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Facts
The assessee, a private limited company, filed its return of income. The CPC made a disallowance for delay in depositing employees' contribution to PF and ESI. The assessee's appeal before the CIT(A)/NFAC was dismissed due to a significant delay of 622 days.
Held
The Tribunal held that the delay in filing the appeal should be condoned, considering the Hon'ble Supreme Court's decisions on extension of limitation due to the pandemic and the importance of substantial justice over technicalities. The appeal was restored to the CIT(A)/NFAC for a decision on merits.
Key Issues
Whether the delay in filing the appeal before the CIT(A)/NFAC should be condoned, considering the pandemic period and the merits of the case.
Sections Cited
143(3), 143(1)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, PUNE BENCH “C”, PUNE
Before: SHRI R. K. PANDA & MS. ASTHA CHANDRA
This appeal filed by the assessee is directed against the order dated 23.05.2022 of the Ld. CIT(A) / NFAC, Delhi relating to assessment year 2018-19.
This appeal was earlier dismissed by the Tribunal ex-parte following the decision of the Hon’ble Supreme Court in the case of Checkmate Services P. Ltd. & Ors. Vs. CIT & Ors (2022) 448 ITR 518 (SC). Subsequently the assessee filed Miscellaneous Application stating that there was no delay in payment of the employees’ contribution to PF and ESI. The Tribunal vide Miscellaneous Application No.120/PUN/2023, order dated 04.11.2024 recalled its earlier order. Hence, this is a recalled matter.
Facts of the case, in brief, are that the assessee is a private limited company. It filed its return of income on 30.11.2018 declaring total income of Rs.50,13,05,920/-. The CPC passed the Intimation determining the total income of the assessee at Rs.50,25,77,650/- by making the disallowance of Rs.12,69,969/- on account of delay in deposit of employees’ contribution to PF and ESI. Since the assessee had filed the appeal before the Ld. CIT(A) / NFAC with a delay of 622 days, the Ld. CIT(A) / NFAC dismissed the appeal on account of delay.
The Ld. Counsel for the assessee at the time of hearing submitted that there was no delay in making deposit of employees’ contribution to PF and ESI since the amounts of Rs.11,80,699/- and Rs.220/- towards employees’ contribution to PF and ESI respectively were deposited on 17.07.2017 instead of 15.07.2017 owing to technical glitches faced by the assessee in the portal / system through which the payments were to be made. Further 15.07.2017 was a Saturday and 16.07.2017 was Sunday for which the assessee could not seek any assistance from the administrative department of PF office. Therefore, the assessee has deposited the amount on Monday i.e. on 17.07.2017 causing a delay of 2 days. Relying on various decisions, he submitted that the Ld. CIT(A) / NFAC should have considered the merit of the case instead of dismissing the appeal on account of delay in filing of the appeal.
So far as the delay before the Ld. CIT(A) in filing of the appeal is concerned, the Ld. Counsel for the assessee submitted that if the delay in filing of the appeal during the Covid period is excluded, there is very little delay in filing of the appeal before the Ld. CIT(A). Referring to the decision of the Hon’ble Supreme Court in the case of Collector, Land Acquisition vs. Mst. Katiji & Ors. reported in 167 ITR 471 (SC), he submitted that the Ld. CIT(A) should have condoned the delay in filing of the appeal and decided the appeal on merit. He also relied on the recent decision of the Hon'ble Supreme Court in the case of Inder Singh Vs. The State of Madhya Pradesh reported in 2025 LiveLaw (SC) 339.
The Ld. DR on the other hand heavily relied on the order of the Ld. CIT(A) / NFAC in dismissing the appeal on account of delay. He submitted that the assessee could not explain the reasons for the delay in filing of the appeal for which the Ld. CIT(A) / NFAC in a very detailed order has dismissed the appeal on account of delay.
We have heard the rival arguments made by both the sides and perused the Intimation of the CPC and the order of Ld. CIT(A) / NFAC. It is an admitted fact that there was a delay of 622 days in filing of the appeal before the Ld. CIT(A) / NFAC. However, it is also a fact that before the Ld. CIT(A) the assessee had made submissions according to which the assessee was under the bonafide belief that the case is selected for scrutiny assessment and therefore, the issue will be resolved by the Assessing Officer in the order passed u/s 143(3) of the I T Act, 1961. It was also explained that due to Covid-19 and continuous lockdown in Pune, Maharashtra, the issue remained to be further deliberated. A perusal of the order of the Ld. CIT(A) / NFAC shows that the Intimation u/s 143(1) dated 06.11.2019 was received by the assessee on 06.11.2019 and the appeal was filed on 19.08.2021 as against the due date pf 05.01.2020. We find the Hon'ble Supreme Court in the case of In Re: Cognizance for extension of limitation with Miscellaneous Application No.29 of 2022 in Miscellaneous Application No.665 of 2021 in Suo Motu Writ Petition (C) No.3 of 2020, order dated 10.01.2022 has issued the following guidelines:
“5. Taking into consideration the arguments advanced by learned counsel and the impact of the surge of the virus on public health and adversities faced by litigants in the prevailing conditions, we deem it appropriate to dispose of the M.A.No.21 of 2022 with the following directions: I. The order dated 23.03.2020 is restored and in continuation of the subsequent orders dated 08.03.2021, 27.04.2021and 23.09.2021, it is directed that the period from 15.03.2020 till 28.02.2022 shall stand excluded for the purposes of limitation as may be prescribed under any general or special laws in respect of all judicial or quasi- judicial proceedings. II. Consequently, the balance period of limitation remaining as on 03.10.2021, if any, shall become available with effect from 01.03.2022. III. In cases where the limitation would have expired during the period between 15.03.2020 till 28.02.2022, notwithstanding the actual balance period of limitation remaining, all persons shall have a limitation period of 90 days from 01.03.2022. In the event the actual balance period of limitation remaining, with effect from 01.03.2022 is greater than 90 days, that longer period shall apply. IV. It is further clarified that the period from 15.03.2020 till 28.02.2022 shall also stand excluded in computing the periods prescribed under Sections 23 (4) and 29A of the Arbitration and Conciliation Act, 1996, Section 12A of the Commercial Courts Act, 2015 and provisos (b) and (c) of Section 138 of the Negotiable Instruments Act, 1881 and any other laws, which prescribe period(s) of limitation for instituting proceedings, outer limits (within which the court or tribunal can condone delay) and termination of proceedings.”
If we consider the appeal filed by the assessee in the light of the above decision of the Hon'ble Supreme Court cited (supra), the appeal filed by the assessee is delayed by only 68 days i.e. the period from 05.01.2020 till 14.03.2020 since the period from 15.03.2020 till 19.08.2021 has to be excluded.
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.”
Respectfully following the above decisions of the Hon'ble Supreme Court and considering the facts of the case and in the interest of justice, we deem it proper to restore the issue to the file of the Ld. CIT(A) / NFAC with a direction to condone the delay in filing of the appeal by the assessee and decide the issue on merit by passing a speaking order after giving due opportunity of being heard to the assessee. 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.
Order pronounced in the open Court on 16th July, 2025.