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Facts
The assessee, a co-operative society, had discrepancies in its TDS returns for AY 2019-20. The TDS Officer passed an order under Section 201 demanding Rs. 7,82,840. The assessee filed an appeal before the CIT(A) with a delay of 63 days, which the CIT(A) refused to condone due to insufficient cause.
Held
The Tribunal upheld the CIT(A)'s decision, finding that the assessee's explanation for the 63-day delay (lack of awareness or consultant's busyness) lacked bona fides and indicated negligence. Citing judicial precedents, the Tribunal stressed that litigants cannot simply blame their counsel for delays and have a responsibility to track their cases.
Key Issues
Whether the CIT(A) was justified in dismissing the appeal in limine by refusing to condone a 63-day delay, and whether the assessee provided sufficient reasonable cause for the delay.
Sections Cited
201
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Income Tax Appellate Tribunal, COCHIN BENCH
Before: SHRI GEORGE GEORGE K., VP & SHRI INTURI RAMA RAO, AM
Assessment Year: 2020-21 Elamkulam Service Co-op. Bank Ltd. .......... Appellant Kunnakkavu P.O., Malappuram 679340 [PAN: AAAAE3476F] vs. The Income Tax Officer (TDS), Tirur .......... Respondent Appellant by: Ms. Swathy S., Advocate Respondent by: Smt. Leena Lal, Sr. D.R. Date of Hearing: 13.05.2025 Date of Pronouncement: 16.05.2025 O R D E R Per: Inturi Rama Rao, AM This appeal filed by the assessee is directed against the order of the Commissioner of Income Tax (Appeals)-1, Pune [CIT(A)], dated 16.09.2024 for Assessment Year (AY) 2020-21.
Brief facts of the case are that the assessee is a co-operative society registered under the Kerala State Co-operative Societies Act, 1969. The Income Tax Officer (TDS) ((hereinafter called "the TDS Officer") on verification of the TDS returns filed by the assessee for the financial year 2019-20 found certain discrepancies in compliance of TDS provisions on payment of salaries, professional Elamkulam Service Co-op. Bank Ltd. payments, contract payments, etc. Accordingly, notices were issued to the appellant. In response to the notices the appellant did not file any explanation before the TDS officer. In the circumstances, the TDS Officer passed an order u/s. 201 of the Income Tax Act, 1961 (the Act) demanding TDS if Rs, 7,82,840/- vide order dated 26.06.2023.
Being aggrieved, an appeal was filed before the CIT(A) with a delay of 63 days. The CIT(A), on due consideration of the explanation filed, refused to condone the delay by holding that the appellant failed to show sufficient, reasonable cause for delay in filing the appeal placing reliance on certain judicial precedents.
Being aggrieved, the appellant is in appeal before us in the present appeal.
5. The learned counsel for the assessee submitted that the CIT(A) ought not have dismissed the appeal in limine on the ground of delay without appreciating that there was sufficient reasonable cause for the delay in filing the appeal before the CIT(A).
On the other hand, the learned Sr. DR opposed the submissions and submits that the CIT(A) had dealt with the explanation given by the appellant for the delay in filing the appeal before passing a reasoned order. Therefore, no interference by this Tribunal is called for.
Elamkulam Service Co-op. Bank Ltd.
