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Facts
The assessee's appeal against the CIT(A)/NFAC order was filed with a delay of 216 days. The assessee claimed the delay was due to incorrect advice from their initial consultant regarding the mandatory deposit of 20% of the demand before filing the appeal, which they could not arrange due to their bank account being attached and funds belonging to PACL.
Held
The Tribunal held that there was a reasonable and sufficient cause for the delay in filing the appeal before the CIT(A)/NFAC. The Tribunal directed the CIT(A)/NFAC to condone the delay and remit the entire issues in dispute back to the CIT(A)/NFAC for adjudication on merits, after providing a reasonable opportunity of being heard.
Key Issues
Whether the delay in filing the appeal before the CIT(A)/NFAC was justifiable due to a consultant's incorrect advice, and if so, whether the matter should be remanded for adjudication on merits.
Sections Cited
147, 148, 143(3), 69A, 115BBE, 250
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Income Tax Appellate Tribunal, “C’’BENCH: BANGALORE
Before: SHRI WASEEM AHMED & SHRI KESHAV DUBEY
Date of Hearing : 17.10.2024 Date of Pronouncement : 08.01.2025 O R D E R PER KESHAV DUBEY, JUDICIAL MEMBER:
This appeal at the instance of assessee is directed against the order of ld. CIT(A)/NFAC dated 07.08.2024 passed under section 250 of the Income Tax act,1961 (in short “the Act”) for the assessment year(in short “AY”) 2014-15. 2. The assessee has raised following grounds of appeal:
2. There was a delay of 216 days in filing the appeal before the Ld. CIT(A)/NFAC & the ld. CIT(A)/NFAC has dismissed the appeal by not condoning the delay on the sole ground that the assessee has neglected/omitted to assert its right of appeal in a timely manner & also failed to demonstrate that sufficient cause existed for non-filing the appeal within due time. Before us, the ld. AR of the assessee has filed a Memo dated 18/10/2024 stating that during the course of hearing on 17/10/2024 she had undertaken to file an affidavit in support of the reasons mentioned in the condonation petition filed before the ld. CIT(A)/NFAC. The application dated 18.10.2024 for condonation of delay along with an affidavit in original sworn before the Notary Public are reproduced below for ease of reference & record:
The ld. D.R. on the other hand strongly opposed to condone the delay in filing the appeal before the ld. CIT(A)/NFAC as the assessee has neglected in filing the appeal before the ld. CIT(A)/NFAC in a timely manner.
We have gone through the reasons explained by the assessee for filing the appeal belatedly before the ld. CIT(A)/NFAC. On going through the affidavit filed before us stating the reasons for belated filing of the appeal before the ld. CIT(A)/NFAC, the main contention of the assessee is that due to wrong advise of earlier consultant, he could not file the appeal before the ld. CIT(A)/NFAC on time At this juncture, it is appropriate to mention the judgement of Hon’ble Supreme Court in the case of Concord of India Insurance Company Ltd. Vs. Smt. Nirmala Devi & Ors. Reported in 118 ITR 507 (SC), wherein it has been held that “the mistake of the counsel may in certain circumstances be taken into account in condoning the delay although there is no general proposition that mistake of counsel by itself is always a sufficient ground”. Accordingly, the Hon’ble Supreme Court has held that there is a mistake of the counsel and therefore, the delay in filing the appeal has been condoned.
5.1 While considering a similar issue the Apex Court in the case of Collector, Land Acquisition v. Mst. Katiji and Ors. (167 ITR 471) laid down six principles. For the purpose of convenience, the principles laid down by the Apex Court are reproduced hereunder:
(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 Sri Diwakar Awasthi, Bangalore Page 8 of 10 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.
5.2 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 non-deliberate delay. Moreover, no counter-affidavit was filed by the Revenue denying the allegation made by the assessee. It is not the case of the Revenue that the appeal was not filed deliberately. Therefore, we have to prefer substantial justice rather than technicality in deciding the issue. Therefore, in our opinion, by preferring the substantial justice, the delay of 33 days has to be condoned. 5.3 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 Sri Diwakar Awasthi, Bangalore Page 9 of 10 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”. 5.4 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. 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. Furthermore, the Chennai Tribunal by 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.
5.5 The Madras High Court in the case of Sreenivas Charitable Trust (280 ITR 357) (Mad.) held that no hard and fast rule can be laid down in the matter of condonation of delay and the Court should adopt a pragmatic approach and the Court should exercise their discretion on the facts of each case keeping in mind that in construing the expression "sufficient cause" the principle of advancing substantial justice is of prime importance and the expression "sufficient cause" should receive a liberal construction. Therefore, this Judgment of the Madras High Court (supra) clearly says that in order to advance substantial justice which is of prime importance, the expression "sufficient cause" should receive a liberal construction.
In view of the above, we are of the opinion that there is reasonable & sufficient cause in not filing the appeal within time before the ld. CIT(A)/NFAC and accordingly we direct the ld. CIT(A)/NFAC to condone the delay in filing the appeal before him. After condoning the delay, in our opinion, it is appropriate to remit the entire issues in dispute with regard to the merits of the case to the file of the ld. CIT(A)/NFAC as he failed to adjudicate the same. The ld. CIT(A)/NFAC will pass an Order in accordance with Law after giving reasonable opportunity of being heard. It is ordered accordingly.
In the result, appeal filed by the assessee is partly allowed for statistical purposes.