Loading judgment…
Facts
The assessee's appeal was dismissed by the CIT(A) due to a delay of 114 days in filing. The assessee cited reasons such as non-receipt of the assessment order and limited literacy, and argued that the delay was bonafide. The present appeal before the Tribunal also faced a delay of 202 days.
Held
The Tribunal held that the concept of 'sufficient cause' for condonation of delay should be interpreted liberally, prioritizing substantial justice over technical lapses. The Tribunal condoned both the 114-day delay before the CIT(A) and the 202-day delay before the Tribunal.
Key Issues
Whether the Tribunal should condone the delay in filing appeals, considering the principles of substantial justice and the specific circumstances of the assessee, and whether the matter should be remanded for fresh adjudication.
Sections Cited
147, 144, 249, 69, 151, 148, 148A
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “K(SMC
Before: SHRI PAWAN SINGH & SHRI GIRISH AGRAWAL
O R D E R
PER GIRISH AGRAWAL, ACCOUNTANT MEMBER:
This appeal filed by the assessee is against the order of National Faceless Appeal Centre (NFAC), Delhi, vide order no. ITBA/NFAC/S/250/2024-25/1074653077(1), dated 18.03.2025, passed against the assessment order by MUM-W-(272)(91), u/s. 147 r.w.s. 144 of the Income-tax Act (hereinafter referred to as the “Act”), dated 15.09.2023, for Assessment Year 2017-18.
2. Grounds taken by assessee are reproduced as under:
“1. On the facts and circumstance of the case and in law, the honorable Commissioner of Income Tax Appeals ("CIT(A)") erred in dismissing the appeal of appellant merely stating the appellant's appeal was not filed on time within the time limit as per the provisions of section 249(2) of the Act and rejected the application for condonation of delay of 114 days in filing the appeal.
2. The Ld. CIT (A) has dismissed the appeal of the appellant without giving any opportunity of being heard to your appellant to explain the case, thus principle of natural justice is violated.
3. The Ld. CIT (A) failed to appreciate the fact that the delay was due to bonafide reasons specifically due to non-receipts of assessment order. Thus the Ld. CIT (A) failed to appreciate that the appellant had demonstrated the sufficient and reasonable cause for the delay which was neither found to be false or misleading. Therefore, the dismissal of appeal on the ground of delay is not justified.
4. The Ld. CIT (A) erred in not deciding the appeal on merits in regards to the addition made by the AO of Rs. 14,66,710/- u/ s. 69 of the Act treating the cash deposit during the demonetization period as unexplained cash credit.
5. The CIT (A) failed to take the cognizance of the Income Tax Return (" ITR ") filed by the appellant which duly discloses the amount of cash deposited during the demonetization period. It is therefore prayed to your honour to delete that addition made by the Ld. CIT (A) and necessary directions may be given in this regard.”
There is a delay of 202 days in filing the present appeal before the Tribunal as noted by the registry for which a petition for condonation of delay is placed on record. We also note from ground no.1 raised by the assessee that first appeal before the ld. CIT(A) was also barred by limitation under provisions of section 249(2) on account of delay of 114 days in filing the said appeal, whereby ld. CIT(A) had rejected the application for condonation of delay and dismissed it as assessee could not discharge the onus of “sufficient cause” as required under the provisions of section 249.
4. To address the issue in hand before us, we need to delve into the understanding of the expression “sufficient cause”. Sub-section 3 of Section 249 contemplates that the CIT(A) may admit an appeal after expiry of relevant period, if he is satisfied that there was a “sufficient
Ramesh Lalawat AY 2017-18 cause” for not presenting it within that period. Similarly, it has been used in section 5 of Indian Limitation Act, 1963. Whenever interpretation and construction of this expression has fallen for consideration before Hon'ble High Court as well as before the Hon'ble Supreme Court, then, Hon'ble Court were unanimous in their conclusion that this expression is to be used liberally.
4.1. We may make reference to the following observations of the Hon'ble Supreme Court from the decision in the case of Collector Land Acquisition Vs. Mst. Katiji & Others, 1987 AIR 1353: "1. Ordinarily a litigant does not stand to benefit by lodging an appeal late.
Refusing to condone delay can result in a meritorious matter being thrown out at the very threshold and cause of justice being defeated. As against this when delay is condoned the highest that can happen is that a cause would be decided on merits after hearing the parties. 3. "Every day's delay must be explained" does not mean that a pedantic approach should be made. Why not every hour's delay, every second's delay? The doctrine must be applied in a rational common sense pragmatic manner.
When substantial justice and technical considerations are pitted against each other, cause of substantial justice deserves to be preferred for the other side cannot claim to have vested right in injustice being done because of a non- deliberate delay.
5. There is no presumption that delay is occasioned deliberately, or on account of culpable negligence, or on account of mala fides. A litigant does not stand to benefit by resorting to delay. In fact he runs a serious risk.
It must be grasped that judiciary is respected not on account of its power to legalize injustice on technical grounds but because it is capable of removing injustice and is expected to do so." 4.2. Similarly, we would like to make reference to authoritative pronouncement of Hon'ble Supreme Court in the case of N. Balakrishnan Vs. M. Krishnamurthy (supra). It reads as under: "Rule of limitation are not meant to destroy the right of parties. They are meant to see that parties do not resort to dilatory tactics, but seek their remedy promptly. The object of providing a legal remedy is to repair the damage caused by reason of legal injury. Law of limitation fixes a life- span for such legal remedy for the redress of the legal injury so suffered.
