ITAT Restores Appeal Dismissed on Limitation Grounds

Background

The Mumbai Bench of the Income Tax Appellate Tribunal, Mumbai Bench has set aside the dismissal of an assessee’s appeal that was rejected by the National Faceless Appeal Centre for delay in filing. The case involved Natarajan Sridhar, whose assessment for AY 2015–16 had been reopened based on information indicating taxable salary income, property transactions, and high-value credit card payments. Following the reassessment, the Assessing Officer added over ₹10 lakh as unexplained investment under Section 69 of the Income Tax Act and also initiated penalty proceedings. Although the assessee challenged both the quantum addition and penalty, the first appellate authority dismissed the appeal in limine, holding that no “sufficient cause” had been shown for the delay.

Liberal Approach to Condonation and Emphasis on Merits

The Tribunal observed that higher judicial forums have consistently advocated a liberal approach while dealing with delay condonation, especially where substantive rights are involved. It found that the assessee had demonstrated reasonable cause and that the dismissal on technical grounds had prevented adjudication on merits. Holding that procedural lapses should not override substantial justice, the ITAT directed the CIT(A) to condone the delay and decide the appeal afresh in accordance with law. The assessee was also cautioned to cooperate fully in the appellate proceedings.

Both connected appeals were accordingly allowed for statistical purposes, reinforcing the principle that disputes should be resolved on merits rather than procedural technicalities.