RAJENDAR BENJARAM,HYDERABAD vs. INCOME TAX OFFICER, CIRCLE-12(1), HYDERABAD

At the outset, there is a delay of 503 days in filing the present appeal before the Tribunal. The assessee has filed a petition for condonation of delay supported by an affidavit explaining the reasons for such delay. It is submitted that the assessee had filed an appeal before the Ld. Commissioner of Income Tax (Appeals) against the assessment order dated 05.02.2021, and thereafter, only a communication dated 10.11.2022 was received stating that the communication window had been enabled. However, no further notices or communications were received from the office of the Ld. CIT(A), and the assessee remained under the bona fide belief that the appeal was pending adjudication. It is further submitted that during the pendency of the said appeal, penalty proceedings under section 271AAC(1) were initiated, and in response to various show cause notices issued from time to time, the assessee had consistently informed the Assessing Officer about the pendency of the appeal and requested that the penalty proceedings be kept in abeyance. The assessee came to know about the disposal of the appeal only upon receipt of the penalty order dated 19.02.2025, wherein it was stated that the appeal had already been disposed of by the Ld. CIT(A) on 28.08.2023. The assessee submits that no such appellate order or communication was ever received, and therefore, the delay in filing the present appeal has occurred due to non- receipt of the appellate order and is neither willful nor deliberate. On the other hand, it is observed from the order of the Ld. CIT(A) that the addition of Rs.4,57,200/- made by the Assessing Officer under section 69A towards unexplained cash payments for credit card bills was confirmed on the ground that the assessee failed to furnish satisfactory explanation regarding the source of such payments. The Ld. CIT(A) recorded that despite opportunity, the assessee failed to substantiate the sources with supporting evidence and did not effectively contest the additions. Accordingly, in the absence of any material to the contrary, the Ld. CIT(A) upheld the findings of the Assessing Officer and dismissed the appeal on merits.

The learned counsel for the assessee, Shri A. Srinivas, C.A. submitted that the delay in filing the present appeal is neither willful nor deliberate but occurred due to bona fide reasons and circumstances beyond the control of the assessee. It was submitted that the assessee had duly filed an appeal before the Ld. CIT(A) against the assessment order dated 05.02.2021 and thereafter received only a communication dated 10.11.2022 stating that the communication window had been enabled. However, no further notices or communications were received from the office of the Ld. CIT(A). The learned counsel submitted that the assessee was under a bona fide belief that the appeal was still pending adjudication. It was further submitted that during the pendency of the appeal, penalty proceedings under section 271AAC(1) were initiated and in response to various show cause notices, the assessee had consistently informed the Assessing Officer about the pendency of the appeal and requested that the proceedings be kept in abeyance. The learned counsel submitted that the assessee came to know about the disposal of the appeal only upon receipt of the penalty order dated 19.02.2025, wherein it was mentioned that the appeal had already been disposed of by the Ld. CIT(A) on 28.08.2023. Immediately thereafter, the assessee took prompt steps and filed the present appeal before the Tribunal. Therefore, it was submitted that the assessee was prevented by sufficient and reasonable cause from filing the appeal within the prescribed time under section 253(3) of the Act and prayed that the delay of 503 days may be condoned in the interest of justice.

The learned Senior A.R. for the Revenue, Ms. Helen Ruby Jesindha, on the other hand, strongly opposed the condonation of delay and submitted that the assessee has failed to demonstrate sufficient and reasonable cause for the delay in filing the appeal before the Tribunal. It was submitted that the reasons advanced by the assessee are general in nature and do not justify the inordinate delay. The learned Sr. A.R. therefore, contended that the condonation petition filed by the assessee deserves to be rejected.

I have heard both the parties and considered relevant reasons given for condonation of delay. I find that the reasons explained by the assessee in his affidavit for the delay in filing the appeal before the Tribunal within the prescribed date are not supported by any cogent evidence and the assessee has failed to show ‘sufficient and reasonable cause’ for condonation of delay. I observe that, during the course of assessment proceedings and during the appellate proceedings before the learned CIT(A) also, the assessee could not substantiate his case by producing necessary documentary evidence as called for. Therefore, the Assessing Officer made the addition which has been sustained by the learned CIT(A). This shows the negligent attitude of the assessee in prosecuting his case before the lower authorities. Further, although the assessee has contended that he was not aware of the disposal of the appeal by the Ld. CIT(A), no material has been placed on record to substantiate such claim. Thus, the reasons explained by the assessee for not filing the appeal before the Tribunal within time are not convincing and reflect lack of due diligence on the part of the assessee. Further, the assessee has failed to show ‘sufficient and reasonable cause’ beyond his control which prevented him from filing the appeal within the prescribed period.

