The Income Tax Appellate Tribunal, Agra, has reaffirmed that procedural delays in tax appeals must not defeat substantive justice, particularly when the appellant lacks digital access to official notices. In two consolidated appeals, the Tribunal set aside orders dismissing appeals for delay and restored them to the first appellate authority for fresh adjudication, emphasizing that technicalities cannot override the right to be heard.
Background & Facts
The Dispute
The appellant, Mahmud Akhtar, filed two appeals before the Income Tax Appellate Tribunal (ITAT) challenging the dismissal of his first appeals before the Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre (NFAC), Delhi, for delay in filing. The appeals pertained to the Assessment Year 2017-18 and were dismissed in limine on the ground that the appeals were filed beyond the statutory limitation period.
Key Facts
- The appellant received a notice dated 12.10.2022 from the Income Tax Department, informing him of proceedings initiated against him for A.Y. 2017-18
- The appellant had no prior knowledge of the original notice issued electronically, as he lacked access to a computer or smartphone
- The appellant, a small business owner operating Indian Hosiery Store in Etawah, relied on informal assistance and was not digitally literate
- The first appeal under Appeal No. NFAC/2016-17/10292950 (ITA No. 179/Agr/2026) was filed on 22.09.2023, 342 days after the expiry of the 30-day limitation period
- The first appeal under Appeal No. NFAC/2016-17/10292063 (ITA No. 188/Agr/2026) was filed on 07.03.2024, 513 days after the expiry of the limitation period
- The appellant approached a qualified Income Tax practitioner immediately upon receiving the notice dated 12.10.2022
- The delay was not intentional, malicious, or due to negligence
- The appellant had no prior history of non-compliance or delay in tax filings
Procedural History
- 25.12.2025: CIT(A)/NFAC dismissed both appeals for delay without considering merits, rejecting condonation applications
- 22.04.2026: Appeals filed before ITAT Agra (ITA No. 179 & 188/Agr/2026)
- 22.04.2026: Hearing conducted and judgment pronounced on the same day
Relief Sought
The appellant sought condonation of delay of 342 days and 513 days respectively, restoration of the appeals before the CIT(A), and adjudication of the appeals on merits.
The Legal Issue
The central question was whether Section 249(3) of the Income-tax Act, 1961 permits condonation of delay in filing an appeal before the Commissioner of Income Tax (Appeals) where the appellant, due to lack of digital access and literacy, was unaware of the electronically issued notice, and whether such a cause qualifies as "sufficient cause" under the law.
Arguments Presented
For the Appellant/Petitioner
The appellant’s counsel argued that the delay was not willful or negligent. The appellant, a small trader without digital infrastructure, had no means to access electronic notices issued by the NFAC. The notice dated 12.10.2022 was the first communication received, and immediate steps were taken thereafter. Reliance was placed on judicial principles that procedural rules must serve justice, not obstruct it. The appellant invoked the doctrine of audi alteram partem and the Supreme Court’s observation in S.P. Chengalvaraya Naidu v. Jagannath that courts must not allow technicalities to defeat substantial justice.
For the Respondent/State
The Department’s representative supported the CIT(A)’s order, contending that the statutory limitation of 30 days under Section 249(2) is mandatory and that the appellant’s failure to monitor electronic portals constitutes negligence. The Department argued that electronic notices are legally valid and that all assessees are presumed to have access to digital systems, especially after the implementation of faceless assessment.
The Court's Analysis
The Tribunal rejected the Department’s rigid interpretation of limitation periods. It emphasized that Section 249(3) explicitly empowers the first appellate authority to condone delay if "sufficient cause" is shown. The Court held that the object of limitation is not to create technical barriers but to ensure expeditious disposal of cases without compromising fairness.
"The object of prescribing procedure is to advance the cause of justice. In an adversarial justice system like ours, no party should ordinarily be denied the opportunity of participating in the process of justice dispensation. Justice is the goal of jurisprudence. Any interpretation which eludes or frustrates the recipient of justice, is not to be followed."
The Tribunal noted that the appellant’s lack of digital access was not a mere oversight but a structural disadvantage faced by many small taxpayers in non-urban areas. The fact that the appellant acted promptly upon receiving the notice demonstrated bona fides. The Tribunal distinguished this case from those involving deliberate evasion or repeated defaults, stating that the law must accommodate the realities of digital exclusion.
The Tribunal further held that the CIT(A) erred in dismissing the appeals without a proper hearing on the condonation application. The mere passage of time, without examination of the cause, violates the principles of natural justice.
The Verdict
The appeals were allowed for statistical purposes. The impugned orders dated 25.12.2025 passed by the CIT(A)/NFAC were set aside. The delay of 342 days in ITA No. 179/Agr/2026 and 513 days in ITA No. 188/Agr/2026 was condoned. The matters were restored to the file of the CIT(A) for fresh adjudication on merits, with a direction to ensure compliance with the principles of natural justice.
What This Means For Similar Cases
Digital Access Cannot Be Presumed
- Practitioners representing small taxpayers, rural assessees, or non-digital users must now argue that lack of access to electronic portals constitutes sufficient cause under Section 249(3)
- The burden shifts to the Department to prove willful neglect, not merely the passage of time
- Taxpayers without smartphones or internet access are entitled to alternative modes of communication under the principle of equitable access
Condonation Is Not a Discretionary Privilege but a Right
- Tribunals and appellate authorities must conduct a substantive inquiry into the cause of delay, not apply mechanical timelines
- A single notice received after delay, coupled with prompt action, is sufficient to establish bona fides
- The doctrine of substantial justice overrides technical compliance where the taxpayer’s right to be heard is at stake
Procedural Fairness Trumps Faceless Efficiency
- The faceless assessment regime cannot override the fundamental right to a fair hearing
- The ITAT’s ruling sets a precedent that digital transformation must not exclude vulnerable taxpayers
- Practitioners should file condonation applications with affidavits detailing digital illiteracy, lack of infrastructure, and immediate steps taken upon notice
