ITAT Rajkot Accepts Delay Caused by Consultant’s Lapse and Sends Case Back to AO for De Novo Assessment

Background of the Dispute

The matter in Jignesh Narendrabhai Mandaliya Vs ITO came up before the Income Tax Appellate Tribunal, Rajkot Bench, in relation to Assessment Year 2019-20. The assessee challenged an ex parte appellate order passed by the National Faceless Appeal Centre (NFAC) under section 250 of the Income Tax Act 1961. That order had affirmed an addition of ₹7,50,000 made in reassessment proceedings conducted under section 147 read with section 144B.

The assessee approached the Tribunal with an appeal that was admittedly filed late by 104 days. A specific petition supported by an affidavit was moved seeking condonation of this delay, on the ground that all communications from the NFAC, including notices and the final appellate order, were delivered to the email ID of a former tax consultant. As per the assessee, this consultant never passed on the information, which led to complete unawareness about the appellate order and, consequently, late filing before the Tribunal.

The Revenue resisted both the request for condonation and the plea for remand, arguing that the assessee had been negligent throughout the proceedings and had not demonstrated “sufficient cause” as required by law.

The Tribunal eventually condoned the delay, admitted the appeal, and then set aside the NFAC order, remanding the case back to the Assessing Officer (AO) for a fresh decision after providing due opportunity of hearing to the assessee.

Procedural History

Assessment and Reassessment Proceedings

  • The original assessment in this case was reopened and completed under section 147 read with section 144B on 18.01.2024.
  • The reassessment order contained an addition of ₹7,50,000.
  • The assessee filed an appeal before the NFAC, which functions as the appellate authority under section 250.
  • The NFAC (Ld. CIT(A)) passed an order dated 27.06.2025, dismissing the appeal and sustaining the addition. This order was passed ex parte, without representation from the assessee.

Appeal Before the ITAT

The assessee challenged the NFAC order before the ITAT, Rajkot, raising multiple grounds, including:

  1. The correctness of the addition of ₹7,50,000.
  2. Non-allowance of deductions and exemptions while completing the assessment.
  3. Application of section 115BBE for tax computation.
  4. Passing of an ex parte order under section 250.
  5. Lack of reasonable opportunity during assessment as well as appellate proceedings.

However, before the Tribunal could go into the merits, it had to address the preliminary issue of a 104-day delay in filing the appeal.

Condonation of Delay: Consultant’s Error and Substantial Justice

Assessee’s Explanation for the 104-Day Delay

The assessee explained the delay by filing an affidavit, stating in substance:

  • The NFAC proceedings were conducted electronically via the ITBA/e-filing portal.
  • Notices under section 250 and the final appellate order dated 27.06.2025 were sent to an email ID that belonged to the assessee’s previous tax consultant.
  • This former consultant allegedly did not inform the assessee about any of these communications.
  • As a result, the assessee remained unaware that the appellate proceedings were going on and that an ex parte order had been passed.
  • The assessee only discovered the existence of the order when he later checked the ITBA system.
  • Once aware, the assessee promptly took action to file an appeal before the ITAT, resulting in the 104-day delay.

On this basis, the assessee urged that the delay was neither intentional nor due to any deliberate inaction, but solely attributable to the lapse of the earlier consultant.

Revenue’s Objection