VARALAKSHMI KRINAMOORTHY IYER,MUMBAI V. ITO 42 (3) (3) MUMBAI, MUMBAI

ITA 378/MUM/2026

AI Insights

The case involves appeals by Varalakshmi Krinamoorthy Iyer against the orders of the National Faceless Appeal Centre (NFAC), Delhi, which had dismissed her appeals concerning the assessment orders for the Assessment Years 2016-2017 and 2017-2018. The primary contention was the refusal to condone the delays in filing these appeals, which were dismissed as being filed beyond the prescribed time limits. The appellant, who is visually impaired, argued that she was unaware of the assessments due to non-receipt of notices, which were instead sent to her tax consultant's email. The Tribunal found merit in her arguments, noting the lack of proper service of notices and the exceptional circumstances under which the delays occurred, including the COVID-19 pandemic.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 841826 (ITAT-MUMBAI)
• Duration Of Justice: 1 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-02-2026
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: J
• Assessment Year: 2016-2017
• Appeal Filed On: 16-01-2026
• Other Referred Cases: Collector, Land Acquisition, Anantnag & Anr. vs. Mst.Katiji & Ors., N. Balakrishnan v. M. Krishnamurthy
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: ASSESSEE; ISSUANCE OF NOTICE DATED UNDER SECTION
• Keywords: Condonation of delay; Set aside; Opportunity of being heard; Additional evidence; Reasonable cause; Reassessment proceedings; Corroborative evidences; Salary income; Principle of natural justice
• Section: 147; 148; 144; 142(1); 10; 133A; 80C

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL “J (SMC)” BENCH, MUMBAI SHRI RAHUL CHAUDHARY, JUDICIAL MEMBER SHRI BIJAYANANDA PRUSETH, ACCOUNTANT MEMBER ITA No.378/MUM/2026 (Assessment Year: 2016-2017) ITA No.379/MUM/2026 (Assessment Year: 2017-2018) Varalakshmi Krinamoorthy Iyer B/56/224, S. V. Road, Near Ram Mandir Bus Stop, Siddharth Nagar, Goregaon West, Mumbai - 400104. Maharashtra. [PAN:AAGPI9884E] …………. Appellant Income Tax Officer 42(3)(3), Mumbai Kautilya Bhavan, Bandra Kurla Complex, Bandra East, Mumbai – 400051. Vs …………. Respondent Appearance For the Appellant/ Assessee For the Respondent/Department : : Shri N. B. Chavan Shri Aditya Rai Date Conclusion of hearing Pronouncement of order : : 26.02.2026 27.02.2026 O R D E R [ Per Rahul Chaudhary, Judicial Member: 1. These are two appeals preferred by the Assessee pertaining to Assessment Years 2016-2017 and 2017-2018. Since identical issues were raised in the appeals, the same were heard together and are, therefore, being disposed by way of a common order. 2. We would first take-up appeal for the Assessment Year 2016-2017. ITA No. 378/MUM/2026 (Assessment Year 2016-2017) 3. The present appeal preferred by the Assessee against the order, dated 28/11/2025, passed by the National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as ‘the CIT(A)’] whereby the Printed from counselvise.com ITA No. 378&379/Mum/2026 Assessment Year 2016-2017 & 2017-2018 2 Ld. CIT(A) had dismissed the appeal against the Assessment Order, dated 24/03/2024, passed under Section 147 read with Section 144B of the Income Tax Act, 1961 [hereinafter referred to as ‘the Act’], for the Assessment Year 2016-2017. 4. The Assessee has raised following grounds of appeal : “1. The learned CIT(A) erred in law and on facts in refusing to condone the delay of 1010 days in filing the appeal, despite the appellant demonstrating bona fide reasons and absence of any deliberate or mala fide intent. 2 The learned CIT(A) failed to appreciate that the assessment order was never validly served upon the appellant and that limitation under section 249(2) commences only from the date of actual knowledge of the order. 3. The learned CIT(A) erred in presuming service merely on the basis that the order was available on the e-filing portal, ignoring settled judicial precedents holding that mere uploading does not amount to valid service. 4. The learned CIT(A) grossly erred in ignoring the fact that the appellant is 100% visually impaired, and in applying an unrealistic standard of vigilance and diligence, thereby violating principles of equity and natural justice. 5. The learned CIT(A) misapplied the principle that each day's delay must be explained, contrary to binding Supreme Court judgments which mandate a liberal and justice- oriented approach in condonation matters. 6. The learned CIT(A) failed to record any finding that the delay was intentional, deliberate, or motivated, and yet proceeded to deny condonation, rendering the order arbitrary 7. The dismissal of the appeal at the threshold without adjudication on merits has resulted in grave prejudice to the appellant and violates principles of natural justice. 8. The impugned order defeats substantial justice by upholding an ex parte assessment without granting the appellant an opportunity to be heard or to place evidence on record.” Printed from counselvise.com ITA No. 378&379/Mum/2026 Assessment Year 2016-2017 & 2017-2018 3 5. We have heard both the sides and have perused the material on record. 