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Income Tax Appellate Tribunal, DELHI BENCH: ‘H’: NEW DELHI
Before: SHRI RAMIT KOCHAR & SHRI SUDHIR PAREEK
Revenue by : Sh. S.K. Jadhav, CIT DR Assessee by : Sh. Neeraj Jain, Advocate Sh. Ramit Katyal, CA Ms. Mansha Bhalla, CA Date of Hearing :13.05.2025 Date of Pronouncement : 04.07.2025 ORDER PER SUDHIR PAREEK, JM By way of this appeal, the Revenue assails the order dated 23.12.2014, passed by the Learned Dispute Resolution Panel- 2(DRP) u/s 144C(5) of the Income Tax Act, 1961 (hereinafter referred as “the Act”) for A.Y. 2010-11.
ITA No.- 7392/Del/2017 M/s NEC Technologies India Pvt. Ltd. 2. The appellant/Revenue has raised following grounds of appeal for adjudication: -
1. Whether on facts and in circumstances of the case, the Ld. Dispute Resolutions Panel-II is legally justified in deleting the addition made under section 40(a)(i) amounting to Rs. 9,34,91,383/- by ignoring the fact that the case was not covered by exception carved out by section 9(1)(vii)(b) of the Act? 2. Whether on facts and in circumstances of the case, the Ld. Dispute Resolutions Panel-II is legally justified in excluding two comparables considered by the TPO namely M/s E-Infochips Bangalore Limited and M/s Infinite Data Systems Pvt. Limited which are functionally similar to the assessee company? 3. Whether on facts and in circumstances of the case, the Ld. Dispute Resolution Panel-II is legally justified in holding that strict funciational comparability is required by ignoring the OECD guidelines that for TNMM relaxed comparability is required? 4. That the appellant craves leave to add, alter, amend or forgo any ground/(s) of appeal either before or at the time of hearing of the appeal.
Facts of the case may be concisely described as that the return for A.Y. 2010-11 declaring income of Rs.3,09,32,409/- filed electronically on 08/10/2010 and in the course of time the case was selected for scrutiny assessment through CASS and in pursuation there of notices u/s. 143 (2),143(2) and 142(1) of the Act was issued and duly served upon the assessee and in response to same necessary details/documents, as Page 2 of 24 ITA No.- 7392/Del/2017 M/s NEC Technologies India Pvt. Ltd. required, were produced and after thorough examination as per section 144C of the Act, draft assessment order passed on dated 21.03.2014.
Thereafter, assessee filed objection in Form 35A on 24-04-2014, before the Dispute Resolution Panel (DRP) against the draft assessment order dated 21.03.2014, set up under relevant chapter relating to procedure for assessment and the Ld. DRP after consideration the submissions of the assessee, observed as under: - “ DRP Observations: In order to analyze, the comparability of this company with the taxpayer, this Panel analyzed the annual report of this company which is as under: The Company is primarily engaged in Software Development and I.T. enabled Services Earnings in Foreign Currency Software Development Rs. 371,388,107, and Consultancy Charges Rs. 59,078,374. As per P-54/AR:- "Income from Software Services 430,466,481 and Software Development Expenses 206,674,788 Since, from the annual report of the company in-sight was not available about the exact details of services, a recourse was taken to refer to the website of this company from which it is observed as under:- "einfochips is a partner of choice for Fortune 500 companies for product innovation and hi-tech engineering consulting. Since 1994, elnfochips has provided solutions to key verticals like Aerospace & Defense, Consumer Electronics, Energy & Utilities, Healthcare, Home, Office, and Industrial Automation, Media & Broadcast, Medical Devices, Retail & e-Commerce, Security & Surveillance, Semiconductor Software/ISV and Storage & Compute. Covering every aspect of the product lifecycle, elnfochips draws from an experience of building 500+ products that have over 10 Million units
Page 3 of 24 ITA No.- 7392/Del/2017 M/s NEC Technologies India Pvt. Ltd. deployed to provide solutions an Product Design and Development, QA and Certifications, Reengineering, Sustenance and Volume Production. Being an innovation driven company, 5% of our revenues are earmarked for building reusable IPs that will accelerate product design cycles and reduce product risks. About 80% of einfochips business comes from companies with revenues over $1 Billion, and 60% of total business from building life and mission critical products. elnfochips has the experience, expertise and infrastructure to deliver complex, critical and connected products. Today, more than 1200 chipmates operate from over 10 Design Centers and dozen Sales Offices spread across Asia, Europe and US. Our clients have recognized our teams for commitment, teamwork and initiatives that we have brought forward, adding immense value to client processes and products. Chipmates have a strong growth path defined for them, with specific soft-skills training modules - Lagoon, Pegasus and Altius - to groom leaders for the future. 