SILVER OAK INFRASTRUCTURE & DEVELOPERS,MUMBAI vs. COMMISSIONER OF INCOME TAX, MUMBAI

On the adjourned date also, none appeared on behalf of the assessee when the appeal was called for hearing. No application for adjournment was filed. No supplementary affidavit, documentary evidence or written explanation was placed on record to reconcile the contradictory particulars or to explain the prolonged inaction. We, therefore, proceed to decide the application for condonation on the basis of the material available on record. We make it clear that the appeal is not being dismissed for non-prosecution. The question of limitation is being adjudicated on merits after examining the condonation application and the supporting affidavit.

The learned Sr. DR opposed the prayer for condonation. He prayed that the application for condonation be rejected and the appeal be dismissed as barred by limitation.

Although the present appeal was instituted after 09.04.2026, it pertains to assessment year 2012-13 and arises from proceedings undertaken under the Act. Under section 253(3) of the Act, an appeal to the Tribunal was required to be presented within sixty days of the date on which the order sought to be appealed against was communicated to the assessee. Section 253(5) empowers the Tribunal to admit a belated appeal only if it is satisfied that there was sufficient cause for not presenting the appeal within the prescribed period. Thus, the existence of sufficient cause is a condition precedent to the exercise of the discretionary power of condonation.

It is settled that the expression “sufficient cause” should receive a pragmatic and justice-oriented construction. At the same time, the liberal approach cannot dispense with the requirement of a truthful, coherent and reasonably complete explanation. While every day of delay need not be explained with pedantic exactitude, the assessee must explain the substantial period of inaction and demonstrate that the delay was occasioned by circumstances beyond its reasonable control.

In Balwant Singh (Dead) v. Jagdish Singh & Ors., (2010) 8 SCC 685, the Hon’ble Supreme Court explained that liberal construction of sufficient cause: “presupposes no negligence or inaction on the part of the applicant, to whom want of bona fide is imputable.” ( para 14) 11. The Hon’ble Supreme Court further held that the explanation must be reasonable and plausible and that the applicant must demonstrate due care and attention.

First, the foundational facts stated by the assessee are internally inconsistent. Form No. 36 mentions 20.03.2015 as the date of the first appellate order. The record conclusively shows that 20.03.2015 is the date of the assessment order and that the first appellate order was passed on 17.02.2017. Form No. 36 further mentions 09.04.2026, namely the very date on which the appeal was filed, as the date of receipt of the first appellate order. The affidavit, however, does not state that the first appellate order was received on 09.04.2026. It states that an order giving effect to the appellate order was received on 10.02.2026.

These are not inconsequential inaccuracies. The date of the impugned order and the date of its communication are the very facts on which limitation is computed. Despite being granted a specific opportunity, the assessee did not appear and did not place any corrected Form No. 36, supplementary affidavit, proof of service or other material on record to reconcile these contradictory statements.

Secondly, the affidavit itself proceeds on the footing that the appellate order dated 17.02.2017 had been received and was thereafter misplaced during the shifting of the office in 2017-18. A document could have been misplaced only after it had come into the possession of the assessee. However, the affidavit conspicuously omits the date on which the order was originally received, the person who received it, the place at which it was kept, the

Thirdly, shifting of an office is an event of limited duration. The affidavit does not explain why no appeal was filed before the alleged shifting, why a duplicate or certified copy was not sought after the order was found missing, or what steps were taken to ascertain the result of the first appeal. There is no correspondence with the erstwhile representative, the office of the learned CIT(A), the Assessing Officer or any other authority evidencing an attempt to obtain the order or to pursue the statutory remedy.

Fourthly, the assertion that the business had ceased and the office was closed does not explain the failure to pursue the appeal. Cessation of business does not extinguish the legal existence of the assessee firm or suspend the statutory period of limitation. The assessee admittedly continued to receive and act upon the order giving effect. No particulars have been furnished regarding the date of closure, the custody of the records or the person responsible for attending to the pending tax proceedings.

Fifthly, the statement that the representative was occupied with audit assignments is vague and unsupported. No name, period, engagement details or affidavit of the concerned representative has been furnished. Professional preoccupation of a representative, without particulars showing that it genuinely prevented the filing of the appeal throughout the relevant period, cannot constitute sufficient cause for several years of inaction.

Sixthly, reliance on the COVID-19 pandemic does not explain the delay that had already occurred long before the pandemic. The impugned order was passed on 17.02.2017. There is no explanation

Seventhly, receipt of the order giving effect on 10.02.2026 did not create a fresh right of appeal against the order dated 17.02.2017, nor did it restart the statutory period prescribed for challenging that order. At the highest, it constituted an occasion for the assessee to become aware of the disposal of the first appeal. It does not explain the assessee’s lack of diligence during the preceding years.

The cumulative effect of the above circumstances is that the assessee has not furnished a continuous, credible or bona fide explanation for the inordinate delay. The affidavit consists substantially of general assertions without dates or supporting evidence. More importantly, the particulars in Form No. 36 are inconsistent with both the impugned order and the affidavit. The specific opportunity granted by the Bench to explain these discrepancies also remained unavailed.

We are conscious that an application for condonation should not be rejected merely because the delay is lengthy. Equally, the length of delay cannot become irrelevant where the explanation does not cover the material period, contains inconsistent foundational facts and discloses prolonged inaction. Condoning such delay in the absence of sufficient cause would amount to rendering the statutory limitation otiose.

Consequently, the appeal is dismissed in limine as barred by limitation. The grounds raised by the assessee on the merits of the additions or disallowances are not adjudicated.

In the result, the appeal of the assessee is dismissed.