AMARJIT SINGH,RUPNAGAR vs. PR. COMMISSIONER OF INCOME TAX, CHANDIGARH-1, CHANDIGARH

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ITA 198/CHANDI/2025Status: DisposedITAT Chandigarh21 July 2026AY 2012-137 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that the assessee failed to establish a sufficient and bona fide cause for the extraordinary delay. The explanation provided did not cover the entire period of delay nor satisfactorily explain the inaction after initiating appellate proceedings against the consequential assessment order.

What were the facts?

The assessee filed an appeal against an order passed under section 263 of the Income-tax Act, 1961, with a significant delay. The assessee claimed the delay was due to being in judicial custody and subsequent unawareness of the independent appeal remedy.

What were the issues?

Whether the delay in filing the appeal against the order passed under section 263 can be condoned based on the reasons provided by the assessee. The maintainability of an independent appeal against a section 263 order.

Which sections of the Income-tax Act were involved?

Section 263

AI-generated summary — verify with the full judgment below

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

Before: SHRI LALIET KUMAR & SHRI MANOJ KUMAR AGGARWAL

For Appellant: Shri Tej Mohan Singh, Advocate
For Respondent: Smt. Jaishree Sharma, CIT DR
Hearing: 20.07.2026Pronounced: 21.07.2026

PER LALIET KUMAR, JM

The present appeal has been preferred by the assessee against the order dated 16.03.2022 passed by the learned Principal Commissioner of Income Tax, Chandigarh-1 (in short, "the PCIT") under section 263 of the Income-tax Act, 1961, for the Assessment Year 2012-13.

2.

The assessee has raised the following grounds of appeal:-

ITA 198/CHD/2025 A.Y. 2012-13 2 1. That the Ld. Principal Commissioner of Income Tax has erred in law and on facts in passing an ex parte order in violation of the principles of natural justice and, therefore, the order passed is arbitrary and unjustified. 2. That the Ld. Principal Commissioner of Income Tax has wrongly assumed jurisdiction under section 263 of the Act to set aside the assessment order dated 20.06.2019 passed by the Assessing Officer, inasmuch as the said order is neither erroneous nor prejudicial to the interest of the Revenue and, therefore, assumption of jurisdiction under section 263 is beyond his competence. 3. That the proceedings under section 263 have been initiated on the allegation that the Assessing Officer accepted the explanation regarding large cash deposits without conducting proper enquiries, whereas the issue had already been examined during the assessment proceedings and, therefore, initiation of proceedings under section 263 is illegal, arbitrary and unjustified. 4. That the appellant craves leave to add, alter or amend the grounds of appeal before the appeal is finally heard and disposed of. 5. That the order passed by the Ld. Principal Commissioner of Income Tax is erroneous, arbitrary, contrary to law and facts of the case and is liable to be quashed.

3.

At the outset, the learned Authorised Representative submitted that the present appeal deserves to be admitted despite the delay in filing the same, as the assessee remained in judicial custody from 27.05.2021 to 14.09.2023. It was submitted that, as a result of such incarceration, the assessee could neither receive the notices issued under section 263 nor effectively prosecute his legal remedies. In support of the application seeking condonation of delay, reliance was placed upon the affidavit filed by the assessee, wherein, inter alia, it has been stated that no effective notice under section 263 was served upon

ITA 198/CHD/2025 A.Y. 2012-13 3 him personally during the period of judicial custody; that after his release he came to know only about the consequential assessment order; that he immediately preferred an appeal before the learned Commissioner of Income Tax (Appeals) against the consequential assessment order; that being an agriculturist, he was unaware that the order passed under section 263 was independently appealable before the Tribunal; and that only upon receiving recovery notices dated 03.02.2025 did his counsel advise him regarding the maintainability of an independent appeal before the Tribunal, whereupon the present appeal was filed on 07.02.2025 without any further delay.

4.

