Condonation of delay and natural justice require appellate merits to be heard after a reasoned decision on delay.

An appeal dismissed in limine for delay without deciding condonation or the merits was held unsustainable on the principles of natural justice and substantive justice. The Tribunal noted that Section 249(3) of the Income-tax Act requires the first appellate authority to first examine whether delay should be condoned, and that only after condonation can the appeal be decided on merits in accordance with the duties under Sections 250(4) and 250(6). The order was set aside and the matter remanded for fresh consideration, with one final opportunity given to explain the delay and, if condoned, to have the appeal heard on merits after reasonable opportunity of hearing.

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Issues: Whether the appeal dismissed by the first appellate authority in limine for delay without adjudicating the request for condonation and the merits could be sustained, and whether the matter required remand for fresh consideration under the law.

Analysis: The appeal had been rejected at the threshold on the ground of delay of 140 days without a condonation application being accepted. The Tribunal noted that the controversy centered on the requirement under Section 249(3) of the Income-tax Act, 1961 to consider delay on merits and, if condoned, to decide the appeal in accordance with the duties cast by Section 250(4) and Section 250(6) of the Income-tax Act, 1961. In view of the principles of natural justice and substantive justice, the Tribunal held that the assessee should be given one final opportunity to explain the delay before the first appellate authority.

Conclusion: The order of dismissal in limine was set aside and the matter was remanded to the first appellate authority to first decide condonation of delay under Section 249(3) of the Income-tax Act, 1961 and, if the delay is condoned, to adjudicate the appeal on merits after granting reasonable opportunity of hearing.

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