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Facts
The assessee filed an appeal before the CIT(A) after a delay of 607 days. The assessee explained the delay as surrendering the PAN and not monitoring the account. The CIT(A) refused to condone the delay and dismissed the appeal.
Held
The Tribunal found that the CIT(A) had erred in dismissing the appeal solely on the ground of delay without considering the merits. The Tribunal noted that the delay was unintentional and the assessee had a justifiable cause for it.
Key Issues
Whether the delay in filing the appeal before the CIT(A) was justifiable and whether the CIT(A) was justified in dismissing the appeal on technical grounds without considering the merits.
Sections Cited
249(2), 249(3), 147, 144, 144B, 5, 250(6)
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Income Tax Appellate Tribunal, NAGPUR BENCH, NAGPUR
Before: SHRI V. DURGA RAO & SHRI K.M. ROY, ACCOUNTANT, MEMBER
Date of Hearing – 13/05/2025 Date of Order – 09/06/2025
O R D E R PER K.M. ROY, A.M.
The instant appeal by the assessee is emanating from the impugned order dated 17/01/2025, passed by the learned Commissioner of Income Tax (Appeals), [“learned CIT(A)”], for the assessment year 2017–18.
In its appeal, the assessee has raised following grounds:–
“1. Honorable CIT(Appeals) dismissing the appeal without considering the facts and circumstances of the case is denial of proper justice especially when there exists another assessment order for the same assessment year and on the same Appellant. 2. Honorable CIT(Appeals) dismissing the appeal on technical ground for condonation of delay is bad in law, unethical and against the principles of natural justice.
2 Astavinayak Gramin Bigar Sheti Sahakari Patsanstha Maryadit ITA no.158/Nag./2025
Notice u/s 148 on the appellant on another PAN when assessment proceedings for the same A.Y. were completed on other PAN is unlawful arbitrary, erroneous, unjustified, and untenable and must be quashed.
Learned AO did not consider the fact that it is not the PAN which is assessed, it is the person as defined u/s 2(31), which is assessed. Notice u/s 148 and subsequent assessment u/s 147 r.w.s. 144 is without proper application of mind, without authority, unlawful and invalid ab initio. 5. Service of notice u/s 148 was not made on the assessee since it was sent on the email id of an old consultant.
That the appellant craves to leave, to add or alter, delete amend, modify, rescind, supplement or alter any of the ground herein above, the appeal.”
We find that the learned CIT(A) has dismissed the appeal of the assessee since it was delayed for 607 days in filing the appeal before the first appellate authority and refused to condone the delay. The learned CIT(A) has elaborately dealt with the issue, the observations of the learned CIT(A) are as under:–
“4. Observations &Findings: - As mentioned above, the appeal against the order under section 147 r.w.s 144 r.w.s. 1448 dated 30-03-2022 served on the same day has been filed on 30- 03-2022. This shows that the delay in filing the appeal as per the provisions of section 249(2) of the Act was 607 days. On perusal of Form No. 35, it is observed that regarding delay in filing the appeal, the appellant has submitted as under:- "There is a delay of 15 months in filing an appeal because, we had surrendered this PAN. Hence, we were not keeping check or logging into this account. But as soon as this issue came to our notice, we immediately took action and are fling this appeal. It will be unjust on the part of assessee to pay tax on the transaction which is already accounted. The assessee is diligent in fling his returns and paying taxes. The merits of the case are strongly in favor of the assessee. In order to avoid unnecessary financial hardships to the assessee we request you to allow condonation of delay and consider our appeal." 4.1 I have considered the explanation furnished by the appellant for delay in filing the appeal. The sub-section (3) of Section 249 of the Act regarding power of the CIT(appeals) to condone the delay in filing the appeal is reproduced as under-
3 Astavinayak Gramin Bigar Sheti Sahakari Patsanstha Maryadit ITA no.158/Nag./2025
"The Joint Commissioner(Appeals) or the 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." 4.2 As per Form no. 35, the appeal is delayed for 607 days. The order under section 147 r.w.s 144 r.w.s. 144B was passed on 30-03-2022 which was served upon the appellant on the same day. Accordingly, the due date for filing the appeal to CIT(A) against the same was 03-04-2022, but the appeal has been filed on 20-12-2023. The appellant has not given any plausible explanation for such a huge delay of 607 days which justifies the condonation of the delay. 