2026 (2) TMI 368 - HC - Income Tax

Condonation of delay in ITAT tax appeal due to postCOVID business disruption; appeal restored subject to costs and merits hearing

Condonation of delay in filing an appeal before the ITAT was granted despite a 202day delay, the court accepting postCOVID business disruption and ... Condonation of delay filling appeal before ITAT - delay of 202 days - cause of the effect of COVID-19 and the subsequent situation that prevailed post COVID-19 more particularly the business of the appellant coming to a standstill, they could not pursue the appeal promptly HELD THAT:- Period during which the appeal was probably filed was immediately post Covid-19 period and during which time, there infact was certain difficulties which was being faced by every commercial establishment and the appellant herein is not exception to the same. Another fact which cannot be lost sight of is that here again is the case as contended by the appellant that the order of the Commissioner of Income Tax (Appeals) which the appellant intended to challenge before the Tribunal also was one which was decided without hearing the appellant on merits rather was decided only on the basis of pleadings before the Commissioner of Income Tax (Appeals) and at this juncture if the appellant’s appeal before the ITAT is not restored, appellant would be rendered remediless in challenging the finding arrived at by the Commissioner of Income Tax (Appeals). In the opinion of this Bench, therefore upon imposition of certain penalty/cost upon the appellant, the delay in filing of the appeal before the ITAT can be condoned and the ITAT can be further directed to decide the appeal on its own merits and in accordance to law. We are inclined to allow the instant appeal to the extent of setting aside the order of learned ITAT [2025 (8) TMI 1773 - ITAT HYDERABAD]. So far as rejection of the appeal on the ground of condonation of delay, however, the appellant is imposed with the cost of Rs. 15,000/- to be paid within a period of 15 days to the Telangana State Legal Services Authority. Issues: Whether the delay of 202 days in preferring the appeal before the Income Tax Appellate Tribunal can be condoned and the Tribunal's order rejecting the appeal as barred by limitation set aside, thereby restoring the appeal for decision on merits.Analysis: The delay is limited to 202 days and occurred in the immediate post-COVID-19 period when commercial activities faced widespread disruption; the appellant also alleges that the Commissioner of Income Tax (Appeals) decided without hearing the appellant on merits. The Tribunal has discretionary power to condone delay on sufficient cause being shown. Considering the short period of delay, the contextual difficulties arising from the pandemic, and the potential denial of an effective opportunity to contest the appellate order on merits, it is appropriate to allow discretionary relief subject to imposition of a cost as a condition for restoring the appeal.Conclusion: The delay of 202 days is condoned on payment of Rs.15,000 to the Telangana State Legal Services Authority within 15 days; upon production of the receipt, the ITA No.895 of 2025 shall stand revived and the appeal shall be decided on merits. The decision is in favour of the assessee.