Ramesh Lalawat AY 2017-18 Time is precious and the wasted time would never revisit. During efflux of time newer causes would sprout up necessitating newer persons to seek legal remedy by approaching the courts. So a life span must be fixed for each remedy. Unending period for launching the remedy may lead to unending uncertainty and consequential anarchy. Law of limitation is thus founded on public policy. It is enshrined in the maxim Interest reipublicae up sit finis litium (it is for the general welfare that a period be putt to litigation). Rules of limitation are not meant to destroy the right of the parties. They are meant to see that parties do not resort to dilatory tactics but seek their remedy promptly. The idea is that every legal remedy must be kept alive for a legislatively fixed period of time. A court knows that refusal to condone delay would result foreclosing a suitor from putting forth his cause. There is no presumption that delay in approaching the court is always deliberate. This Court has held that the words "sufficient cause" under Section 5 of the Limitation Act should receive a liberal construction so as to advance substantial justice vide Shakuntala Devi lain Vs. Kuntal Kumari [AIR 1969 SC 575] and State of West Bengal Vs. The Administrator, Howrah Municipality [AIR 1972 SC 749]. It must be remembered that in every case of delay there can be some lapse on the part of the litigant concerned. That alone is not enough to turn down his plea and to shut the door against him. If the explanation does not smack of mala fides or it is not put forth as part of a dilatory strategy the court must show utmost consideration to the suitor. But when there is reasonable ground to think that the delay was occasioned by the party deliberately to gain time then the court should lean against acceptance of the explanation. While condoning delay the Could should not forget the opposite party altogether. It must be borne in mind that he is a looser and he too would have incurred quiet a large litigation expenses. It would be a salutary guideline that when courts condone the delay due to laches on the part of the applicant the court shall compensate the opposite party for his loss."
We do not deem it necessary to re-cite or recapitulate the proposition laid down in other decisions. It is sufficed to say that the Hon'ble Courts are unanimous in their approach to propound that whenever the reasons assigned by an applicant for explaining the delay, then such reasons are to be construed with a justice-oriented approach.
Ramesh Lalawat AY 2017-18 6. In the affidavit, averments of the assessee are that he has studied only till 10th standard in vernacular language. He is a small trader with limited literacy and no exposure to technology. He was not aware of the impugned assessment order passed which was sent via electronic communication for which he does not have any access or knows how to operate, the same. He relied fully on the services of the professional engaged. Assessee claims that the delay caused at various stages of this proceeding are on account of limited education, non-access to email, absence of legal understanding and non-exposure to technology. According to him, the delay is bonafide, which has caused genuine hardship and thus, prayed that the matter be restored back to the file of ld. Assessing Officer for de novo meritorious adjudication.
We have considered the submissions made before us. Ld. DR objected on the submissions made by the assessee by contending that assessee has defaulted at all the stages including the assessment which is also completed ex parte u/s. 144. We have perused the material placed on record. Case of the assessee was taken up for re-assessment u/s.147 based on information relating to deposit of cash during the demonetization amounting to Rs.14,66,710/- in his bank account of Oriental Bank of Commerce, Vashi branch. According to the ld. Counsel for the assessee, he has a good case to explain, both on the merits as well as on the law, for the claim made by it. He gave an assurance on behalf of the assessee for due compliance, once the matter is restored back to the file of ld. Assessing Officer for expeditious disposal.
Assessee has also raised additional grounds, contesting on the provision of section 151 relating to requirement of approval for issuing the notice u/s.148 as well as jurisdiction of the Assessing Officer for issuing the notice u/s. 148A(b) and passing of order u/s. 148A(d).
Considering the submissions of the assessee, we do take note of the fact that faceless regime is a new technological phenomenon going through teething phase. Hence, it requires lenient and pragmatic approach to handle certain lapses which are unintended. Transition to a faceless and digital appellate regime is intended to enhance efficiency, but it must not become a barrier to justice for those who lack the technical proficiency to navigate such systems. Reiterating Hon'ble Supreme Courts’s repeated emphasis on the view that "substantial justice" must prevail over technical lapses, we emphasise that the merits should not be stifled due to a failure to respond to electronic notices, provided such failure is not mala fide.
9.1. In light of the above, if we examine the facts, then it would reveal that there is a delay of 114 days in filing of the first appeal by the assessee before the ld. CIT(A). In his submissions as reproduced in the order of ld. CIT(A), assessee has explained the reasons which prevented him in filing the appeal within the prescribed limitation. For the delay before the Tribunal also, explanation is furnished. Therefore, for the just decision of the controversy, it is incumbent upon us to condone the delay. Accordingly, taking the circumstances holistically, we condone the delay of 202 days in filing the present appeal before the Tribunal and also of 114 days in filing the first appeal before the ld. CIT(A).
In the given set of facts and circumstances, we find it appropriate to remit the matter back to the file of ld. Assessing Officer for de novo meritorious adjudication on the issue for which the case was taken up for re-assessment u/s.147 as assessee has explained of having limited literacy and no exposure with technology. We also direct the assessee to be diligent in making all its submissions, so as to comply with the Ramesh Lalawat AY 2017-18 notices for the hearing for effective and expeditious disposal of the assessment proceedings. Needless to say, assessee be given reasonable opportunity of being heard and to make all the relevant submissions as required to substantiate the claim made by it. Accordingly, grounds raised by the assessee are allowed for statistical purposes.
In the result, appeal of the assessee is allowed for statistical purposes.