ITAT Bangalore Holds 247-Day Delay Not Inordinate Where Sufficient Cause Exists — Section 271AAC Penalty Matter Remanded for Fresh Adjudication

Background and Context

The Income Tax Appellate Tribunal, Bangalore, recently examined a significant procedural question in the case of Malavagoppa Hallapa Sharath Vs ITO (ITAT Bangalore) concerning whether a delay of 247 days in preferring an appeal before the CIT(A)/NFAC could be condoned when the assessee demonstrated a reasonable and non-deliberate cause for such delay. The matter pertained to Assessment Year 2022-23 and arose in the context of penalty proceedings initiated under Section 271AAC(1) of the Income Tax Act, 1961.

The underlying facts involved a penalty of Rs. 2,48,433 levied on the assessee, which stemmed from additions of Rs. 31,85,040 made under Section 69A of the Act. The CIT(A)/NFAC, Delhi, by its order dated 27.10.2025, had declined to condone the delay and dismissed the appeal without examining it on merits.

Factual Matrix

Who Is the Assessee?

Malavagoppa Hallapa Sharath, the assessee, is a farmer residing in a rural locality in the Shivamogga district of Karnataka. Given his background and limited familiarity with income tax compliance procedures, he had entrusted the handling of his tax affairs — including responding to notices — to an income tax professional.

How Did the Delay Arise?

The sequence of events that led to the 247-day delay can be understood as follows:

  1. The Assessing Officer (Assessment Unit, National Faceless Penalty Centre) passed an order under Section 271AAC(1) on 23.07.2024, levying a penalty of Rs. 2,48,433.
  2. The appeal before the CIT(A)/NFAC was required to be filed on or before 22.08.2024 (within 30 days of the penalty order).
  3. The appeal was eventually filed on 26.04.2025, resulting in a delay of 247 days (from 23.08.2024 to 26.04.2025).
  4. The assessee submitted that the income tax professional to whom the matter had been entrusted failed to file any submissions before the Assessing Officer, causing the assessment to conclude as a best-judgment assessment.
  5. The assessee came to know of this non-compliance only in April 2025, when his current Chartered Accountant accessed the e-filing portal and discovered the state of affairs, following which immediate steps were taken to file the appeal.

The assessee maintained that the delay was entirely attributable to circumstances beyond his control, with no element of deliberateness or bad faith.

Grounds of Appeal Raised Before ITAT

Before the Tribunal, the assessee raised multiple grounds challenging the CIT(A)/NFAC's order, which included: