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Facts
The assessee, a partnership firm, filed its return for AY 2011-12, which was processed by the CPC, disallowing depreciation claimed. The assessee's appeal before the CIT(A) was dismissed due to a significant delay (7 years, 6 months, 18 days) without deciding on merits, as no 'sufficient cause' was established. The assessee then appealed to the Tribunal.
Held
The Tribunal found that the CIT(A) had dismissed the appeal solely on technical grounds without considering the merits. The Tribunal condoned the delay, stating that the issue warranted fresh examination on merits. The matter was remitted back to the CIT(A) for a fresh adjudication, with directions to grant the assessee a fair opportunity for hearing and to examine the depreciation claim.
Key Issues
Whether the delay in filing the appeal before the CIT(A) was condonable, and whether the CIT(A) erred by dismissing the appeal on technical grounds without adjudicating the merits of the depreciation claim.
Sections Cited
143(1), 249(3), 250, 5
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Income Tax Appellate Tribunal, “C” BENCH KOLKATA
Before: Shri Rajesh Kumar & Shri Sonjoy Sarma
Assessment Year: 2011-12 M/s B. N. Dutta ….…………………………………………………..………….……Appellant Head Office: 518, G Road, Sonari West Layout, Jamshedpur, Jharkhand – 831011. [PAN: AADFB0648J] vs. DCIT, Circle-2, Durgapur……..……....….….. ……………….........……...…..…..Respondent Appearances by: Shri D. Khasnobis, CA, & None appeared on behalf of the appellant. Shri H. Robindro Singh, Addl. CIT - DR, & None appeared on behalf of the Respondent. Date of concluding the hearing : February 05, 2025 & December 17, 2025 Date of pronouncing the order : December 17, 2025 ORDER
Per Sonjoy Sarma, Judicial Member:
The present appeal has been preferred by the assessee against an order dated 13.02.2024 of the Commissioner of Income Tax (Appeals), Indore [hereinafter referred to as ‘CIT(A)’] passed u/s 250 of the Income Tax Act (hereinafter referred to as the ‘Act’).
Brief facts of the case are that the assessee is partnership firm and engaged in the business of civil construction and maintenance of civil structures inside stell plants. For the assessment year 2011-12, the assessee filed its return on 30.09.2011 by declaring total income of Rs.36,58,080/- and total tax and cess liability of Rs.11,30,347/- was discharged in full resulting in a refund of Rs.12,520/-. The return of the assessee was processed by the CPC u/s 143(1) of the Act on 27.01.2012. The assessee did not receive any information from the CPC either directly by way of service of physical copy of the same or from the then authorised representative namely Mr. S. N. Gupta. Due to non-receipt of Assessment Year: 2011-12 M/s B. N. Dutta the tax refund for this assessment year and subsequent assessment years, the assessee came to know that CPC has adjusted arrears of tax demands including current year suo moto in accordance with the applicable provisions of the Act. The assessee discovered this fact much later after proving by the new authorized representative by log-in id and log-in password which were changed and copy of the intimation was electronically downloaded from the then e-filing portal. From the intimation u/s 143(1) of the Act, the assessee came to know that CPC did not allow deduction on account of entire depreciation amounting to Rs.17,58,129/- as claimed in the return filed by the assessee. Accordingly, total income of the assessee was determined in the intimation as Rs.54,16,208/- as against the returned income of Rs.36,58,079/-. The difference between Rs.54,16,208/- and Rs.36,58,079/- comes to Rs.17,58,129/- i.e. on account of disallowance of entire amount of depreciation claimed in the return.
Aggrieved by the order of the CPC, the assessee preferred an appeal before the ld. CIT(A) along with an application for condonation of delay in filing the appeal together with an affidavit duly sworn by one of working partner explaining reason for delay of 7 years 6 months 18 days. The ld. CIT(A) after referring various case laws has not condoned the aforesaid delay in filing the appeal before him observing that there was no ‘sufficient cause’ for such delay has been shown by the assessee u/s 249(3) of the Act and accordingly, he dismissed the appeal of the assessee without deciding the case on merits. The relevant part of the order of the ld. CIT(A) is reproduced as under:
4.8 From the above decisions, it becomes clear that in the case of condonation of delay where the appeal was filed beyond the limitation of period, the courts are empowered to condone the delay, provided that the appellant can prove his claim of inability to file within the prescribed period. Litigant must be able to demonstrate that there was sufficient cause" which obstructed his action to file Appeal beyond the prescribed time limit.
Assessment Year: 2011-12 M/s B. N. Dutta 4.9 The law of limitation is found upon the maxims "Interest Reipublicae Ut Sit Finis Litium" that litigation must come to an end in the interest of society as a whole, and "vigilantibus non dormientibus Jura subveniunt that the law assists those that are vigilant with their rights, and not those that sleep thereupon. The law of limitation in India identifies the need for limiting litigation by striking a balance between the interests of the state and the litigant. 4.10 In the present case, the appellant has not adduced any reasonable cause which prevented it from filing the appeal within the 30 days' time limit and there is inordinate delay in filing of appeal. There should be sufficient cause that prevented the appellant from exercising its legal remedy of filing appeal within that prescribed period of 30 days, the delay thereafter cannot be condoned without there being compelling grounds as advocated by the Hon'ble Courts. 4.11 From the facts of the case, it is clear that the statutory right to appeal which was vested with the appellant was not exercised within the stipulated time u/s.249(2). Thus, this clearly is a case of laches and is directly the result of deliberate inaction on the part of the appellant. 4.12 This is not a case of change in law which is beneficial to the appellant and hence the delay in seeking such remedy may be condoned in the furtherance of substantial justice. Therefore, there is no denial or destruction of a statutory right in this case, by adhering to the prescribed period of limitation as otherwise it will only lead to protract the matter endlessly and will undoubtedly render the legislative scheme and intention behind the concerned provision otiose as held by the Hon'ble Supreme Court in the case of Assistant Commissioner (CT) LTU, Kakinada & Ors. v. M/s Glaxo Smith Kline Consumer Health Care Limited 2020[36] G.S.T.L. 305. 4.13 The Hon'ble Mumbai Tribunal in the case of Prashant Projects Ltd. vs. DCIT (2013) 37 taxmann.com 137 has held that by adopting a liberal view in condoning delay is one of the guiding principles in the realm of belated appeals, but liberal approach cannot be equated with a license to file appeals at will-disregarding the time-limits fixed by the Statutes. The behaviour of the assessee could be termed as personified in action and negligence which would not constitute reasonable cause. 4.14 Further, Hon'ble Apex Court in the case of Vedabai Alias Vaijayanatabai Baburao Patil Vs. Shantaram Baburao Patil, 253 ITR 798, it was held as follows:- "In exercising discretion under section 5 of the Limitation Act, the Court should adopt a pragmatic approach. A distinction must be made between a case where the delay is inordinate and a case where the delay is of a few days. Whereas in the former case the consideration of prejudice to the other side will be a relevant factor so the case calls for a more cautious approach but in the latter case Assessment Year: 2011-12 M/s B. N. Dutta no such consideration may arised and such case deserves a liberal approach." 4.15 Further, ITAT, Chennai in the case of JCIT vs. Tractors & Farm Equipment's Ltd. it was held as under. - "The delay cannot be condoned simply because the appellant's case is hard and calls for sympathy or merely out of benevolence to the party seeking relief. In granting the indulgence and condoning the delay it must be proved beyond the shadow of doubt that the appellant was diligent and was not guilty of negligence whatsoever. The sufficient cause within the contemplation of the limitation provision must be a cause which is beyond the control of the party invoking the aid of the provisions. The Hon'ble Supreme Court in the case of Ramlal v. Rewa Coalfields Ltd. AIR 1962 SC 361 has held that the casue for the delay in filing the appeal which by due care and attention could have been avoid cannot be a sufficient cause within the meaning of the limitation provision. Where no negligence, nor inaction, or want of bona fides can be imputed to the appellant a liberal construction of the provisions has to be made in order to advance substantial justice. Seekers of justice must come with clear hands. 4.16 For these reasons, the claim of the appellant is not acceptable especially when there is an inordinate delay of 7 Years 6 months 18 days. Therefore, the delay of 7 Years 6 months 18 days in A.Y. 2011-12 in filing of appeal in this case is not condoned as no "sufficient cause' has been shown u/s. 249(3) of the Income Tax Act, 1961 for the appellant's failure to file the appeal within the prescribed period of limitation u/s.249(2) of the Income Tax Act, 1961 r.w.s. 5 of Limitation Act and hence the appeal sought to be instituted belatedly is hereby rejected. 5.0 Since delay in filing of appeal is not condoned and application for delay condonation is rejected, the case is not decided on merits. In the result, the appeal of the appellant is dismissed.”
