CHOGARAM HRARAMJI DEVASI,MUMBAI vs. ITO 19(1)(1), MUMBAI

At the outset, it is observed that there is a delay of 17 days in filing the present appeal before the Tribunal. The impugned order of the Ld. CIT(A)

The assessee filed a condonation application supported by an affidavit praying for condoning the 17 days' delay. The Ld. Authorized Representative (AR) explained that the delay occurred as the assessee was out of town during the Diwali festival period, was making efforts to ascertain the status of a manually filed appeal via RTI, and needed time to mobilize the appeal fees.

Having considered the submissions and the affidavit, we are satisfied that the assessee was prevented by reasonable cause from filing the appeal within the stipulated time limit. Guided by the principles laid down by the Hon’ble Supreme Court in Collector, Land Acquisition v. Mst. Katiji [1987] 167 ITR 471 (SC), we condone the delay of 17 days in filing the present appeal before us and admit the appeal for hearing on merits.

Turning to the merits of the appeal, the brief facts are that the Assessment Order under Section 143(3) of the Act for A.Y. 2007-08 was passed by the Assessing Officer on 11.12.2009 and served on the assessee on 28.12.2009. The statutory period to file an appeal before the Ld. CIT(A) under Section 249(2) expired on 28.01.2010. However, the online appeal before the Ld. CIT(A) was submitted only on 06.03.2020, resulting in an inordinate delay of 10 years and 2 months.

Before the Ld. CIT(A), the assessee sought condonation of delay stating that he was a layman lacking legal guidance, and that his tax consultant, Mr. S. L. Jain, underwent spine surgery on 06.08.2018 and was thereafter on bed rest. The Ld. CIT(A) noted that despite multiple opportunities, the assessee failed to furnish medical evidence or documentary proof supporting the illness or explaining the inaction for the period prior to August 2018 or the subsequent period. Consequently, relying on judicial precedents, the Ld. CIT(A) held that the assessee failed to establish "sufficient cause" under Section 249(3) and dismissed the appeal as barred by limitation without dealing with the merits.

During the course of hearing before us, the Ld. AR submitted that a manual appeal in Form No. 35 was allegedly filed on 28.01.2010 and that, as its status could not be ascertained, the appeal was subsequently re-filed online on 06.03.2020 in good faith. On the other hand, the Ld. Departmental Representative (DR) strongly supported the order of the Ld. CIT(A), submitting that no satisfactory evidence establishing the filing and pendency of such manual appeal was brought on record before the Ld. CIT(A), nor was any valid reason provided for the huge delay of over 10 years.

We have carefully considered the rival submissions and perused the material available on record. The core issue before us is whether the Ld. CIT(A) was justified in refusing to condone the delay of 10 years and 2 months in filing the appeal before him.

It is a settled legal position that under Section 249(3) of the Act, an appellant seeking condonation of delay is required to demonstrate "sufficient cause" for not presenting the appeal within the prescribed period. The explanation furnished by the assessee must satisfactorily account for the delay and be supported by cogent material where circumstances so warrant.

In the present case, as noted by the Ld. CIT(A), despite being afforded multiple opportunities, the assessee failed to furnish any medical evidence or documentary material substantiating the illness of the tax consultant. More importantly, the explanation furnished does not satisfactorily account for the entire period of delay of 10 years and 2 months. The alleged illness of the tax consultant in August 2018, even if taken into consideration, does not explain the complete inaction from the expiry of the original limitation period in January 2010 up to August 2018, nor the delay thereafter.

Regarding the contention of filing a manual appeal on 28.01.2010, no cogent documentary evidence establishing the receipt, filing, and pendency of such manual appeal was substantiated on record before the Ld. CIT(A) or before us.

The law of limitation is founded upon the principle that a litigant seeking condonation must exercise reasonable diligence. While a liberal approach may be adopted in cases of short delays, an extraordinary delay of 10 years and 2 months requires a plausible, cogent, and evidence-backed explanation covering the entire period of inaction. Mere assertion of lack of legal guidance or illness of a consultant, without explaining the full period, does not constitute "sufficient cause" in law.

The Hon’ble Supreme Court in Ramlal v. Rewa Coalfields Ltd. [AIR 1962 SC 361] held that the party seeking condonation must establish sufficient cause and demonstrate due diligence. While substantial justice is preferred over technical considerations, this principle does not dispense with the requirement of demonstrating sufficient cause when the delay extends over several years.

Therefore, considering the totality of facts and circumstances, we find no infirmity or perversity in the order of the Ld. CIT(A) in refusing to condone the delay of 10 years and 2 months. Once the delay was rightly not condoned, the appeal before the Ld. CIT(A) was barred by limitation, and the Ld. CIT(A) was fully justified in dismissing the appeal without adjudicating the grounds on merits.

Accordingly, the order of the Ld. CIT(A) is hereby affirmed.

In the result, the appeal filed by the assessee is dismissed.