'At einfochips we are determined that our growth should empower the ones in need. Every year we contribute 1% of our profits for development in education and healthcare." Further, from the details of services, it was observed that this company is also into Board Designs and mention to that effect on the website is as under: "einfochips design services consists of custom board designs, development platforms, reference designs and FPGA based designs to suit customer-specific requirements. These services cater to requirements ranging from small-footprint, power-optimized solutions to high-end, rugged systems built around various embedded processors and DSPs. Our hardware and board design supports efficient processor inter-communications and memory access operations, as well as cost-effective PCB architecture and manufacturing testobility. elnfochips has strong technological expertise in various board design tools like Schematic Tools, Layout Tools, Signal Integrity Analysis Tool, Thermal Analysis Tool, and CAM Validation Tool; Board Debugging Tools like various Oscilloscopes, different Logic Analyzers, and Emulators. 150+ Hardware Designs on leading processor & platform Expertise in Complexity, Quality, Density und Speed
Page 4 of 24 ITA No.- 7392/Del/2017 M/s NEC Technologies India Pvt. Ltd. Boards of 2 to 140 Sq. Inches in size, density up to 20 components/sq. Inch 40% Designs with 10-18 Layer PCBs, up to 4000 components on a board 2-Level Micro Via/Via-on-Pad/Blind Via/Buried Via ISO 9001 compliant, comprehensive 132-step checklist for production on second spin Quality Audits for top global product companies, for Industrial, Commercial and MILSPEC Designs Diagnostics at the CM/OEM site for high product yield and quality Alliances with 6 CMs with 14 facilities worldwide Design exclusivity even with ODM engagements"
The above profile of this company indicates that this company is equipped to carry out high end technology driven services and product development which is not the forte of the taxpayer. The taxpayer is justified in its objection to the inclusion of this company. The TPO is directed to exclude this comparable. ii) Infinite Data Systems Pvt. Ltd.: Assessee's Contention Functionally dissimilar Exceptional growth in operations, revenue and profits Earning supernormal profits DRP Observation For the purpose of determination of comparability of this company with the taxpayer, the analysis of this Panel is as under:- As per P-13/AR:- "Infinite Data Systems Private Limited ("IDS" or "The Company") was incorporated on 26th September, 2006. The company is wholly owned subsidiary of Infinite Computer Solutions (India) Limited. It provides solutions that encompass technical consulting, design & Page 5 of 24 ITA No.- 7392/Del/2017 M/s NEC Technologies India Pvt. Ltd. development of software, maintenance, systems integration, implementation, testing and infrastructure management services." "Revenue is primarily derived from technical support and infrastructure management services." As per P-17/AR:- "The Company is primarily a services company engaged in technical consulting, design & development of software, maintenance, systems integration, implementation, testing and infrastructure management services." An effort was made to refer to the website of the company. It appears that the company does not have website of its own and from the information available in public domain it is observed that this company has amalgamated w.e.f. 01/04/2012 with M/s Infinite Infosoft Services Private and with Infinite Computer Solutions (India) Ltd. It is not known which of the activities appearing on the website are in respect of the comparable M/s Infinite Data Systems Pvt. Ltd and which others pertain to other amalgamating companies. Therefore, the reliance made by the TPO on the website is not accepted by this Panel in this case. Further, the information available from the annual report refers to the activity of the company into technical consulting, design & development of software, maintenance, systems integration, implementation, testing and infrastructure management services. The taxpayer however is rendering services like E-business & web, Application services, Mobile & PDA, Business Intelligence and reporting, Systems integration, IT infrastructure, Product related, Customer relationship management & telephony services as appears from the profile of the taxpayer as given on para 2 of this order. Moreover, from the annual report it is observed that value of software in the fixed asset is Rs. 9,898,767/- out of the total fixed assets of Rs. 27,494,062/-. This happens to be 36% of the total fixed assets which is substantial. In view of all the above reasons, this Panel holds that the company is into technical consultancy, design and development of software etc in contrast to the domain of the taxpayer mainly into software development services, the TPO is directed to exclude this comparable.”
