RAMBABU SATHI,KAKINADA vs. COMMISSIONER OF INCOME TAX (APPEALS), KAKINADA

Subsequently, the appellant raised certain legal grounds and filed petition for admission of the revised grounds of appeal which are mentioned below: -

From the above it is seen that Learned Commissioner of Income Tax (Appeals) [hereinafter in short “Ld. CIT(A)”] dismissed the appeal of the assessee by holding that there is an inordinate delay of 1827 days in filing the appeal which does not deserve to be condoned and the facts on record in this case clearly discloses the inaction on the part of the appellant in filing the appeal within the prescribed time. The Ld. CIT(A) further held that the assessee had also failed to come forth with any plausible explanation as regards sufficient reasons leading to the said inordinate delay of 1827 days. Ld. CIT(A) at Para No. 17 in his order has stated that he is of the considered view that the reasons given by the appellant lacks substance and is devoid of merit, insufficient and unsatisfactory for condoning the inordinate delay and therefore this is not a fit case to condone the same. Certain cases law were also mentioned in the order of the Ld. CIT(A) for the proposition that where there is a long delay and there is no proper explanation, latches would also come into play, and the appellant does not deserve the condonation of delay for filing the appeal. To sum-up, the Ld. CIT(A) held that there is no sufficient cause for filing the appeal with such an inordinate delay, the appeal was dismissed.

During the appeal proceedings before ITAT, Ld. AR of the assessee has stated that the Assessing Officer (in short “A.O.”) passed the assessment order on 20.12.2019 and the appeal was filed along with Form 35 and ground of appeal on 22.01.2020. The assessee passed away on 27.12.2020 and the same was brought to the notice of Ld.CIT(A) which can be seen from Page No. 10 of the paper book filed by the appellant during the course of the proceedings. As the appellant passed away, the Office of the Ld. CIT(A) informed the assessee to implead his legal heir to continue the appeal proceedings on 17.12.2024 which is evidenced from Page No. 17 and 20 of the paper book. In regard to this, Ld. AR has submitted that the deceased’s wife was impleaded by filing a fresh appeal on 20.12.2024 which can be seen from Page No.23 of the paper book. In view of the same, there is no delay in filing the appeal for the first time. The filing of subsequent appeal by impleading the wife of the deceased appellant should not be taken as fresh appeal and the period for counting the delay in filing of appeal should be taken from the date of filing appeal originally by the appellant himself. If the delay is counted from the date of filing of appeal by the appellant himself as was done by the appellant himself when he was alive, there is no delay in filing of the appeal at all. Due to the misunderstanding of the Ld. AR of the appellant, a fresh appeal was filed by the wife of appellant, instead of impleading the wife of the appellant to the original appeal. As this is a bonafide mistake, the Ld. AR of the appellant has stated that there is no delay, if the filing of appeal by deceased appellant is taken into consideration. Hence, it was prayed that the case may be remanded to Ld. CIT(A) to adjudicate the issue on merits.

Ld.DR relied on the order of the Ld. CIT(A) and argued that the mistake is on the part of the appellant in filing a fresh appeal instead of impleading the appellant’s wife during the proceedings of appeal and hence the order of the Ld. CIT(A) is correct.

After hearing both the sides, the Bench observed that the bonafide mistake was committed by the Ld. AR of the appellant’s wife, the same constitutes “sufficient cause” under section 249(3) of the Act and the delay had to be condoned. The appeal was originally filed within the time limit mentioned in the Act and due to the demise of the appellant, fresh appeal was filed by the Ld. AR of the appellant’s wife instead of simply impleading herself and allow the Ld. CIT(A) to continue the proceedings. As there is no delay in filing the first appeal and also the bonafide mistake was committed by Ld.AR / the wife of deceased assessee, the same constitutes sufficient cause. Office of Ld.CIT(A) intimated the appellant’s wife to implead a legal heir on 17.12.2024 and on 20.12.2024 itself, the wife of deceased-appellant filed an appeal afresh. The appellant is under the mistaken bonafide belief that a fresh appeal is to be filed instead of simply impleading herself in the case of her deceased husband. Moreover the Ld. CIT(A) did not adjudicate the issue on merits by passing the order under section 250 of the Act. In the case of CIT Vs. Premkumar Arjundas Luthra [240 Taxman 133 (Bom)] the Hon'ble Bombay High Court has held that Ld. CIT(A) does not have the power to dismiss the appeal of appellant in-limine and the First Appellate Authority has to pass the order on merits also. In view of the same, it is held that there is no delay in filing the appeal, if the date of filing of appeal is reckoned from 22.01.2020 when the appeal was originally filed by the appellant who passed away subsequently. Consequently, the issue is remanded to the file of the Ld. CIT(A) directing him to pass the order on merits in accordance with law after giving an effective opportunity to the assessee.

In the result, appeal filed by the Assessee is allowed for statistical purposes.