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Facts
The assessee's appeal before the CIT(A) was dismissed as time-barred. The CIT(A) held that the appeal was filed three years late. The assessee's original return was processed by CPC on 01.05.2020, and the appeal was filed on 15.05.2023.
Held
The Tribunal held that the CIT(A) erred in dismissing the appeal as time-barred. It noted that the period of limitation was affected by the Covid-19 pandemic, and the delay should be condoned based on the principle of sufficient cause as interpreted liberally by higher courts.
Key Issues
Whether the delay in filing the appeal before the CIT(A) was caused by sufficient reason and should be condoned to allow for adjudication on merits.
Sections Cited
143(1), 253, 249, 5
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DIVISION BENCH, ‘B’ CHANDIGARH
Before: SHRI RAJPAL YADAV & SHRI KRINWANT SAHAY
the order of the ld.Commissioner of Income Tax (Appeals) [in short ‘the CIT (A)’] dated 13.08.2024 passed for assessment year 2019-20.
2. The ld. CIT(A) has dismissed appeal of the assessee on the ground that it is time barred by three years. A perusal A.Y.2019-20 2 of the record would indicate that impugned order was passed by the AO under Section 143(1) on 01.05.2020. In other words, the return of the assessee was processed by the CPC vide its order dated 01.05.2020. Against this order, the appeal was filed on 15.05.2023. We are of the view that CIT(A) has construed period of limitation for three years which is erroneous because upto May,2022, the delay was condoned by the Hon'ble Supreme Court while exercising suo-moto powers. This period pertains to Covid period.
Thus, the only delay could be from May, 2022 upto May,2023.
3. In order to explain this delay, assessee has filed application as well as affidavit of a Chartered Accountant namely Shri Anil Kakkar, S/o late Shri Inder Nath.
With the assistance of ld. Representative, we have gone through the record carefully. Sub-section 5 of Section 253 contemplates that the Tribunal may admit an appeal or permit filing of memorandum of cross- objections after expiry of relevant period, if it is satisfied that there was a sufficient cause for not presenting it within that period. This A.Y.2019-20 3 expression sufficient cause employed in the section has also been used identically in sub-section 3 of section 249 of Income Tax Act, which provides powers to the ld. Commissioner to condone the delay in filing the appeal before the Commissioner. Similarly, it has been used in section 5 of Indian Limitation Act, 1963. Whenever interpretation and construction of this expression has fallen for consideration before Hon’ble High Court as well as before the Hon’ble Supreme Court, then, Hon’ble Court were unanimous in their conclusion that this expression is to be used liberally. We may make reference to the following observations of the Hon’ble Supreme court from the decision in the case of Collector Land Acquisition Vs. Mst. Katiji& Others, 1987 AIR 1353:
Ordinarily a litigant does not stand to benefit by lodging an appeal late.
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.
ITA No.1046/CHD/2024 A.Y.2019-20 4
"Every day’s delay must be explained" does not mean that a pedantic approach should be made. Why not every hour's delay, every second's delay? The doctrine must be applied in a rational common sense pragmatic manner.
4. 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.
There is no presumption that delay is occasioned deliberately, or on account of culpable negligence, or on account of mala fides. A litigant does not stand to benefit by resorting to delay. In fact, he runs a serious risk. 6. It must be grasped that judiciary is respected not on account of its power to legalize injustice on technical grounds but because it is capable of removing injustice and is expected to do so.
5. Similarly, we would like to make reference to authoritative pronouncement of Hon’ble Supreme Court in the case of N. Balakrishnan Vs. M. Krishnamurthy (supra). It reads as under:
“Rule of limitation are not meant to destroy the right of parties. They are meant to see that parties do not resort to dilatory tactics, but seek their remedy promptly. The object of providing a legal remedy is to repair the damage caused by reason of legal injury.
ITA No.1046/CHD/2024 A.Y.2019-20 5
Law of limitation fixes a life-span for such legal remedy for the redress of the legal injury so suffered. Time is precious and the wasted time would never revisit. During efflux of time newer causes would sprout up necessitating newer persons to seek legal remedy by approaching the courts. So a life span must be fixed for each remedy. Unending period for launching the remedy may lead to unending uncertainty and consequential anarchy. Law of limitation is thus founded on public policy. It is enshrined in the maxim Interest reipublicae up sit finislitium (it is for the general welfare that a period be putt to litigation). Rules of limitation are not meant to destroy the right of the parties. They are meant to see that parties do not resort to dilatory tactics but seek their remedy promptly. The idea is that every legal remedy must be kept alive for a legislatively fixed period of time. A court knows that refusal to condone delay would result foreclosing a suitor from putting forth his cause. There is no presumption that delay in approaching the court is always deliberate. This Court has held that the words "sufficient cause" under Section 5 of the Limitation Act should receive a liberal construction so as to advance substantial justice vide Shakuntala Devi lain Vs. Kuntal Kumari [AIR 1969 SC 575] and State of West Bengal Vs. The Administrator, Howrah Municipality [AIR 1972 SC 749]. It must be remembered that in every case of delay there can be some lapse on the part of the litigant concerned. That alone is not enough to turn down his plea and to shut the door against him. If the explanation does not smack of mala fides or it is not put forth as part of a dilatory strategy the court must show utmost consideration to the suitor. But when there is reasonable ground to think that the delay was occasioned by the party deliberately to gain time then the court should lean against acceptance of the explanation. While condoning delay the Could should not forget the opposite party altogether. It must be borne in mind that he is a looser and he too would have incurred quiet a large litigation expenses. It would be a salutary guideline that when courts condone the delay due to laches on the part of the applicant the court shall compensate the opposite party for his loss”.
ITA No.1046/CHD/2024 A.Y.2019-20 6
A perusal of the application for condonation of delay as well as affidavit of the assessee would indicate that assessee has given the alleged order of the CPC, Bangalore to his Tax Consultant alongwith other relevant papers but somehow he failed to file the appeal. On cross verification of the record of the Department, it came to the notice of his new Tax Consultant Shri Anil Kakkar that no such appeal was filed. He was not aware to check the details on IT Portal. A perusal of the application alongwith affidavits of the assessee would indicate that the delay in filing appeal before CIT(A) was not adopted by the assessee as a strategy to litigate with the Department. By making his appeal time barred, he will not gain anything. Therefore, we deem it appropriate to set aside the order of the CIT(A). We condone the delay in filing the appeal before CIT(A) and restore these issues to the file of CIT(A) for fresh adjudication on merit.
In result, the appeal is allowed.
Order pronounced on 10.03.2025.