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Facts
The assessee, claiming to be a sadhu, filed an appeal against an assessment order that added Rs. 1,09,47,800/- as unexplained cash deposit. The appeal was filed with a delay of 251 days, and the assessee attributed this to a lack of knowledge about income tax laws.
Held
The Tribunal held that the assessee's explanation of ignorance of law was not a sufficient cause for condoning the inordinate delay in filing the appeal. The appeal was dismissed in limine on the grounds of limitation.
Key Issues
Whether the explanation of ignorance of law constitutes a sufficient cause for condoning an inordinate delay in filing an appeal under the Income Tax Act.
Sections Cited
69A, 147, 144, 249, 148A, 271(1)(C), 234A, 234B, 234C
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, LUCKNOW BENCH “A”, LUCKNOW
PER ANADEE NATH MISSHRA, A.M.: (A). The present appeal has been filed by the assessee against the order passed by the Ld. Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre (NFAC), Delhi dated 29/07/2024 for the assessment year 2015-16. The grounds of appeal of the assessee are as under: -
The learned CIT(A) has erred both in law and on facts of the case in confirming the addition of Rs.1,09,47,800/- being unexplained cash deposit in bank u/s 69A of the Income Tax Act, 1961.
The learned CIT(A) has passed the order without properly appreciating the facts and ignoring the fact that the appellant is sadhu who does not have any knowledge about the income tax further erred in passing the impugned order without providing sufficient opportunity to explain the reason for delay in filing appeal nor the learned CIT(A).”
(B). In this case, the assessment order dated 27.03.2023 was passed u/s 147 read with section 144 of the Income Tax Act, Page 2 of 8 1961 (hereinafter “the Act”) wherein the assessee’s total income was assessed at Rs.1,12,64,409/-. In the aforesaid assessment order, addition of Rs.1,09,47,800/- was made on account of unexplained cash deposit in the bank u/s 69A of the Act. The assessee filed appeal in the office of the Ld. CIT(A). However, the appeal filed by the assessee in the office of the Ld. CIT(A) was beyond time limit prescribed u/s 249(2) of the Act. Vide aforesaid impugned appellate order dated 29.07.2024, the Ld. CIT(A) dismissed the assessee’s appeal in limine on grounds of limitation. The Ld. CIT(A) has noted that the appeal was filed on 02.01.2024 whereas the aforesaid assessment order was served on the assessee on 27.03.2023. The Ld. CIT(A) has also observed that the appeal filed by the assessee in the office of the Ld. CIT(A) on 02.01.2024 was with an inordinate delay of 251 days. The relevant portion of the impugned order of the Ld. CIT(A) is reproduced as under: - “2. Condonation of delay:- Appeal is late by 251 days. Appellant has cited reasons for condonation of delay in Column 15 of Form 35, which are reproduced as under: “Your appellant is an Individual and has become SADHU since the year 1980. He has set up his Ashram at Village Mandali in Mehsana and is trustee of Namami Satguruswami Trust. On the basis of the information available on the Insight portal disseminated, the case of the assesse was re-opened u/s 148 of the Income Tax Act, 1961 along with the order under Section 148A (d) of the Act dated 30-03-2022. Appellant is a SADHU and was unaware about Income tax Act and was under bonafied impression that he being SADHU, is not required to file return of income. Therefore, he did not file any return. The notices issued were having address of PILIBHIT, Uttar Pradesh. Ultimately the AO passed the assessment order on 27-032023 under section 147 r.w.s 144 and made addition of Rs. 1,09,47,800/u/s 69A and Rs. 3,16,609/-as interest earned. The appellant is a SADHU who does not have any knowledge about the income tax. Few notices were received by post, however did not understand the seriousness. Appellant received few notices for recovery of demand. He then showed the notices to a tax consultant who advised him to file this appeal. Therefore, there is a delay of about 242 days in filling the appeal. The assessment order is passed on 27.03.2023. The appeal should have been filed by 26.04.2023. Hence there is a delay of 252 days. As the delay is unintentional and due to non-awareness of the assessment order passed and due to ignorance of law, it is requested to condone the delay and oblige.”
Page 3 of 8 3. Facts of the Case: The brief facts of the case as stated by the appellant is reproduced as under: “Your appellant is Individual and SADHU/ Saint since 1980. He has set up his ashram at Village Mandali in Mehsana and is trustee of Namami Satguruswami Trust. He had received cash contribution/donation in the from his followers for the purpose of setting up ashram. He had deposited this cash into his bank account and used it for the purpose of construction of ashram. Meanwhile due to cash deposit in bank account, the proceedings under Income tax Act started. He was not aware about the Proceedings initiated by the Income tax office u/s 148A and 147. Due to noncompliance of the notices the assessment was done u/s 147 read with section 144 of the Income tax Act resulting into addition of Rs 1,09,47,800/ u/s 69A as unexplained deposit and Rs 3,16,609/-as interest earned. The AO has also initiated penalty proceedings u/s 271(1) (c) Being aggrieved, the appellant prefers this appeal on the grounds as mentioned in grounds of appeal
.”
