ABDUL HAKEEM,GULBARGA vs. INCOME TAX OFFICER, WARD-1 & TPS, , GULBARGA

(1) Ordinarily, a litigant does not stand to benefit by lodging an appeal late.

(2) Refusing to condone delay can result in a meritorious matter being thrown 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, commonsense and pragmatic manner.

(4) When substantial justice and technical consideration are pitted against each other, the 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 nondeliberate 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. (6) It must be grasped that the judiciary is respected not on account of its power to legalise injustice on technical grounds but because it is capable of removing injustice and is expected to do so.

6.2 When substantial justice and technical consideration are pitted against each other, the cause of substantial justice deserves to be preferred, for the other side cannot claim to have vested right for injustice being done because of nondeliberate delay. Therefore, we have to prefer substantial justice rather than technicality in deciding the issue. As observed by Apex Court, if the application of the assessee for condoning the delay is rejected, it would amount Abdul Hakeem, Gulbarga Page 11 of 14 to legalize injustice on technical ground when the Tribunal is capable of removing injustice and to do justice. Therefore, this Tribunal is bound to remove the injustice by condoning the delay on technicalities. If the delay is not condoned, it would amount to legalizing an illegal order which would result in unjust enrichment on the part of the State by retaining the tax relatable thereto. Under the scheme of Constitution, the Government cannot retain even a single pie of the individual citizen as tax, when it is not authorized by an authority of law. Therefore, if we refuse to condone the delay, that would amount to legalize an illegal and unconstitutional order passed by the lower authority. 6.3 Further, in the case of People Education & Economic Development Society Vs/ ITO reported in 100 ITD 87 (TM) (Chen), wherein held that “when substantial justice and technical consultation are pitted against each other, the cause of substantial justice deserves to be preferred for the other side cannot claim to have vested right in injustice being done because of non-deliberate delay”.

6.4 The next question may arise whether delay was excessive or inordinate. There is no question of any excessive or inordinate when the reason stated by the assessee was a reasonable cause for not filing the appeal. We have to see the cause for the delay. When there was a reasonable cause, the period of delay may not be relevant factor. In fact, the Madras High Court in the case of CIT vs. K.S.P. Shanmugavel Nadai and Ors. (153 ITR 596) considered the condonation of delay and held that there was sufficient and reasonable cause on the part of the assessee for not filing the appeal within the period of limitation. Accordingly, the Madras High Court condoned nearly 21 years of delay in filing the appeal. When compared to 21 years, 450 days cannot be considered to be inordinate or excessive. Furthermore, the Chennai Tribunal by Abdul Hakeem, Gulbarga Page 12 of 14 majority opinion in the case of People Education and Economic Development Society (PEEDS) v. ITO (100 ITD 87) (Chennai) (TM) condoned more than six hundred days delay. Therefore, in our opinion, by preferring the substantial justice, the delay of 450 days has to be condoned and accordingly we condone the delay and admit the appeal for adjudication.

Abdul Hakeem, Gulbarga Page 13 of 14 7.1 Since the assessee has neither appeared before any of the tax authorities below nor the AO had verified the cash deposits in accordance with the CBDT circulars & therefore taking into consideration totality of the facts of the case as well as in the interest of justice and fair play and as requested by the ld. A.R. of the assessee, we are of the view that the assessee may be provided with an opportunity to represent his case before the AO. Since the assessee was delinquent and lethargic in pursuing his matter before the tax authorities we impose a cost of Rs.5000/- (Five Thousand) upon the assessee which shall be paid to the credit of the income tax department as “other fees” within one month from the date of receipt of this order.

7.2 The AO shall verify all the cash deposits in accordance with the CBDT circulars after calling for the details/evidences /information/submission/record from the assessee based on the above directions and consider the claim made by the assessee. Needless to say, a reasonable opportunity of being heard must be granted to the assessee. Accordingly, with the above observations, the issue in dispute is remitted back to the file of AO for fresh consideration in accordance with law.