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Facts
The assessee, a Co-operative Bank, had its assessment completed under Section 143(3) with several additions. Its appeal to the CIT(A) was filed with a 28-day delay, which the CIT(A) refused to condone, dismissing the appeal as barred by limitation. The assessee then appealed to the Tribunal.
Held
The Tribunal condoned a 230-day delay in filing the appeal before itself and found that the 28-day delay before the CIT(A) was due to the assessee's Chartered Accountant's critical medical condition, constituting sufficient cause. Citing Supreme Court precedents, the Tribunal set aside the CIT(A)'s order and restored the matter for a decision on merits, directing the CIT(A) to condone the delay.
Key Issues
Whether the CIT(A) erred in dismissing the appeal due to a 28-day delay in filing without condoning it, and if the assessee had sufficient cause for the delay.
Sections Cited
143(1), 143(2), 142(1), 143(3), 36(1)(viia), 249(2), 249(3), 250
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Income Tax Appellate Tribunal, “A” BENCH, PUNE
Before: SHRI R.K. PANDA & MS. ASTHA CHANDRA
Assessment Year : 2017-18 Kolhapur Mahila Sahakari Bank Limited, Assistant Commissioner of 1082 KH B Ward, Tutuchi Bag, Income Tax, Opp. Khasbag, Kolhapur, Vs. Circle – 1, Kolhapur Maharashtra-416012 PAN : AAAAK0367R अपीलार्थी / Appellant प्रत्यर्थी / Respondent Assessee by : Shri Nikhil S. Pathak Department by : Shri Ramnath P. Murkunde Date of hearing : 30-09-2025 Date of 26-11-2025 Pronouncement : आदेश / ORDER
PER ASTHA CHANDRA, JM :
The appeal filed by the assessee is directed against the order dated 07.05.2024 of the Ld. Commissioner of Income Tax (Appeals)/NFAC, Delhi [“CIT(A)”] pertaining to Assessment Year (“AY”) 2017-18.
There is a delay of 230 days in filing of this appeal before the Tribunal for which the assessee has filed an affidavit explaining the reasons for such delay. After hearing both the sides, we are of the view that the delay is attributable to the sufficient cause. We, therefore, in light of the decisions of the Hon'ble Supreme Court in the case of Collector, Land Acquisition vs. Mst. Katiji & Ors. (1987) 167 ITR 471 (SC) and in the case of Inder Singh Vs. The State of Madhya Pradesh reported in 2025 LiveLaw (SC) 339, condone the said delay and proceed to decide the appeal.
Briefly stated the facts are that the assessee is a Co-operative Bank engaged in the business of providing banking facilities. The assessee is covered by the Banking Regulation Act as well as guidelines and circulars issued by the RBI from time to time. The assessee e-filed its return of income on 26.10.2017 showing gross total income at Rs.66,16,132/-. The return of income was initially processed u/s 143(1) of the Income Tax Act, 1961 (the “Act”). Thereafter the case was selected for scrutiny under CASS. Accordingly, notice(s) u/s 143(2) and 142(1) of the Act along with questionnaire were issued and duly served on the assessee through e-proceedings. In response thereto, the assessee has furnished the required information/documents. The assessment was completed by the Ld. Assessing Officer (“AO”) vide his order dated 11.12.2019 u/s 143(3) of the Act by making the following addition(s)/disallowance(s) :- (i) Rs.23,00,000/- on account of bad and doubtful debts u/s 36(1)(viia) of the Act; (ii) Rs.1,50,000/- on account of provision made for standard assets; (iii) Rs.3,86,539/- on account of unclaimed dividend; (iv) Rs.2,80,000/- on account of nominal membership fee and (v) Rs.34,300/- on account of entrance fee, totaling to Rs.31,50,839/-.
Aggrieved, the assessee carried the matter before the Ld. CIT(A)/NFAC. Before the Ld. CIT(A)/NFAC, the appeal was filed with a delay of 28 days. The Ld. CIT(A)/NFAC did not condone the said delay and dismissed the appeal observing the delay to be inordinate and that the reasons cited by the assessee do not constitute the „sufficient cause‟ for not presenting the appeal in time. The relevant findings and observations of the Ld. CIT(A)/NFAC are as under : “4. Appellate decision: Notice was issued on 01.02.2021 fixing the appeal for hearing on 16.02.2021. Again the notice was issued on 07.07.2023 and the case was re- fixed for hearing on 17.07.2023, and finally on 24.07.2023 fixed for hearing on 04.08.2023. However, no response was made during the entire appellate proceedings. In this case, the appellant has stated in Form 35 that he received the copy of the assessment order on 10.01.2020 after the assessment order was passed on 11.12.2019. In this case appellant has preferred the instant appeal against the assessment order dated 11.12.2019, which was completed under E-assessment Scheme, 2019 on ITBA. In this system the assessment is completed in electronic platform and notice, order etc. is communicated through e-mail on appellants e- filing portal, therefore the communication is instantaneous and on the real time basis, without any considerable delay in communication. Therefore, it is very strange that how the assessment order which was passed on 11/12/2019 was served to the appellant 30 days later on 10/01/2020, thus appellant has failed to adduce any evidence in support of late service of assessment order. Further, the appellant has preferred the instant appeal on 07/02/2020, which is much beyond the statutory date as prescribed in section 249(2) of IT Act, 1961 i.e. within the 30 days from the date of service of assessment order to the appellant. Thus, the appeal of the appellant is inordinately delayed as it was filed after the delay of 28 days. Therefore, in view of the above narrated facts it is established that appellant has failed to furnish any "sufficient and reasonable cause" alongwith evidence which may be accepted and considered for attributing delay in preferring the appeal within limitation period.
