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Facts
The assessee filed returns on time but claimed Foreign Tax Credit (FTC) by filing Form-67 late, leading the Assessing Officer-CPC to deny the claim under Section 143(1)(a). The assessee's appeals to the CIT(A) were filed with significant delays (361, 270, and 60 days for different assessment years) due to the Covid-19 pandemic and staff changes. The CIT(A) dismissed these appeals *in limine* without considering their merits, as the filings were beyond the extended limitation period set by the Supreme Court.
Held
The Tribunal found the reasons for delays, both before itself and the CIT(A), to be bona fide and reasonable. Citing the Supreme Court's emphasis on a lenient approach to condone delays for substantial justice, the Tribunal condoned all delays. It remanded the cases back to the CIT(A) with directions to admit the appeals and decide the issues on merits after providing adequate opportunity of hearing to the assessee.
Key Issues
Whether the delays in filing appeals before the CIT(A) and the Tribunal, attributed to the Covid-19 pandemic and administrative reasons, should be condoned, and if the CIT(A) was justified in dismissing the appeals *in limine* without considering the merits.
Sections Cited
250, 143(1)(a), 139(1), 249(3)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, HYDERABAD “A” BENCH: HYDERABAD
Before: SHRI MANJUNATHA G & SHRI RAVISH SOOD
ORDER PER MANJUNATHA G. : The above three appeals are filed by the assessee against the orders all dated 26.07.2024 of the learned Addl./JCIT(A)-4, Mumbai, passed u/sec.250 of the Income Tax Act, 1961, relating to the assessment years 2020-2021, 2021-2022 & 2022-2023. Since common issues are involved in all these three appeals, these appeals were heard together
2 ITA.Nos.717, 718 and 719/Hyd./2025 and are being disposed of by this single consolidated order for the sake of convenience and brevity.
At the outset, we noticed that, there is a delay of 206-208 days delay in filing the appeals before the Tribunal for all three appeals. The assessee has filed condonation petition along with affidavit explaining the reasons for delay in filing of the appeal. Learned Counsel for the Assessee Shri CA, Ravi Bharadwaj, referring to the reasons given by the assessee, requested to condone the delay in the interest of substantial justice and admit the appeals for hearing.
Learned DR on the other hand, strongly opposed the petitions filed by the assessee and submitted that, the assessee has failed to make-out a case of sufficient cause for explaining the delay in filing of the appeals and, therefore, the delay in filing of the appeals for all three assessment years, should not be condoned.
We have heard both the parties and gone through the affidavit filed by the assessee. We find that, the reasons explained by the assessee in his affidavit are seems to be 3 ITA.Nos.717, 718 and 719/Hyd./2025 genuine and bonafide by taking note of chronology of dates and events furnished by the assessee. The Hon’ble Supreme Court in the case of Collector, Land Acquisituon vs., MST Katiji [1987] 167 ITR 471 (SC) has laid down certain principles for condoning the delay and also directed the lower courts to follow a lenient approach for condoning the delay. Going by the principles laid down by the Hon’ble Supreme Court in the case of MST Katiji (supra), there is no dispute if an appeal is dismissed on account of technicalities, a meritorious case may be thrown-out of judicial review. Therefore, while condoning the delay, the courts must have a liberal approach or lenient approach considering the reasons given by the petitioners or appellants. Therefore, going by the principles laid down by the Hon’ble Supreme Court in the case of MST Katiji (supra) and also considering the submissions of the assessee, we condone the delay of 208 days in filing the above three appeals before the Tribunal and admit the appeals for adjudication.
4 ITA.Nos.717, 718 and 719/Hyd./2025 5. Brief facts of the case extracted from ITA.No.717/Hyd./2025 for the assessment year 2020-2021 are that, the assessee had filed it’s return of income for the assessment year 2020-2021 on 31.12.2020. Further, the assessee had filed Form-67 on 10.11.2021 and claimed Foreign Tax Credit [in short “FTC”] of Rs.1,91,137/-. The return of income filed by the assessee has been processed and intimation under section 143(1)(a) of the Income Tax Act, 1961, has been issued on 06.04.2021 and the Assessing Officer-CPC has denied the claim of credit for FTC of Rs.1,91,137/- for non-filing of Form-67 on or before the ‘due date’ provided u/sec.139(1) of the Income Tax Act, 1961 [in short “the Act”].
