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Facts
The assessee, a cooperative society, filed an appeal against an intimation under section 143(1) for A.Y. 2019-20, disallowing a deduction under section 80P(2) for interest received from members. The appeal was filed with a delay of 468 days after considering the Supreme Court's exclusion period, as the assessee was awaiting rectification of the intimation after filing multiple grievance petitions. The Ld. CIT(A) dismissed the appeal by not condoning the delay, citing vague submissions.
Held
The Tribunal, adopting a liberal approach to 'sufficient cause' based on Apex Court decisions, condoned the 468-day delay, finding it bona fide and not deliberate negligence. The case is remanded back to the Ld. CIT(A) for a decision on merits, with directions to provide the assessee a proper opportunity of hearing.
Key Issues
Whether the Ld. CIT(A) was justified in not condoning the delay of 468 days in filing the appeal, and if the reasons provided by the assessee constituted 'sufficient cause' for such delay.
Sections Cited
143(1), 80P(2), 80P(2)(a)(i), 80P(2)(d), 253(5), 273, 274, 51
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Income Tax Appellate Tribunal, VISAKHAPATNAM “SMC” BENCH, VISAKHAPATNAM
Before: SHRI DUVVURU RL REDDY, HON’BLE & SHRI S BALAKRISHNAN, HON’BLE
आदेश /O R D E R PER SHRI S BALAKRISHNAN, ACCOUNTANT MEMBER:
This appeal is filed by the assessee against order of Learned Commissioner 1. of Income Tax (Appeals), National Faceless Appeal centre, Delhi [hereinafter in short “Ld.CIT(A)”] vide DIN & Order No. ITBA/APL/S/250/2024- (A.Y. 2019-20) The Tenali P & T Employees Mutually Aided Co-Op thrift & Credit Society Limited 25/1075066174(1) dated 26.03.2025 for the A.Y.2019-20 arising out of the order passed under section 143(1) of Income Tax Act, 1961 (in short ‘Act’) dated 01.05.2020.
2. At the outset, Ld. Authorised Representative [hereinafter in short “Ld.AR”], inviting our attention to the order of the Ld.CIT(A) submitted that the Ld.CIT(A) did not condone the delay of 526 days in filing the appeal stating that submissions are vague and dismissed the appeal without going into the merits of the case. Ld. AR submitted before us that Ld. CIT(A) dismissed the appeal of the assessee without condoning the delay in filing the appeal as no such sufficient cause is established. Further, Ld.AR submitted that the Ld.CIT(A) did not appreciate the submissions properly and without giving any reasons for not condoning the delay and except stating that submissions are vague, rejected the condonation petition. Ld.AR submitted that the delay may be condoned and the appeal be restored to the file of the Ld.CIT(A) for deciding on merits and pleaded that one more opportunity may be provided to the assessee in the interest of justice.
Per contra, Ld. Departmental Representative [hereinafter in short “Ld.DR”] strongly placed reliance on the order of the Ld.CIT(A) in rejecting the condonation petition. Ld. DR strongly opposed for condonation of delay.
Page No. 2 (A.Y. 2019-20) The Tenali P & T Employees Mutually Aided Co-Op thrift & Credit Society Limited 4. We have heard both the sides and perused the material available on record. The reasons for delay in filing the appeal before the Ld. CIT(A) are reproduced below: -
1. In the case of appellant, the Intimation u/s 143(1) of the Act was issued on 01.05.2020: As such, the appeal against the Intimation u/s 143(1) of the Act ought to have been filed on or before 31.05.2020. However, the appeal could be filed only on 09.09.2023.
As per the order dt. 10.01.2022 of the hon'ble Supreme Court in W.P. No.3/2020, the period -from 15.03.3020 to 29.05.2022 is to be excluded while calculating the limitation period for filing the appeal. Therefore, technically the delay is between the period 30.05.2022 to 09.09.2023 ie 468 days.
3. The appellant is a cooperative society and its income is eligible for deduction u/s 80P(2) of the Act. The appellant filed return of income on 30.09.2019 claiming deduction of Rs.24,60,627 u/s 80P(2)(a)(i) towards interest received from members and deduction of Rs.22,35,471 u/s 80P(2)(d) of the Act towards dividend/interest received from other cooperative societies. In the Intimation passed on 01.05.2020, the deduction towards dividend was allowed but the interest received from members was disallowed. It was mentioned in the Intimation that the deduction u/s 80P shall not be allowed unless the relevant schedules were filled properly. The appellant filled all the schedules correctly. Therefore, the appellant filed a request on 04.03.2022 for rectification of the Intimation. However, the rectification order was not passed. 4. The appellant filed grievances on 28.10.2022, 31.10.2022 and again on 28.08.2023 for rectification of the Intimation. However, the Intimation was not rectified. Having no other alternative, the appellant filed appeal against the Intimation on 09.09.2023. 5. The delay in filing the appeal was thus due to the bonafide belief entertained by the appellant that the Intimation would be rectified, once the mistake is brought to the notice of the department. Further, the appellant acted before the expiry of the limitation specified by the hon'ble Supreme Court. Thus, the delay in filing the appeal is due to reasons beyond the control of the appellant. The delay is neither intentional nor deliberate. Therefore, the appellant prays the learned Commissioner of Income Tax (Appeals) to kindly condone the said delay of 468 days in filing the appeal and to pass appropriate orders in the interest of rendering substantial justice.”
