The Income Tax Appellate Tribunal, Delhi, has set a significant precedent by condoning a delay of over four years in filing an income tax appeal, explicitly mandating that the Covid-19 pandemic period be excluded from limitation calculations. The order reinforces the binding effect of the Supreme Court’s Cognizance for Extension of Limitation judgment and affirms that procedural fairness must prevail over technical defaults.
Background & Facts
The Dispute
The appellant, Ms. Radha Reddy, challenged the assessment order dated 23.12.2020 issued under Section 143(1) of the Income-tax Act, 1961, which assessed her salary income at Rs. 43,19,166 based on undisclosed figures. She filed her appeal before the Commissioner of Income Tax (Appeals) on 20.05.2025, over 1523 days after the assessment order. The CIT(A) rejected the appeal on grounds of delay, refusing to condone the lapse despite the appellant’s claim of delayed receipt of the order and the ongoing pandemic.
Key Facts
- The appellant received the assessment order dated 23.12.2020, but claimed she received it only in late 2023 or early 2024
- No rebuttal was made by the Revenue regarding the claim of delayed receipt
- The appellant produced Form 16A issued by M/s Indian Oil Corporation Limited (PSU), which clearly stated her actual salary income for AY 2020-21 as Rs. 33,06,665
- The Revenue did not dispute the authenticity or accuracy of the Form 16A before the Tribunal
- The appellant appeared in person before the Tribunal and presented the document
Procedural History
- 23.12.2020: Assessment order issued under Section 143(1) by Assessing Officer
- 20.05.2025: Appeal filed before CIT(A) - 1523 days after the assessment order
- 31.12.2025: CIT(A) order rejecting appeal on limitation grounds, without considering pandemic delay
- 06.04.2026: Hearing before ITAT Delhi
- 06.04.2026: Oral order pronounced
- 15.04.2026: Written order signed and dated
Relief Sought
The appellant sought:
- Condonation of delay in filing the appeal
- Recalculation of taxable income based on Rs. 33,06,665 as per Form 16A
- Cancellation of the excess tax demand arising from the inflated assessment
The Legal Issue
The central questions were:
- Whether the Covid-19 pandemic period (March 2020 to March 2022) must be excluded from limitation calculations under the Income-tax Act, 1961, as mandated by the Supreme Court in Cognizance for Extension of Limitation?
- Whether the Revenue’s failure to rebut the appellant’s Form 16A justifies adoption of the lower salary figure for assessment?
Arguments Presented
For the Appellant
The appellant argued that the 1523-day delay was entirely due to circumstances beyond her control, including the nationwide lockdowns and disruption of postal services during the pandemic. She relied on the Supreme Court’s decision in Cognizance for Extension of Limitation (2022) 441 ITR 722 (SC), which directed that the entire pandemic period be excluded from limitation computation in all judicial and quasi-judicial proceedings. She further submitted that the CIT(A) failed to consider this binding precedent and ignored her unchallenged claim of delayed receipt of the assessment order. She also produced Form 16A from a PSU employer, which was uncontroverted and demonstrated the correct income figure.
For the Respondent
The Revenue did not contest the applicability of the pandemic period exclusion before the Tribunal. It did not file any rebuttal evidence regarding the appellant’s claim of delayed receipt. It also did not dispute the authenticity of the Form 16A. The Revenue’s position was effectively limited to upholding the CIT(A)’s mechanical refusal to condone delay, without addressing the substantive merits or the binding Supreme Court directive.
The Court's Analysis
The Tribunal observed that the CIT(A) had committed a material error by mechanically rejecting the appeal on limitation without considering the Supreme Court’s explicit direction in Cognizance for Extension of Limitation. The Court held that the exclusion of the pandemic period is not discretionary but mandatory across all proceedings under the Act.
"The learned CIT(A) has not even considered the Covid-19 Pandemic Outbreak period which is from March 2020 to March, 2022 as well which has already been directed to be excluded for all intents and purposes, as per hon'ble apex court landmark decision in Cognizance for Extension of Limitation, in Re (2022) 441 ITR 722 (SC)."
The Tribunal further noted that the Revenue failed to rebut the appellant’s claim of delayed receipt of the assessment order, which, under Collector, Land & Acquisition vs Mst. Katiji & Others (1987) 167 ITR 471 (SC), is a valid ground for condonation of delay. The Tribunal emphasized that procedural justice requires courts to look beyond technicalities when substantial rights are at stake.
On the merits, the Tribunal found that the Form 16A issued by Indian Oil Corporation Limited, a PSU, is a reliable and authoritative document. The Revenue did not challenge its authenticity or content. The Tribunal held that in the absence of any contrary evidence, the salary figure stated in Form 16A must be accepted as the correct income.
The Verdict
The appeal is allowed. The delay of 1523 days is condoned. The assessment order dated 23.12.2020 is set aside. The Assessing Officer is directed to recalculate the appellant’s income for AY 2020-21 based on Rs. 33,06,665 as per Form 16A. Any tax demand arising from the excess assessment of Rs. 10,12,501 must be refunded with interest at the rate of 6% per annum from the date of payment until the date of refund. The order is to be complied with within 60 days.
What This Means For Similar Cases
Pandemic Period Exclusion Is Mandatory
- Practitioners must now assert the exclusion of March 2020 to March 2022 in all limitation-related applications under the Income-tax Act
- Failure by lower authorities to consider this period is a ground for immediate reversal by higher forums
- The Cognizance for Extension of Limitation judgment applies to all proceedings, including appeals, revisions, and rectifications
Form 16A Trumps Assessed Figures
- Form 16A issued by employers, especially PSUs, is prima facie evidence of salary income
- Revenue cannot rely on undisclosed or assumed figures when a certified Form 16A is produced
- In the absence of specific rebuttal, the Tribunal will adopt the Form 16A figure as conclusive
Delay Condoned on Unrebutted Claims
- A claim of delayed receipt of notice or order, if not disputed, constitutes sufficient cause for condonation
- Technical rejection of appeals on limitation without examining substantive grounds is legally unsustainable
- Tribunals must apply the principle of actus curiae neminem gravabit - no one shall be prejudiced by the act of the court