We have heard the rival contentions and perused the material available on record. The only issue that arises in the present appeal is whether the CIT(A) was justified in dismissing the appeal in limine on the ground of delay by refusing to condone the delay of 63 days having regard to the explanation filed before him. It is undisputed fact that there was a delay of 63 days in filing the appeal before the CIT(A). The appellant had offered the following explanation: -
“6.3 On the issue of delay in filing the appeal, the reason given by the appellant is that the appellant was not aware of the course of action to be adopted. Further, appellant did not get proper guidance in the matter from our tax consultant. Appellant, upon came to know the proper procedure to deal with the situation, made arrangement to file appeal against the Order before the Commissioner (Appeals). On the issue of delay in filing the appeal, the reason given by the appellant is lack of knowledge about income tax provisions. The notion of Legal literacy is based on the principle that every individual must be aware of their rights and obligations. The maxim 'ignorantia juris non-excusat, or ignorance of the law is no excuse, implies that the Court presumes that every party is aware of the law and hence cannot claim ignorance of the law as a defence to escape liability. This reason of delay in filing of appeal also shows that the appellant was casual in attitude. Appellant further argued that tax consultant was busy with filing of return and audit of the clients. This cannot be considered as a reasonable cause for substantial delay in filing of appeal. It also shows that the appellant was casual in attitude.” The CIT(A), considering the above explanation, proceeded to hold that the appellant had failed to show sufficient cause for the delay and held that the appellant is guilty of negligence. Accordingly, Elamkulam Service Co-op. Bank Ltd. refused to condone the delay and dismissed the appeal in limine on the ground of delay. We had carefully perused the explanation filed for the delay in filing the appeal before the CIT(A). The tenor of the explanation indicates that the appellant is not aware of the proper course of action to be adopted and did not get guidance from the Tax Consultant. He did not mention the details of the Tax Consultant nor is the explanation convincing as the appellant is not an ignorant rustic villager but a co-operative bank carrying on the business of banking. Thus, the explanation lacks bona fides and he cannot shift the burden to the Tax Consultant. This kind of tendency was highly depreciated by the courts. Recently the Hon'ble Delhi High Court in the case of Rahul Mavai v. Union of India in SP(C) 17440/2024 dated 18.12.2024 held as under: - 4. We also disapprove the unwholesome practice of seeking to explain away inordinate delay and laches on approaching the Court on the mere ground that the Counsel who had been dealing with, or entrusted, the matter, was tardy, negligent, or indolent. At times, this assertion is sought to be supported by an assertion that the litigant has approached the Bar Council concerned against the counsel.
We emphatically disapprove of this practice of shifting, to the shoulders of the Counsel, the negligence in approaching the Court. It is easy, in such circumstances, to file a complaint before the Bar Council and seek to explain away the delay. We deprecate this. A litigant does not abandon all responsibility to keep track of a matter, once it is entrusted to Counsel.” The Hon'ble Supreme Court in the case of Salil Dutta v. T.M. & M.C. Pvt. Ltd. [1993] 2 SCC 184 (SC) held as follows: - Elamkulam Service Co-op. Bank Ltd. “8. The advocate is the agent of the party. His acts and statements, made within the limits of authority given to him, are the acts and statements of the principal i.e. the party who engaged him. It is true that in certain situations, the court may, in the interest of justice, set aside a dismissal order or an ex parte decree notwithstanding the negligence and/or misdemeanour of the advocate where it finds that the client was an innocent litigant but there is no such absolute rule that a party can disown its advocate at any time and seek relief. No such absolute immunity can be recognised. Such an absolute rule would make the working of the system extremely difficult. The observations made in Rafiq [(1981) 2 SCC 788: AIR 1981 SC 1400] must be understood in the facts and circumstances of that case and cannot be understood as an absolute proposition. As we have mentioned hereinabove, this was an on-going suit posted for final hearing after a lapse of seven years of its institution. It was not a second appeal filed by a villager residing away from the city, where the court is located. The defendant is also not a rustic ignorant villager but a private limited company with its head-office at Calcutta itself and managed by educated businessmen who know where their interest lies. It is evident that when their applications were not disposed of before taking up the suit for final hearing they felt piqued and refused to appear before the court. Maybe, it was part of their delaying tactics as alleged by the plaintiff. May be not. But one thing is clear they chose to non-cooperate with the court. Having adopted such a stand towards the court, the defendant has no right to ask its indulgence. Putting the entire blame upon the advocate and trying to make it out as if they were totally unaware of the nature or significance of the proceedings is a theory which cannot be accepted and ought not to have been accepted".
Thus, the explanation lacks bona fides. It is nothing but the appellant is guilty of negligence and cannot seek indulgence of the
In the result, appeal filed by the assessee stands dismissed.
Order pronounced in the open court on 16th May, 2025.