SARDAR FANCY STORES,RAJNANDGAON V. INCOME TAX OFFICER - 1 RAJNANDGAON, RAJNANDGAON

ITA 770/RPR/2025

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The case involves M/s. Sardar Fancy Stores appealing against an ex-parte order passed by the CIT(Appeals)/NFAC due to non-compliance with hearing notices. The Tribunal noted that the assessee did not receive the order as they had opted not to receive communications via email, leading to a delay in filing the appeal by 164 days. The Tribunal, considering the principles of natural justice and previous Supreme Court judgments, decided to condone the delay and remand the case for a fresh hearing, emphasizing the need for substantial justice over technicalities.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 827366 (ITAT-RAIPUR)
• Duration Of Justice: 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-01-2026
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2018-2019
• Appeal Filed On: 11-12-2025
• Other Referred Cases: Vidya Shankar Jaiswal Vs. ITO, Ward-2, Ambikapur, Jagdish Prasad Singhania Vs. Additional Commissioner of Income Tax (TDS), Raipur, Collector, Land Acquisition Vs. Mst. Katiji & Ors, Inder Singh Vs. the State of Madhya Pradesh, Brajesh Singh Bhadoria Vs. Dy./ACIT, Central Circle-2, Naya Raipur, Vijay Shrinivasrao Kulkarni Vs. Income-tax Appellate Tribunal, Delhi Transport Corporation vs. DTC Mazdoor Union, Commissioner of Income Tax Madras v. Chenniyappa Mudiliar
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ASSESSEE GETTING; PRIYANKA PATEL
• Keywords: Condonation of delay; Set aside; Opportunity of being heard; Rule of consistency; Principle of natural justice; TDS; Validity of assessment

Judgement Text

"आयकर अपीलȣय अͬधकरण Ûयायपीठ “एक-सदèय” मामला रायपुर मɅ IN THE INCOME TAX APPELLATE TRIBUNAL RAIPUR BENCH “SMC”, RAIPUR Įी पाथ[ सारथी चौधरȣ, ÛयाǓयक सदèय क े सम¢ BEFORE SHRI PARTHA SARATHI CHAUDHURY, JUDICIAL MEMBER आयकर अपील सं./ITA No.770/RPR/2025 Ǔनधा[रण वष[ /Assessment Year : 2018-19 M/s. Sardar Fancy Stores Cinema Line, Rajnandgaon Chhattisgarh-491 441 PAN: AAKFS6762M .......अपीलाथȸ / Appellant बनाम / V/s. The Income Tax Officer-1, Ranjandgaon (C.G.) ……Ĥ×यथȸ / Respondent Assessee by : None Revenue by : Dr. Priyanka Patel, Sr. DR सुनवाई कȧ तारȣख / Date of Hearing : 08.01.2026 घोषणा कȧ तारȣख / Date of Pronouncement : 08.01.2026 Printed from counselvise.com 2 Sardar Fancy Stores Vs. ITO-1, Ragnandgaon ITA No.770/RPR/2025 आदेश / ORDER PER PARTHA SARATHI CHAUDHURY, JM The present appeal preferred by the assessee emanates from the order of the Ld.CIT(Appeals)/NFAC, Delhi dated 11.04.2025 for the assessment year 2018-19 as per the grounds of appeal on record. 2. When the matter was called for hearing none appeared for the assessee nor any adjournment petition has been filed. The matter is heard after recording the submissions of the Ld. Sr. DR and on a careful perusal of the materials available on record. 3. At the very outset, it is noted that the appeal is time barred by 164 days. Elaborating the reasons leading to the said delay, the assessee has filed condonation petition a/w. affidavit dated 23.12.2025, wherein it is stated as follows: Printed from counselvise.com 3 Sardar Fancy Stores Vs. ITO-1, Ragnandgaon ITA No.770/RPR/2025 On perusal of the aforesaid affidavit, it is observed that in Form 35, there is specific column on the personal information mentioning “whether notices /communication may be sent on email?” and the assessee has given reply as “No” which means there is an option given to the assessee for receiving of the notice/communication through email or not. In this case, the order of the Ld. CIT(Appeals)/NFAC was sent by the department through registered email id but since the assessee has opted as “No”, therefore, there was no checking of such mail and therefore consequent non-receipt of the said order resulting in the delay. Printed from counselvise.com 4 Sardar Fancy Stores Vs. ITO-1, Ragnandgaon ITA No.770/RPR/2025 4. The Ld. Sr. DR did not raise any objection as regards the condonation of delay. 