4.1. As per section 249(2) of the Act, the appeal must be filed within 30 days of the service of the order to the appellant. It is not the case of the appellant that the order was not served to him. Section 249(3) gives the CIT(Appeals) powers to condone the delay if the appellant has sufficient cause for not filing the appeal in time. The word used in section 249 (3) is "may" and not "shall" and the first appellate authority is given a discretion to admit an appeal even after the expiration of the period of limitation prescribed under section 249(2). The discretion is to be exercised not on any arbitrary or fanciful grounds or whim or caprice of the first appellate authority, but it is to be a judicial discretion. The discretion is obviously to be exercised where "sufficient cause" for not presenting the appeal within time is made out by the appellant (Cf. Mohd. Ashfaq vs. State Transport Tribunal, U.P., AIR 1976 SC 2161, 2162). 4.2 In its essence, the phrase "sufficient cause" is not a question of principle but is a question of fact. Hence, whether to condone the delay or not, depends upon the facts and circumstances of each case since 'sufficient cause' for condonation of delay depends only on the facts placed by the applicant before the authority concerned. In the instant case, the appellant has not been able to produce any facts to show that he was prevented by sufficient cause for filing the appeal in time [Cf. Municipal Corporation of Ahmedabad v. Voltas Ltd., AIR 1995 Guj 29, 43 (FB), Calicut Trading Co. vs. Deputy CCT, 91998) 110 STC 195, 199 (Karn). It is the duty of the appellant to place the relevant facts that there was a sufficient cause for delay in filing an appeal. In the absence of such facts, no presumption can be drawn that there must a sufficient cause for not filing the appeal within the prescribed time [Union of India v. Brij Lal Prabhu Dayal, AIR 1999 Raj 216, 221). 4.3 The sufficient cause within the contemplation of these provisions must be a cause which is beyond the control of the party invoking the aid of the provisions. The cause for delay in filing the appeal which by due care and attention could have been avoided cannot be a sufficient cause within the meaning of these provisions [Ramlat vs. Rewa Coalfields Ltd., AIR 1962 SC 361; Ashutosh Bhadra v. Jatindra Mohan, AIR 1954 Ca238; Soorajmull Nagarmal v. Golden Fibre & Products, AIR 1969 Cal 381, 384]. 4.4 The appellant must show sufficient cause for not filing the appeal on the last day of limitation and must explain the delay made thereafter, day by day, till the actual date of the filing of the appeal. In other words, the whole of the delay must be explained (see, Ramlal v Rewa Coal fields Ltd., AIR 1962 SC 361, 364; Sitaram Ramcharan v. M.N. Nagarshana, (1960) 1 SCR 875, 889 AIR 1960 SC 260, 265-66; J.B. Advani& Co., Pr. Debi, AIR 1978 SC 537, 542; Saoorajmull Nagarmal v. Golden Fibre& Products, AIR 1969 Cal 381, 384; Bhaktipada Majhi vs. SDO, AIR 1971 Cal 204]. 4.5 However, while deciding the prayer for condonation of delay the authority cannot ignore or give a go-by to the basic principle that the burden to prove the existence of sufficient cause is always upon the applicant and there is no presumption that the delay occasioned in the filing of the appeal, etc, is always bona fide and the authority must in all cases condone the delay as matter of course. Thus, where the applicant has failed to show sufficient cause for condonation of delay, the application for condonation of delay is liable to be rejected [Classic Ispat Pvt. Ltd. v. Janak Steel Tubes Ltd. (1998) 93 Comp Cas 165, 167, 169 (Punj)]. Reference may also be made to Girdhar Lal M. Pittle vs. Appellate Authority for Industrial and Financial Reconstruction [(1998) 94 Comp Cas 225, 228 (Del). 4.6 The Single Judge bench of the Hon'ble Madras HC, while exercising writ jurisdiction in Kathiravan Pipes Pvt. Ltd., v. CESTAT, 2007 [5] STR 9 (Mad.) has observed that the period of limitation prescribed is not for destruction of a statutory right but only to give finality without protracting the matter endlessly. 4.7 The appellant has not explained this delay in filing of appeal and has therefore failed to discharge the onus cast upon it.