Further, the argument of the assessee that the appeal could not be filed due to circumstances beyond the control of the assessee is not convincing, having regard to the conduct of the assessee and the facts on record. No doubt, it is an admitted legal position of law from the decision of various Courts, including the decision of Hon’ble Supreme Court in the case of Collector, Land Acquisition vs., MST. Katiji & Ors. [1987] 167 ITR 471 (SC) that, generally, the Courts have adopted a very liberal approach in construing the phrase ‘sufficient cause’ used in section 5 of the Limitation Act, in order to condone the delay, to enable the Courts to do substantial justice and apply law in a meaningful manner, which subserves the ends of justice. The Courts further noted that, while adhering the liberal approach in condoning the delay for ‘sufficient cause’ ordinary litigant does not stand benefit by lodging an appeal late and it is not necessary to explain every day’s delay in filing the appeal and since, sometimes refused to condone the delay, result in thrown out a meritorious matter. Therefore, it is, in the interest of justice, that cause of substantial justice should be allowed to prevail upon technical consideration and if the delay is not deliberate, it should be condoned. Notwithstanding the above, howsoever, liberal approach is adopted in condoning the delay, existence of ‘sufficient cause’ for not filing the appeal in time, is a condition precedent for exercising the discretionary power of the Court to condone the delay. The phrases ‘liberal approach’, justice-oriented approach’ and cause for the advancement of ‘substantial justice’ cannot be employed to defeat the law of limitation so as to allow stale matters or as a matter-of-fact dead matter to be revived and re-opened by taking aid of Section 5 of the Limitation Act. Therefore, it must always be borne in mind that, while construing ‘sufficient cause’ in deciding an appeal under Section 5 of the Limitation Act, on the expiry of the period of limitation prescribed for filing the appeal, substantive right in favour of the appellant accrues and this right should not be lightly disturbed.

The law of limitation is founded on public policy. It is enshrined in the legal maxim "interest reipublicae ut sit finis litium" i.e., it is for the general welfare that, the period of limitation be put to litigation. The object is to put an end to every legal remedy and to have a fixed period of life for every litigation as it is futile to keep any litigation or dispute pending indefinitely. Every public policy requires that there should be an end to the litigation, otherwise, it would be a dichotomy if the litigant is made immortal vis-a-vis the right in parties i.e., human beings were mortals. Therefore, considering the importance of limitations and time limits provided under the statutes must be understood in this context. The Income Tax Act, 1961 provided for limitation for filing appeals before various authorities including the Tribunal. Further, the Act has also provided a discretionary power to the Authorities for condoning the delay, if ‘sufficient cause’ is made out with reasonable explanation. Therefore, while condoning the delay, the Authorities must keep in mind the importance of limitation provided under various statutes and the discretionary power conferred by the said statute keeping in mind the phrase ‘sufficient and reasonable cause’.

In the present case, going by the affidavit filed by the assessee for explaining the reasons, the assessee claims that it could not file the present appeal before the Tribunal on account of non-receipt of the appellate order passed by the Ld. CIT(A) and that the assessee was under a bona fide belief that the appeal filed before the Ld. CIT(A) was still pending, and further that the assessee came to know about the disposal of the appeal only upon receipt of the penalty order. However, the said reasons given by the assessee are not convincing and are not supported by any substantive evidence, and the assessee has failed to take timely steps to ascertain the status of the appeal and to file the present appeal before the Tribunal. Therefore, the argument of the assessee that due to the above reasons, the appeal before the Tribunal could not be filed within the prescribed time is not acceptable. Further, in my considered view, the ‘sufficient cause’ for condonation of delay under Section 5 of the Limitation Act is a cause that prevents an appellant from filing the appeal within the prescribed time limit and is beyond their control and not due to negligence or inaction. In the present case, going by the facts available on record, it is attributable to lack of due diligence on the part of the assessee that the instant appeal could not be filed within the time allowed under the Act before the Tribunal. Therefore, I am of the considered view that the reasons given by the assessee for the delay in filing of the appeal do not constitute ‘sufficient cause’ and for this reason, the delay of 503 days in filing the present appeal cannot be condoned.