5. Considering the contents of the condonation petition a/w. affidavit on the ground of limitation, I am of the considered view that such delay has been caused due to technical issue arising from Form 35 itself and it cannot be attributed for any deliberate or malafide conduct on the part of the assessee since there was no receipt of the order of the Ld. CIT(Appeals)/NFAC by the assessee physically while the assessee has already opted as “No” as observed herein before and for that reason, the said delay has occurred. In so far the delay is concerned, it would be relevant to point out that the Hon’ble Supreme Court in the case of Vidya Shankar Jaiswal Vs. ITO, Ward-2, Ambikapur, Civil Appeal Nos……………../2025 [Special Leave Petition (Civil) Nos. 26310- 26311/2024, dated 31.01.2025, had observed that a justice oriented and liberal approach ought to be adopted while considering the aspect of condoning the delay involved in filing of the appeal. Also, the Hon’ble High Court of Chhattisgarh in the case of Jagdish Prasad Singhania Vs. Additional Commissioner of Income Tax (TDS), Raipur (C.G.), TAX Case No.17/2025, dated 24.02.2025, after relying on the judgment of the Hon’ble Supreme Court in the case of Vidya Shankar Jaiswal Vs. ITO, Ward-2, Ambikapur (supra) had held that a justice oriented and liberal Printed from counselvise.com 5 Sardar Fancy Stores Vs. ITO-1, Ragnandgaon ITA No.770/RPR/2025 approach be adopted while considering the application filed by the assessee for condonation of delay. 6. The Hon’ble Supreme Court in the case of Collector, Land Acquisition Vs. Mst. Katiji & Ors, reported in 167 ITR 471 (SC) has held that when substantial justice and technical considerations are pitted against each other, cause of substantial justice deserves to be preferred for the other side cannot claim to have vested right in injustice being done because of a non-deliberate delay. Refusing to condone delay can result in a meritorious matter being thrown out at the very threshold and cause of justice being defeated. As against this when delay is condoned the highest that can happen is that a cause would be decided on merits after hearing the parties. 7. That in the recent judgment of the Hon’ble Supreme Court in the case of Inder Singh Vs. the State of Madhya Pradesh, Civil Appeal No…………/2025, Special Leave Petition (Civil) No.6145 of 2024, dated 21st March, 2025, the Hon’ble Apex Court while interpreting Section 5 of the Limitation Act, 1963 regarding the condonation of delay in respect of case of land acquisition has observed and held on the aspect of delay that although the delay cannot be condoned without sufficient cause, the merits of the case could not be discarded solely on the ground of delay. A liberal approach, therefore, should be taken in condoning the Printed from counselvise.com 6 Sardar Fancy Stores Vs. ITO-1, Ragnandgaon ITA No.770/RPR/2025 delay when limitation ground undermines the merits of the case and obstructs the substantial justice. In other words, the objective of the court should be to deliver substantial justice coupled with liberal and judicious approach while deciding the issue of limitation and whenever it is found that the case has merits which needs to be addressed substantially, in such case, the delay should be condoned. 8. Relying on the aforesaid judicial pronouncements and upon examination of the facts hereinabove on the issue of limitation, the said delay of 164 days is hereby condoned. 9. It is noted that as evident from Para 4 of the order of the Ld. CIT(Appeals)/NFAC, an ex-parte order has been passed by the said authority due to non-compliance from the assessee. The said Para 4 is extracted as follows: “4. During the appellate proceedings hearing notices were issued to the appellant on 25.09.2024, 18.11.2024, 29.11.2024, 03.01.2025, 15.01.2025 and 31.01.2025. The appellant requested adjournment however did not file any submissions.” There can be no doubt that sufficient opportunities were provided to the assessee which were not availed off by the assessee and hence, the Ld. CIT(Appeals)/NFAC was compelled to pass an ex-parte order. Printed from counselvise.com 7 Sardar Fancy Stores Vs. ITO-1, Ragnandgaon ITA No.770/RPR/2025 10. At