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Facts
The assessee's appeal was dismissed by the CIT(A) due to an inordinate delay of 687 days in filing the appeal. The assessee cited the COVID-19 pandemic and accountant's issues as reasons for the delay, but these were not substantiated. The assessee failed to appear before the tribunal, and no cogent reason for the delay was provided.
Held
The Tribunal found no infirmity in the CIT(A)'s order refusing to condone the delay, as the assessee failed to provide a justifiable reason. Relying on various judicial precedents, the Tribunal held that delay cannot be condoned without sufficient cause and that the assessee was not diligent and was guilty of negligence.
Key Issues
Whether the delay in filing the appeal before the CIT(A) of 687 days could be condoned despite lack of sufficient cause and substantiated reasons.
Sections Cited
143(2), 142(1), 144, 272A(1)(d), 270A, 5
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Income Tax Appellate Tribunal, “D” BENCH, AHMEDABAD
Before: SMT. ANNAPURNA GUPTA & SHRI SIDDHARTHA NAUTIYAL
(Assessment Year: 2018-19) Soleone Tradelinks Pvt. Ltd., Vs. Deputy Commissioner of 114, Anandmilan Complex, Opp. Income Tax, Jain Derasar, Navrangpura, Circle-4(1)(1), Ahmedabad-380009 Ahmedabad [PAN No.AAPCS5586D] (Appellant) .. (Respondent) Appellant by : None Respondent by: Smt. Malarkodi R., Sr. DR Date of Hearing 07.07.2025 28.07.2025 Date of Pronouncement O R D E R
PER SIDDHARTHA NAUTIYAL - JUDICIAL MEMBER:
This appeal has been filed by the Assessee against the order passed by the Ld. Commissioner of Income Tax (Appeals), (in short “Ld. CIT(A)”), National Faceless Appeal Centre (in short “NFAC”), Delhi vide order dated 20.01.2025 passed for A.Y. 2018-19.
The assessee has raised the following grounds of appeal:
“1. The Ld. CIT(A) has erred in dismissing the appeal on account of delay in filing appeal of 687 days without appreciating that the delay was caused due to genuine reasons beyond the control of the appellant, including the impact of the COVID-19 pandemic and availability of Accountant. The rejection of condonation, of delay is contrary to the principles of natural justice and deserves to be set aside.
2. The Ld. CIT(A) has erred in not adjudicating the appellant's grounds on merits and mechanically dismissing the appeal on technical grounds. It is prayed that the matter be restored for fresh adjudication on merits.
3. The Ld. CIT(A) failed to appreciate that the additions made by the Ld. A.O. were arbitrary and without any basis: a) The Ld. A.O. made an adhoc addition of Rs. 1,28,14,970/- being 10% of sales as net profit, despite the fact that the entire sales were already disclosed in the books of accounts and tax audit report. The said addition results in double taxation and is therefore bad in law.
Soleone Tradelinks Pvt. Ltd. vs. DCIT Asst.Year –2018-19 - 2– b) The Ld. A.O. made an addition of Rs. 1,96,60,842/- on account of interest income, even though the said income was already disclosed in the return under the head "Other Income". This addition also amounts to double taxation and is incorrect.
The order passed by the Ld. CIT(A) is bad in law and contrary to the provisions of the Act and facts of the case. The same is liable to be quashed.
5. The appellant craves leave to add,.alter, and/or amend all or any of the grounds before the final hearing of the appeal.”
The brief facts of the case are that the case of Soleone Tradelinks Private Limited (the assessee) was selected for complete scrutiny under the e-Assessment Scheme, 2019, based on discrepancies such as mismatch in tax credit, consistent losses despite large fund inflows, and low income declared by the assessee compared to high loans and investments. The assessee had filed a return declaring “nil” income. However, despite multiple notices under sections 143(2) and 142(1) of the Income Tax Act (Act), the assessee failed to furnish any response or supporting documentation. Accordingly, the Assessing Officer proceeded to complete the ex-parte assessment under section 144 of the Act. Based on available information, 10% of the sales of ₹12,81,49,681/-, (amounting to ₹1,28,14,970/-), was estimated and added as business income. Further, interest income of ₹1,96,60,842/- was added in the hands of the assessee in absence of any explanation. As a result, the total assessed income was computed at ₹3,24,75,812/-. Penalty proceedings under sections 272A(1)(d) and 270A of the Act, were also initiated.
