CIT(A) obliged to decide appeals on merits and pass speaking orders under Section 250(6): ITAT Delhi ruling

Background and procedural history

In Mahavir Prashad Jain Vs Assessing Officer (ITAT Delhi), the Delhi Bench of the Income Tax Appellate Tribunal examined whether the Commissioner of Income Tax (Appeals) [CIT(A)] can summarily dismiss an appeal for non-compliance without deciding the issues on merits. The Tribunal ultimately set aside the ex parte appellate order and sent the matter back to the CIT(A) for a fresh, reasoned adjudication.

The matter arose from reassessment proceedings for Assessment Year 2020-21. The assessee, an elderly individual, had not filed a return under Section 139 for that year. Based on risk parameters flagged on the departmental insight portal, the Assessing Officer (AO) initiated proceedings under Section 147 on the ground that the assessee, along with seven co-owners, had allegedly understated the sale consideration in respect of a land transaction.

The AO passed an order under Section 147 r.w.s. 144B on 04.03.2025 and computed long-term capital gains by adopting a higher sale consideration as per an agreement to sell dated 13.02.2018. The assessee challenged this order before the CIT(A), raised multiple factual and legal grounds, but did not respond to three hearing notices. The CIT(A) treated the non-compliance as lack of interest in pursuing the appeal, and dismissed it ex parte without dealing with any of the specific grounds raised.

The assessee then filed a second appeal before the ITAT, contesting both the manner in which the first appeal had been dismissed and the reliance on a photocopy of an alleged agreement to sell.

Condonation of delay in filing appeal before ITAT

Explanation for delay

The appeal before the Tribunal was filed 71 days after the limitation period prescribed under Section 253(3) of the Income Tax Act 1961. Along with the memorandum of appeal, the assessee filed a condonation application explaining the delay. The key assertions were:

  • The assessee is an advanced-age individual.
  • The appellate order of the CIT(A) was communicated by email, which the assessee did not notice due to unfamiliarity with email communication.
  • Family members also did not detect the email.
  • The existence of the order came to light only in January 2026 when the assessee’s counsel checked the income-tax portal.
  • Immediately after becoming aware of the order, steps were taken to prepare and file the appeal with the Tribunal.
  • Non-condonation would result in serious and irreparable prejudice to the assessee.

The assessee sought condonation of delay, initially describing it as 83 days, though under the amended provision in the 1961 Act the effective delay was 71 days.

Tribunal’s approach to delay and reliance on Supreme Court precedent

The Departmental Representative opposed condonation in principle but left it to the Bench to decide considering the facts. After examining the condonation petition and the case record, the ITAT condoned the 71-day delay and proceeded to hear the matter on merits.

The Tribunal emphasised that when there is a conflict between strict technical compliance and substantial justice, courts lean in favour of substantial justice in the absence of mala fides or gross negligence. The ITAT noted:

  • The assessee had nothing to gain by deliberately filing the appeal late.
  • The delay was attributable to age, limited familiarity with email communication, and the specific mode of electronic service.

The Tribunal placed reliance on the Supreme Court judgment in Collector, Land Acqusition, Anantnag v. Mst. Katiji & Ors. 1987(2) SCC 107, which underscores a liberal approach to condonation where no deliberate inaction or mala fide intent is evident.

Facts leading to reassessment: land sale transaction

Information triggering reopening

The AO initiated proceedings after receiving specific information flagged as “High Risk CRIU/VRU” on the insight portal. According to that information:

  • The assessee and seven other co-owners held a property measuring 20 Kanal and 15 Marla.
  • The assessee’s share was 2.31 Kanal.
  • The total agreed sale consideration as per an agreement to sell and purchase dated 13.02.2018 was Rs. 4,10,92,000/-.
  • The transaction was later formalised through two registered sale deeds dated 20.01.2020 and 22.09.2022.

Based on this data, the AO tabulated the assessee’s alleged share in the transaction as follows (as per the agreement rate):

  • Share: 2.3 Kanal
  • Sale consideration as per agreement: Rs.