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5. The Learned DRP, in view of the discussions on each of the grounds of objection raised, directed the Learned AO to complete the assessment accordingly and aggrieving with the same, the revenue before us.
6. Heard rival submissions and carefully scanned the material available on record.
Expressing dissatisfaction with the impugned order, it is submitted on behalf of the Revenue that the Ld. DRP panel erroneously deleted the addition made u/s. 40(a)(i) amounting to Rs.9,34,91,383/- and by doing so the Ld. DRP ignored the fact that the case was not covered by exception carved out by section 9(1) (vii) (b) of the Act.
At the outset, it is noticed that this appeal filed, after inordinate delay of 1021 days i.e. on 08-12-2017with endorsement at the bottom of appeal that the limitation expires on 21-02-2015 and the copy of the order was communicated on 23-12-2014.
At the threshold of this appeal, the appellant submitted application for condonation of delay in filing this appeal on Page 7 of 24 ITA No.- 7392/Del/2017 M/s NEC Technologies India Pvt. Ltd. 08-12-2017 alongwith affidavit of Additional Commissioner of Income Tax Special Range-6 New Delhi, relevant extract thereof as follows:-
1) That the final assessment order in the case of M/s. NEC Technologies India Private Limited (Earlier know as M/s. NEC Technologies India Limited), Unit No. 1, Second Floor, TDI Centre, Commercial Plot No. 7, Jasola, New Delhi-110025 for Assessment Year 2010-11 was passed u/s 143(3) read with section 144C(13) of Income Tax Act, 1961 on 29.01.2015. 2) That the Commissioner of Income Tax, Delhi -06, New Delhi has issued directions u/s 253(2A) of the Act for filing the accompanying appeal against the directions of the Dispute Resolutions Panel-II, New Delhi dated 17.12.2014 issued u/s 144C(5) of the Income Tax Act, 1961. 3) That as per the provisions of section 253(3A) of the Act, the limitation for filing appeal before this Hon'ble Tribunal expire on 21.02.2015 and therefore, the present accompanying appeal is delayed by 1021 days. 4) The matter regarding filing of appeal in the impugned case for AY 2010-11 got missed due to the reason for this omission are as follows:-oversight which was an inadvertent omission. The reason for this omission are as follows :- Due to immense workload of time barring assessments, and time barring litigation before various judicial forums, the matter regarding filing of appeal in the impugned case for A.Y. 2010-11 got missed due to oversight which was an inadvertent omission. Due to restructuring in the Department in November 2014 as a result of which there was some bifurcation in the erstwhile Circle 13(1) involving a lot of movement of assessment records and all attention of the officials was occupied with the smooth transition to the restructuring phase The right given to the Department for filing appeal against the DRP’s directions remained on the Statute for a limited period Page 8 of 24 ITA No.- 7392/Del/2017 M/s NEC Technologies India Pvt. Ltd. of time due to which it took some time for the necessary internal procedures to get established which further contributed to the above inadvertent omission. Further, there has been a continuous change of incumbers having jurisdiction over the impugned case. The fact first came to the notice of the Department when the Appellate proceedings for A.Y. 2011-12 were taken by the Hon’ble ITAT. Upon coming to know about this fact, action was speedily taken.
5. That under the above circumstances, the present accompanying appeal got delayed by 1021 days.
That the delay is bona fide due to the circumstances stated above.
In the course of hearing, another application praying for the same, submitted by DIT, Circle 16(1), New Delhi on 04.02.2025 and of which relevant extract as follows: - In this context, it is submitted that the directions of the DRP-II. New Delhi dated: 17.12.2014 were communicated to the office of the then CIT-6, New Delhi on 23.12.2014. Accordingly, the appeal before the Hon'ble ITAT should have been filed by 21.02.2015.
3. However, the appeal was filed on 08.12.2017 before the Hon'ble ITAT. It has resulted in delay of 984 days. 3.1 The delay of 984 days in filing appeal before the Hon'ble ITAT is attributable to the restructuring of the department that occurred in November 2014. 3.2 The restructuring of department resulted in re-organization of assessment records as well as officers/officials. 3.3 It is humbly submitted that the delay in filing appeal before the Hon'ble ITAT is not deliberate. Page 9 of 24 ITA No.- 7392/Del/2017 M/s NEC Technologies India Pvt. Ltd. 3.4 The delay in filing appeal is only a result of humongous workload.
