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Facts
The assessee filed appeals for AY 2018-19 and 2020-21 after significant delays. The CIT(A) rejected the condonation of delay applications, citing lack of proper reasons and evidence. The assessee attributed the delay to the COVID-19 pandemic, the manager's post-COVID health issues, and the tax consultant's challenges.
Held
The Tribunal held that the assessee deserves an opportunity to present evidence to support the delay condonation request. The impugned orders of the CIT(A) were set aside, and the matter was restored to the CIT(A) for a fresh consideration of the delay condonation application.
Key Issues
Whether the CIT(A) was justified in rejecting the condonation of delay applications without considering the evidence presented by the assessee regarding the reasons for the delay.
Sections Cited
143(1), 80P(2), 154
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Income Tax Appellate Tribunal, MUMBAI BENCH “SMC” MUMBAI
Before: SHRI OM PRAKASH KANT & SHRI RAHUL CHAUDHARY
ORDER PER OM PRAKASH KANT, AM
These appeals by the assessee are directed against two separate order, both dated 25.04.2025 passed by the Ld. Additional/Joint Commissioner of Income-tax (Appeals) – 1, Visakhapatnam [hereinafter shall be referred as ‘the Ld. CIT(A)’] for assessment years 2018-19 and 2020-21 respectively.
Palm Court M Premises Co-operative Palm Court M Premises Co 2 Society Ltd & 3831/MUM/2025 & 3831/MUM/2025
At the very threshold, the lear At the very threshold, the learned counsel for the assessee ned counsel for the assessee submitted that the learned Commissioner of Income-tax (Appeals) submitted that the learned Commissioner of Income submitted that the learned Commissioner of Income [hereinafter referred to as "Ld. CIT(A)"] declined to admit the appeals [hereinafter referred to as "Ld. CIT(A)"] declined to admit the appeals [hereinafter referred to as "Ld. CIT(A)"] declined to admit the appeals for Assessment Years 2018 for Assessment Years 2018-19 and 2020-21, on the ground of 21, on the ground of inordinate delay in filing the s inordinate delay in filing the same. In the case of Assessment Year ame. In the case of Assessment Year 2018-19, the Ld. CIT(A) recorded a delay of 2075 days in filing the 19, the Ld. CIT(A) recorded a delay of 2075 days in filing the 19, the Ld. CIT(A) recorded a delay of 2075 days in filing the appeal, while for Assessment Year 2020 appeal, while for Assessment Year 2020-21, the delay noted was 21, the delay noted was 1138 days. The Ld. CIT(A), while declining to condone the delay, 1138 days. The Ld. CIT(A), while declining to condone the delay, 1138 days. The Ld. CIT(A), while declining to condone the delay, has extracted the reques has extracted the request made by the assessee for condonation. t made by the assessee for condonation. For ready reference, the request pertaining to A.Y. 2018–19 is For ready reference, the request pertaining to A.Y. 2018 For ready reference, the request pertaining to A.Y. 2018 reproduced hereunder: reproduced hereunder:
“REQUEST FOR CONDONATION OF DELAY REQUEST FOR CONDONATION OF DELAY REQUEST FOR CONDONATION OF DELAY IN THE MATTER OF PALM COURT "M" PREMISES CO- IN THE MATTER OF PALM COURT "M" PREMISES CO IN THE MATTER OF PALM COURT "M" PREMISES CO OPERATIVE SOCIETY LIMITED (THE APPELLANT) OPERATIVE SOCIETY LIMITED (THE APPELLANT) OPERATIVE SOCIETY LIMITED (THE APPELLANT) Α.Υ. 2018-19 The appellant is Co The appellant is Co-operative Housing Society. For the Assessment operative Housing Society. For the Assessment Year 2018-19, an order under Section 143(1) of the Income Tax 19, an order under Section 143(1) of the Income Tax 19, an order under Section 143(1) of the Income Tax Act, 1961 was passed on 31.05.2019, denying the deduction Act, 1961 was passed on 31.05.2019, denying the deduction Act, 1961 was passed on 31.05.2019, denying the deduction under Section 80P(2) (d) claimed by the appellant. The deadlin under Section 80P(2) (d) claimed by the appellant. The deadlin under Section 80P(2) (d) claimed by the appellant. The deadline for filing the appeal was 30.06.2019. However, the appellant is filing filing the appeal was 30.06.2019. However, the appellant is filing filing the appeal was 30.06.2019. However, the appellant is filing the appeal now on 04.03.2025, with a delay of 2074 days the appeal now on 04.03.2025, with a delay of 2074 days the appeal now on 04.03.2025, with a delay of 2074 days Upon receiving the said order, the appellant, as advised, filed a Upon receiving the said order, the appellant, as advised, filed a Upon receiving the said order, the appellant, as advised, filed a rectification application under Section 154 of the Income Tax rectification application under Section 154 of the Income Tax rectification application under Section 154 of the Income Tax Act, 1961. However, this application was rejected by the CPC on 1961. However, this application was rejected by the CPC on 1961. However, this application was rejected by the CPC on 14.07.2020, right in the midst of the nationwide COVID 14.07.2020, right in the midst of the nationwide COVID 14.07.2020, right in the midst of the nationwide COVID-19 lockdown imposed by the Government of India from 24.03.2020. lockdown imposed by the Government of India from 24.03.2020. lockdown imposed by the Government of India from 24.03.2020. Consequently, the manager responsible for overseeing tax matters Consequently, the manager responsible for overseeing tax matters Consequently, the manager responsible for overseeing tax matters and coordinating with the tax consultant inadvertently failed to rdinating with the tax consultant inadvertently failed to rdinating with the tax consultant inadvertently failed to inform the Managing Committee about the rejection of the inform the Managing Committee about the rejection of the inform the Managing Committee about the rejection of the rectification application. Additionally, after contracting COVID rectification application. Additionally, after contracting COVID rectification application. Additionally, after contracting COVID-19, the manager has been dealing with post the manager has been dealing with post-COVID health issues. COVID health issues.