4. Grounds of Appeal: Before the First Appellate Authority, appellant raised following grounds of appeal.
1. The learned income tax officer has erred in law and on facts in making addition -of Rs.1,09,47,800/- being unexplained cash deposit in bank u/s 69A of the income tax Act 1967.
2. The learned income tax officer has erred in law and on the facts in initiating penalty u/s 271(1) (C) of the Act.
3. The learned income tax officer has erred in law and on facts in charging interest u/s-234A, 234B and 234C of the Act.
4. Appellant craves leave to add, amend, and modify any or all grounds of appeal.
5. Submission of appellant: During the appellate proceedings, appellant has made submissions, which are reproduced as under: “My Authorized Representative who is taking care of my proceedings is out of country so It is not possible for me to submit response, I therefore request your selves to consider the facts and allow me time of 15 days to submit my written submission along with paper books and other documents. However, till date no replies, documents or evidence qua substantial cause u/s 249 (3) of the ITA, 1961.
6. Decision: In this case, before deciding appeal on merits, Condonation of delay has to be decided. 6.1. On going through Form-38, it is noticed that the date of order is 27/03/2023 and it was served on the same date. Appeal is filed on 02/01/2024. There is a considerable delay of 251 days. No affidavit has been submitted by the appellant. It needs to be noted that sufficient Cause delay needs to be derived and presented from chronology of events and it cannot be explained post facto. I find that no documents have been submitted which can explain such a long delay except assertion that he does not have any knowledge about the income tax. Till date no replies, documents or evidence qua substantial cause u/s 249 (3) of the ITA, 1961.
Page 4 of 8 In view of the above, I propose not to condone delay in filing of appeal by 251 days in View of following further discussion. 8.1.1 The appeal is dismissed in limine as it is not just and proper at this stage to raise the issue after a gap of 251 days. It is for general welfare that a period be put on litigation. Further, it is a general principle of law that law is made to protect only diligent and vigilant people. Equity aids the vigilant and not the indolent. Law will not protect people who are careless about their rights. (Vigilantibus non domientibus jur A subventiunt). Moreover, there should be certainty in law and matters cannot be kept in-suspense indefinably. It is, therefore, provided that Courts of Law cannot be approached beyond fixed period. in civil matters, the limit is provided in Limitation Act, 1963. The ‘Law of Limitation’ prescribes the time-limit for different suits within, which an aggrieved person can approach the court for redress or justice. (2) The appeal shall be presented within thirty days of the following date, that is to say, 9[(a) where the appeal is under section 248, the date of payment of the tax, or] (b) where the appeal relates to any assessment or penalty, the date of service of the notice of demand relating to the assessment or penalty: 10[Provided that, where an application has been made under section 146 for reopening an assessment, the period from the date on which the application is made to the date on which the order passed on the application is served on the assessee shall be excluded, or] (c) in any other case, the date on which intimation of the order sought to be appealed against is served. 11[(2A) Notwithstanding anything contained in sub-section (2), where an order has been made under section 201 on or after the 1st day of October, 1998 but before the 1st day of June, 2000 and the assessee in default has not presented any appeal within the time specified in that sub-section, he may present such appeal before the 1st day of July, 2000.] (3) The 12[****] 13[Commissioner (Appeals)] may admit an appeal after the expiration of the said period if he is satisfied that the appellant had sufficient cause for not presenting it within that period. 14[(4) No appeal15 under this Chapter shall be admitted unless at the time of filing of the appeal, (a) whereas return has been filed by the assessee, the assessee has paid the tax due on the income returned by him; or (b) where no return has been filed by the assessee, the assessee has paid an amount equal to the amount of advance tax which was payable by him: Provided that, 16[in a case falling under clause (b) and] on an application made by the appellant in this behalf, the 17[* * *] 18[{Commissioner (Appeals)] may, for any good and sufficient reason to be recorded in writing, exempt him from the operation of the provisions of 19[{that clause].]” 6.1.3 It is incumbent on appellant that such inordinate delay in filing appeal should be ordinarily accompanied by an elaborate petition showing and explaining cause of appellant not being able to file appeal within Page 5 of 8 period of limitation and praying for condonation of delay. The reasons for delay in filing of appeal cannot be made but they must have existed. However, lack of legal awareness/ no knowledge about income tax would not constitute sufficient cause. 6.1.4 The procedure in appeal laid down by the Faceless Appeal Scheme, 2021 notified via S.O. 5429(E) dated 28/12/2021 is reproduced as below for ready reference. “5 Procedure in appeal —(1) The appeal referred to in paragraph 3 shall be disposed of under this Scheme as per the following procedure, namely: (i) the National Faceless Appeal Centre shall assign the appeal for disposal to a Commissioner (Appeals) of a specific appeal unit through an automated allocation system; (ii) on assignment of an appeal, the Commissioner (Appeals), (a) I may condone the delay in filing appeal if the appeal is filed beyond the time permitted under section 249 of the Act and record the reasons for such condonation or otherwise in the appeal order passed under clause (x); As mentioned above reasons proffered by appellant are not sufficient cause with proper explanation. 