4. In view of the above, it is prayed that the delay of filing appeal before the Hon'ble ITAT of 984 days may be condoned and admit the appeal and hear the appeal on merits in the interest of natural justice.
11. As per the provision of Section 253(3) of the Act, there is limitation prescribed for preferring appeal before the Tribunal is sixty days from the receipt of the notice, and the Appellate Tribunal may admit an appeal after the expiry of the above sixty days, if it is satisfied that there was sufficient cause for not presenting it within that period u/s 253(5) of the Act.
12. The Ld. DR submitted that there was sufficient cause with the Revenue/Appellant in not filing the present appeal within prescribed time limit and prayed for condonation of delay.
13. Foremost question exists before us for consideration that whether the appellant established that there was sufficient cause with appellant in not filing appeal in prescribed period? As per section 253(5) of the Act, if the appellant establishes that there was sufficient cause for not filing appeal within prescribed period, then the Tribunal may condone the delay and admit the appeal for Page 10 of 24 ITA No.- 7392/Del/2017 M/s NEC Technologies India Pvt. Ltd. adjudication, unless and until it is demonstrated that there was sufficient cause that prevented the appellant from exercising his legal remedy for filing appeal within prescribed period of sixty days, thereafter, delay cannot be condoned, without there being compelling grounds. A sufficient cause for condoning delay, as per established legal precedents, requires adequate reasons that prevented an applicant from filing an application in the proceedings within the prescribed time limit and here sufficient cause includes bonafide conduct also and where gross negligence, deliberate inaction or lack of bona fides exist, then it should not be inferred that there was sufficient cause with the appellant for not filing the appeal within the prescribed limit as lack of bona fides imputable to a party seeking condonation of delay is a relevant and significant fact.
It is stated by the appellant in the aforesaid application dated 08-12-2017 that due to immense workload of time barring assessments and litigation of like nature before various judicial forums, and in such circumstances the matter regarding filing of appeal in the impugned case for A.Y. 2010-11 got missed due to oversight which was an inadvertent omission. It is strange that Page 11 of 24 ITA No.- 7392/Del/2017 M/s NEC Technologies India Pvt. Ltd. immense workload of time barring assessment caused not to file present appeal within prescribed limit , whereas this appeal was also time barring litigation at particular point of time and it is not shown or properly specify that why on that point of time immense workload was exist, because such a version of appellant/Revenue shows casual approach in dealing with the important official affairs and in our humble opinion immense workload never to be treated as sufficient cause and it is unlikely to be a sufficient cause on it’s own as court may consider factors such as whether the workload was a direct and unavoidable impediment to filing the present appeal and also the appellant under legal obligation to provide specific evidence to demonstrate that how the workload directly hindered the appellant from filing the present appeal within prescribed period? It is also submitted by the Learned DR that the present case got missed due to oversight which was an inadvertent omission but we are in strong disagreement with the plea of the appellant as oversight is a sufficient cause to condone the delay, but it is expressed negligence. Another reasons, on which, the appellant relied upon is restructuring in the Department in November, 2014, but in both the applications dated 08.12.2017 and 04.02.2025, it is Page 12 of 24 ITA No.- 7392/Del/2017 M/s NEC Technologies India Pvt. Ltd. stated that restructuring of the Department commenced in November, 2014 but it is not sufficiently shown that when it was actually completed, because it is essential to show that when the particular activity was commenced and when the same is completed in computing the days of condonation. In our humble opinion that the revenue is not even sure that what period should be condoned as in application dated 08.12.2017 it is prayed that the delay of 1021 days may be condoned and whereas in contrary, in the application dated 04.02.2025, it is of 984 days and there is no explanation of above-mentioned contrary prayers.
15. Whatever reasons assigned for condonation the delay, not even lacks of bona fides but also it appears that there was a negligent conduct in the form of oversight adopting casual approach. The concept of liberal approach in condonation of delay has to encapsulate the conception of reasonableness and it cannot be allowed unfettered free play because the conduct of party relating to it’s inaction or negligence are relevant factors to be taken into consideration.