6. The grievance of the Assessee is that the Learned CIT(A) had dismissed the appeal preferred by the Assessee against the Assessment Order for the Assessment Year 2016-2017 as being barred by limitation. We note that the Learned CIT(A) had declined to condone the delay 1010 days in filing appeal against the Assessment Order. 7. The relevant facts in brief are that the Assessee is an individual salaried employee working with Mahanagar Telephone Nigam Limited and she is 100% visually impaired (blind by birth). For Assessment Year 2016-17 the Assessee filed return of income declaring total income of INR.4,78,689/-. The aforesaid return of income was filed through an Income-Tax Practitioner who was covered under survey conducted under Section 133A of the Act conducted on 30/01/2018. It was discovered that the said Income- Tax Practitioner was engaged in filing returns of income by suppressing salary income and misreported components of salary. Therefore, reassessment proceedings were initiated in the case of the Assessee by issuance of notice dated 24/03/2021 under Section 148 of the Act. The Assessee was proceeded ex-parte in the assessment proceedings and Assessment Order, dated 24/03/2022, was passed under Section 147 read with Sections 144 and 144B of the Act assessing income at INR.9,95,290/- the Assessing Officer made an addition of INR.2,40,048/- in respect of House Rent Allowance of INR.2,27,448/- and other allowances (such as gratuatiy, leave encashment, uniform allowance, conveyance allowance, etc.) of INR.12,600/-. Further the Assessing Officer also disallowed statutory deductions aggregating to INR.2,76,556/- (INR.1,50,000/- under Sections 80C, INR.1,556/- under Section Printed from counselvise.com ITA No. 378&379/Mum/2026 Assessment Year 2016-2017 & 2017-2018 4 80GGC, & INR.1,25,000/- under Section 80U). 8. Being aggrieved, the Assessee preferred appeal before Learned CIT(A) against the ex-party Assessment Order for the Assessment Year 2016-2017. It was contended that the Assessee never received any notice or the Assessment Order either by post or by e-mail. The Assessee came to know of the assessment only upon receiving a telephonic call from the Department for recovery of demand, where after immediate steps were taken. The appeal before the Learned CIT(A) was filed on 28/01/2025, along with a detailed application for condonation of delay and explanation supported by facts. On perusal of statement of facts filed by the Assessee before Learned CIT(A) we find that the Assessee had specifically averred as under: “9. The appellant came to know about the assessment order recently when she received a phone call from the Income Tax Department asking her to pay the outstanding tax demand in my case. 10. The appellant downloaded the assessment order through her tax consultant. Upon receipt of the Assessment Order, the appellant visited the e-compliance portal and observe that the notice u/s 148 dated 24/03/2021, notice u/s 142(1) dated 17/12/2021, 08/02/2022 and the SCN dated 17/02/2022, 09/03/2022 are shown as issued. The appellant submits that none of these notices have been received on email nor physically through post. The appellant observe that all the notices were addressed to an email address [e-mail] which is not the email address of the appellant. This email address was created by the tax consultant for ITR filing purposes. The notices sent to this email address remained unattended. 11. The appellant submits that a proper and reasonable opportunity of being heard was not given before completing the assessment. Your appellant requests your Honor to allow the appellant a reasonable opportunity of being heard in the interest of justice to put forth her case. 12. On perusal of the assessment order, it is observed that the learned Assessing Officer had determined total income of the appellant at Rs.950670/- as against returned income of Rs 537540/- Printed from counselvise.com ITA No. 378&379/Mum/2026 Assessment Year 2016-2017 & 2017-2018 5 13. The learned assessing officer has made following additions to the total income of the appellant: i. Disallowance of House Rent Allowance of Rs.123744/- claimed as exempt u/s 10 ii. Disallowance of Transport allowance of Rs.12600/- claimed as exempt iii. Disallowance of claim for deduction under section 80C of Rs.150000/- iv. Disallowance of claim for deduction under section 80D of Rs.1790/- v. Disallowance of claim for deduction under section 800 of Rs.125000/- 14. The appellant places on record the following documents and prays that same may be taken on record as & by way of additional evidence in accordance with Rule 46A i. Computation of Income for the assessment year 2017-18 ii. if Copy of Salary Certificate (Form 16) issued by the employer iii. Copy of Disability Certificate for purposes of section 80U (Form 10-IA)” 