TAMILNADU GRAMA BANK, OMANDUR,- vs. -, -

The Ld. AR advanced arguments and submitted that the appeals of the assessee have been dismissed by first appellate authority for want of condonation of delay. The Ld. AR submitted that the delay was not intentional and there was reasonable cause for late filing of the appeal since the law was not settled at the relevant point of time and the assessee’s claim became tenable only due to subsequent favorable decisions rendered on the issue of levy of fees u/s 234E. Another argument was that the quarterly TDS returns were being filed by respective bank branches and TDS intimations were also sent to the bank branches which were not received by the head office of the assessee bank which led to delay in filing of the appeals. The Ld. AR filed written submissions supporting the case of the assessee and urged for condonation of delay before first appellate authority.

The Ld. Sr. DR, on the other hand, drawing attention to the impugned order, submitted that there was inordinate delay for which no justifiable reason has been adduced by the assessee. The Ld. Sr. DR pleaded for dismissal of the appeals of the assessee. 4. The quantum of delay as tabulated by Ld. AR, in each of the appeal, is as under: - No. Actual date Date of intimation Date of filing of No. of of filing of u/s.200A against which Form 35 CIT days of original appeal was filed before APPEAL delay for return CIT (Date of order of CIT(A) Assessing Officer) 1 1009/Chny/2023 2013-14 04-12-2012 11-12-2013 23-01-2023 3300 2 1010/Chny/2023 2013-14 15-03-2013 11-12-2013 23-01-2023 3300 3 1011/Chny/2023 2013-14 15-03-2013 11-12-2013 23-01-2023 3300 4 1012/Chny/2023 2013-14 15-03-2013 11-12-2013 23-01-2023 3300 5 1013/Chny/2023 2014-15 11-04-2014 17-04-2017 24-01-2023 2078 6 1014/Chny/2023 2014-15 30-06-2014 03-07-2014 24-01-2023 3097 7 1015/Chny/2023 2014-15 11-04-2014 17-04-2017 24-01-2023 2078 8 1016/Chny/2023 2014-15 30-06-2014 03-07-2014 24-01-2023 3097 9 1017/Chny/2023 2015-16 12-03-2015 10-01-2017 24-01-2023 2175 10 1018/Chny/2023 2015-16 12-03-2015 15-03-2015 24-01-2023 2842 11 1019/Chny/2023 2013-14 30-01-2013 27-01-2014 23-01-2023 3253 12 1020/Chny/2023 2013-14 18-06-2013 27-01-2014 23-01-2023 3253 13 1021/Chny/2023 2014-15 14-06-2014 04-12-2016 23-01-2023 2211 14 1022/Chny/2023 2014-15 26-11-2013 30-01-2014 23-01-2023 3250 15 1023/Chny/2023 2014-15 14-02-2014 16-03-2014 23-01-2023 3205 16 1024/Chny/2023 2014-15 12-08-2014 15-08-2014 23-01-2023 3053 17 1025/Chny/2023 2015-16 12-03-2015 15-03-2015 23-01-2023 2841 18 1026/Chny/2023 2015-16 12-03-2015 15-03-2015 23-01-2023 2841 19 1027/Chny/2023 2015-16 12-03-2015 16-03-2015 23-01-2023 2840 20 1028/Chny/2023 2015-16 31-08-2015 11-09-2015 23-01-2023 2661 21 1029/Chny/2023 2013-14 06-08-2013 12-12-2013 23-01-2023 3299 22 1030/Chny/2023 2013-14 06-08-2013 12-12-2013 23-01-2023 3299 23 1031/Chny/2023 2015-16 20-04-2015 23-04-2015 23-01-2023 2802 24 1032/Chny/2023 2015-16 20-04-2015 23-04-2015 24-01-2023 2803 25 1033/Chny/2023 2015-16 20-04-2015 04-05-2015 24-01-2023 2792 26 1034/Chny/2023 2013-14 14-02-2014 16-03-2014 23-01-2023 3205 27 1035/Chny/2023 2014-15 26-11-2013 30-01-2014 23-01-2023 3250 28 1036/Chny/2023 2014-15 21-02-2014 16-03-2014 23-01-2023 3205 29 1037/Chny/2023 2015-16 06-07-2015 09-07-2015 23-01-2023 2725 30 1038/Chny/2023 2015-16 06-07-2015 09-07-2015 23-01-2023 2725 31 1039/Chny/2023 2015-16 06-07-2015 17-07-2015 23-01-2023 2717 32 1040/Chny/2023 2015-16 06-07-2015 17-07-2015 23-01-2023 2717 Upon perusal of above table, it could be seen that there was inordinate delay in filing the appeal before first appellate authority. The delay ranges between 2175 days to 3300 days which roughly translates into 6 to 9 years. The same has led Ld. CIT(A) to dismiss all the appeals for want of condonation of delay.