In the case of Rajneesh Kumar & Another Vs. Ved Prakash, in SLP (civil) Nos.- 935-936 of 2021, the Hon’ble Supreme Court of Page 13 of 24 ITA No.- 7392/Del/2017 M/s NEC Technologies India Pvt. Ltd. India held that the object of the statutes of limitations is to compel a person to exercise his right of action within a reasonable time as also to discourage and suppress stale, fake or fraudulent claims. The relevant para no. 12 and 13 reproduced as under: “ 12 As regards the law of limitation, we may refer to the decision of this Court in Bharat Barrel & Drum MFG Go. u. The Employees State Insurance Corporation. (1971) 2 SCC, 860, wherein this Court held as under:- "The necessity for enacting periods of limitation is to ensure that actions are commenced within a particular period, firstly to assure the availability of evidence documentary as well as oral to enable the defendant to contest the claim against him; secondly to give effect to the principle that law does not assist a person who is inactive and sleeps over his rights by allowing them when challenged or disputed to remain dormant without asserting them in a Court of law. The principle which forms the basis of this rule is expressed in the maximum vigilantibus, non dermientibus, jura sub-veniunt (the laws give help to those who are watchful and not to those who sleep). Therefore, the object of the statutes of limitations is to compel a person to exercise his right of action within a reasonable time as also to discourage and suppress stale, fake or fraudulent claims." (Emphasis supplied)
It is established principle of law that the length of the delay is a relevant matter which the court must take into consideration while considering whether the delay should be condoned or not, and if it appears that they want to fix their own period of limitation for instituting the proceedings for which law has prescribed a period of limitation and once it is held that a party has lost his right to have Page 14 of 24 ITA No.- 7392/Del/2017 M/s NEC Technologies India Pvt. Ltd. the matter considered on merits because of his own inaction for a long, it cannot be presumed to be non-deliberate delay and in such circumstances of the case, appellant cannot be heard to plead that substantial justice deserves to be preferred as against the technical considerations. The court owes a duty to first ascertain the bona fides of the explanations offered by the party seeking condonation. It is only if the sufficient cause assigned by the litigant and the opposition of the other side is equally balanced that the court may bring into aid the merits of the matters for the purpose of condoning the delay, because the question of limitation is not merely a technical consideration and the rules of limitation are based on the principles of sound public policy and principles of equity, and should not keep the Sword of Damocles hanging over the head of the respondent for indefinite period of time to be determined at the whims and fancies of the appellants. Condonation of delay should not be used as an anticipated benefit for the government departments and unless the department has reasonable and acceptable genuine reason for the delay with bona fide efforts. It is true that that when there is no any gross negligence or deliberate inaction or lack of bona fide, liberal approach has to be adopted to Page 15 of 24 ITA No.- 7392/Del/2017 M/s NEC Technologies India Pvt. Ltd. advance substantial justice but the claim on account of impersonal machinery and inherited bureaucratic methodology of making several notes cannot be accepted and the law of limitation undoubtedly binds everybody, including the Government. The government departments are under a special obligation to ensuring performance of their duties with diligence and commitment and condonation of delay is an exception which should not be used as an benefit for the government departments.
18. In the course of hearing, the Ld. AR vehemently contested the condonation of the delay by relied upon the order of Hon’ble High Court of Delhi in the case of Pr. Commissioner of Income Tax-7 vs. M/s SH Tech Park Developers Pvt. Ltd. The relevant part of this order is reproduced as under:
‘6. Further the Supreme Court in Government of Maharashtra (Water Resources Department) Represented by Executive Engineer vs. Borse Brothers Engineers and Contractors Private Limited [(2021) 6 SCC 460] had observed:- "58. Given the object sought to be achieved under both the Arbitration Act and the Commercial Courts Act, that is, the speedy resolution of disputes, the expression "sufficient cause" is not elastic enough to cover long delays beyond the period provided by the appeal provision itself. Besides, the expression "sufficient cause" is not itself a loose panacca for the ill of pressing negligent and stale claims. This Court, in Basawaraj v. LAO (Basawaraj v. 1.10). (2013) 14 SCC 81], has held: (SCC pp. 85-88. paras 9-15) Page 16 of 24 ITA No.- 7392/Del/2017 M/s NEC Technologies India Pvt. Ltd.