4. In appeal, CIT(Appeals) dismissed the appeal filed by the assessee, on the ground of the inordinate delay of 687 days in filing the appeal. Although an Affidavit for condonation of delay was submitted before CIT(Appeals) stating that delay was on account of mistake of the accountant and challenges during the COVID-19 pandemic, CIT(Appeals) was not convinced with the same and further CIT(A) noted nor were these reasons were substantiated by any supporting documentation. The CIT(Appeals) noted that the assessment order was issued electronically and that the limitation period, after Soleone Tradelinks Pvt. Ltd. vs. DCIT Asst.Year –2018-19 - 3– considering pandemic-related exclusions, expired on 30.03.2022, while the appeal was filed on 28.02.2023. It was further observed that the Affidavit and condonation petition were submitted only after a notice from CIT(Appeals) was issued to the assessee and not voluntarily at the time of filing Form 35. In light of these facts, CIT(Appeals) held that the reasons cited for the delay were an afterthought and not credible, and therefore rejected the condonation application filed by the assessee and dismissed the appeal as being time- barred.
Before us, none appeared on behalf of the assessee when the matter was called out for hearing. Even on the previous date of hearing, none had appeared on behalf of the assessee to present the case on merits. On going through the facts of the instant case, we observe that for the year under consideration, there has been an inordinate delay in filing of appeal by the assessee before Ld. CIT(A) which was refused to be condoned by CIT(Appeals) in absence of any convincing reasons cited by the assessee. Even before us, the assessee has not been able to give any cogent reason for such inordinate delay in filing of appeal before Ld. CIT(A). It would be useful to look into the judicial precedents on the subject dealing with condonation of delay.
In the case of Mani Mandir Sewa Nyas Samiti Ramghat Ayodhya vs. CIT [2020] 119 taxmann.com 383 (SC), the Hon'ble Supreme Court held that where assessee sought for condonation of delay of four and half years in filing appeal against order of Tribunal on ground of ailment of manager but High Court declined to condone delay on ground that there was nothing on record to show that manager was suffering from ailments which did not permit him to take initiative for filing of appeal, SLP against said decision was to be dismissed. In the case of Amit Cotton Industries [2022] 136 taxmann.com 328 (SC), the Hon'ble Supreme Court held that delay of Soleone Tradelinks Pvt. Ltd. vs. DCIT Asst.Year –2018-19 - 4– 520 days in filing special leave petition cannot be condoned without satisfactory explanation and hence, dismissed. In the case of Pundlik Jalam Patil v. Executive Engineer, Jalgaon Medium Project [2008] 17 SCC 448 (Para 6), the Hon'ble Supreme Court has made the following observations in this regard:
13. Whether the respondent had satisfied the court that it had sufficient cause for not preferring the appeals within the prescribed time? Section 5 of the Limitation Act provides for extension of prescribed period of limitation in certain cases and confers jurisdiction upon the court to admit any application or any appeal after the prescribed period if it is satisfied that the appellant or applicant had sufficient cause for not preferring such appeal or application within the prescribed period. The applicant having set the machinery in motion cannot abandon it to resume it after number of years because the authority with whom it had entered into correspondence did not heed to its request to file appeals. The question is : Can the respondent/applicant in this case take advantage of its negligence, after lapse of number of years, of the decision of Government? It knew the exact grounds on which appeals could have been preferred. The law will presume that it knew of its right to file appeal against the award. Everybody is presumed to know law. It was its duty to prefer appeals before the court for consideration which it did not. There is no explanation forthcoming in this regard. The evidence on record suggest neglect of its own right for long time in preferring appeals. The court cannot enquire into belated and stale claims on the ground of equity. Delay defeats equity. The court helps those who are vigilant and `do not slumber over their rights.' The question for consideration is whether the averments disclosed any sufficient cause to condone the inordinate delay of 1724 days in filing the appeals.