THE CONGREGATION OF THE SISTERS OF THE CROSS OF CHAVANOD VS ACIT CPC DATED 26.10.2022 (ITA NO 807/CHNY/2022) 2. M/S SAM & CO V/S ACIT, CPC-TDS DATED 16.08.2022 (ITA NO. 595/CHNY/2021) 3. M/S LAMPMASTER WOLTERS INDIA PVT.LTD V/S ITO (TDS) DATED 29.07.2022 (IT A NO. 590 TO 592/CHNY/2022) 4. M/S DRX REXINE INC V/S ACIT CPC-TDS DATED 24.02.2022 (ITA NO. 351/CHNY/2021) (All Judgments attached in Detailed Written Submission Copy- From page no 64 to 100). Further Appellant would like to rely on the below decisions wherein in all cases it has been held that decision of jurisdictional ITAT is binding on the lower authorities.

It is pertinent to note that the delay may be condoned and the appeal may be admitted u/s.249(3) only if the appellant could successfully demonstrate that it had sufficient cause for not presenting the appeal within the period of 30 days.

Further, appellant in its reply has again placed reliance upon various case laws including the case of Hon'ble Jurisdictional ITAT Chennai as under: - 1. THE CONGREGATION OF THE SISTERS OF THE CROSS OF CHAVANOD VS ACIT CPC DATED 26.10.2022 (ITA NO 807/CHNY/2022) 2. M/S SAM & CO V/S ACIT, CPC-TDS DATED 16.08.2022 (ITA NO. 595/CHNY/2021) 3. M/S LAMPMASTER WOLTERS INDIA PVT.LTD V/S ITO (TDS) DATED 29.07.2022 (ITA NO. 590 TO 592/CHNY/2022) 4. M/S DRX REXINE INC VIS ACIT CPC-TDS DATED 24.02.2022 (ITA NO. 351/CHNY/2021) Upon perusing the judgments of the aforementioned case laws rendered by the Hon'ble jurisdictional ITAT, it becomes evident that the sole grievance or the grounds raised in these appeals are pertaining to levy of fees u/s. 234E, rather than addressing the matter of granting relief to the assessee due to the condonation of an inordinate delay in filing the appeal. The observations made during the perusal indicate that the focus of the appeals has primarily been on contesting the imposition of fees under Section 234E. However, it is worth noting that the assessee's should have demonstrated that there existed sufficient cause for inordinate delay in filling appeal. The appellant, a regional rural Bank who is assisted by qualified chartered accountants who simply ignore the statutory notices/orders issued by assessing officer and also various limitations given in the Act for the purpose of filing appeal. The job related to statutory compliances cannot be left like this and same is to be looked after or adequately managed by the management of the Bank who has been made responsible for compliances. The appellant is required to explain normally each day of the delay in filing of appeal and the law only helps those who respect it. This shows gross negligence on the part of the appellant. The application for condonation is filed as a routine exercise with no seriousness behind it. Therefore, the facts and circumstances of the case laws relied upon by the appellant are different from the instant appeal and do not support the appellant in the matter of condoning the delay.

The aforesaid view was reiterated in the case of Balwant Singh (Dead) v. Jagdish Singh, (2010) 8 sec 685, where in the Court held that: "25. We may state that even if the term "sufficient cause" has to receive liberal construction, it must squarely fall within the concept of reasonable time and proper conduct of the party concerned. The purpose of introducing liberal construction normally is to introduce the concept of "reasonableness" as it is understood in its general connotation.

The law of limitation is a substantive law and has definite consequences on the right and obligation of a party to arise. These principles should be adhered to and applied appropriately depending on the facts and circumstances of a given case. Once a valuable right has accrued in favour of one party as a result of the failure of the other party to explain the delay by showing sufficient cause and its own conduct, it will be unreasonable to take away that right on the mere asking of the applicant, particularly when the delay is directly a result of negligence, default or inaction of that party. Justice must be done to both parties equally. Then alone the ends of justice can be achieved. If a party has been thoroughly negligent in implementing its rights and remedies, it will be equally unfair to deprive the other party of a valuable right that has accrued to it in law as a result of his acting vigilantly."