"9. Sufficient cause is the cause for which the defendant could not be blamed for his absence. The meaning of the word "sufficient" is "adequate" or "enough", inasmuch as may be necessary to answer the purpose intended. "Therefore, the word "sufficient" embraces no more than that which provides a platitude, which when the act done suffices to accomplish the purpose intended in the facts and circumstances existing in a case, duly examined from the viewpoint of a reasonable standardof a cautious man. In this context, "sufficient cause" means that the party should not have acted in a negligent manner or there was a want of bona fide on its part in view of the facts and circumstances of a case or it cannot be alleged that the party has "not acted diligently" or "remained inactive". However, the facts and circumstances of coach case must afford sufficient ground to enable the court concerned to exercise discretion for the reason that whenever the court exercises discretion, it has to be exercised judiciously. The applicant must satisfy the court that he was prevented by any "sufficient cause" from prosecuting his case, and unless a satisfactory explanation is furnished, the court should not allow the application for condonation of delay. The court has to examine whether the mistake is bona fide or was merely a device to cover an ulterior purpose. (Sce Manindra Land & Building Corpn. v. Bhutnath Banerjee Manindra Land & Building Corpn. v. Bhutnath Banerjee. AIR 1964 SC 1336), Mata Din v. A. Narayanan Mata Din v. A. Narayanan, (1969) 2 SCC 770] Parimal v. Veena | Parimal v. Veena, (2011) 3 SCC 545: (2011) 2 SCC (Civ) 11 and Maniben Devraj Shah v. Municipal Corpn. of Brihan Mumbai | Maniben Devraj Shah v. Municipal Corpn. of Brihan Mumbai, (2012) 5 SCC 157: (2012) 3 SCC (Civ) 241.) 10. In Arjun Singh v. Mohindra Kumar [Arjun Singh v. Mohindra Kumar, AIR 1964 SC 993] this Court explained the difference between a "good cause" and a "sufficient cause" and observed that every "sufficient cause" is a good cause and vice versa. However, if any difference exists it can only be that the requirement of good cause is complied with on a lesser degree of proof than that of "sufficient cause".
The expression "sufficient cause" should be given a liberal interpretation to ensure that substantial justice is done, but only Ed. The matter between two asterisks has been emphasized in original. so long as negligence, inaction or lack of bona fides cannot be imputed to the party concerned [Ed.: The matter between two asterisks has been emphasised in original.. whether or not sufficient cause has been furnished, can be decided on the facts of a particular case and no straitjacket formula is possible. (Vidc Madanlal v. Shyamlal Madanlal v. Shyamlal, (2002) 1 SCC 535 and Ram Nath Sao v. Gobardhan Sao [Ram Nath Sao v. Gobardhan San, (2002) 3 SCC 195].)
Page 17 of 24 ITA No.- 7392/Del/2017 M/s NEC Technologies India Pvt. Ltd.
It is a settled legal proposition that law of limitation may harshly affect a particular party but it has to be applied with all its rigour when the statute so prescribes. The court has no power to extend the period of limitation on equitable grounds. 'A resultflowing from a statutory provision is never an evil. A court has no power to ignore that provision to relieve what it considers a distress resulting from its operation. The statutory provision may cause hardship or inconvenience to a particular party but the court has no choice but to enforce it giving full effect to the same. The legal maxim dura lex sed lex which means "the law is hard but it is the law", stands attracted in such a situation. It has consistently been held that, "inconvenience is not" a decisive factor to be considered while interpreting a statute.
The statute of limitation is founded on public policy, its aim being to secure peace in the community, to suppress fraud and perjury, to quicken diligence and to prevent oppression. It seeks to bury all acts of the past which have not been agitated unexplainably and have from lapse of time become stale. According to Halsbury' Aaws of England, Vol. 28, Para 605 p. 266: '605. Policy of the Limitation Acts. The courts have expressed at least three differing reasons supporting the existence of statutes of limitation, namely, (7) that long dormant claims have more of cruelty than justice in them. (2) that a defendant might have lost the evidence to disprove a stale claim, and (3) that persons with good causes of actions should pursue them with reasonable diligence. An unlimited limitation would lead to a sense of insecurity and uncertainty, and therefore, limitation prevents disturbance or deprivation of what may have been acquired in equity and justice by long enjoyment or what may have been lost by a party's own inaction, negligence or laches. (Sec Popat & Kotecha Property v. SBI Staff Assn. Popat & Kotecha Property v. SBI Staff Assn., (2005) 7 SCC 510), Rajender Singh v. Santa Singh | Rajender Singh v. Santa Singh, (1973) 2 SCC 705] and Pundlik Jalam Patil v. Jalgaon Medium Project [Pundlik Jalam Patil v. Jalgaon Medium Project, (2008) 17 SCC 448: (2009) 5 SCC (Civ) 9071) 14. In P. Ramachandra Rao v. State of Karnataka [P. Ramachandra Rao v. State of Karnataka, (2002) 4 SCC 578: 2002 SCC (Cri) 830| this Court held that judicially engrafting principles of limitation amounts to legislating and would fly in the face of law laid down by the Constitution Bench in Abdul Rehman Antulay v. R.S. Nayuk Abdul Rehman Antulay v. R.S. Nayak, (1992) 1 SCC 225: 1992 SCC (Cri) 931.