At this stage, it is relevant to consider the Judgment of Hon’ble Supreme Court in the case of Pathapati Subbareddy (died) reptd. by his L.Rs & Ors. vs., The Special Deputy Collector-(LA) in Special Leave Petition (Civil) No.31248 of 2018 vide order dated 08.04.2024 wherein the Hon’ble Supreme Court after considering the provisions of sec.3(1) Secs.4 to 24 of the Limitation Act has refused to condone the delay and dismissed the SLP filed by the assessee and uphold the order of the Hon’ble High Court Andhra Pradesh High Court which dismissed the appeal on account of delay. The Hon’ble Supreme Court while dismissing the SLP, after considering the various judicial precedents on the subject matter of condonation of delay, noted that, “where a litigant could not explain the ‘sufficient cause’ which means adequate, enough reasons which prevented him to approach the Court within the period of limitation and could not properly, satisfactorily and convincingly explained the delay to the Court/Tribunal, Court’s has no power to condone such delays”. The Hon’ble Supreme Court further noted that, “the statutory provisions under Limitation Act may cause hardship or inconvenience to a particular party, but, the Court has no choice, but, to enforce it giving full effect to the same by quoting the legal maxim dura lex sed lex which means “the law is hard but it is the law", stands attracted when there were negligence/failure to exercise due diligence etc., and accordingly dismissed the SLP of the appellants in the aforesaid case”. Further, the Hon’ble Supreme Court yet in an another case Balwant Singh (Dead) vs., Jagdish Singh & Ors. in Civil Appeal No.1166/2006 reported in [2010] 8 SCC 685 in para-16 very clearly held as under :

In the present appeal, admittedly, the assessee is an individual and has filed his return of income on 30.09.2018 admitting total income of Rs.17,08,020/-. Subsequently, the case was selected for limited scrutiny under the e-assessment scheme on the issue of credit card payments. During the course of assessment proceedings, notices under Sections 143(2) and 142(1) of the Act were issued from time to time. Though the assessee furnished certain details, he could not satisfactorily explain the source of cash payments made towards credit card bills amounting to Rs.4,57,200/-. Therefore, the Assessing Officer treated the same as unexplained money under Section 69A of the Act and made addition of Rs.4,57,200/- and determined the total assessed income at Rs.21,65,220/-. During the course of appellate proceedings before the Ld. CIT(A), the assessee failed to substantiate his case with supporting evidences and, therefore, the Ld. CIT(A) confirmed the addition made by the Assessing Officer. Further, once again the assessee has shown negligence in filing the present appeal before the Tribunal, which is evident from the delay of 503 days in filing the appeal. From the conduct of the assessee right from the assessment stage, appellate proceedings before Ld. CIT(A) and even before the Tribunal, the assessee has failed to effectively pursue the matter and substantiate his claim. Therefore, from the above conduct of the assessee, it appears that the reasons given for delay in filing of the appeal in the affidavit are not bona fide. As already stated in the earlier part of this order, the Hon’ble Supreme Court in the case of Balwant Singh (Dead) vs. Jagdish Singh & Ors. has held that the Court must take into account the conduct of the parties, bona fide reasons for condonation of delay and whether such delay could have been avoided by the applicant by acting with reasonable care and caution. In the present case, going by the facts available on record, the assessee could have avoided the delay in filing of the appeal had he exercised due care and diligence in pursuing the matter. Since the assessee has shown casual approach in pursuing the case before the authorities, including filing of appeal before the Tribunal, in my considered view, the reasons given by the assessee for delay in filing of the instant appeal cannot be accepted.

Further, u/sec.253(5) of the Income Tax Act, 1961, such powers can be exercised only upon showing sufficient cause preventing the assessee from filing the appeal within the prescribed period. In the present case, the delay involved is 503 days which is highly inordinate. The reasons adduced by the assessee are general in nature and did not inspire confidence. The explanation lacks specific dates, supporting evidence or cogent material to demonstrate bonafides. It is well settled by the decision of Hon’ble Supreme Court yet in another decision in the case of O/o. Chief Post Master General & Ors. vs., Living Media India Ltd., & Anr. [2012] 348 ITR 7 (SC) that, Law of Limitation has to be applied with all its rigor and liberal approach cannot be extended to cases of gross negligence or inaction.

In this view of the matter and considering the facts and circumstances of the case, I find that, the assessee has failed to explain delay and the circumstances beyond the control of the assessee in not filing the appeal before the Tribunal within the prescribed period with ‘sufficient and reasonable cause’. Therefore, by respectfully following the Judgments of Hon’ble Supreme Court in the cases of Pathapati Subbareddy (died) reptd. by his L.Rs & Ors.

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

The Principal Commissioner of Income Tax, Hyderabad. 4. नवभधगीयप्रनतनिनर्, आयकर अपीलीय अनर्करण, हैदरधबधद / DR, ITAT, Hyderabad 5. गधर्ाफ़धईल / Guard file