Dissatisfied with the above order, the assessee preferred an appeal before this Tribunal stating that the appeal of the assessee was dismissed by the ld. CIT(A) simply on technical ground which was not correct and also without looking into the merits of the case, which is bad in law, therefore, the Tribunal may set aside the matter to the file of the ld. CIT(A) directing him to decide the appeal on merits of the case. He further stated that due to failure to receive the intimation order in a timely manner, the assessee was unable to contest the adjustment made by CPC within the prescribed period before the ld. CIT(A) and by citing Assessment Year: 2011-12 M/s B. N. Dutta the fact, the assessee filed condonation of delay petition which was calculated to be the delay of 7 years 6 months 18 days. The ld. AR contended that such delay was neither wilful nor attributable to any extraneous or ulterior motive on the part of the assessee and the assessee was not benefitted in any way from the delayed filing of this appeal, therefore, the dismissal of the appeal only on technical grounds referring section 249(3) of the Act without going into the merits of the case, was not correct. Therefore, he sought a fresh adjudication on merits of the case before the ld. CIT(A). The ld. AR in this respect has relied on a decision of Coordinate Amritsar Bench of the Tribunal in the case of M. K. Hotels and Resorts Ltd. vs. ACIT reported in [2023] 104 ITR (Trib) 204 wherein it was held as under:
“6. We heard the rival submission and relied on the documents available in the record. In fact, there is a delay of 9 years is a huge delay for adjudicating the appeal by the ld. CIT(A). But the assessee also submitted the “reasonable cause” for filing the appeal in delay. In fact, the revenue also not able to submit proof for any other mode of service of intimation to the assessee. However, through the Email there is huge confusion in relation to the service of intimation u/s 143(1) of the assessee. The assessee submitted the condonation of delay with an affidavit and also the ld. counsel respectfully relied on the order of Hon’ble Apex Court which are reproduced as below: Hon'ble Supreme Court in the case of Senior Bhosale Estate (HUF) v. ACIT [2019] 112 taxmann.com 134 (SC): “Held that where revenue did not expressly refute stand taken by assessee that they had no knowledge about passing of order of Tribunal, dated 29-12-2003, until June, 2008, assessee's delay of 1754 days in filing appeal before Bombay High Court against Tribunal order was to be condoned. The brief facts of the case were that assessee sought condonation of delay of 1754 days in filing appeals against order, dated 29-12-2003, passed by Tribunal. The assessee pleaded that it had no knowledge about passing of Tribunal's order, until it was confronted with auction notices in June, 2008, issued by competent authority, immediately upon which, assessee filed appeal with High Court. The High Court dismissed assessee's appeals holding that these were not fit cases in which inordinate delay of 1754 days in filing appeals deserved to be condoned. However, it was found that respondent revenue did not expressly refute stand taken by assessee that they had no Assessment Year: 2011-12 M/s B. N. Dutta knowledge about passing of order, dated 2912-2003, until June, 2008. The Supreme Court held that unless that fact was to be refuted by the Revenue, question of disbelieving stand taken by assessee on affidavit, could not arise and for which reason, High Court should have shown sympathy to assessee by condoning delay in filing concerned appeal(s).” Hon'ble Supreme Court in the case of Shakuntala Devi Jain vs Kuntal Kumari AndOrs. AIR 1969 SC 575, 1969 SCR 1006 “We are inclined to accept the statement that she was under the bona fide impression that the certified copy was not ready, and that is why it was not supplied to her by the copying department. It is not a case where it is possible to impute to the appellant want of bona fides or such inaction or negligence as would deprive her of the protection of Section 5 of the Limitation Act. We are therefore inclined to allow her application under Section 5 and to condone the delay in re-filing the appeal with a certified copy of the order.” Hon'ble Supreme Court in the case of State of West Bengal V Adm.1972 AIR 749 “It is not possible to lay down precisely as to what facts or matters would constitute 'sufficient cause' under s. 5 of the Limitation Act. But those words should be liberally construed so as to advance substantial justice when no negligence or any inaction or want of bona fides is imputable to a party; that is, the delay in filing an appeal should not have been for reasons which indicate the party's negligence in not taking necessary steps which he could have or should have taken.” 6.1 We find that the assessee has a sufficient cause for non-submission of the appeal within due time. The merit was also not considered in appeal stage as it is decided in limine. Therefore, we remit back the issue to the ld. CIT(A) and direct to pass the order on merits, denovo. Needless to say, the assessee should get a reasonable opportunity of hearing in set-aside proceeding.