Palm Court M Premises Co-operative Palm Court M Premises Co 3 Society Ltd & 3831/MUM/2025 & 3831/MUM/2025
The delay in The delay in filing the appeal was primarily caused by the filing the appeal was primarily caused by the nationwide COVID nationwide COVID-19 lockdown, followed by the manager's post 19 lockdown, followed by the manager's post- COVID health issues, which affected his ability to attend the office COVID health issues, which affected his ability to attend the office COVID health issues, which affected his ability to attend the office regularly and oversee the society's affairs effectively. Under a regularly and oversee the society's affairs effectively. Under a regularly and oversee the society's affairs effectively. Under a genuine belief genuine belief that tax matters were being handled appropriately, that tax matters were being handled appropriately, the manager only became aware in November 2024 that the Tax the manager only became aware in November 2024 that the Tax the manager only became aware in November 2024 that the Tax Consultant had also been facing health Consultant had also been facing health-related challenges and related challenges and had not been managing the tax matters. Upon realizing this, the had not been managing the tax matters. Upon realizing this, the had not been managing the tax matters. Upon realizing this, the manager promptly i manager promptly informed the Managing Committee, which nformed the Managing Committee, which swiftly engaged new tax consultant to review all pending tax swiftly engaged new tax consultant to review all pending tax swiftly engaged new tax consultant to review all pending tax matters, explore possible remedial actions, and ensure that the matters, explore possible remedial actions, and ensure that the matters, explore possible remedial actions, and ensure that the necessary appeals were filed without further delay. necessary appeals were filed without further delay. The delay of 2,074 days in filing the app The delay of 2,074 days in filing the appeal was due to eal was due to circumstances beyond the appellant's control. It was neither circumstances beyond the appellant's control. It was neither circumstances beyond the appellant's control. It was neither intentional nor motivated by any malafide intent. Furthermore, the intentional nor motivated by any malafide intent. Furthermore, the intentional nor motivated by any malafide intent. Furthermore, the appellant has not derived any benefit from the delay. Sufficient appellant has not derived any benefit from the delay. Sufficient appellant has not derived any benefit from the delay. Sufficient cause has been demonstrated to justify the condo cause has been demonstrated to justify the condonation of the nation of the delay, and the appellant respectfully requests that the application delay, and the appellant respectfully requests that the application delay, and the appellant respectfully requests that the application be considered with a justice be considered with a justice-oriented approach, to render oriented approach, to render substantial justice. substantial justice. In light of the above, it is respectfully requested that the delay in In light of the above, it is respectfully requested that the delay in In light of the above, it is respectfully requested that the delay in filing the appeal be cond filing the appeal be condoned. The affidavit of the Manager detailing the aforesaid facts is The affidavit of the Manager detailing the aforesaid facts is The affidavit of the Manager detailing the aforesaid facts is attached, which may kindly be placed before the Hon'ble CIT(A) for attached, which may kindly be placed before the Hon'ble CIT(A) for attached, which may kindly be placed before the Hon'ble CIT(A) for condonation of the delay in submission of appeal. condonation of the delay in submission of appeal. For your kind referral the assessee wishes to place reliance on the For your kind referral the assessee wishes to place reliance on the For your kind referral the assessee wishes to place reliance on the following 2 case laws that lays down the law on the issue of lowing 2 case laws that lays down the law on the issue of lowing 2 case laws that lays down the law on the issue of condonation of delay:” 2.1 The Ld. CIT(A), however, rejected the plea for condonation of The Ld. CIT(A), however, rejected the plea for condonation of The Ld. CIT(A), however, rejected the plea for condonation of delay primarily on the ground that the assessee failed to establish delay primarily on the ground that the assessee failed to establish delay primarily on the ground that the assessee failed to establish absence of negligence and failed to demon absence of negligence and failed to demonstrate a satisfactory level strate a satisfactory level of diligence in pursuing the appellate remedy. It was further of diligence in pursuing the appellate remedy. It was further of diligence in pursuing the appellate remedy. It was further observed that no cogent evidence had been furnished in support of observed that no cogent evidence had been furnished in support of observed that no cogent evidence had been furnished in support of the reasons advanced in the application. The relevant portion of the the reasons advanced in the application. The relevant portion of the the reasons advanced in the application. The relevant portion of the Ld. CIT(A)’s findings reads as Ld. CIT(A)’s findings reads as under:
