ACE TEMPO OPERATOR UNION,PUNJAB vs. ITO WARD SIRHIND , PUNJAB

That on the facts, circumstances and legal position of the case, the Worthy CIT(A), NFAC in Appeal No. CIT (A), NFAC /2019-20/10220897 has erred in passing order dtd. 14.11.2023 in contravention of provisions of s. 250 of the Income Tax Act, 1961 (hereinafter referred to as "Act").

That on the facts, circumstances and legal position of the case, the Worthy CIT(A) has erred in upholding the action of Ld. AO of confirming the addition of Rs. 24,04,100/- by erroneously disallowing the deduction claimed u/s 57 in respect of the contractual receipts received on behalf of the members of the association.

That on facts, circumstances and legal position of the case, the Worthy CIT(A) has erred CIT(A) has erred in upholding the disallowance of Rs. 24,04,10O/- by wrongly applying s. 40A(3) to payments distributed to members.

That on facts, circumstances and legal position of the case, the impugned assessment order u/s 144 r.w.s 144B passed by the Ld. AO and then the appellate order thereon passed by Worthy CIT(A) both deserves to be quashed since they have been passed without affording reasonable opportunity of being heard to the appellant.

That the appellant craves leave for any addition, deletion or amendment in the grounds of appeal on or before the disposal of the same.

The brief facts of the case, as emanating from the assessment records, are that the assessee is an association engaged in activities relating to its members. The assessee filed its return of income declaring total income of Rs.1,15,130/-. The case was 2 selected for limited scrutiny under CASS to examine the issue relating to claim of substantial deduction under the head “Income from Other Sources”. In response to statutory notices, the assessee failed to furnish requisite details and the assessment was ultimately completed ex parte under section 144 read with section 144B of the Act on 19.09.2022. The Assessing Officer made an addition of Rs.24,04,100/- by disallowing deduction claimed under section 57, inter alia, holding that the assessee had not substantiated the claim and that the payments were hit by the provisions of section 40A(3).

Aggrieved against the assessment order, the assessee carried the matter in appeal before the Ld. CIT(A). The record reveals that the appellate authority issued multiple notices fixing the case for hearing on various dates; however, there was complete non-compliance on the part of the assessee. As noted in the appellate order (pages 2 and 3), despite repeated opportunities, no submissions or evidences were furnished. The Ld. CIT(A), therefore, proceeded to adjudicate the appeal on the basis of material available on record and confirmed the addition made by the Assessing Officer, observing that the assessee had failed to rebut the findings of the AO and had not discharged the onus cast upon it. The appeal was accordingly dismissed.

Against the order of the Ld. CIT(A), the assessee has preferred the present appeal before the Tribunal raising grounds challenging the confirmation of addition of Rs.24,04,100/- and also alleging that the orders of the lower authorities were passed without affording reasonable opportunity of being heard.

At the outset, we note from the Form No. 36 placed on record that the impugned order of the Ld. CIT(A) was passed on 14.11.2023 and was served upon the assessee on the same date. The present appeal, however, has been filed on 06.12.2025. Thus, there is a delay of more than two years in filing the appeal before the Tribunal, which is clearly beyond the period of limitation prescribed under the Act.

During the course of hearing, the Ld. AR submitted that the delay in filing the appeal was unintentional and occurred due to circumstances beyond the control of the assessee. It was contended that the assessee being a small association could not take timely steps due to lack of proper professional guidance and administrative lapses. It was thus prayed that a liberal view may be taken and the delay be condoned in the interest of substantial justice.

Per contra, the Ld. DR vehemently opposed the condonation of delay and submitted that the delay is inordinate and remains wholly unexplained. It was argued that no application for condonation of delay supported by affidavit or any documentary evidence has been filed. The explanation furnished is vague, general and does not constitute “sufficient cause” within the meaning of law. It was thus contended that the appeal deserves to be dismissed as barred by limitation.

We have carefully considered the rival submissions and perused the material available on record. The issue requiring adjudication at this stage is confined to whether the delay of more than two years in filing the present appeal deserves to be condoned.

1 It is an admitted position that the appeal has been filed beyond the prescribed period of limitation. We further find that the assessee has neither filed any formal application seeking condonation of delay nor furnished any cogent explanation supported by evidence explaining the delay on a day-to-day basis. The explanation offered during the course of hearing is general and lacks specificity.

2 The law relating to condonation of delay is well settled. The Hon’ble Supreme Nafar Academy (2013) 12 SCC 649 has laid down certain guiding principles governing condonation of delay. It has been held that while a liberal and justice-oriented approach is desirable, the same cannot be extended to cases where there is gross negligence, inaction or lack of bona fides on the part of the litigant. It has further been emphasized that the concept of liberal approach cannot be equated with a licence to approach the court at one’s own convenience without any reasonable cause.

3 Further, in University of Delhi vs. Union of India, the Hon’ble Apex Court has reiterated that limitation is founded on public policy and courts cannot dilute the rigour of limitation provisions by condoning delay in a routine or mechanical manner in the absence of a satisfactory explanation.

4 Similarly, in Delhi Metro Rail Corporation Ltd. vs. Tarun Pal Singh, the Hon’ble Supreme Court has categorically held that where the delay is substantial and remains unexplained, the same cannot be condoned merely on equitable considerations and that the doctrine of limitation must be applied with its full force.

5 In the light of the aforesaid judicial pronouncements, it is evident that the existence of “sufficient cause” is a sine qua non for condonation of delay. The burden

6 Applying these principles to the facts of the present case, we find that the delay of more than two years is substantial. The assessee has failed to place on record any material to demonstrate that it was prevented by sufficient cause from filing the appeal in time. The explanation furnished is vague and does not inspire confidence. The conduct of the assessee, both at the stage of appellate proceedings before the Ld. CIT(A) where there was complete non-compliance, and at the stage of filing the present appeal, reflects a lack of due diligence and seriousness in prosecuting the matter.

7 In our considered view, such inordinate and unexplained delay cannot be condoned by adopting a liberal approach, as doing so would defeat the very purpose of the law of limitation and would encourage indiscipline in litigation.

8 Accordingly, in the absence of any sufficient cause, we decline to condone the delay. Consequently, the appeal filed by the assessee is dismissed in limine as barred by limitation, without going into the merits of the additions/disallowances made by the Assessing Officer and confirmed by the Ld. CIT(A).

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