In the result, the appeal of the assessee bearing is allowed for statistical purposes.” 7. On the other hand, the ld. DR contended that the claim of adjustment of depreciation was carried out in accordance with provisions of the Act and the intimation order of the CPC was duly issued and accessible through the e-filing portal and the assessee has given ample opportunities to review and if necessary can contest the intimation order. He, therefore, prayed that the delay in filing the appeal over 7 years Assessment Year: 2011-12 M/s B. N. Dutta cannot be condoned merely on the basis of alleged non-receipt of communication which is not a good ground and the appeal of the assessee may be dismissed as time-barred by upholding the CIT(A)’s order.
We, after hearing the rival submissions and perusing the materials available on record, find that the CPC passed intimation order on 27.01.2012 regarding subsequent adjustment of depreciation claimed. From the facts, we note that substantive issue whether depreciation claimed was disallowed correctly has not been fully adjudicated on merits rather than solely dismissed the appeal on technical issue of delay. On similar circumstances, the Coordinate Ranchi Bench of the Tribunal in the case of Sanjay Kr. Choudhury vs. DCIT in IT(SS) Nos.3 to 8/Ran/2020 allowed a delay of 1130 days in filing the appeal before the Tribunal on the part of the assessee by holding as under:
“11. After hearing the rival contentions and perusing the material on record, we find that the appeals of the assessee have been decided by the First Appellate Authority without deciding the merits as the assessee has not appeared either personally or through authorized representative on various dates as is apparent from para 2 as is extracted (supra). In our considered view, the Ld. CIT(A) is duty bound to decide the appeals on merit after stating the point for determination, decision thereon and reasons therefore as is apparent from perusal of provisions of Section 250(6) of the Act which is reproduced as under for the sake of ready reference: 6)The order of the [* * *] [ Omitted by Act 21 of 1998, Section 65 (w.e.f. 1.10.1998).] [Commissioner (Appeals)] [ Inserted by Act 29 of 1977, Section 39 and Schedule V (w.e.f. 10.7.1978).] disposing of the appeal shall be in writing and shall state the points for determination, the decision thereon and the reason for the decision. [(6-A) In every appeal, the Commissioner (Appeals), where it is possible, may hear and decide such appeal within a period of one year from the end of the financial year in which such appeal is filed before him under sub-section (1) of section 246-A.] [ Inserted by Act 27 of 1999, Section 84 (w.e.f. 1.6.1999).] 12. In our opinion, in the interest of justice and fair play and having regards to the principal of natural justice, the appeals of the assessee Assessment Year: 2011-12 M/s B. N. Dutta need to be restored to the file of Ld. CIT(A) so that the assessee could be heard on merit and appeals could be decided after taking into account the merits of the issues. Accordingly we restore these appeals to the file of Ld. CIT(A) with the directions to decide the same after taking into account the merits of the issues and also the evidences which may be filed by the assessee in the appellate proceedings. Needless to say that the assessee has to cooperate in the proceedings before the First appellate authority failing which adverse view would be taken against the assessee. Consequently, we restore to all these appeal to the Ld. CIT(A).
In the result, all the appeals of the assessee are allowed for statistical purposes.” 8.1 From the above facts and discussion and in the light of section 253(5) of the Act, the Tribunal finds that there is sufficient cause to condone the delay of 7 years 6 months 18 days in filing the appeal before the ld. CIT(A). We note that the ld. CIT(A) has is not considered the issues on merits and the appeal of the assessee cannot be dismissed solely on ground of delay, therefore, the issue warrants a fresh examination. We find that the assessee has failed to furnish required documents within the prescribed time before the ld. CIT(A) and the ld. CIT(A) was proceeded with the evaluation based on existing record or documents and decided the appeal accordingly. We, therefore, direct that the assessee must furnish additional supporting documents in order to substantiate its claim before the ld. CIT(A). Accordingly, the matter is remanded back to the file of the ld. CIT(A) for a fresh adjudication on merits of the case specially with a direction to examine the depreciation claimed by the assessee in the light of the assessee’s submissions and available evidences and by doing so, the ld. CIT(A) is hereby directed to issue a notice to the assessee informing to submit additional documents and relevant evidences, if so required. The assessee is also directed to submit required documents as and when asked for. In view of the above and also to ensure the principles of natural justice and fair play, we remit the matter back to the ld. CIT(A) solely for the purpose of Assessment Year: 2011-12 M/s B. N. Dutta examination of substantive issues on merits by providing the assessee a fair opportunity of hearing. 9. In terms of the above, the appeal of the assessee is allowed for statistical purposes. Kolkata, the 17TH December, 2025.