Palm Court M Premises Co-operative Palm Court M Premises Co 4 Society Ltd & 3831/MUM/2025 & 3831/MUM/2025 “The appellant has not furnished any proper reason for delay in The appellant has not furnished any proper reason for delay in The appellant has not furnished any proper reason for delay in filing the appeal along with proofs. Even after exclusion provided filing the appeal along with proofs. Even after exclusion provided filing the appeal along with proofs. Even after exclusion provided by the Honourable Supreme court of India in Miscellaneous by the Honourable Supreme court of India in Miscellaneous by the Honourable Supreme court of India in Miscellaneous Application No. 21 of 2022 dt. 10.01.2022 there is a delay Application No. 21 of 2022 dt. 10.01.2022 there is a delay Application No. 21 of 2022 dt. 10.01.2022 there is a delay about 1360 days in filing the appeal. The condonation delay application 1360 days in filing the appeal. The condonation delay application 1360 days in filing the appeal. The condonation delay application is carefully gone through. The request for condonation of is carefully gone through. The request for condonation of is carefully gone through. The request for condonation of inordinate delay in filing of appeal is not acceptable as the inordinate delay in filing of appeal is not acceptable as the inordinate delay in filing of appeal is not acceptable as the appellant not furnished any proper cause for delay in filing the appellant not furnished any proper cause for delay in filing the appellant not furnished any proper cause for delay in filing the appeal along with evidences.”
Before us, the learned counsel for the assessee submitted that Before us, the learned counsel for the assessee submitted that Before us, the learned counsel for the assessee submitted that the assessee is now willing to produce necessary evidence to the assessee is now willing to produce necessary evidence to the assessee is now willing to produce necessary evidence to substantiate the reasons for the delay as stated in the condonation substantiate the reasons for the delay as stated in the condonation substantiate the reasons for the delay as stated in the condonation application. It was pointed ou application. It was pointed out that the delay was occasioned on t that the delay was occasioned on account of prolonged post account of prolonged post-COVID illness of the society’s manager, COVID illness of the society’s manager, who was primarily entrusted with tax matters, as well as serious who was primarily entrusted with tax matters, as well as serious who was primarily entrusted with tax matters, as well as serious health issues faced by the erstwhile tax consultant, who eventually health issues faced by the erstwhile tax consultant, who eventually health issues faced by the erstwhile tax consultant, who eventually passed away.
Having regard to the facts and circumstances of the case, we ing regard to the facts and circumstances of the case, we ing regard to the facts and circumstances of the case, we are of the considered view that the assessee deserves an are of the considered view that the assessee deserves an are of the considered view that the assessee deserves an opportunity to place on record the evidence in support of the opportunity to place on record the evidence in support of the opportunity to place on record the evidence in support of the condonation request. In the interest of substantial justice, we, condonation request. In the interest of substantial justice, we, condonation request. In the interest of substantial justice, we, therefore, set aside the impugned order of the Ld. CIT(A) and restore aside the impugned order of the Ld. CIT(A) and restore aside the impugned order of the Ld. CIT(A) and restore the matter to his file for the limited purpose of considering afresh the matter to his file for the limited purpose of considering afresh the matter to his file for the limited purpose of considering afresh the application for condonation of delay, after granting adequate the application for condonation of delay, after granting adequate the application for condonation of delay, after granting adequate opportunity of being heard and after appreciating the evidence that opportunity of being heard and after appreciating the evidence th opportunity of being heard and after appreciating the evidence th may be placed on record by the assessee. In the event the delay is may be placed on record by the assessee. In the event the delay is may be placed on record by the assessee. In the event the delay is condoned, the Ld. CIT(A) shall thereafter proceed to adjudicate the condoned, the Ld. CIT(A) shall thereafter proceed to adjudicate the condoned, the Ld. CIT(A) shall thereafter proceed to adjudicate the Palm Court M Premises Co-operative Palm Court M Premises Co 5 Society Ltd & 3831/MUM/2025 & 3831/MUM/2025 appeal on merits in accordance with law and after affording appeal on merits in accordance with law and after affording appeal on merits in accordance with law and after affording reasonable opportunity to the assessee. reasonable opportunity to the assessee.
4.1 The facts pertaining to Assessment Year 2020-21 being pari- 4.1 The facts pertaining to Assessment Year 2020 4.1 The facts pertaining to Assessment Year 2020 materia and identical to those of Assessment Year 2018 and identical to those of Assessment Year 2018 and identical to those of Assessment Year 2018-19, the appeal for Assessment Year 2020 appeal for Assessment Year 2020-21 is also restored to the file of 21 is also restored to the file of the Ld. CIT(A) to be decided afresh, the Ld. CIT(A) to be decided afresh, mutatis mutandis mutatis mutandis, in accordance with the observations made hereinabove. with the observations made hereinabove.
In the result, both the appeals of the assessee are allowed for In the result, both the appeals of the assessee are allowed for In the result, both the appeals of the assessee are allowed for statistical purposes.