9. The learned CIT(A), however, dismissed the appeal in limine, refusing to condone the delay of 1010 days under section 249(3) of the Act, without adjudicating the appeal on merits holding as under: 5. Decision 5.1. I have perused the assessment order dated 24.03.2022, the grounds of appeal, and the submissions regarding delay in filing this appeal. The impugned order under section 147 r.w.s. 144 and 144B was served on the appellant on 24/03/2022, whereas the appeal has been filed only on 28/01/2025. Thus, the delay in filing comes to 1010 days, well beyond the prescribed time limit laid down under section 249(2) of the Act. 5.2 The appellant has stated that notices and the assessment order were not received either physically or by email and that the delay was due to circumstances beyond her control. Printed from counselvise.com ITA No. 378&379/Mum/2026 Assessment Year 2016-2017 & 2017-2018 6 However, the appellant has not produced any credible or verifiable evidence to substantiate the plea of non-service. Further, the appellant has been regularly filing income-tax returns electronically and was expected to monitor her tax records and communications available on the e-filing portal. Ignorance of proceedings and alleged communication issues with a tax practitioner cannot constitute a \"sufficient cause as contemplated under section 249(3) of the Act 5.3 It is a settled legal position that condonation of delay is an exception and not a right. The party seeking condonation must demonstrate bona fide and reasonable cause explaining the delay for each day beyond the prescribed limitation. In the absence of satisfactory explanation and supporting evidence, the delay appears to be due to sheer negligence and lack of diligence on the part of the appellant. 5.4 The Hon'ble Supreme Court and various High Courts have consistently held that statutory timelines cannot be relaxed routinely and that prolonged delay without reasonable cause cannot be condoned, as it defeats the purpose of the law of limitation which is founded on the principle that \"the law assists those who are vigilant, not those who sleep over their rights 5.5 In the present case, no \"sufficient cause\" has been demonstrated for the inordinate delay of 1010 days in filing the appeal. Accordingly, the delay cannot be condoned under section 249(3) of the Act.” 10. The Assessee being aggrieved by the said order, prefers the present appeal. 11. We note that the reassessment proceedings were initiated during the Covid period. The Assessing Officer stated that the notice under Section 148 of the Act was issued on 24/03/2021. It has not been disputed that the Assessee is visually impaired and was dependent upon Income-Tax Practitioner/Consultant for tax filings. It is the case of the Assessee that she only got knowledge about the Assessment Order for the Assessment Year 2016-2017 having been passed on receiving phone call from the Income Tax Department requiring her to pay the outstanding demand. Before the Learned Printed from counselvise.com ITA No. 378&379/Mum/2026 Assessment Year 2016-2017 & 2017-2018 7 CIT(A), the Assessee had contended that notices of the assessment proceedings were neither received physically through post nor through e-mail. It was also contended that the notices were addressed to email address [e-mail] which was not the email address of the Assessee and was created by Tax Consultant. The Tax Consultant did not inform her about the assessment proceedings. We find that the Learned CIT(A) has not dealt with any of the aforesaid averments and has rejected the same observing that the Assessee had failed to produce credible/verifiable evidence to show non service of notices. In our view, the fact that subsequent income tax returns were filed by the Assessee cannot be sole reason to reject the submissions made by the Assessee. We also take note of the fact that the Assessing Officer had made the additions by merely relying upon the fact that in the survey proceedings the details/information relating to income tax return filed by the Assessee were found in the software package/computer of the Income-Tax Practitioner covered under Survey. Perusal of Assessment Order shows that no efforts were made by the Assessing Officer to carry out any inquiry or gather information even from Mahanagar Telephone Nigam Limited (i.e. the employer of the Assessee). 12. The Hon’ble Supreme Court has in the case of Collector, Land Acquisition, Anantnag & Anr. vs. Mst.Katiji & Ors.