assessee has filed the appeal before the Tribunal.

5. Rival contentions were heard and the submissions made have been examined. It was submitted by the Ld. AR that the assessment was reopened as the assessee was found to have sold 2 pieces of land along with other parties. As there was no compliance to the notice issued, the share of the assessee as per the market value was added to the total income by invoking the provision of section 50C of the Act. The land was sold to M/s Goodluck Merchants Pvt. Ltd. and as the possession had also been handed over to the developers, therefore, the capital gains was charged. However, the entire sale consideration received by the assessee and as worked out on the basis of the market value, was added to the income and apparently no indexed cost of acquisition was allowed. In the course of the appeal, the assessee has filed the written submission in which after claiming the exemption under section 54F for the flat purchase for Rs. 9,09,020/-, the long-term capital gain has been worked out at Rs. nil. The written submission filed is as under:

BEFORE THE HON’BLE “D” BENCH, I.T.A.T. KOLKATA, IN THE CASE OF SRI SAMARNATH MONDAL IN RESPECT OF I.T.A. NO. 367/KOL/2026

FOR THE ASSESSMENT YEAR 2014-15 BRIEF HISTORY & SUBMISSION

The Appellant above named did not file any Income Tax Return for the above Assessment year as he did not have any taxable income.

But the Assessing Officer on the basis of information available in the I.T. Department came to know that the Appellant had sold two pieces of lands along with other parties. On the basis of the said information after taking approval from the competent authority, the A.O. issued to the Appellant Notice u/s. 148 of the LT. Act, 1961 on 20.03.2020, which was although served on him but there was no response. Thereafter as per Assessment Order although various notices and letters were issued and served on the Appellant there was no single response. Finding no other way the A.O. had completed Assessment u/s.147r.w.s.144r.w.s.144B of the Act on 21.09.2021 determining Assessed Income at Rs.62,83,970/- and raising a Demand of Rs.34,46,398/-.

The Appellant vide his Affidavit sworn before the Notary Public of India, which has been enclosed along with this Appeal has confessed that all the papers, which were received from the office of the A.O. from time to time were handed over for taking necessary and timely action to one Mr. CHIRANJIB DAS of 4/2A, Raja Ram Mohan Sarani, P.S. Amherst Street, Kolkata-700009, to whom the Appellant believed blindly and who also assured him for doing the needful in the matter for which he was paid his fees, filing fees of Appeal etc. In the middle of June,2025, when the adjustment of Refunds for the Assessments 2023-24 & 2024-25 were made by the Department against the Demand for the A.Y. 2014- 15, the Appellant could understand there was something wrong. To clarify the issue he went to the house of Mr. Chiranjib Das and came to know about his sudden death, collected all the papers given to him and his Death Certificate from his wife. Thereafter he was in search of a reliable Tax Consultant through his friend circle and about after a month he was able to find out a reliable Tax Consultant who had helped him to file an Appeal. Thus there was about 1439 days delay in filing the Appeal for which one Petition for condonation of delay, although was filed, but the Ld. CIT (A) has dismissed the Appeal with the following remarks, “Based on the foregoing the Appeal filed by the appellant stands dismissed and the addition made by the AO is upheld.”

In view of the facts stated herein above, it is prayed that the delay of 1349 days in filing the Appeal before the Ld. CIT (A) was not deliberate, it was due to some unexpected situation which was beyond the imagination and controlled of the Appellant, hence for the sake of justice, the Appellant’s case may kindly be considered sympathetically so that an opportunity may kindly be allowed for determining the correct income and tax, if any payable thereon.

In this connection, your kind attention is drawn to the decision of the Hon’ble Supreme Court in the case of Collector, Land Acquisition, Shri A. Manoharan v. Katiji and Others (1987) 167ITR 471 (SC) wherein the Apex Court observed as follows:

1. Ordinarily a litigant does not stand to benefit by lodging an appeal late.

2. Refusing to condone delay can result in a meritorious matter being thrown out at the very threshold and cause of justice being defeated. As against this when delay is condoned the highest that can happen is that a cause would be decided on merits after hearing the parties.

3. “Every day’s delay must be explained” does not mean that a pedantic approach should be made. Why not every hour’s delay, every second’s delay? The doctrine must be applied in a rational common sense pragmatic manner. 4. When substantial justice and technical considerations are pitted against each other, cause of substantial justice deserves to be preferred for the other side cannot claim to have vested right in injustice being done because of a non-deliberate delay.

5. There is no presumption that delay is occasioned deliberately, or on account of culpable negligence, or on account of mala fides. A litigant does not stand to benefit by resorting to delay. In fact, he runs a serious risk.