the same time, no incriminating evidence has been filed by the Ld. Sr. DR against the assessee stating that such non-compliance was deliberate or malafide on the part of the assessee. In this scenario, benefit of doubt has been granted to the assessee on principle of consistency wherein there may be a possibility of prevailing circumstances beyond the control of the assessee and due to which the assessee was not able to comply with the hearing notices before the first appellate authority. In such circumstances position of the revenue shall not be jeopardized if the matter is remanded to the file of the Ld. CIT(Appeals)/NFAC for denovo adjudication providing one final opportunity to the assessee. 11. In these factual spectrum, I refer to the decision of the ITAT, “Division Bench”, Raipur in the cases of Brajesh Singh Bhadoria Vs. Dy./ACIT, Central Circle-2, Naya Raipur, IT(SS)A Nos. 1 to 6, 8 & 9/RPR/2025, dated 20.03.2025. Hence, on the principle of consistency as above discussed keeping the matter pending before the Tribunal will not serve any logical purpose. The relevant paras of the aforesaid decision (supra) are extracted as follows: “7. We have considered the submissions of the parties herein and analyzed the facts and circumstances involved in all the captioned appeals. After careful perusal of the documents on record, we find that the assessee had assailed the legal ground as aforestated, however, the fact of the matter is that on perusal of the respective orders of the Ld. CIT(Appeals) for all the years before us, it is also evident from Para 3 that there has been no compliance by the assessee before the said authority and as such, an ex-parte order was passed for the Printed from counselvise.com 8 Sardar Fancy Stores Vs. ITO-1, Ragnandgaon ITA No.770/RPR/2025 concerned years in appeal. Admittedly, as per record, sufficient opportunities had been provided to the assesse, however, there was no compliance by the assessee. In effect, rights and liabilities of the parties herein are yet to be adjudicated substantially at the level of the first appellate authority. Though in the impugned orders, discussion has been done as per material available on record by the Ld.CIT(Appeals) but they are only Form 35, statement of facts, grounds of appeal and the assessment order. However, due to non-compliance by the assessee, there are no submissions, evidence and documents submitted for adjudication by the assessee before the Ld. CIT(Appeals). That as per Para 3 of the Ld. CIT(Appeals) order, there has been no compliance on the part of the assessee for submitting detailed explanations regarding the grounds of appeal for the years under consideration which clearly shows that the grounds of appeal raised before the first appellate authority has not been substantiated on merits through corroborative evidence /submissions. 8. That in such scenario we are of the considered view that the Income tax Act is within the ambit of welfare legislation which are completely different from that of the penal legislation, therefore, benefit of doubt whenever arises, it has to be interpreted in favour of the assessee tax payer within the parameters of law and facts. There may be circumstances beyond control of the assessee because of which, the assessee may not have been able to represent his case on the given dates of hearing before the Ld. CIT(Appeals). Though it is correct that there was no compliance from the side of the assessee, however, nothing is there on record which suggests any deliberate non-compliance or malafide conduct of the assessee. That further, if one final opportunity is provided to the assessee to represent his case before the first appellate authority, the position of the revenue will also not be jeopardized. 