Therefore, after the careful consideration of the above narrated facts & circumstances of the case, judicial principles laid down by the above quoted judgments, it is clear that appellant has failed to furnish sufficient and reasonable cause explaining the delay hence the instant appeal filed after the expiry of due date is barred by limitation and not admitted. In view of the foregoing, the appeal is dismissed.”
Dissatisfied, the assessee is in appeal before the Tribunal raising the following grounds of appeal:
1. On the facts and the circumstances of the case and in law, learned CIT appeal erred in passing Ex-parte order u/s 250 of The Income Tax Act, 1961 without discussing the merit of the case, appellant prays for restoring the matters to the file of learned CIT Appeal for considering the appeal on merit.
2. Without prejudice to the above ground the following grounds are taken on merit: On facts and in law- 2.1 The learned CIT(A) erred in confirming the addition on account Bad and Doubtful Debts(BDDR) for Rural Advances of ₹ 23,00,000/-. 2.2 The learned CIT(A) erred in confirming additions of ₹ 1,50,000/- on account of provision made for Standard Assets. 2.3 The learned CIT(A) erred in confirming additions of ₹ 3,86,539/-/- on account of unclaimed dividend when such was paid out of Appropriation and not charged to Profit & Loss Account. 2.4 The learned CIT(A) erred in confirming additions of ₹ 2,80,000/- on account of Nominal Membership Fee and ₹ 34,300/-on account of Entrance Fee.
3. The appellant craves leave to add, alter, amend or delete any of the above grounds of appeal.”
The Ld. AR submitted that the assessee had a reasonable/sufficient cause for not being able to file the appeal within the statutory prescribed time limit. He submitted that the delay occurred due to the critical medical condition of the Chartered Accountant of the assessee because of which he was unable to check his email and consequently could not inform the assessee about the receipt of the assessment order in time. The delay was therefore neither intentional nor attributable to any lack of bonafide or negligence on the part of the assessee and/or his Tax Consultant. The Ld. Counsel for the assessee placed on record the affidavit of the Chartered Accountant of the assessee along with the supporting medical documents to support his above contention. The Ld. AR further submitted that the assessee has a strong case on merits and given an opportunity the assessee is in a position to substantiate its case by filing the requisite details/documents before the Ld. CIT(A)/NFAC. He, therefore, submitted that in the interest of justice, the matter may be AY 2017-18 restored to the file of the Ld.CIT(A)/NFAC with a direction to condone the delay and decide the appeal on merit, after affording an opportunity of hearing to the assessee.
The Ld. DR, on the other hand, relied on the order of the Ld. CIT(A)/ NFAC.
We have heard the rival arguments made by both the sides and perused the material available on record. We find that the Ld. CIT(A)/NFAC has dismissed the appeal of the assessee for the reason that there is an inordinate delay in filing of the appeal by the assessee and the reason for such delay do not constitute a sufficient cause for condoning the delay. He, therefore, dismissed the appeal being barred by limitation, the reasons of which have already been reproduced in the preceding paragraph. Before us, the Ld. AR placed an affidavit of the Chartered Accountant of the assessee and demonstrated that the delay was not intentional but occurred on account of severe and critical medical condition of the assessee‟s Chartered Accountant and thus there was a reasonable/sufficient cause on the part of the assessee for the delay in filing of the appeal before the Ld. CIT(A)/NFAC. In support thereof an affidavit of the assessee‟s Chartered Accountant along with the medical reports/documents have been placed on record.
We find the Hon'ble Supreme Court in the case of Collector, Land Acquisition vs. Mst. Katiji & Ors. reported in 167 ITR 471 (SC) has held that when substantial justice and technical considerations are pitted against each other, 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. 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 merits after hearing the parties.
We find recently the Hon‟ble Supreme Court in the case of Inder Singh Vs. The State of Madhya Pradesh reported in 2025 LiveLaw (SC) 339 has held as under: “14. There can be no quarrel on the settled principle of law that delay cannot be condoned without sufficient cause, but a major aspect which has to be kept in mind is that, if in a particular case, the merits have to be examined, it should not be scuttled merely on the basis of limitation.”
In light of the above factual matrix of the case and the decision(s) of the Hon‟ble Supreme Court (supra), we deem it proper, in the interest of justice, to set aside the impugned order of the CIT(A)/NFAC and restore the matter back to his file with a direction to condone the delay and decide the appeal on merit(s) as per fact and law after giving due opportunity of being heard to the assessee. Needless to say, the assessee shall appear and make submissions on the appointed date without seeking adjournment under any pretext unless required for a sufficient cause, failing which the Ld. CIT(A)/NFAC shall be at liberty to pass appropriate order as per law. We hold and direct accordingly. The grounds raised by the assessee are accordingly allowed for statistical purposes.
In the result, the appeal filed by the assessee is allowed for statistical purposes.