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Facts
The assessee filed two appeals (one for assessment u/s 144 and another for penalty u/s 271(1)(c)) with significant delays of 677, 1024, and 852 days, which were not condoned by the CIT(A), leading to their dismissal in limine. The assessee attributed the delay to non-service of the appellate order and a communication gap with their tax counsel. The assessee challenged the dismissal on limitation grounds and also the confirmation of the AO's action on merits.
Held
The Tribunal condoned the delay in filing both appeals, acknowledging that substantive justice requires providing the assessee an opportunity to present their facts. The impugned orders were set aside, and the cases were remanded back to the Assessing Officer for fresh assessment on merits.
Key Issues
Whether the significant delay in filing appeals should be condoned given reasons like non-service of orders and communication gaps, and if the cases should be remanded to the AO for fresh assessment on merits.
Sections Cited
144, 271(1)(c), 250
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “A” BENCH”, KOLKATA
Bluebell Tradecom LLP (Successor of Bluebell Tradecom Pvt. Ltd.), 44, S.N. Banerjee Road, Barrackpore, Kolkata - 700020 [PAN: AABCG1741J] ……..…...…………….... Appellant vs. ITO, Ward-2(4), Kolkata, P-7, Chowringhee Square, Esplanade, Chowringhee North, Kolkata - 700069 ................................. Respondent Appearances by: Assessee represented by : Miraj D Shah, AR Department represented by : Sandeep Kumar Mehta, Sr. DR Date of concluding the hearing : 03.07.2025 Date of pronouncing the order : 08.07.2025 O R D E R
PER SANJAY AWASTHI, ACCOUNTANT MEMBER
This is a batch of two appeals pertaining to the same assessee for AY 2014-15. Whereas, pertains to an assessment y/s 144 of the Income Tax Act, 1961 (hereafter “the Act”) and pertains to penalty u/s 271(1)(c) of the Act. In both of these appeals there is a delay of 677 days, which has been requested to be condoned. For the sake of convenience, an affidavit filed for ITA No. 499/Kol/2025 is extracted for reference:
& 500/Kol/2025 Bluebell Tradecom LLP (successor of Bluebell Tradecom Pvt. Ltd.) “1. Whereas the appeal for the AY 2014-2015 arising from the appellate order passed by the Ld CIT(Appeals), National Faceless Appeal Centre (NFAC), Delhi dated 03/02/2023 which was not served on the assessee.
The assessee was unaware of the Appellate order passed by the Ld CIT(Appeals) as the order was not served/delivered on the registered Email address of the assessee.
3. The assessee received a call from CPC, Bengaluru in mid-month of February 2025 to pay the outstanding demand wherein the assessee came to know that the Appellate order has been passed and then the assessee contacted their counsel who downloaded the order from and advised the assessee to file an appeal before the Honorable ITAT and accordingly the appeal was prepared.
4. However, if date of appellate order is considered then appeal was thus to be filed by 05/04/2023. However, the appeal is being filed on 07/03/2025 hence there is a delay of 702 days in filing the appeal.
5. The assessee immediately notified their counsel regarding pendency of the case. The counsel of the assessee then took immediate steps and is now filing this by filing appropriate condonation petition.
6. It is submitted that considering the above facts and circumstances of the case the assessee humbly prays that the delay in filing of appeal may be condoned considering the above circumstances.
It is humbly submitted that the delay of 702 days in filing of the appeal was not due to any malafide intention or negligence on our part but was due to the above said fact, thus the delay was not intentional. It is therefore requested that the delay in filing of the appeal be condoned.
It is well settled in law that the delay may be condoned in cases where sufficient cause is explained for the delay in filing of the appeal. In support of the same we are relying on the following decisions: (a) In the case of Collector, Land Acquisition v. Mst. Kati Ji 1987 (13) ALR 306, Hon'ble Supreme Court held as follows: "The Legislature has conferred the power to condone delay by enacting section 5 of the Limitation Act of 1963 in order to enable the Courts to do substantial justice to parties by disposing of matters on 'merits. The expression 'sufficient cause' employed by the Legislature is adequately elastic to enable the Courts to apply the law in a meaningful manner which sub serves the ends of justice that being the life-purpose of the existence of the institution of Courts. It is common knowledge that this Court has been making a justifiably liberal approach in matters instituted in this Court. But the message does not appear to have percolated down to all the other Courts in the hierarchy. Any such a liberal approach is adopted on principle as it is realized that:
1. 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 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 merit after hearing the parties.