The assessee has carried the matter in appeal before the learned CIT(A) and the said appeal has been filed on 02.05.2023 with delay of 361 days. The assessee filed petition for condonation of delay with a reason that, the entire period of delay is covered by the Covid period and in view of decision of Hon’ble Supreme Court in Cognizance for Extension of Limitation, In re 438 ITR 296 (SC) read with 5 ITA.Nos.717, 718 and 719/Hyd./2025 judgment in Cognizance for Extension of Limitation, In re 432 ITR 206 (SC) dated 08.03.2021 and 421 ITR 314, excluding the covid-19 pandemic outbreak period from for all intents and purposes under the limitation law. Therefore, the appeal filed by the assessee should be admitted for adjudication.
The learned CIT(A) after considering the relevant submissions of the assessee and also taking note of the decision of Hon’ble Supreme Court in the case of Cognizance for Extension of Limitation, In re 438 ITR 296 (SC) read with judgment in Cognizance for Extension of Limitation (supra), observed that, the Hon’ble Supreme Court extended the time limit for filing the appeal up-to 28.02.2022, whereas the assessee has filed the present appeal on 02.05.2023, which is even beyond the limitation period prescribed by the Hon’ble Supreme Court. Therefore, the learned CIT(A) rejected the petition filed by the assessee and dismissed the appeal filed by the assessee as un-admitted for delay in filing of the appeal.
6 ITA.Nos.717, 718 and 719/Hyd./2025 8. Aggrieved by the order of the learned CIT(A), the assessee is now, in appeal before the Tribunal.
CA, Ravi Bharadwaj, Learned Counsel for the Assessee submitted that, the learned CIT(A) has erred in dismissing the appeal filed by the assessee without condoning the delay, even though, the assessee has explained the reasons for delay in filing of the appeal on account of Covid pandemic outbreak period and there is sufficient cause for not filing the appeal. Therefore, he submitted that, the delay in filing of the appeal before the learned CIT(A) may be condoned and the issue may be set- aside to the file of learned CIT(A) to decide the issue on merits.
MS. G. Saratha, learned Sr. AR for the Revenue, on the other hand, supporting the order of the learned CIT(A) submitted that, the Hon’ble Supreme Court in the case of Cognizance for Extension of Limitation, In re 438 ITR 296 (SC) read with judgment in Cognizance for Extension of Limitation, (supra), has extended the time limit up-to 28.02.2022 with a grace period of 90 days, which is expired
7 ITA.Nos.717, 718 and 719/Hyd./2025 on 31.05.2022, whereas the assessee has filed the appeal on 02.05.2023, which is beyond the limitation period prescribed by the Hon’ble Supreme Court. The assessee could not explain the said delay with sufficient cause. Therefore, the learned CIT(A) has rightly dismissed the appeal filed by the assessee in terms of section 249(3) of the Income Tax Act, 1961 and the Order of the learned CIT(A) should be upheld. Shri Gurpreet Singh, Sr. AR for the Revenue has also endorsed the above submissions of the Sr. AR in the above appeals.