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The law on the issue can be summarized to the effect that where a case has been presented in the court beyond limitation, the applicant has to explain the court as to what was the "sufficient cause" which means an adequate and enough reason which prevented him to approach the court within limitation. Incase a party is found to be negligent, or for want of bona fide on his part in the facts and circumstances of the case, or found to have not acted diligently or remained inactive, there cannot be a justified ground to condone the delay. No court could be justified in condoning such an inordinate delay by imposing any condition whatsoever. The application is to be decided only within the parameters laid down by this Court in regard to the condonation of delay. In case there was no sufficient cause to prevent a litigant to approach the court on time condoning the delay without any justification, putting any condition whatsoever, amounts to passing an order in violation of the statutory provisions and it tantamounts to showing utter disregard to the legislature." (emphasis supplied) 59. likewise, merely because the Government is involved, a different yardstick for condonation of delay cannot be laid down. This General v. Living was felicitously Media stated (India) in Postmaster Lid. [Postmaster General v. Living Media (India) Ltd., (2012) 3 SCC 563: (2012) 2 SCC (Civ) 327: (2012) 2 SCC (Cri) 580: (2012) 1 SCC (1.&S) 649||"Postmaster General"), as follows: (SCC pp. 573-74, paras 27-29) "27. It is not in dispute that the person(s) concerned were well aware or conversant with the issues involved including the prescribed period of limitation for taking up the matter by way of filing a special leave petition in this Court. They cannot claim that they have a separate period of limitation when the Department was possessed with competent persons familiar with court proceedings. In the absence of plausible and acceptable explanation, we are posing a question why the delay is to be condoned mechanically merely because the Government or a wing of the Government is a party before us.
Though we are conscious of the fact that in a matter of condonation of delay when there was no gross negligence or deliberate inaction or lack of bona fides, a liberal concession has to be adopted to advance substantial justice, we are of the view that in the facts and circumstances, the Department cannot take advantage of various earlier decisions. The claim on account of impersonal machinery and inherited bureaucratic methodology of making several notes cannot be accepted in view of the modern technologies being used and available. The law of limitation undoubtedly binds everybody, including the Government.
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In our view, it is the right time to inform all the government bodies, their agencies and instrumentalities thatunless they have reasonable and acceptable explanation for the delay and there was bona fide effort, there is no need to accept the usual explanation that the file was kept pending for several months/years due to considerable degree of procedural red tape in the process. The government departments are under a special obligation to ensure that they perform their duties with diligence and commitment. Condonation of delay is an exception and should not be used as an anticipated benefit for the government departments. The law shelters everyone under the same light and should not be swirled for the benefit of a few." xxxx 61. In a recent judgment, namely, State of M.P. v. Chaitram Maywade [State of M.P. v. Chaitram Maywade. (2020) 10 SCC 667: (2021) 1 SCC (Civ) 111: (2021) | SCC (Cri) 120: (2021) 1 SCC (L&S) 871 this Court referred to Postmaster General [Postmaster General v. Living Media (India) 1.td.. (2012) 3 SCC 563: (2012) 2 SCC (Civ) 327: (2012) 2 SCC (Cri) 580: (2012) 1 SCC (L&S) 6491, and held as follows: (SCC pp. 668-69, paras 1- 5) "1. The State of Madhya Pradesh continues to do the same thing again and again and the conduct seems to be incorrigible. The special leave petition has been filed after a delay of 588 days. We had an occasion to deal with such inordinately delayed filing of the appeal by the State of Madhya Pradesh in State of M.P. v. Bherulal [State of M.P. v. Bherulal. (2020) 10 SCC 654: (2021) 1 SCC (Civ) 101: (2021) 1 SCC (Cri) 117: (2021) 1 SCC (L&S) 84] in terms of our order dated 15-10-2020. 2. We have penned down a detailed order in that case and we see no purpose in repeating the same reasoning again except to record what are stated to be the facts on which the delay is sought to be condoned. On 5- 1-2019, it is stated that the Government Advocate was approached in respect of the judgment delivered on 13-11-2018 | Chaitram Maywade v. State of M.P., 2018 SCC OnLine MP 1632) and the Law Department permitted filing of the SL.P against the impugned order on 26-5-2020. Thus, the Law Department took almost about 17 months' time to decide whether the S1.P had to be filed or not. What greater certificate of incompetence would there be for the Legal Department! 3. We consider it appropriate to direct the Chief Secretary of the State of Madhya Pradesh to look into the aspect of revamping the Legal Department as it appears that the Department is unable to file appeals within any reasonable period of time much less within limitation. These