[1987 (2) SCR 387] held that the expression 'sufficient cause' employed by the legislature in the Limitation Act is adequately elastic to enable the courts to apply the law in a meaningful manner which sub-serves the ends of justice. The Hon’ble Supreme Court Observed that a liberal approach should be adopted on account of the following: (a) Ordinarily a litigant does not stand to benefit by lodging an appeal late. Printed from counselvise.com ITA No. 378&379/Mum/2026 Assessment Year 2016-2017 & 2017-2018 8 (b) 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 (c) 'Every day's delay must be explained' does not mean that a pedantic approach should be made. The doctrine must be applied in a rational common sense pragmatic manner (d) 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. (e) There is no presumption that delay is occasioned deliberately, or on account of culpable negligence, or on account of mala fides. A litigant does not stand to benefit by resorting to delay. In fact he runs a serious risk. (f) It must be grasped that judiciary is respected not on account of its power to legalize injustice on technical grounds but because it is capable of removing injustice and is expected to do so. 13. In the case of N. Balakrishnan v. M. Krishnamurthy [1998 (7) SCC 123] the Hon’ble Supreme Court has held that the purpose of providing limitation is not to destroy the rights. It is founded on public policy fixing a life span for the legal remedy for the general welfare. The object of providing legal remedy is to repair the damage caused by reason of legal injury. If the explanation given does not smack malafides or is not shown to have been put forth as a part of dilatory strategy, the court must show utmost Printed from counselvise.com ITA No. 378&379/Mum/2026 Assessment Year 2016-2017 & 2017-2018 9 consideration to the suitor. In this context it was observed: “It is axiomatic that condonation of delay is a matter of discretion of the court Section 5 of the Limitation Act does not say that such discretion can be exercised only if the delay is within a certain limit. Length of delay is no matter, acceptability of the explanation is the only criterion. Sometimes delay of the shortest range may be uncondonable due to want of acceptable explanation whereas in certain other cases delay of very long range can be condoned as the explanation thereof is satisfactory. Once the court accepts the explanation as sufficient it is the result of positive exercise of discretion and normally the superior court should not disturb such finding, much less in reversional jurisdiction, unless the exercise of discretion was on whole untenable grounds or arbitrary or perverse. But it is a different matter when the first cut refuses to condone the dela. In such cases, the superior cut would be free to consider the cause shown for the delay afresh and it is open to such superior court to come to its own finding even untrammeled by the conclusion of the lower court. The reason for such a different stance is thus: The primary function of a court is to adjudicate the dispute between the parties and to advance substantial justice. Time limit fixed for approaching the court in different situations in not because on the expiry of such time a bad cause would transform into a good cause. Rule of limitation are not meant to destroy the right of parties. They are meant to see that parties do not resort to dilatory tactics, but seek their remedy promptly. the object of providing a legal remedy is to repair the damage caused by reason of legal injury. Law of limitation fixes a life-span for such legal remedy for the redress of the legal injury so suffered. Time is precious and the wasted time would never revisit. During efflux of time newer causes would sprout up necessitating newer persons to seek legal remedy by approaching the courts. So a life span must be fixed for each remedy. Unending period for launching the remedy may lead to unending uncertainty and consequential anarchy. Law of limitation is thus founded on public policy. It is enshrined in the maxim Interest reipublicae up sit finis litium (it is for the general welfare that a period be putt to litigation). Rules of limitation are not meant to destroy the right of the parties. They are meant to see that parties do not resort to dilatory tactics but seek their remedy promptly. The idea is that every legal remedy must be kept alive for a legislatively fixed period of time. Printed from counselvise.com ITA No. 378&379/Mum/2026 Assessment Year 2016-2017 & 2017-2018 10 A court knows that refusal to condone delay would result foreclosing a suitor from putting forth his cause. There is no presumption that delay in approaching the court is always deliberate” 14. In our view the above judgment of the Hon’ble Supreme Court come to the aid of the Assessee in the present case. The power to condone the delay in approaching the court has been conferred to enable substantial justice by disposing of matters on merits. In our view, the conduct of the Assessee does not smack of malafides in the present case. The Assessee is visually impaired. The reassessment proceedings were initiated during COVID pandemic period. There was no representation on behalf of the Assessee since the Assessee did not have knowledge of the proceedings. The CIT(A) has not returned any positive finding regarding service of notice upon the Assessee and has held the Assessee responsible for failure to furnish proof of non-service