The A.O. has computed the Long Term Capital Gain of the Appellant at Rs.62,83,970/- against his share of sales proceeds on sale of 2 plots of ancestral properties. While computing the said income the A.O. had not allowed the Indexation Cost of Acquisition, which he is legally entitled. After taking into consideration the Index Cost of Acquisition his share of LTCG, as per Approved Valuer’s Report works out as under:

1. Cost of Land admeasuring 7.615 Cottahs as on Rs.31,98,300/-

01.04.2001
Index Cost of Acquisition for the F. Y. 2013-14 works out to Rs.31,98,300×220/100 = “70,36,260/-” Add: Cost of Structure 3,50,000/-
Aggregate cost of land & Structure	Rs.73,86,260/-
Sales Proceeds of Land as per Deed of Conveyance Less: Aggregate value of land & Structure Total Long Term Capital Gain Appellant’s l/9^th share works out to	Rs.89,47,952/- Rs.73,86,260/- Rs.15,61,692/- Rs. 1,73,521/-
2 Cost of Land admeasuring 10.97 Cottahs as on 01.04.2001	Rs.46,07,400/-
Index Cost of Acquisition for the F. Y. 2013-14 works out to Rs.46,07,400×220/100 = “Rs.1,01,36,280/-” Add: Cost of Structure Rs. 4,50,000/-
Aggregate cost of land & Structure	Rs. 1,05,86,280/-
Sales Proceeds of Land as per Deed of Conveyance Less: Aggregate value of land & Structure Total Long Term Capital Gain Appellant’s 35.185% of share works out to	Rs. 1,28,89,098/- Rs. 1,05,86,280/- Rs. 23,02,818/- Rs. 8,10,247/-
Appellant’s Aggregate Long Term Capital Gain= (Rs. 1,73,521+Rs.8,10,247) = Less: Exemption u/s. 54 (Purchase of Flat for Rs.19,09,020/- Total Long Term Capital Gain =	RS. 9,83,768/- Rs. 9,83,768/- NIL

5.1 The Ld. AR submitted that since no capital gains is chargeable and the delay had occurred on account of circumstances as mentioned in the application seeking condonation of delay; therefore, the same maybe condoned for appeal filed before the Ld. CIT(A) and the matter may be remanded to the Ld. AO for fresh adjudication. The Ld. DR relied upon the order of the Ld. CIT(A) and requested that the same may be upheld. The assessee has filed an application along with an affidavit justifying the condonation of delay before the Ld. CIT(A). The contents of the application are as under:

Condonation of delay

SAMAR NATH MONDAL BMSPM8601A AY-2014-15

1. That appellant has no taxable income so that he did not file any return for A.Y 2014-15. The appellant had filed its IT return for the AY-2015-16 for the first time on 14.03.2016 through a tax consultant since then he was authorized to deal with your appellant’s IT matter and handed over all income tax notices, order, etc received from IT Department for necessary compliance in due time but the said consultant had not complied any notices keeping me in dark. The impugned assessment was received on 21.09.2021 which was handed over to him but he did not file any appeal or even represented the case before the Id AO resulting ex-parte order u/s 144/147. Thus, the cause for delay was beyond the control of the appellant.

2. That your appellant due to lack of digital knowledge was not following the e-portal where all the notices and assessment were served. All the notices were issued by IT Department and on receiving of the same notices were forwarded to my Tax consultant for necessary compliance to the I.T department.

3. That your appellant had received the hard copy of the assessment order or demand notice u/s 156 of the Act through registered post and handed over to the Tax consultant who was authorized to deal with the same. Few days before I went to the Tax consultant office to enquire about my IT matters position and wanted to know why my IT refunds for the AY- 2023-24 & AY 2024-25 have been adjusted with demand but his wife told me that he has expired and given me the copy of the demand notice and penalty orders. It is evident from the order that the Tax consultant had not moved my case either to appeal nor complied to all notices during scrutiny proceedings. I have no option than to depend on a legal consultant as I am not aware of I.T. matters and if the Tax consultant does not do his job, the appellant cannot be held responsible. Thus, there is a delay in filing the present appeal which is not attributable to your appellant and hence may be condoned for 1470 days.

That appellant further prays before your good self that due to negligence of the earlier consultant, the receipt of the impugned assessment order and notices, shall not be penalized and allow to submit his arguments regarding the addition so made for investment so deposited into his bank account. Thus, it is preyed that delay in filing the appeal against the impugned assessment order maybe condoned as your appellant could not make any representation before the ld AO at the time of assessment proceedings. It is well settled in law that if the tax is not legitimately due, an assessee cannot be made to pay the tax. It is the AO’s responsibility to collect tax as per the Income Tax Act. It must only collect legitimate tax due, not what is not due. In order to be fair and follow the principle of natural justice, your appellant seek a chance to explain the sources of the deposits which can only be done if the appeal is admitted and the delay is condoned.

6. We have considered the submissions made, gone through the facts of the case and perused the record and the order of the Ld. CIT(A). Since there was no proper compliance before both the Ld. AO as the assessment order is ex parte and the appeal was dismissed by the Ld. CIT(A) on account of delay which ought to have been condoned as there was sufficient cause; therefore, in the interest of justice and fair play it was considered by the Bench that the request of the assessee to set aside the order of the Ld. CIT(A) and remand the assessment proceeding before the Ld. AO may be allowed so that a proper opportunity of being heard may be provided. Hence, after examining the facts of the case, we deem it appropriate to set aside the order of the Ld. CIT(A) and remand the matter to the Ld. AO for making the assessment de novo. Needless to say, the assessee shall be given a reasonable opportunity of being heard to make any further submission he wants to make in support of the relief claimed and shall not seek unnecessary adjournments. Accordingly, the grounds taken by the assessee in the appeal are partly allowed for statistical purposes.

7. In the result, the appeal filed by the assessee is partly allowed for statistical purposes.