The learned Authorised Representative further submitted that although the Hon'ble Punjab & Haryana High Court in Veena Shah v. PCIT (ITA No. 153 of 2024, decided on 13.02.2025) has held that the Tribunal did not possesses the power to condone delay in filing an appeal against an order passed under section 263, however, the Coordinate Bench of the Tribunal in MTS MC Co. Charitable Trust has also recognized that each case has to be examined on its own facts while considering whether sufficient cause has been established. It was accordingly contended that merely because there is a delay in filing the appeal, the assessee cannot be denied the statutory remedy once a bona fide explanation has been furnished.

ITA 198/CHD/2025 A.Y. 2012-13 4 5. Per contra, the learned Departmental Representative strongly opposed the application for condonation of delay. It was submitted that although the assessee remained in judicial custody till 14.09.2023, there was absolutely no legal impediment in filing the appeal immediately after his release. On the contrary, the assessee admittedly preferred an appeal before the learned Commissioner of Income Tax (Appeals) against the consequential assessment order on 22.09.2023, thereby clearly demonstrating that he had resumed legal proceedings and had engaged legal assistance. Despite this, no appeal was filed before the Tribunal against the order passed under section 263 for more than sixteen months thereafter, and the present appeal came to be filed only on 07.02.2025, resulting in a delay of about 963 days. It was, therefore, submitted that the affidavit filed by the assessee is merely self-serving and fails to explain the delay for the entire period.

6.

We have heard the rival submissions and carefully perused the material available on record. The undisputed facts reveal that the impugned order under section 263 was passed on 16.03.2022. Although the assessee remained in judicial custody up to 14.09.2023, it is equally undisputed that immediately after his release he approached his counsel and preferred an appeal before the learned Commissioner of Income Tax (Appeals) against the

ITA 198/CHD/2025 A.Y. 2012-13 5 consequential assessment order on 22.09.2023. Thus, from that date onwards, the assessee had admittedly resumed legal proceedings and was represented through counsel.

7.

Once the assessee had consciously challenged the consequential assessment order before the first appellate authority, there was no legal prohibition or practical impediment preventing him from simultaneously challenging the order passed under section 263 before this Tribunal. The statute provides an independent remedy against an order passed under section 263, and the pendency of an appeal against the consequential assessment order does not preclude the filing of such an appeal. Therefore, the explanation that the assessee became aware of the appellate remedy only upon receipt of recovery notices in February, 2025 does not inspire confidence.

8.

The affidavit filed in support of the condonation application is essentially self-serving and is unsupported by any contemporaneous material explaining why, despite engaging counsel and filing an appeal before the learned Commissioner of Income Tax (Appeals) on 22.09.2023, no appeal was preferred before this Tribunal until 07.02.2025. The explanation, therefore, fails to satisfactorily account for the delay after the assessee had regained liberty and had already commenced appellate proceedings under the Act.

ITA 198/CHD/2025 A.Y. 2012-13 6 9. The law of limitation requires that every day's delay be reasonably explained. While the expression "sufficient cause" deserves liberal construction in deserving cases, such liberality cannot be extended where the conduct of the litigant demonstrates negligence or lack of due diligence or an deliberate act to play hide and seek with the Court. A litigant cannot be permitted to decide, at his own convenience, when a statutory remedy should be invoked. The statutory period prescribed for filing an appeal cannot be rendered otiose by permitting an appellant to challenge the foundational order only after the consequential proceedings have assumed an adverse complexion. Such a course would amount to allowing the assessee to take a joyride of the proceedings, which is impermissible in law.

10.

In view of the aforesaid facts and circumstances, we are of the considered opinion that the assessee has failed to establish sufficient and bona fide cause for condonation of the extraordinary delay of about 963 days in filing the present appeal. The explanation furnished neither covers the entire period of delay nor satisfactorily explains the inaction after the appeal against the consequential assessment order had already been instituted before the learned Commissioner of Income Tax (Appeals). Consequently, we decline to condone the delay. Since the delay is not condoned, the present appeal is liable to be

ITA 198/CHD/2025 A.Y. 2012-13 7 dismissed as barred by limitation, without entering into the merits of the grounds raised by the assessee.

11.

In the result, the appeal filed by the assessee is dismissed as barred by limitation.Order pronounced on 21.07.2026.

Sd/- Sd/- (MANOJ KUMAR AGGARWAL) (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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