4.3 The delay caused in filing the appeal can't be condoned for following reasons: a. While the intention to establish a trust is commendable; however, incorporation carries with it an inherent responsibility to comply with legal and regulatory obligations. Financial constraints and operational challenges do not absolve the trust of adhering to statutory timelines or responding to notices. The reason cited for the delay i.e. surrender of the PAN and ceasing to monitor the account, do not constitute of "sufficient cause" as required under the law the taxpayers are expected to exercise due diligence and insure that all tax related matters are monitored irrespective of status of PAN. b. Ignorance of the law is not a valid defense. Upon receiving notices from the Income Tax Department, the trust was obligated to seek timely professional assistance. c. The principle of limitation serves to uphold the finality of proceedings, ensuring judicial discipline and administrative efficiency. Condoning the delay without reasonable justification would dilute the sanctity of these timelines and encourage non-compliance. Judicial precedents underscore that while equity and natural justice must be observed, they cannot be stretched to accommodate inordinate delays caused by negligence or mismanagement. d. The delay of 15 months is significant and beyond a reasonable timeframe for filing an appeal. Such a prolonged delay indicates a lack of vigilance and allowing condonation of such a substantial delay without valid justification would set a precedent detrimental to the efficiency of the tax administration and the interests of revenue. e. Courts have consistently held that condonation of delay is an exception rather than the rule. In this instance, the delay is primarily attributable to internal mismanagement and lack of diligence on the part of the appellant, not factors beyond their control. f. The issue in question relates to the assessee own accounts and transactions the obligation to monitor and respond to the notices or issues rests with the taxpayer. The immediate corrective action upon discovering the issue, while appreciated, however, it does not mitigate the failure to act within prescribe time. g. The trust's inability to respond to statutory notices or seek timely advice points to negligence rather than a bona fide reason for the delay. The appellant has not provided credible evidence of extraordinary circumstances that prevented them from filing the appeal within the prescribed timeline Delay of 4 Astavinayak Gramin Bigar Sheti Sahakari Patsanstha Maryadit ITA no.158/Nag./2025 607 days is substantial and cannot be brushed aside as a minor lapse. For such an inordinate delay, the appellant must demonstrate unavoidable hindrances, which they have failed to establish. In view of the above facts, the reasons advanced by the assessee for delay in filing the appeal are insufficient, unsubstantiated, unreasonable and hence unacceptable. The appellant has failed to demonstrate reasonable cause or exceptional circumstances to warrant condoning the delay. Therefore, the condonation of delay in filing the appeal is denied in the interest of justice, equity, and procedural discipline. 4.4 There is legal maxim- "Vigilantibus non dormientibus Jura subveniunt" meaning that law assists those who are vigilant with their rights and not those who sleep thereupon. It is trite that filing of an appeal or an application under any Act is a right provided by the concerned statute. These rights carries certain obligations including adhering to the time limit prescribed in the statute for filing of such an appeal or application. Sometimes the relevant statute carves out exceptions by granting the competent authority/forum a power to entertain an appeal or application beyond the prescribed period on sufficient cause. It is in the hue of such an express authorization that the concerned authority/forum can exercise its discretion and condone the delay, if satisfied with the reasonableness of the cause in late presentation. In the context of Income-tax Act, 1961, although section 249(2) of the Act requires the filing of an appeal before the CIT(A) within 30 days, sub-section (3) empowers the CIT(A) to admit an appeal after the expiry of the said period if he is satisfied that the appellant had sufficient cause for not presenting the appeal within the period. As discussed in the preceding para, the present appellant has not been able to show any reasonable cause for filing the appeal late by 607 days. From the facts of the case, it is clear that the statutory right to appeal which was vested with the appellant was not exercised within the stipulated time u/s 249(2). Thus, this clearly is a case of laches and is directly the result of deliberate inaction on the part of the appellant. Therefore, the law cannot come to its rescue by condoning the delay for such inaction on the part of the appellant. 4.5 In a comparable set of facts and circumstances, the Hon'ble Supreme Court in their judgment dated 16-12-2021 in the case of MajjiSannemma @ Sanyasirao versus Reddy Sridevi&Ors.inCivil Appeal No.7696 of 2021 has observed as under- 6.2 "We have gone through the averments in the application for the condonation of delay. There is no sufficient explanation for the period from 15.03.2017 till the Second Appeal was preferred in the year 2021. In the application seeking condonation of delay it was stated that she is aged 45 years and was looking after the entire litigation and that she was suffering from health issues and she had fallen sick from 01.01.2017 to 15.03.2017 and she was advised to take bed rest for the said period. However, there is no explanation for the period after 15.03.2017. Thus, the period of delay from 15.03.2017 till the Second Appeal was filed in the year 2021 has not at all been explained. Therefore, the High Court has not exercised the discretion judiciously.
