Mumbai ITAT Accepts Long Delay in Filing Appeals When Tax Orders Were Not Properly Communicated

Background and Context

The decision in Chandrakant Babaladas Patel Vs ACIT (ITAT, Mumbai) deals with an important procedural issue: whether an inordinate delay in filing appeals before the CIT(A) can be condoned where the assessee did not effectively receive assessment and penalty orders due to the way his tax affairs were being handled.

Two appeals were before the Mumbai Bench of the ITAT, arising from search-related proceedings:

  • One appeal related to assessment under Section 153A r.w.s. Section 144 for Assessment Year 2014-15 (ITA No. 5134/Mum/2026); and
  • The other appeal related to penalty under Section 271F for Assessment Year 2013-14 (ITA No. 5129/Mum/2026).

The common and only point for the Tribunal’s consideration at this stage was whether the delay in filing appeals before the CIT(A)—1,289 days in the quantum matter and 1,166 days in the penalty matter—was liable to be condoned.

The Tribunal had already dealt with the same assessee in connected years (Assessment Years 2015-16, 2016-17, 2017-18 and 2019-20) involving similar facts and the same explanation for delay. That earlier consolidated order formed the basis for the approach adopted in this case.

Procedural History of the Appeals

Orders Passed by the AO and Delay Before CIT(A)

As recorded in the order of the CIT(A), the chronology was as follows:

  • For Assessment Year 2014-15, an assessment order under Section 153A r.w.s. Section 144 was passed on 22.09.2021.
  • The assessee filed the appeal before the CIT(A) only on 03.04.2025, leading to a delay of 1,289 days.

Similarly, for Assessment Year 2013-14 relating to penalty:

  • A penalty order under Section 271F was passed on 27.01.2022.
  • The appeal against this penalty order was filed on 07.04.2025, resulting in a delay of 1,166 days.

The assessee moved applications seeking condonation of delay in both matters. The CIT(A) first considered whether the delays could be condoned. After rejecting the condonation applications, the CIT(A) dismissed the appeals without going into the merits of the additions or the penalty.

Explanation Offered by the Assessee

Role of Employer and Communication of Departmental Notices

The assessee explained that the events followed a search action, after which his employer Shri Kamlesh Rajnikant Shah started dealing with his income-tax compliances. According to the assessee:

  • The mobile number and e-mail ID registered on the assessee’s Income-tax e-filing profile actually belonged to Shri Kamlesh Rajnikant Shah.
  • As a result, notices and orders issued by the Department in relation to the assessee were going to the employer’s contact details rather than the assessee’s own.
  • Due to this arrangement, the orders and communications of the Department were not effectively brought to the assessee’s knowledge at the relevant time.

Only later, upon becoming aware that assessment and penalty proceedings had been completed in his case, the assessee claimed he took steps to:

  1. Obtain copies of the relevant assessment and penalty orders; and
  2. File appeals before the CIT(A) along with applications for condonation of delay.