The Courts in the abovementioned cases, highlighted upon the importance introducing the concept of "reasonableness" while giving the clause "sufficient cause" a liberal interpretation. In furtherance of the same, the Courts has cautioned regarding the necessity of distinguishing cases where delay is of few days, as against the cases where the delay is inordinate as it might accrue to the prejudice of the rights of the other party. In such cases, where there exists inordinate delay and the same is attributable to the party's inaction and negligence, the Courts have to take a strict approach so as to protect the substantial rights of the parties.

The Division bench of the Hon'ble Bombay HC in Ornate Traders Private Limited v. The Income Tax Officer, Mumbai emphasized the need for reasonableness and hence, the actions which can be condoned by the court should fall within the scope of normal human conduct or normal conduct of a litigant. The Hon'ble Bombay HC further observed that while Section 5 of the Limitation Act is being interpreted liberally, it cannot be so liberally that it is without any justification, since condonation of delay in a mechanical or routine manner will jeopardize the legislative intent behind Section 5.

In the case of University of Delhi Vs Union of India &Ors. in Civil Appeal No. 9488 of 2019 vide Order dated 17/12/2019, the Hon'ble Supreme Court has refused to condone delay by holding that, "the entire explanation as noted above, depicts the casual approach unmindful of the law of limitation despite being aware of the position of law. That apart when there is such a long delay and there is no proper explanation, laches would also come into play while noticing as to the manner in which a party has proceeded before filing an appeal.

In the matter of condonation of delay and laches, the well accepted position is also that the accrued right of the opposite party cannot be lightly dealt with."

From the above decisions it becomes clear that in the case of condonation of delay where the appeal was filed beyond the limitation of period, the courts are empowered to condone the delay, provided that the Appellant can prove his claim of inability to file appeal within the prescribed period. Litigant must be able to demonstrate that there was "sufficient cause" which obstructed his action to file Appeal beyond the prescribed time limit.

The law of limitation is found upon the maxims "Interest Reipublicae Ut Sit FinisLitium" that litigation must come to an end in the interest of society as a whole, and "vigilantibus non dormientibus Jura subveniunt" that the law assists those that are vigilant with their rights, and not those that sleep thereupon. The law of limitation in India identifies the need for limiting litigation by striking a balance between the interests of the state and the litigant.

In the present case, the appellant has not adduced any reasonable cause which prevented it from filing the appeal within the 30 days' time limit and there is inordinate delay in filing of appeal as pointed out in para 4 above. Unless and until it is demonstrated that there was sufficient cause that prevented the appellant from exercising its legal remedy of filing appeal within that prescribed period of 30 days, the delay thereafter cannot be condoned without there being compelling grounds as advocated by the Hon'ble Courts.

From the facts of the case, it is clear that the statutory right to appeal which was vested with the appellant was not exercised within the stipulated time u/s.249(2). Thus, this clearly is a case of laches and is directly the result of deliberate inaction on the part of the appellant.

This is not a case of change in law which is beneficial to the appellant and hence the delay in seeking such remedy may be condoned in the furtherance of substantial justice. Therefore, there is no denial or destruction of a statutory right in this case, by adhering to the prescribed period of limitation as otherwise it will only lead to protract the matter endlessly and will undoubtedly render the legislative scheme and intention behind the concerned provision otiose as held by the Hon'ble Supreme Court in the case of Assistant Commissioner (CT) LTU, Kakinada & Ors. v. M/s Glaxo Smith Kline Consumer Health Care Limited 2020[36] G.5.T.L. 305.

