M/S UNIQUE INSURANCE SERVICES,LUDHIANA,PUNJAB vs. ITO, WARD 6(1), LUDHIANA, PUNJAB

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ITA 398/CHANDI/2026Status: DisposedITAT Chandigarh06 August 2026AY 2010-116 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that the assessee failed to provide a satisfactory explanation for the inordinate delay, lacking material particulars and an affidavit. Citing Supreme Court judgments, the Tribunal found the delay to be due to gross negligence and lack of diligence.

What were the facts?

The assessee filed appeals before the ITAT with an extraordinary delay of 3,098 days. The Assessing Officer had made disallowances of interest expenditure for AYs 2009-10 and 2010-11, which were confirmed by the CIT(A) ex parte due to the assessee's non-appearance.

What were the issues?

Whether the extraordinary delay in filing the appeals can be condoned based on the explanation provided by the assessee.

Which sections of the Income-tax Act were involved?

Section 36(1)(iii)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DIVISION BENCH, ‘B’ CHANDIGARH

Before: SHRI LALIET KUMAR & SHRI VIJAY VARMA

For Appellant: Shri Parikshit Aggarwal, CA
For Respondent: Dr. Ranjit Kaur, Addl. CIT, Sr. DR
Hearing: 05.08.2026Pronounced: 06.08.2026

PER LALIET KUMAR, JM

These appeals are directed against the separate orders passed by the learned Commissioner of Income Tax (Appeals), Ludhiana, both dated 22.06.2017, pertaining to Assessment Years 2009-10 and 2010-11.

2.

Since identical issues arise in these two appeals, both involving the same assessee and common questions relating to condonation of an extraordinary delay in filing the appeals, they

ITA 397 & 398/CHD/2026 A.Y. 2009-10, 2010-11 2 were heard together and are being disposed of by this consolidated order for the sake of convenience and brevity.

3.

For Assessment Year 2009-10, the Assessing Officer completed the assessment under section 143(3) of the Income-tax Act, 1961 by making a disallowance of interest expenditure amounting to ₹6,75,960/- under section 36(1)(iii) on the ground that the assessee had advanced interest-free loans to related and unrelated parties for non-business purposes. The learned CIT(A), after noting the repeated non-appearance of the assessee despite several opportunities, dismissed the appeal ex parte and confirmed the addition.

4.

Similarly, for Assessment Year 2010-11, the Assessing Officer completed the assessment under section 143(3) by disallowing interest expenditure of ₹14,16,238/- under section 36(1)(iii) on identical reasoning. The learned CIT(A), observing that the assessee had failed to appear despite repeated notices and had not intimated its changed address, dismissed the appeal ex parte and sustained the addition.

5.

Aggrieved by the aforesaid appellate orders, the assessee preferred the present appeals before the Tribunal on 23.02.2026, resulting in an extraordinary delay of 3,098 days in filing the appeals.

ITA 397 & 398/CHD/2026 A.Y. 2009-10, 2010-11 3 6. The learned Authorised Representative submitted that the delay in filing the appeals was neither deliberate nor intentional. It was contended that the delay occurred due to circumstances beyond the control of the assessee. It was prayed that a liberal approach be adopted while considering the applications for condonation of delay so that the appeals could be decided on merits. It was further submitted that substantial justice should prevail over technical considerations.

7.

Per contra, the learned Departmental Representative strongly opposed the applications for condonation of delay. It was submitted that the delay involved is inordinate, extending to 3,098 days, and the assessee has failed to furnish any cogent or convincing explanation for such prolonged inaction. It was further argued that no affidavit has been filed by the assessee in support of the applications seeking condonation of delay. The explanation furnished is vague, general and unsupported by any documentary evidence. The learned DR, therefore, prayed that the applications for condonation of delay be rejected and the appeals be dismissed as barred by limitation.

8.

We have heard the rival submissions and carefully perused the material available on record. The preliminary issue requiring adjudication is whether the extraordinary delay of 3,098 days in filing the present appeals deserves to be condoned.

ITA 397 & 398/CHD/2026 A.Y. 2009-10, 2010-11 4 9. The record reveals that the impugned orders of the learned Commissioner of Income Tax (Appeals) were passed on 22.06.2017, whereas the present appeals came to be instituted before the Tribunal only on 23.02.2026, after a delay of 3,098 days. The explanation furnished by the assessee for seeking condonation of such inordinate delay is wholly unsatisfactory. The reasons assigned are vague, omnibus and bereft of material particulars explaining the prolonged inaction on the part of the assessee. More importantly, no affidavit has been filed in support of the applications seeking condonation of delay. In the absence of a duly sworn affidavit, the averments made in the applications remain unsubstantiated and cannot be accepted as constituting "sufficient cause" within the meaning of law. The law relating to condonation of delay is well settled. Although a liberal approach is to be adopted where sufficient cause is shown, such liberality cannot be extended to cases involving gross negligence, prolonged inaction or lack of bona fides.

10.

In Esha Bhattacharjee v. Managing Committee of Raghunathpur Nafar Academy & Ors. (2013) 12 SCC 649, the Hon'ble Supreme Court has authoritatively held that while considering an application for condonation of delay, the Courts are required to adopt a pragmatic approach; however, where the delay is inordinate, the doctrine of liberal approach cannot be invoked

ITA 397 & 398/CHD/2026 A.Y. 2009-10, 2010-11 5 as a matter of course. The Hon'ble Apex Court has further held that the explanation offered must be reasonable, bona fide and supported by material particulars and that vague, casual or fanciful explanations do not constitute sufficient cause for condonation of delay. Similarly, in University of Delhi v. Union of India & Ors., the Hon'ble Supreme Court reiterated that the law of limitation is founded on sound public policy and that a party seeking equitable relief must establish due diligence and bona fide conduct. The Court emphasized that unexplained or grossly delayed proceedings cannot be entertained merely on sympathetic considerations. Applying the aforesaid settled principles to the facts of the present case, we find that the assessee has failed to furnish any satisfactory explanation for the extraordinary delay of 3,098 days. The explanation offered is vague and general in nature and is unsupported by any affidavit or contemporaneous material. The conduct of the assessee clearly demonstrates complete lack of diligence in pursuing the statutory remedy available under the Act.

11.

In these circumstances, we are of the considered opinion that no sufficient cause has been made out warranting the exercise of our discretionary jurisdiction under the law for condonation of the inordinate delay. Consequently, the applications seeking condonation of delay are rejected.

ITA 397 & 398/CHD/2026 A.Y. 2009-10, 2010-11 6 12. Since the delay itself has not been condoned, the appeals are barred by limitation and cannot be examined on merits.

13.

In the result, both the appeals filed by the assessee are dismissed in limine as barred by limitation.

Order pronounced on 06.08.2026.

Sd/- Sd/- (VIJAY VARMA) (LALIET KUMAR) ACCOUNTANT MEMBER JUDICIAL MEMBER “Poonam”

आदेश क� �ितिलिप अ�ेिषत/ Copy of the order forwarded to : अपीलाथ�/ The Appellant 1. ��यथ�/ The Respondent 2. आयकर आयु�/ CIT 3. िवभागीय �ितिनिध, आयकर अपीलीय आिधकरण, च�डीगढ़/ DR, ITAT, CHANDIGARH 4. गाड� फाईल/ Guard File 5.

सहायक पंजीकार/ Assistant Registrar

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