instead. The Assessee had contended that she is visually impaired and was depended upon tax consultant for the tax matters. The notices issued in the assessment proceedings were issued at the email address created of tax consultant. The Assessee got knowledge of the Assessment Order having been passed when she was asked to pay the outstanding demand. We have also noted that the Assessing Officer has made additions solely based upon the fact that the details were found in the software/computed of the Income-Tax Practitioner covered by survey without any independent inquiry or verification. In our view, the aforesaid facts, the substantial justice requires that the case of the Assessee be adjudicated on merits. Accepting the explanation given by the Assessee to be reasonable, we hold that in the present case the Assessee was prevented by the sufficient cause from filing the appeal before the CIT(A) within the prescribed time. Therefore, we condone the delay of 1010 days in filing the appeal before the CIT(A) keeping in view the above judgments of the Hon’ble Supreme Court. The Order, dated 28/11/2025, passed by Learned CIT(A) is set aside with the directions to adjudicate the grounds raised by the Printed from counselvise.com ITA No. 378&379/Mum/2026 Assessment Year 2016-2017 & 2017-2018 11 Assessee in appeal on merits after granting the Assessee a reasonable opportunity of being heard. The Assessee is also directed to file details, documents & submission in support of its claims/contentions before the Learned CIT(A). The Learned CIT(A) would be at liberty to admit/consider the same as per law. In terms of the aforesaid and without returning any findings on merits, Grounds No. 1, 2 and 4 to 8 raised by the Assessee are allowed and Ground No. 3 is dismissed as having being rendered academic on account of setting aside of the impugned order. 15. In terms of above, the present appeal is treated as allowed for statistical purpose. ITA No379/MUM/2026 (Assessment Year 2017-2018) 16. Next will take up the appeal preferred by the Assessee against the order dated 28/11/2025, passed by the CIT(A) wherein the Learned CIT(A) had dismissed the appeal against the Assessment Order, dated 29/04/2024, passed under Section 147 read with Section 144 read with Section 144B of the Act. 17. Both the sides agree that in facts and circumstances identical to the Assessment Year 2017-2018, the Assessing Officer had passed ex- parte Assessment Order and the Learned CIT(A) had dismissed the appeal preferred by the Assessee against the said order as barred by limitation refusing to condone the delay of 610 days in filling the appeal. Therefore, our findings/adjudication in relation to appeal for the Assessment Year 2016-2017 shall apply mutatis mutandis to the appeal for the Assessment Year 2017-2018. Accordingly, adopting the reasoning given while adjudicating the appeal preferred by the Assessee for the Assessment Year 2016-2017, we accept the explanation given by the Assessee to be reasonable and hold that in the present case the Assessee was prevented by the sufficient cause from filing the appeal before the CIT(A) within the prescribed time. Printed from counselvise.com ITA No. 378&379/Mum/2026 Assessment Year 2016-2017 & 2017-2018 12 The delay of 610 days in filing the appeal before the CIT(A) is, therefore, condoned keeping in view the above judgments of the Hon’ble Supreme Court. The Order, dated 28/11/2025, passed by Learned CIT(A) is set aside with the directions to adjudicate the grounds raised by the Assessee in appeal on merits after granting the Assessee a reasonable opportunity of being heard. The Assessee is also directed to file details, documents & submission in support of its claims/contentions before the Learned CIT(A). The Learned CIT(A) would be at liberty to admit/consider the same as per law. In terms of the aforesaid and without returning any findings on merits, Grounds No. 1, 2 and 4 to 8 raised by the Assessee are allowed and Ground No. 3 is dismissed as having being rendered academic on account of setting aside of the impugned order. 18. In terms of above, the present appeal is treated as allowed for statistical purpose. Conclusion 19. The appeal preferred by the Assessee for the Assessment Year 2016- 2017 and 2017-2018 are allowed for statistical purposes Order pronounced on 27.02.2026. Sd/- Sd/- (Bijayananda Pruseth) Accountant Member (Rahul Chaudhary) Judicial Member मुंबई Mumbai; िदनांक Dated : 27.02.2026 Milan, LDC Printed from counselvise.com ITA No. 378&379/Mum/2026 Assessment Year 2016-2017 & 2017-2018 13 आदेश की Ůितिलिप अŤेिषत/Copy of the Order forwarded to : 1. अपीलाथŎ / The Appellant 2. ŮȑथŎ / The Respondent. 3. आयकर आयुƅ/ The CIT 4. Ůधान आयकर आयुƅ / Pr.CIT 5. िवभागीय Ůितिनिध ,आयकर अपीलीय अिधकरण ,मुंबई / DR, ITAT, Mumbai 6. गाडŊ फाईल / Guard file. आदेशानुसार/ BY ORDER, सȑािपत Ůित //True Copy// उप/सहायक पंजीकार /(Dy./Asstt. Registrar) आयकर अपीलीय अिधकरण, मुंबई / ITAT, Mumbai Printed from counselvise.com "