Liberal condonation approach requires merits hearing when delay is plausibly explained and the dispute remains unadjudicated.

A plausible explanation for delay, including serious illness and the assessee's initial-stage business circumstances, warranted a liberal approach to condonation where the dispute had not yet been examined on merits. The Allahabad HC held that the appellate forum should not shut out the assessee on a technical ground when the explanation deserved sympathetic consideration. The order rejecting the second appeal was set aside, and the first appellate authority was directed to hear the appeal on merits.

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Issues: Whether the rejection of the assessee's appeal and the refusal to entertain the delay condonation plea were sustainable, and whether the matter should be heard on merits.

Analysis: The assessee had challenged an ex parte assessment and the subsequent rejection of the restoration application. The business was stated to be in its initial stage, and the explanation offered for the delay in filing the appeal was that the assessee had been seriously ill during the relevant period. In these circumstances, the Court held that the explanation deserved sympathetic consideration and that the assessee ought to have been afforded an opportunity to contest the matter on merits.

Conclusion: The order rejecting the second appeal was not sustainable and was set aside. The first appellate authority was directed to hear the appeal on merits.

Final Conclusion: The revision succeeded to the extent that the assessee obtained a fresh hearing before the first appellate authority, and the matter was sent back for adjudication on merits.

Ratio Decidendi: Where a taxpayer shows a plausible explanation for delay and the dispute has not been examined on merits, the appellate forum should adopt a liberal approach and permit adjudication on merits rather than shut out the appeal on a technical ground.

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