1100-day delay condoned in section 263 appeal where tax practitioner mistakenly believed order non-appealable

ITAT Surat condoned 1100-day delay in filing appeal against order u/s 263, finding sufficient cause where income tax practitioner erroneously believed the order was not appealable. The tribunal applied liberal construction of "sufficient cause" principle, noting lawyer's mistake constitutes valid grounds for condonation when no negligence or bad faith exists. The PCIT's ex-parte order u/s 263 was set aside for violating natural justice principles as assessee lacked adequate hearing opportunity. Matter remitted to PCIT for fresh adjudication on merits. Appeal treated as allowed for statistical purposes.

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Issues:
1. Condonation of delay in filing the appeal.
2. Validity of the order passed by the Principal Commissioner of Income Tax under section 263 of the Income Tax Act, 1961.

Detailed Analysis:

1. Condonation of Delay:
The appellant challenged the order passed by the Principal Commissioner of Income Tax (PCIT) under section 263 of the Income Tax Act, 1961. The appeal was filed for Assessment Year 2008-09, but it was barred by a delay of 1740 days. The appellant sought condonation of the delay, arguing that the effective delay was only 1100 days if the Covid-19 Pandemic period was excluded. An affidavit was submitted explaining the reasons for the delay, including the belief that the order under section 263 was not appealable initially. The appellant's counsel contended that the delay should be condoned due to the mistake made by the income tax practitioner and the honest belief that the appeal was filed before the CIT(A). The Tribunal considered the reasons provided and relied on precedents where delays were condoned due to similar circumstances involving mistakes by professionals. The Tribunal exercised its discretion to condone the delay and admitted the appeal for hearing.

2. Validity of PCIT's Order:
The appellant argued that the order passed by the PCIT was ex parte and violated the principles of natural justice as the appellant could not represent their case during the revision proceedings under section 263 of the Act. The appellant requested another opportunity to contest the appeal before the PCIT. The Tribunal noted that the PCIT's order was non-speaking and ex parte, indicating that the appellant was not given a sufficient opportunity to be heard. Consequently, the Tribunal set aside the PCIT's order and remitted the matter back to the PCIT for fresh adjudication on merits. The appeal was treated as allowed for statistical purposes.

In conclusion, the Tribunal allowed the appeal for statistical purposes, condoning the delay in filing the appeal and setting aside the PCIT's order for fresh adjudication, emphasizing the importance of providing a fair opportunity to be heard in such proceedings.

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