The Hon'ble Mumbai Tribunal in the case of Prashant Projects Ltd. vs. DCIT (2013) 37 taxmann.com 137 has held that by adopting a liberal view in condoning delay is one of the guiding principles in the realm of belated appeals, but liberal approach cannot be equated with a license to file appeals at will-disregarding the time-limits fixed by the Statutes. The behavior of the assessee could be termed as personified in action and negligence which would not constitute reasonable cause. 19. Further, Hon'ble Apex Court in the case of Vedabai Alias Vaijayanatabai Baburao Patil Vs. Shantaram Baburao Patil, 253 ITR 798, it was held as follows: - "In exercising discretion under section 5 of the Limitation Act, the Court should adopt a pragmatic approach. A distinction must be made between a case where the delay is inordinate and a case where the delay is of a few days. Whereas in the former case the consideration of prejudice to the other side will be a relevant factor so the case calls for a more cautious approach but in the latter case no such consideration may arise and such case deserves a liberal approach." 20. Further, ITAT, Chennai in the case of JCIT vs. Tractors & Farm Equipments Ltd. it was held as under: - "The delay cannot be condoned simply because the appellant's case is hard and calls for sympathy or merely out of benevolence to the party seeking relief. In granting the indulgence and condoning the delay it must be proved beyond the shadow of doubt that the appellant was diligent and was not guilty of negligence whatsoever. The sufficient cause within the contemplation of the limitation provision must be a cause which is beyond the control of the party invoking the aid of the provisions. The Hon'ble Supreme Court in the case of Ram/al v. Rewa Coalfields Ltd. AIR 1962 SC 361 has held that the cause for the delay in filing the appeal which by due care and attention could have been avoid cannot be a sufficient cause within the meaning of the limitation provision. Where no negligence, nor inaction, or want of bona tides can be imputed to the appellant a liberal construction of the provisions has to be made in order to advance substantial justice. Seekers of justice must come with clear hands." 21. For these reasons, the claim of the appellant is not acceptable especially when there is an inordinate delay of 3297 days. Moreover, in this case the order u/s 200A of the IT Act has been passed by the AO on 11.12.2013 and the date of service of the order as per appeal memo in Form 35 filed by the appellant is also 14.12.2013. However, appellant has filed the appeal on 23.01.2023. Whereas, the appellant was required to file appeal by 14.01.2014 as prescribed by the provision of the section 249(2) of the IT Act. So the appellant could not successfully demonstrate that there was sufficient cause for not filing the appeal within prescribed period. Therefore, the delay of 3297 days in filing appeal in this case is not condoned as no "sufficient cause" has been shown u/s. 249(3) of the Income Tax Act, 1961 for the appellant's failure to file the appeal within the prescribed period of limitation u/s. 249(2) of the Income Tax Act, 1961 r.w.s. 5 of Limitation Act and hence the appeal sought to be instituted belatedly is hereby rejected.

In the result, as delay in filing of appeal is not condoned, the appeals are rejected accordingly.

In the result, the appeal is dismissed.”

The Ld. AR has submitted that the assessee is serving in the remote areas. Initially, the TDS compliances were being handled individually branch-wise. However, due to increase in compliance provisions and complexities of TDS provisions, branches used to face many difficulties in complying with it on timely manner. The TIN Facilitation Centre where TDS statement was to be filed was far away from the branches making it difficult to file return in time. Further, there were continuous changes in branch managers and concerned persons who were responsible for filing TDS returns. Due to amalgamation of various banks with assessee bank, it became difficult for head office of Bank to compile all previous data related to TDS returns which led to delay in filing the appeals. Lastly, due to unavailability of qualified professionals in remote areas and also due to lack of knowledge of compliance requirement to Income Tax notices, the notices remain unintentionally unanswered by the Bank. The Ld. AR further submitted that no appeals were preferred against original intimation orders since there was lack of clarity on the issue of levy of late fees u/s 234E. The assessee was informed by its consultants that the levy of late fee u/s 234E was already being challenged in the judicial forums and Bank decided to wait for the outcome of the judicial proceedings. Once the decision in the matter was rendered by different Hon'ble High Courts and Jurisdictional Chennai ITAT, details of late filing levy fee u/s 234E of different branches, was compiled by Head Office and the appeals were filed against the Intimation orders issued u/s 200A. In the said background, Ld. AR sought condonation of delay in the appeals.

Upon perusal of these submissions, we find that these reasons and arguments are very general in nature. Difficulty in compliance or change in concerned offices / professional or the fact that the TIN facilitation centre was far-off could not be a reasonable cause to justify such an inordinate delay. The plea that the assessee was waiting for the outcome of judicial decisions also does not impress us since the assessee’s grievance could be redressed only by filing an appeal by the assessee only. Even today, there are divergent views of various High Courts on impugned issue and this issue is yet to be settled by Hon’ble Apex Court. The assessee is a regional rural bank and surely assisted by qualified professionals and therefore, we are unable to accept all these arguments of Ld. AR.