9. Recently, the Hon’ble High Court of Bombay in the case of Vijay Shrinivasrao Kulkarni Vs. Income-tax Appellate Tribunal (2025) 171 taxmann.com 696 (Bom.), dated 04.02.2025 observed that in the case the Assessing Officer had passed an ex-parte order and when the matter went on appeal before the Ld. CIT(Appeals)/NFAC, it had also dismissed the matter ex-parte due to non-compliance by the assessee’s authorized representative, when the matter came up before the ITAT, it had failed to address the infirmity regarding the fact that the assessee was not afforded proper opportunity of being heard and the matter was dismissed ex- parte by the Ld. CIT(Appeals)/NFAC which amounted to Printed from counselvise.com 9 Sardar Fancy Stores Vs. ITO-1, Ragnandgaon ITA No.770/RPR/2025 violation of principles of natural justice, and instead ITAT decided the case on merits, in such circumstances, the Hon’ble High Court of Bombay held that passing of an order on merits by the ITAT even when the impugned order was passed ex-parte amounts to violation of principles of natural justice and accordingly, the said matter was remanded to ITAT for passing a fresh order in accordance with law after hearing the parties. The legal principle as enshrined in the present judgment is crystal clear that the principles of natural justice i.e. the right to be heard is to be provided and accordingly, the matter had to be substantially adjudicated by the appellate authority. Therefore, if the impugned order of the Ld. CIT(Appeals)/NFAC is an ex-parte order, the only recourse in conformity with the aforesaid judicial pronouncement is to remand the matter back to the file of the Ld. CIT(Appeals)/NFAC for fresh adjudication in terms with the principles of natural justice providing one final opportunity to the assessee. 10. In the aforesaid case, the Hon’ble High Court of Bombay had referred to a judgment of the Hon’ble Supreme Court in the case of Delhi Transport Corporation vs. DTC Mazdoor Union AIR 1999 SC 564, wherein the Supreme Court inter-alia held that Article 14 guarantees a right of hearing to a person who is adversely affected by an administrative order. The principle of audi-alteram partem is a part of Article 14 of the Constitution of India. In light of such decision, the petitioner ought to have been granted an opportunity of being heard which, partakes the characteristic of the fundamental right under Article 14 of the Constitution of India. 11. The Hon’ble High Court of Bombay in the aforesaid case had referred to a decision of the Hon’ble Supreme Court in the case of Commissioner of Income Tax Madras v. Chenniyappa Mudiliar 1969 1 SCC 591, wherein the Supreme Court in interpreting the section 33(4) of the Income Tax Act, 1922 has held that the appellate tribunal was bound to give a proper decision on question of fact as well as law, which can only be done if the appeal is disposed off on merits and not dismissed owing to the absence of the appellant. Reverting to the facts of the present case the grounds of appeal were simply filed before the Ld.CIT(Appeals) they were not substantiated or corroborated through submissions and filing of documentary evidences since the assessee had not complied before the Ld.CIT(Appeals) on the dates of hearing. Therefore, as per framework of the Act there must be adjudication on merits by the first appellate authority and one final Printed from counselvise.com 10 Sardar Fancy Stores Vs. ITO-1, Ragnandgaon ITA No.770/RPR/2025 opportunity be provided to the assessee to represent his matter on merits in the interest of natural justice. 12. There may even be a situation where the Ld. Counsel for the assessee may assail a legal ground before the Tribunal following the decision of the Hon’ble Supreme Court in the case of National Thermal Power Company Ltd. Ltd. Vs. CIT (1998) 229 ITR 383 (SC) with a contention that irrespective of the order of the Ld. CIT(Appeals) being ex-parte, the Tribunal may decide the legal issue that has been raised by the Ld. Counsel. In our view, the decision of the Hon’ble Supreme Court in the case of National Thermal Power Company Ltd. Ltd. Vs. CIT (supra) provides that any legal issue which goes to the root of the matter and is established through legal principles, the assessee can take up and raise such legal issue at any appellate forum irrespective of whether the assessee had raised such legal issue at the sub-ordinate level or not, however, it always depends on facts and circumstances of each case whether the Tribunal