In the case of Tractors & Farm Equipments Ltd. [2007] 104 ITD 149 (Chennai) (TM), the ITAT held that where assessee justified delay of 310 days in filing appeal before Tribunal by stating that Commissioner (Appeals)’s order was misplaced and forgotten and when same was found while sorting out unwanted papers, steps were taken for preparation of appeal, the delay in filing of appeal before Tribunal could not be condoned as same was due to negligence and inaction on part of assessee and assessee could have very well avoided delay by exercise of due care and attention. While rejecting the assessee’s application for condonation of delay, the Tribunal made the following observations:
Soleone Tradelinks Pvt. Ltd. vs. DCIT Asst.Year –2018-19 - 5– “The delay cannot be condoned simply because the appellant’s case is hard and calls for sympathy or merely out of benevolence to the party seeking relief. In granting the indulgence and condoning the delay, it must be proved beyond the shadow of doubt that the appellant was diligent and was not guilty of negligence, whatsoever. The sufficient cause within the contemplation of the limitation provision must be a cause which is beyond the control of the party invoking the aid of the provisions. The cause for the delay in filing the appeal, which by due care and attention, could have been avoided, cannot be a sufficient cause within the meaning of the limitation provision. Where no negligence, or inaction, or want of bona fides can be imputed to the appellant, a liberal construction of the provisions has to be made in order to advance substantial justice. Seekers of justice must come with clean hands. In the instant case, the assessee justified the delay only with reference to the affidavit of its director. In the said affidavit it was stated that the Commissioner (Appeal)’s order was misplaced and forgotten. It was found while sorting out the unwanted papers and thereafter steps were taken for the preparation of the appeal and consequently the delay was caused. That clearly showed that the delay was due to the negligence and inaction on the part of the assessee. The assessee could have very well avoided the delay by the exercise of due care and attention. There existed no sufficient and good reason for the delay of 310 days. Therefore, reasonings adduced by the Accountant Member were to be concurred with. [Para 8]”
The ITAT Hyderabad in the case of T. Kishan [2012] 23 taxmann.com 383 (Hyderabad) held that in condoning delay in filing appeal, it must be proved beyond shadow of doubt that assessee was diligent and was not guilty of negligence whatsoever.
In the case of C. I. Builders (P.) Ltd. vs. Principal Commissioner of Income-tax [2025] 174 taxmann.com 534 (Madhya Pradesh) [02-05- 2025], the High Court held that where assessee contended that there was delay of 6-7 years in filing appeal before Tribunal due to negligence of counsel engaged to file appeal, since assessee was aware of counsel's negligence when ex-parte orders was passed by Commissioner (Appeals) but assessee failed to exercise any care to enquire about status of second appeal and tried to shift responsibility towards his lawyer, appeal was to be dismissed as time barred.
Soleone Tradelinks Pvt. Ltd. vs. DCIT Asst.Year –2018-19 - 6– 10. In the case of Royal Stitches (P.) Ltd. vs. Deputy Commissioner of Income-tax [2023] 156 taxmann.com 361 (Madras)[21-09-2023], the High Court held that where assessee had not given 'sufficient cause' for condoning huge delay of 1072 days in filing appeal, delay could not be condoned.
In view of the judicial precedents on the subject and facts of the assessee’s case, we are of the considered view that even before us the assessee has not been able to give any reason to justify the inordinate delay in filing of appeals before Ld. CIT(A). Accordingly, we find no infirmity in the order of Ld. CIT(A) refusing to condone the inordinate delay in filing of appeal before him, in absence of any justifiable reason being cited by the assessee. Accordingly, we are not inclined to interfere with the observations made by the Ld. CIT(A) while dismissing the appeal of the assessee.
In the result, the appeal filed by the assessee is hereby dismissed. This Order pronounced in Open Court on 28/07/2025
Sd/- Sd/- (ANNAPURNA GUPTA) (SIDDHARTHA NAUTIYAL) ACCOUNTANT MEMBER JUDICIAL MEMBER Ahmedabad; Dated 28/07/2025 TANMAY, Sr. PS TRUE COPY आदेश की �ितिलिप अ�ेिषत/Copy of the Order forwarded to : 1. अपीलाथ� / The Appellant 2. ��थ� / The Respondent. 3. संबंिधत आयकर आयु� / Concerned CIT 4. आयकर आयु�(अपील) / The CIT(A)- 5. िवभागीय �ितिनिध, आयकर अपीलीय अिधकरण, अहमदाबाद / DR, ITAT, Ahmedabad गाड� फाईल / Guard file. 6. आदेशानुसार/ BY ORDER,