& 500/Kol/2025 Bluebell Tradecom LLP (successor of Bluebell Tradecom Pvt. Ltd.) 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 considerations 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 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 grapped 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. (b) In N. Balakrishnan v. M. Krishnamurthy (1998) 7 SCC 123 the Apex Court explained the scope of limitation and condonation of delay, observing as under: "The primary function of a Court is to adjudicate the dispute between the parties and to advance substantial justice. The time-limit fixed for approaching the Court in different situations is not because on the expiry of such time a bad cause would transform into a good cause. Rules of limitation are not meant to destroy the rights of parties. They are meant to see that parties do not resort to dilatory tactics, but seek their remedy for the redress of the legal injury so suffered. The law of limitation is thus founded on public policy." (c) In Smt. Prabha v. Ram Prakash Kalra 1987 Suppl. SCC 339, the Supreme Court took the view that the Court should not adopt an injustice-oriented approach in rejecting the application for condonation of delay. (d) In Vedabai v. Shantaram Baburao Patil 2001 (44) ALR 577, the Apex Court made a distinction in delay and inordinate delay observing as under. "In exercising discretion under section 5 of the Limitation Act, the Courts 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 otherwise will be a relevant factor so the case calls for a more cautious approach..." (e) In New India Insurance Co. Ltd. v. Smt. Shanti Misra AIR 1976 SC 237, Hon'ble Supreme Court held that discretion given by section 5 should not be defined or crystallized so as to convert a discretionary matter into a rigid rule of law. The expression 'sufficient cause' should receive a liberal construction. (f)In Briji Inder Singh v. Kanshi Ram AIR 1917 PC 156, it was observed that true guide for a Court to exercise the discretion under section 5 is whether the appellant acted with reasonable diligence in prosecuting the appeal. (g) In Shakuntala Devi Jain v. Kuntal Kumari AIR 1969 SC 575, the Hon'ble Supreme Court held that unless want of bona fides of such in action or negligence as would deprive a party of the protection of section 5 is proved, the application must not be thrown out or any delay cannot be refused to be condoned.
& 500/Kol/2025 Bluebell Tradecom LLP (successor of Bluebell Tradecom Pvt. Ltd.) (h) In O.P. Kathpalia v. Lakhmir Singh AIR 1984 SC 1744, the Hon'ble Supreme Court held that if the refusal to condone the delay results in grave miscarriage of justice; it would be a ground to condone the delay. (i) In State of Haryana v. Chandramani AIR 1996 SC 1623, Hon'ble Supreme Court considered large number of its earlier judgments including Binod Bihari Singh v. Union of India [1993] 1 SCC 572, Shakambari & Co. v. Union of India [1993] Suppl. (1) SCC 487, Warlu v. Gangotribai [1995] Suppl. (1) SCC 37, Ramlal, Motilal and Chhotelal v. Rewa Coalfields Ltd. AIR 1962 SC 361, Concord of India Insurance Co. Ltd. v. Nirmala Devi AIR 1979 SC 1666, Lala Mata Din v. A. Narayanan AIR 1970 SC 1953, and held that expression 'each day's delay must be explained', does not mean that a pedantic approach should be made and it must be applied in a rational common sense pragmatic manner.
Considering the judicial decisions as cited above and the facts of the case the delay in filing of appeal, be condoned and the appeal be admitted for hearing of merits.
For these acts of kindness, the appellant assessee shall always be obliged.” 1.1 Considering the reasons given in the said affidavit, the delay is hereby condoned for and since similar explanations have been given for ITA No. 500/Kol/2025, the delay in that appeal is also condoned. Accordingly, both of these appeals are admitted for adjudication. arises from order u/s 250 of the Act dated 03.02.2023 in which a delay of 1024 days was not condoned by the Ld. CIT(A). Similarly, in ITA No. 500/Kol/2025, the appeal arises from order dated 03.02.2023 passed u/s 250 of the Act by the Ld. CIT(A), National Faceless Appeal Centre (NFAC). In this appeal also, a delay of 852 days has not been condoned. Accordingly, both of these appeals have been dismissed in limine.
2.1 Aggrieved with both of these appellate orders, the assessee has filed the present appeals with several grounds challenging the confirmation of action of Ld. AO by the Ld. CIT(A) on merit and the assessee has also challenged the action of Ld. CIT(A) in dismissing the assessee’s appeals on grounds of limitation.
Before us, the Ld. AR mentioned that the assessee depended on his tax counsel for complying with the notices etc. issued by the Revenue Authorities. However, due to a communication gap between the assessee & 500/Kol/2025 Bluebell Tradecom LLP (successor of Bluebell Tradecom Pvt. Ltd.) and his tax counsel, the notices could not be responded to and hence there was no worthwhile compliance before the authorities below. The Ld. AR requested for an opportunity to present the facts before the Ld. AO so that the correct income of the assessee could be determined.
3.1 The Ld. DR relied on the orders of authorities below.
We have carefully considered the facts of the case and have also gone through the orders of authorities below. It is felt that in the interests of substantive justice, the assessee deserves a chance to present the facts before the Ld.AO. Accordingly, we set aside both of the impugned orders, after condoning the delay in both the cases, and remand these matters back to the file of Ld. AO for fresh assessment. It would be expected that the assessee would be alert to the opportunities given by the Ld.AO.
With these remarks, appeals are allowed for statistical purposes.
Order pronounced on 08.07.2025