would decide the legal ground or in a case where the question is of natural justice and ex- parte order by the Ld. CIT(Appeals) the Tribunal would remand it back to Ld.CIT(Appeals) providing final opportunity to a bonafide assessee. The Tribunal as the highest fact finding authority must be certain enough that the impugned order before it has been passed on merits and is a speaking order where the assessee has also complied during the process of litigation. In case, where the order of the Ld. CIT(Appeals) itself is ex-parte and some legal ground is raised and if the Tribunal decides such legal ground where in fact principles of natural justice is left unanswered due to the fact that the impugned order before the Tribunal is ex-parte and there was no compliance by the assessee in such scenario the Tribunal would also be usurping the power of the Ld. CIT(Appeals) which is also a statutory authority as per the Act. This is due to the reason that as per framework of the Act, Ld.CIT(Appeals) is the first appellate authority where an appeal by assessee it would be substantially decided through a speaking order by the Ld.CIT(Appeals). When this part is over and either party is aggrieved second appeal lies before the ITAT. Now if for every ex-parte order passed by the Ld. CIT(Appeals), of course due to non-compliance by the assessee, if the Tribunal adjudicates a legal ground, for instance validity of assessment or reassessment order and answers it in favour of the assessee then it would create an easy route for assessee getting redressal from Tribunal even without bothering to comply with hearing notices before the Ld. CIT(Appeals). This would dismantle the structure of the Act which is definitely not the Printed from counselvise.com 11 Sardar Fancy Stores Vs. ITO-1, Ragnandgaon ITA No.770/RPR/2025 intention of the legislature. Here in this situation, where the benefit of doubt is given to the assessee since he had not complied with the hearing notices before the Ld. CIT(Appeals) which resulted in passing of an ex-parte order by the Ld. CIT(Appeals), in such scenario, as per the scheme of the Act and following the principles of natural justice, the only course of action is to remand the matter back to the file of the Ld. CIT(Appeals) for adjudication on merits providing one final opportunity to the assessee. 13. In view thereof, we set aside the respective orders of the Ld. CIT(Appeals) for all the years and remand the same to their file for denovo adjudication on merits. At the same time, we direct the assessee that this being the final opportunity, there must be compliance on merits before the first appellate authority. Needless to say, the Ld. CIT(Appeals) shall provide reasonable opportunity of being heard to the assessee and pass an order in terms of Section 250(4) and (6) of the Act within three months from receipt of this order.” 12. Respectfully following the aforesaid order, I set-aside the order of the Ld. CIT(Appeals)/NFAC and remand the matter back to its file for denovo adjudication while complying with the principles of natural justice as per similar terms. At the same time, it is directed that this being the final opportunity, the assessee shall duly comply with the hearing notices from the Ld.CIT(Appeals)/NFAC. 13. As per the aforesaid terms, the grounds of appeal of the assessee stands allowed for statistical purposes. Printed from counselvise.com 12 Sardar Fancy Stores Vs. ITO-1, Ragnandgaon ITA No.770/RPR/2025 14. In the result, appeal of the assessee is allowed for statistical purposes. Order pronounced in open court on 8th day of January, 2026. Sd/- (PARTHA SARATHI CHAUDHURY) ÛयाǓयक सदèय/JUDICIAL MEMBER रायपुर / Raipur; Ǒदनांक / Dated : 8th January, 2026. SB, Sr. PS आदेश कȧ ĤǓतͧलͪप अĒेͪषत / Copy of the Order forwarded to : 1. अपीलाथȸ / The Appellant. 2. Ĥ×यथȸ / The Respondent. 3. The Pr. CIT-1, Raipur (C.G.) 4. ͪवभागीय ĤǓतǓनͬध, आयकर अपीलȣय अͬधकरण, “एक-सदèय” बɅच, रायपुर / DR, ITAT, “SMC” Bench, Raipur. 5. गाड[ फ़ाइल / Guard File. आदेशानुसार / BY ORDER, // True Copy // Senior Private Secretary आयकर अपीलȣय अͬधकरण, रायपुर / ITAT, Raipur Printed from counselvise.com "