HC Slams CIT(A) for Ignoring SC & HC Orders; Awards 10K Cost to Petitioner

HC Slams CIT(A) for Ignoring SC & HC Orders; Awards 10K Cost to Petitioner

The petitioner, a charitable trust, filed its return for AY 2016–17 claiming exemption, but the AO rejected the claim and instead raised a demand of Rs. 45.43 lakh in the scrutiny assessment. A writ petition challenging the order was dismissed with liberty to appeal within four weeks, which the Supreme Court, while deciding the Special Leave Petition, extended by another four. The petitioner filed the appeal on 03.06.2019 within the extended time, along with a delay condonation plea and court orders. After the case was transferred to NFAC, CIT(A) dismissed the appeal, citing a 137-day delay and absence of condonation, ignoring Form 35 disclosures and prior court directions.

Main Issue: Can the CIT(A) at NFAC dismiss an appeal for delay without considering a condonation petition and binding orders from the Supreme Court and High Court?

HC’s Ruling: The Court held that the CIT(A) acted with gross negligence by disregarding judicial orders and facts. The bench cautioned against such behaviour and stated that it was hard to accept that such a mistake had been made at a senior level.

The High Court overturned the contested order and mandated a new hearing including a personal hearing within three months. The order was set aside, the case was remanded back for a new hearing, and the department was ordered to reimburse the petitioner for Rs. 10,000 in costs that were recoverable from the negligent officer.