At this stage, a few decisions of this Court on delay in filing the appeal are referred to and considered as under:
5 Astavinayak Gramin Bigar Sheti Sahakari Patsanstha Maryadit ITA no.158/Nag./2025
In the case of Ramlal, Motilal and Chhotelal (supra), it is observed and held as under: "In construing s. 5 it is relevant to bear in mind two important considerations. The first consideration is that the expiration of the period of limitation prescribed for making an appeal gives rise to a right in favour of the decree holder to treat the decree as binding between the parties. In other words, when the period of limitation prescribed has expired the decree holder has obtained a benefit under the law of limitation to treat the decree as beyond challenge, and this legal right which has accrued to the decree holder by lapse of time should not be light heartedly disturbed. The other consideration which cannot be ignored is that if sufficient cause for excusing delay is shown discretion is given to the Court to condone delay and admit the appeal. This discretion has been deliberately conferred on the Court in order that judicial power and discretion in that behalf should be exercised to advance substantial justice. As has been observed by the Madras High Court in Krishna v. Chattappan, (1890) J.L.R. 13 Mad. 269, s. 5 gives the Court a discretion which in respect of jurisdiction is to be exercised in the way in which judicial power and discretion ought to be exercised upon principles which are well understood; the words 'sufficient cause' receiving a liberal construction so as to advance substantial justice when no negligence nor inaction nor want of bona fide is imputable to the appellant." 7.2 In the case of P.K. Ramachandran (supra), while refusing to condone the delay of 565 days, it is observed that in the absence of reasonable, satisfactory or even appropriate explanation for seeking condonation of delay, the same is not to be condoned lightly. It is further observed that the law of limitation may harshly affect a particular party but it has to be applied with all its rigour when the statute so prescribes and the courts have no power to extend the period of limitation on equitable grounds. It is further observed that while exercising discretion for condoning the delay, the court has to exercise discretion judiciously. 7.3 In the case of Pundlik Jalam Patil (supra), it is observed as under: "The laws of limitation are founded on public policy. Statutes of limitation are sometimes described as "statutes of peace". An unlimited and perpetual threat of limitation creates insecurity and uncertainty, some kind of limitation is essential for public order. The principle is based on the maxim "interest reipublicaeut sit finislitium", that is, the interest of the State requires that there should be end to litigation but at the same time laws of limitation are a means to ensure private justice suppressing fraud and perjury, quickening diligence and preventing oppression. The object for fixing time limit for litigation is based on public policy fixing a lifespan for legal remedy for the purpose of general welfare. They are meant to see that the parties do not resort to dilatory tactics but avail their legal remedies promptly. Salmond in his Jurisprudence states that the laws come to the assistance of the vigilant and not of the sleepy." 7.4 In the case of Basawaraj (supra), it is observed and held by this Court that the discretion to condone the delay has to be exercised judiciously based on facts and circumstances of each case. It is further observed that the expression "sufficient cause" cannot be liberally interpreted if negligence, inaction or lack of bona fides is attributed to the party. It is further observed that even though limitation may harshly affect rights of a party but it has to be applied with all its rigour when prescribed by statute. It is further observed that in case a party has acted with negligence, lack of bona fides or there is inaction then there cannot be any justified ground for condoning the delay even by imposing
6 Astavinayak Gramin Bigar Sheti Sahakari Patsanstha Maryadit ITA no.158/Nag./2025 conditions. It is observed that each application for condonation of delay has to be decided within the framework laid down by this Court. It is further observed that if courts start condoning delay where no sufficient cause is made out by imposing conditions then that would amount to violation of statutory principles and showing utter disregard to legislature. 7.5 In the case of Pundlik JalamPatil (supra), it is observed by this Court that the court cannot enquire into belated and stale claims on the ground of equity. Delay defeats equity. The Courts help those who are vigilant and "do not slumber over their rights".
Applying the law laid down by this Court in the aforesaid decisions to the facts of the case on hand and considering the averments in the application for condonation of delay, we are of the opinion that as such no explanation much less a sufficient or a satisfactory explanation had been offered by respondent Nos. 1 and 2 herein appellants before the High Court for condonation of huge delay of 1011 days in preferring the Second Appeal. The High Court is not at all justified in exercising its discretion to condone such a huge delay. The High Court has not exercised the discretion judiciously. The reasoning given by the High Court while condoning huge delay of 1011 days is not germane. Therefore, the High Court has erred in condoning the huge delay of 1011 days in preferring the appeal by respondent Nos. 1 and 2 herein - original defendants. Impugned order passed by the High Court is unsustainable both, on law as well as on facts.
In view of the above and for the reasons stated above, the present Appeal is allowed. The impugned order dated 16.09.2021 passed by the High Court condoning the delay of 1011 days in preferring the Second Appeal by respondent Nos. 1 and 2 herein is hereby quashed and set aside. Consequently, Second Appeal No.331 of 2021 preferred by respondent Nos. 1 and 2 herein stands dismissed on the ground of delay. The present Appeal is accordingly allowed. However, there shall be no order as to costs."
In view of the above discussion and legal position, the delay of 607 days in filing of appeal in this case is not condoned as no "sufficient cause" has been shown u/s 249(3) of the Income Tax Act, 1961 for the appellant's failure to file the appeal within the prescribed period of limitation u/s 249(2) of the Income Tax Act, 1961 r.w.s. 5 of Limitation Act and hence the appeal sought to be instituted belatedly is hereby rejected.
In the result, as delay in filing of appeal is not condoned, the appeal is not admitted and is rejected accordingly.”
We are unable to persuade ourselves to the findings of the learned CIT(A) as quoted above. The assessee had a justifiable cause for the delay. More so, the delay was unintentional without any mala fide. Therefore, we set aside the impugned order passed by the learned CIT(A) and direct him to condone the delay and pass a speaking order while adjudicating the issues
7 Astavinayak Gramin Bigar Sheti Sahakari Patsanstha Maryadit ITA no.158/Nag./2025 raised by the assessee on merits under section 250(6) of the Act and after providing reasonable opportunity of being heard to the assessee.
In the result, assessee’s appeal is allowed for statistical purposes. Order pronounced in the open Court on 09/06/2025