6.1.5 I find that delay of 251 days is an inordinate delay. A pragmatic approach can be espoused when delay is short. While interpreting ‘sufficient cause’ vs advancing cause of ‘substantial justice’, period of delay can not to be ignored out of hand. Such a long delay will also cause grave prejudice to revenue. State as a party to this litigation need to be given equal treatment. Decision of Hon'ble Punjab & Haryana High Court in the case of CIT v. Ram Mohan Kabra is relevant, which reads as under: “The provisions relating to prescription of limitation in every statute must not be construed so liberally that it would have the effect of taking away the benefit accruing to the other party in a mechanical manner. Where the Legislature spells out a period Of limitation and provides for power to condone the delay as well, then such delay can be condoned only for sufficient and good reasons supported by cogent and Proper evidence.” Now, it is a settled principle of law that provisions relating to specified period of limitation must be applied with their rigour and effective consequences. In case of JCIT Vs. Tractors & Farm Equipments Ltd., [2007] 104 ITD 149 (Chennai)(TM) delay was not condoned by the Hon'ble ITAT as it was due to negligence and inaction on part of appellant which could have very well be avoided by exercise of due care and attention. Hon’ble ITAT in the case of ITO V. Hemraj Onkarji Mali, [2009] 311 ITR (AT) 416 (Indore) decided that there was no reasonable cause for delay on part of revenue. A conscious decision had been taken by senior officer of the rank of Commissioner not to file appeal. No proper steps were shown to establish that cause was beyond reasonable doubt for delay. In the case of Madhu Dadha Vs. ACIT, [2009] 317 ITR 458 (Mad.) Court while dismissing appeal noticed that assessee had not explained cause of delay in filing appeal. It held as under Page 6 of 8 14. At this juncture, we have to be guided by the judgment reported in [1990] 1 LLN 457 in the case of T.N.M. BANK LTD. v. APP. AUTY., SHOPS ACT. In that particular case, the Division Bench of this court has held that, “We are of the view that the question of limitation is not merely a technical consideration. Rules of limitation are based on principles of sound policy and principles of equity. Is a litigant liable to have a Damocles’ sword hanging over his head indefinitely for a period to be determined at the whims and fancies of the opponent?” In that decision, this Court has held that the delay of 285 days in preferring the appeal could not be condoned. It was held that the condonation of delay was not justified on facts and evidence of the case. As rightly pointed out that the Rules of limitation are based on principles of sound public policy and principles of equity. Though there is no presumption that the delay is occasioned deliberately or on account of culpable negligence, if the admitted facts in that case are taken note of, there is no doubt that the delay on the part of the appellant is deliberate and the appellant is clearly guilty of culpable negligence. Such negligent attitude of the appellant was not taken care to preserve the right of appeal and having been slept over for more than 558 days and not explained the delay without any reasonable doubt, the appellant cannot avail sympathy or discretion of this Court.
In any way of the matter, the discretion having been rightly refused by the Tribunal, there is no sufficient reason or cause to interfere with the order passed by the Tribunal. Hence, the appeal is dismissed. No costs. Consequently, connected TAMP is also dismissed.” 6.2 In view of the aforesaid legal discussion and observations, I believe in the Present case, cause of substantial justice would not be served by condoning inordinate delay of 251 days for which no cogent reason has been given. Therefore, appeal stand dismissed in limine in view of provision of section 249(3) of Income Tax Act, 1961 read with Faceless Appeal Scheme 2021 Paragraph 5(1)(ii)(a).” (C). Materials on record have been perused. The learned Departmental Representative has been heard, who relied on the impugned order of Ld. CIT(A). The assessee not only failed during appellate proceedings in the office of Ld. CIT(A), to adduce “sufficient cause” for not presenting the appeal in the office of the Ld. CIT(A) within the due date stipulated u/s 249(2)(b) of the Act; but also, even during appellate proceedings in Income Tax Appellate Tribunal (ITAT, for short) the assessee failed to present any material to explain the reasons for delay in filing of appeal in the office of Ld. CIT(A). In the absence of any explanation from the assessee’s side, and in the absence of any materials, on the basis of which the delay in filing of appeal in the office of the Ld. Page 7 of 8 CIT(A) can be condoned; this appeal filed by the assessee without any merits. In the absence of any materials to persuade us to take a view different from view taken by Ld. CIT(A), and in view of the foregoing discussion, the impugned order of the Ld. CIT(A) is upheld.
(D). Since we have upheld the impugned appellate order of the Ld. CIT(A) wherein he did not admit the assessee’s appeal and dismissed the assessee’s appeal in limine on ground of the limitation; there is no occasion for us to decide the grounds taken by the assessee in the present appeal before us, on the merits of the addition made by the Assessing Officer. Therefore, we decline to express any view on the merits of the addition made in the aforesaid assessment order.
(E). In the result, the appeal of the assessee is dismissed for statistical purposes.
Order pronounced in the open Court on 07/08/2025.