We have heard both the parties, perused the material on record and gone through the orders of the authorities below. Admittedly, the assessee has filed it’s return of income for the year under consideration on or before the due date provided under section 139(1) of the Act, which is evident from the date of filing of the return on 31.12.2020. Further, the assessee has filed Form-67 on 10.11.2021, which is beyond the due date provided under section 139(1) of the Act. The return of income filed by the assessee has been processed under section 143(1) of the Act
8 ITA.Nos.717, 718 and 719/Hyd./2025 on 06.04.2021 and the Assessing Officer-CPC denied the credit of FTC on the ground that, Form-67 has been filed beyond the due date provided under the Act and further, the same has been filed after processing of return of income under section 143(1) of the Act. In the First Appellate Proceedings, the CIT(A) did not going into the merits of the issue and dismissed the appeal filed by the assessee in limne for not filing the appeal within the due date provided under the Act. The assessee explained the reasons for delay in filing the appeal before the learned CIT(A) and according to the assessee, due to on-going Covid pandemic outbreak and subsequent disruption in normal life, the assessee could not attend to the tax matters, including filing of the appeal and due to this, there is a delay of 361 days, but, the said delay is, neither intentional nor for want of any undue benefit. In our considered view, the reasons given by the assessee for explaining the delay in filing of the appeal is, bonafide and reasonable going by the Covid pandemic situation prevailing at that point of time and subsequent effects of the Covid pandemic outbreak on the normal life of 9 ITA.Nos.717, 718 and 719/Hyd./2025 the citizens. Therefore, going by the reasons given by the assessee, the learned CIT(A) ought to have condone the delay in filing of the appeal and decide the issue on merits. Since the learned CIT(A) has dismissed the appeal filed by the assessee in limine for not filing the appeal on or before the due date, in our considered view, going by the reasons given by the assessee for delay in filing the appeal before the learned CIT(A), the delay should be condoned. Thus, we are inclined to condone the delay in filing the appeal before the learned CIT(A) and restore the issue back to the file of CIT(A) because, the learned CIT(A) did not considered the issue on merits. The learned CIT(A) is directed to admit the appeal filed by the assessee and decide the issue involved in the appeal on merits, after providing adequate opportunity of hearing to the assessee.
In the result, appeal ITA.No.717/Hyd./2025 of the assessee is allowed for statistical purposes.
10 ITA.Nos.717, 718 and 719/Hyd./2025 ITA.Nos.718 & 719/Hyd./2025 - AYs 2021-22 and 2022-23
For these two assessment years, the assessee has explained the reasons for delay in filling of the appeal due to the Accountant who is responsible for looking after the tax matters, has left the job, without any notice and since the assessee was not aware of the order passed by the Assessing Officer-CPC under section 143(1) dated 04.07.2022 and 02.02.2022 for the assessment years 2021- 2022 and 2022-2023, respectively. Further, after analysing the order passed by the Assessing Officer-CPC, steps has been taken to file the appeals before the CIT(A), which has resulted in delay of 270 days and 60 days, respectively, for the impugned assessment years. But, the said delay is neither intentional nor for want of any undue benefit.
We find that, the reasons given by the assessee in filing the appeal before the learned CIT(A) on or before the due date appears to be bonafide and reasonable going by the explanation of assessee. Further, no litigant would get any benefit by lodging appeal late. In fact, by not filing the appeal within the time allowed under the Act, the assessee
11 ITA.Nos.717, 718 and 719/Hyd./2025 would put itself in an adverse position. Therefore, when the assessee has explained the reasons for not filing the appeals due to absence of staff who looks-after the tax matters and the assessee could not file the appeals before the First Appellate Authority-CIT(A) appears to be a ‘sufficient cause’ and thus, the learned CIT(A) ought to have condone the delay in filing of the appeal to render substantial justice. Thus, we are inclined to condone the delay of 270 days and 60 days respectively, in filing the appeal before the learned CIT(A) for the impugned assessment years 2021-2022 and 2022-2023 and restore the issues back to the file of learned CIT(A) because, the learned CIT(A) did not considered the issues on merits. The learned CIT(A) is directed to admit the appeals filed by the assessee and decide the issue involved in the appeals on merits for the assessment years 2021- 2022 and 2022-2023, after providing adequate opportunity of hearing to the assessee.
In the result, appeals ITA.Nos.718 & 719/Hyd./ 2025 of the assessee are allowed for statistical purposes.
12 ITA.Nos.717, 718 and 719/Hyd./2025 16. To sum-up, appeals ITA.Nos.717, 718 & 719/ Hyd./2025 of the assessee are allowed for statistical purposes. A copy of this common order be placed in the respective case files. Order pronounced in the open Court on 25.07.2025.