Page No. 3 (A.Y. 2019-20) The Tenali P & T Employees Mutually Aided Co-Op thrift & Credit Society Limited 5. We notice that the moot question to be adjudicated is with respect to condonation of delay. Broadly, we are of the view, that the Courts and the quasi- judicial bodies are empowered to condone the delay, if a litigant satisfies the Courts that there was sufficient reason for availing the remedy after the expiry of limitation. Such reasoning should be to the satisfaction of the Court. The expression “sufficient cause or reasons” as provided in sub-section (5) of section 253 of the Act is used in identical position in the Limitation Act 1963, and in CPC. Such expression has also been used in other sections of the Income Tax Act such as section 273, 274, etc. Keeping in mind, the authoritative pronouncement from Hon’ble Apex Court, it is admitted position that the words “sufficient cause” appearing in sub-section (5) of section 253 of the Act should receive a liberal construction so as to advance substantial justice. It must be remembered that in every case of delay, there can be some lapses on the part of the litigant concern. That alone is not enough to turn down the plea and to shut the doors against him, unless and until, it makes a mala-fide or a dilatory statutory, the court must show utmost consideration to such litigant. Further the length of delay is immaterial, it is the acceptability of the explanation and that is the only criteria for condoning the delay.
In such a situation, no doubt filing of an appeal is a right granted under the statute to the assessee and is not an automatic privilege, therefore, the assessee is expected to be vigilant in adhering to the manner and mode in which the appeals
Page No. 4 (A.Y. 2019-20) The Tenali P & T Employees Mutually Aided Co-Op thrift & Credit Society Limited are to be filed in terms of the relevant provisions of the Act. Nevertheless, a liberal approach has to be adopted by the appellate authorities, where delay has occurred for “bona fide reasons” on the part of the assessee or the Revenue in filing the appeals. In matters concerning the filing of appeals, in exercise of the statutory right, a refusal to condoned the delay can result in a meritorious matter being thrown out at the threshold, which may lead to miscarriage of justice. The 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.
The Hon’ble Apex Court in a celebrated decision in Collector, Land Acquisition v. Mst. Katiji& Ors. [167 ITR 471] opined that when technical consideration and substantial justice are pitted against each other, the courts are expected to further the cause of substantial justice. This is for the reason that an opposing party, in a dispute, cannot have a vested right in injustice being done because of a non- deliberate delay. Therefore, it follows that while considering matters relating to the condonation of delay, judicious and liberal approach is to be adopted. If “sufficient cause” is found to exist, which is bona-fide one, and not due to negligence of the assessee, the delay needs to condoned in such cases. The expression ‘sufficient cause’ is adequately elastic to enable the courts to apply law in a meaningful manner, which sub-serves the end of justice- that being the life purpose of the existence of the institution of the courts. When substantial justice and technical consideration are pitted against each other, the cause of Page No. 5 (A.Y. 2019-20) The Tenali P & T Employees Mutually Aided Co-Op thrift & Credit Society Limited substantial justice deserves to be preferred. This means that there should be no malafide or dilatory tactics. Sufficient cause should receive liberal construction to advance substantial justice. The Hon’ble Apex Court in Collector, Land Acquisition vs Mst. Katiji& Ors. (167 ITR 471) observed as under:-
“3. The legislature has conferred the power to condone delay by enacting section 51 of the Limitation Act of 1963 in order to enable the courts to do substantial justice to parties by disposing of matters on de merits. The expression “sufficient cause” employed by the legislature is adequately elastic to enable the courts to apply the law in a meaningful manner which subserves the ends of justice that being the life-purpose of the existence of the institution of courts. It is common knowledge that this court has been making a justifiably liberal approach in matters instituted in this court. But the message does not appear to have percolated down to all the others courts in the hierarchy.”
In the light of the above judicial pronouncements and keeping in view the principles of natural justice, we are of the considered view that the lis between the parties be decided on merits and no person should be condemned unheard. Therefore, the delay on the part of the assessee in filing appeal before Ld.CIT(A) is condoned and the appeal is remanded back to the file of Ld.CIT(A) to decide the appeal filed by the assessee on merits. It is needless here to mention that before passing the order of assessment, Ld. CIT(A) shall provide sufficient opportunity of hearing to the assessee. Before parting, we may make it clear that our decision to restore the matter back to the file of Ld.CIT(A) shall in no way be construed as having any reflection or expression on the merits of the dispute,
Page No. 6
In the result, appeal of the assessee is allowed for statistical purpose.
Order pronounced in the open court on 28th August, 2025.