Page 20 of 24 ITA No.- 7392/Del/2017 M/s NEC Technologies India Pvt. Ltd. kinds of excuses, as already recorded in the aforesaid order, are no more admissible in view of the judgment in Postmaster General v. Living Media (India) Ltd.[Postmaster General v. 1.iving Media (India) Ltd., (2012) 3 SCC 563: (2012) 2 SCC (Civ) 327: (2012) 2 SCC (Cri) 580: (2012) 1 SCC (L&S) 6491 4. We have also expressed our concern that these kinds of the cases are only "certificate cases" to obtain a certificate of dismissal from the Supreme Court to put a quietus to the issue. The object is to save the skin of officers who may be in default. We have also recorded the irony of the situation where no action is taken against the officers who sit on these files and do nothing.
Looking to the period of delay and the casual manner in which the application has been worded, the wastage of judicial time involved, we impose costs on the petitioner State of Rs 35,000 to be deposited with the Mediation and Conciliation Project Committee. The amount be deposited within four weeks. The amount be recovered from the officer(s) responsible for the delay in filing and sitting on the files and certificate of recovery of the said amount be also filed in this Court within the said period of time. We have put to Deputy Advocate General to caution that for any successive matters of this kind the costs will keep on going up."
Also, it must be remembered that merely because sufficient cause has been made out in the facts of a given case, there is no right in the appellant to have delay condoned. This was felicitously put in Ramlal v. Rewa Coalfields Ltd. Ramlal v. Rewa Coalfields ltd., (1962) 2 SCR 762: AIR 1962 SC 361 as follows: (SCR p. 771: AIR p. 365, para 12) "12. It is, however, necessary to emphasise that even after sufficient cause has been shown a party is not entitled to the condonation of delay in question as a matter of right. The proof of a sufficient cause is a condition precedent for the exercise of the discretionary jurisdiction vested in the court by Section 5. If sufficient cause is not proved nothing further has to be done; the application for condoning delay has to be dismissed on that ground alone. If sufficient cause is shown then the Court has to enquire whether in its discretion it should condone the delay. This aspect of the matter naturally introduces the consideration of all relevant facts and it is at this stage that diligence of the party or its bona fides may fall for consideration; but the scope of the enquiry while exercising the discretionary power after sufficient cause is shown would naturally be limited only to such facts as the Court may regard as relevant. It cannot justify an enquiry as to why the party was sitting idle during all the time available to it. In this connection we may point out that considerations of bona fides or due diligence are always material relevant when the Court
Page 21 of 24 ITA No.- 7392/Del/2017 M/s NEC Technologies India Pvt. Ltd. is dealing with applications made under Section 14 of the Limitation Act. In dealing with such applications the Court is called upon to consider the effect of the combined provisions of Sections 5 and 14. Therefore, in our opinion, considerations which have been expressly made material and relevant by the provisions of Section 14 cannot to the same extent and in the same manner be invoked in dealing with applications which fall to be decided only under Section 5 without reference to Section 14."
7. In view of the judicial pronouncements and the absence of any justification or sufficient cause having been shown, we find ourselves unable to sustain the prayer for condonation of delay.”
As we discussed above and respectfully following the judicial precents cited hereinbefore, we made it clear that we are not inclined to discuss on the merits of the case as not convinced that sufficient cause has been made out for condonation of such inordinate delay and it is established that the present appeal filed beyond prescribed limit and appellant/Respondent have failed to prove that they were reasonably diligent in prosecuting the matter and this vital test for condoning the delay is not satisfied in this case and on the basis of the foregoing facts situation the appeal of the Revenue liable to be dismissed as it is time barred. As we decide the instant appeal on time barring, no need to adjudicate other grounds of appeal.