Plea that assessee was not aware of order cannot be brushed aside in absence of proof of service

Ground taken by assessee that he was not aware of the order cannot be brushed aside so lightly in absence of any proof otherwise – High Court

In a recent judgment Hon’ble High Court while condoning the delay of eight years in filing appeal has held that the ground taken by the appellant assessee that he was not aware of the order cannot be brushed aside so lightly in absence of any proof otherwise, and considering the provision under Section 253(3) the assessee cannot be disbelieved.

ABCAUS Case Law Citation:
5237 (2026) (10) abacus.in HC

In the instant case, the appellant assessee had challenged the order passed by the Income-Tax Appellate Tribunal (ITAT) dismissing his appeal holding it to be barred by limitation.

The assessee had filed the appeal before Commissioner of Income Tax (Appeals) against the order passed by the Assessing Officer (AO) under Section 148/144 of the Income Tax Act, 1961 (the Act).

The CIT Appeals dismissed the appeal. The assessee challenged the order of CIT(A) before the ITAT along with an application for condonation of delay of eight year supported with an affidavit.

It was submitted that a notice from the Tax Recovery Office for recovery of amount was received at the address of assessee/appellant, by his permanent servant who placed the notice of recovery before the Chartered Accountant who in turn verified the facts and came to know that the appeal filed by appellant was dismissed but appellant did not receiv any order. There was a clear averment by appellant that the first appeal order was not served upon him. However, the appeal is filed immediately after receipt of copy of the order, i.e. immediately after the date of knowledge.

However, the ITAT dismissed the appeal on the ground of limitation observing that no sufficient cause was shown to condone the inordinate delay of more than 08 years and that there was absence of any bonafide reason explaining the inordinate delay.

The Hon’ble High Court observed that the Appellate Tribunal had taken into consideration other circumstances pleaded in the application for condonation of delay by the appellant that he was residing out of his permanent address as mentioned in the Income Tax record, but did not take into consideration as to whether the department had fulfilled the requirement under the provisions of Section 253(3) of the Act of 1961 or not.

The Hon’ble High Court observed that the period of limitation provided under Section 253 does not talk of the date of order for computing the period of limitation, rather it provides that the period of limitation of two months for filing of the appeal is to be computed from the date of communication of the order. However, the Tribunal had not made any discussion as to when the order of CIT Appeals is communicated to the Assessee/appellant.

The Hon’ble High Court observed that Hon’ble Supreme Court had an occasion to take into consideration the starting point of filing an appeal, wherein it was held that the date of the communication of the order will be the starting point for limitation of filing an appeal.

The Hon’ble High Court opined that in general the period of limitation will start from the date of knowledge. Further, Hon’ble Supreme Court had considered that the knowledge would mean knowledge of the essential contents of the award. Also, Hon’ble Supreme Court have dealt with the issue of distinction between making of an order and communication thereof to the affected person under the provisions of Central Excise Act, 1944. On yet another occasion the Hon’ble Supreme Court had held that unless that fact was to be refuted, the question of disbelieving the stand taken by the appellant(s) on affidavit, cannot arise.

In the light of the decisions of Hon’ble Supreme Court, the Hon’ble High Court observed that the department before the Appellate Tribunal could not be able to point out the date of communication of the order to the assessee or the receipt or knowledge of the order to the assessee of the CIT appeals. In absence of any specific objection to the ground urged in application for condonation of delay the order was not communicated and that assessee came to know about order only after receipt of notice for recovery, the ground taken by the appellant/assessee that he was not aware of the order cannot be brushed aside so lightly. In fact in absence of any proof otherwise, and considering the provision under Section 253(3) the grounds raised by the appellant assessee cannot be disbelieved.

The Hon’ble High Court held that from the facts of the case as also from the events, it appeared that the appeal was filed within the period of limitation prescribed i.e. from the date of notice received based upon which the appellant came to know about the passing of order by CIT Appeals.

As a result, the impugned order passed by the Tribunal was held to be not sustainable and accordingly, it was set aside. The matter was remitted back to the Appellate Tribunal for deciding the appeal on merits in accordance with law.

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