MBR EDUCATIONAL SOCIETY,HYDERABAD vs. ITO., EXEMPTION WARD-1(2), HYDERABAD

Per contra, the Learned Departmental Representative (“Ld. DR”) strongly opposed the condonation. She submitted that the assessee, being an educational institution, cannot claim the benefit of leniency afforded to an illiterate or rural assessee. She argued that the reasons furnished do not constitute reasonable cause and placed reliance on the judgment of the Hon’ble Page 4 of 9 Supreme Court in Balwant Singh vs. Jagdish Singh & Ors, Civil Appeal No. 1166 of 2006, for the proposition that delay cannot be condoned in the absence of demonstrable diligence.

After considering the rival submissions, examining the affidavits, and reviewing the record, we find that the explanation offered by the assessee is neither reasonable nor satisfactory, particularly having regard to the inordinate length of the delay. The delay of 441 days is substantial and cannot be brushed aside lightly. When there is such an inordinate delay, the assessee is under a higher obligation to furnish clear, credible, and cogent reasons demonstrating due diligence. However, in the present case, the explanation is wholly unconvincing. The assessee is running an educational institution, which, by its nature, is required to comply with statutory and regulatory procedures on a continuous basis. It is not believable that such an institution remained unaware for more than 15 months that its quantum appeal had not been filed. During the entire period of delay, no notice or communication was received from the Tribunal, which should ordinarily have prompted inquiry regarding the status of the appeal. The absence of even a single enquiry over such an extended period demonstrates lack of due care. In this regard, we have gone through the affidavit of the Chartered Accountant filed by the assessee, which is to the following effect:

On perusal of the above, we find that the explanation furnished by the Chartered Accountant does not inspire confidence. It is admitted by the Chartered Accountant that the appellate work was allotted to his staff member in the last week of November 2023, and that the said staff left employment in January 2024, barely one to two months thereafter. It is normal and expected practice that when a staff member leaves an office, the employer reviews the work pending with the outgoing staff, particularly tasks of immediate statutory importance such as filing an appeal before this Tribunal. The work entrusted in the present case was not an old matter nor one that could have been forgotten; it was a recently assigned and legally significant responsibility. Therefore, the contention that the Chartered Accountant remained unaware that the appeal was not filed from January 2024 until April 2025 reflects a casual and negligent approach rather than a bona fide omission. Such an explanation is not acceptable. Additionally, the claim that the staff member took away the papers with him while leaving service is implausible. If the taking away of papers was intentional, then logically, similar papers of other clients too would have been taken. Further, it is unreasonable to accept that a professional Chartered Accountant would fail to verify the filing status of an appeal for nearly 15 months, particularly when the entrusted task had been allotted only recently. These circumstances collectively demonstrate gross negligence and lack of due diligence on the part of both the assessee and its Chartered Accountant. Accordingly, in our considered view, the assessee has not established “sufficient cause” within the meaning of section 253(5) of the Act.

In view of the foregoing discussion and respectfully following the decision of the Hon’ble Supreme Court in the case of Balwant Singh vs. Jagdish Singh (supra), we hold that the inordinate delay of 441 days in filing the appeal cannot be condoned. Accordingly, the appeal of the assessee is dismissed in limine as barred by limitation.

In the result, the appeal of the assessee is dismissed.