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Facts
The assessee's appeals before the CIT(A) were dismissed due to a delay of 710 days and failure to respond to directions. Before the Tribunal, the appeals are delayed by 2292 days. The assessee cited various legal cases, seizure of records and assets, and arrests of directors as reasons for the delay.
Held
The Tribunal noted that the assessee failed to provide sufficient cause for the abnormal delay in filing the appeals before both the CIT(A) and the Tribunal. The reasons provided, such as ongoing legal cases and seizure of company assets and directors' arrests, were deemed insufficient to condone the extensive delay.
Key Issues
Whether the delay in filing the appeals before the CIT(A) and the Tribunal is sufficiently explained and can be condoned.
Sections Cited
249(3) of the Act, 249(2) of the Act, Section 5 of the Limitation Act, 1963, 143(3) r.w.s. 153A of the Income Tax Act 1961, 263 of the Act
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Income Tax Appellate Tribunal, NAGPUR BENCH, NAGPUR
Before: SHRI V. DURGARAO & SHRIK.M. ROY, ACCOUNTANT, MEMBER
Date of Hearing – 06/02/2025 Date of Order – 05/03/2025
O R D E R PER V. DURGA RAO, J.M.
These appeals by the assessee are emanating from the impugned orders of even date 12/02/2018, passed by the learned Commissioner of Income Tax (Appeals)–3, Nagpur, [“learned CIT(A)”], for the assessment year 2011–12 and 2012–13.
During the course of hearing, on perusal of the impugned orders passed by the learned CIT(A), we noticed that there was a delay of 710 days in filing the appeals by the assessee before the learned CIT(A). The Bench further noticed that the assessee even failed to respond to the directions of the learned CIT(A) and filed no reply either, which resulted in passing ex–parte
2 M/s. Phoenix Infra Estate International Ltd. and 417/Nag./2024 orders and dismissed the appeals by rejecting the request of the assessee to condone the delay.
Before us, the learned A.R. appearing for the assessee submitted that the learned CIT(A) passed an ex-parte order and prayed that one opportunity may be granted by restoring the matter to the file of the learned CIT(A) to enable the assessee to substantiate its case before the learned CIT(A). He further submitted that the due process shall be followed.
On the other hand, the learned D.R. submitted that despite the learned CIT(A) provided sufficient opportunities to the assesse, however, the assessee did not file any reply before the learned CIT(A) and failed to respond to the directions of the learned CIT(A). The assessee has even not furnished cause of delay in filing these appeals to enable the learned CIT(A) to condone the delay. Under these circumstances, the learned CIT(A) was justified in dismissing the appeals. He strongly supported the orders passed by the learned CIT(A).
We have heard both the parties, perused the materials available on record and gone through orders of the authorities below. Before the Tribunal also, the assessee has filed these appeals which are delayed by 2292 days. The only submission of the learned Authorised Representative for the assessee is that the assessee is fading many legal cases before various Courts and hence the assessee could not file appeal in time. The learned A.R. for the assessee thus prayed that both the matters be restored to the file of the learned CIT(A) with direction to condone the delay and adjudicate the 3 M/s. Phoenix Infra Estate International Ltd.
and 417/Nag./2024 grounds of appeals raised on merit emphasizing the need of providing adequate opportunity of hearing. The assessee has also furnished application dated 22/07/2024, seeking condonation of delay in filing these appeals before the Tribunal. The contents of the said application seeking condonation of delay are as under:–
“A. Applicant has filed the above appeal on against the order of Ld. CIT(A) dated 12/02/2018 passed under section 263 of the Act. The present appeal is filed beyond the period of limitation. The delay is of 2261 Days. Brief facts leading to the delay of filing the appeal are as under:
1. 1. Search u/s 132 was conducted by the Income tax department in 2013 and all the major records were seized by the Income Tax Department.
2. All the assets i.e. stock in trade and capital assets (corporate office) of the company were seized by the department in 2013.
3. On 19/02/2014 a Board Meeting was held in which a resolution was passed to remove Mr. Vijay Gautam & Mr. Ahemad Jiwani from the board though the above 2 held 66.67% shares in the company and they were restricted to enter any of the premises of the company. Also, they were barred from doing any of the operations of the company & their signing authority was cancelled from all the bank accounts. A part from this Mr. Jitesh himself stopped carrying on the operations of the company which resulted into closure of many offices in various cities and the customers. In response to his removal Mr. Vijay Gautam has filed plea before the Company Law Board for cancellation of his removal from directorship and on hearing his plea, the CLB gave him a relief by passing an order against Mr. Jitesh & other directors and restraining them for doing unethical reinstated Mr. Vijay's name on the board of directors.
4. Assessment proceeding under section 143(3) r.w.s. 153A of the Income Tax Act 1961 were completed on 22/09/2014.
5. In the year 2014, all the bank accounts were also seized by the department. Due to the seizure of stock in trade, the company was unable to execute the sale deed in favour of customers although advance amount was received from the customers. Hence, all the customers started filing complaints to various authorities like police stations, crime branch, consumer court & civil courts. Because of this there were many disputes among the directors which resulted into hampering of the business of the company. The directors were not able to look after all the office of the company having H.O at Kanchan Sarita Apartment, Lokmat square, Nagpur is already seized by the Income Tax Department.
4 M/s. Phoenix Infra Estate International Ltd. and 417/Nag./2024 6. An appeal was filed to Commissioner of Income Tax (Appeals) u/s 246 of Income tax Act, 1961 on 3rd Oct, 2016.
Due to the earlier complaints filed by the customers for non-execution of the sale deed against the company, Mr. Vijay was arrested and sent to the judicial custody at Indore District Jail, Azad Nagar on 05/08/2017. Since the company office was seized and Mr. Vijay was in judicial custody, nobody was there to look after the operations of the company and hence documents were not available which resulted into non-compliance and delay in filling of the appeal.
Appeal filed before the Hon'ble CIT(A) were dismissed by the Hon'ble CIT(A) on account of non- compliance by the appellant and delay in filling of the appeal. The above appellate order was passed on 12/02/2018. But the order passed by the Hon'ble CIT(A) was not send to the registered office of the assessee company which is already seized by the Income Tax Department, hence the order of CIT(A) was not severed to the assessee.
Due to the complaints filed by the customers for non-execution of the sale deed against the company, Mr. Vijay Gautam and other was arrested by Ambad Police Station Nashik and sent to the judicial custody on 17/12/2018.
In the year 2019, the office of the applicant company situated at 16, Kanchan Sarita Phoenix Tower, besides Lokmat Building, Wardha Road, Nagpur which was seized by the Income Tax department is sold by the Income Tax Department without giving any information to the director of assessee company and all relevant papers of the company relating to Cheque Books, Stamp Papers, Computers, T.N.C.P. Approved papers, diversion certificates, development permissions, company audit reports, ledger accounts and other document which were kept in the premise are not handed over to the assessee company till date.
Due to the complaints filed by the customers for non-execution of the sale deed against the company, another director of assessee company Mr. Jitesh Nashine was arrested by Indore Police and sent to the judicial custody in December 2021.
Ex. Employee of company Mr. Motilal Tukaram Bandebuche has fraudulently sold the property bearing Kh. No. 1170/2, 1170/3 and 1226 admeasuring about 52 acres of land at Mouza Devpur Dist. Nashik, belongs and owned be the assessee company in the year 2020.
Ex. Employee of company Mr. Motilal Tukaram Bandebuche has fraudulently sold the property bearing Kh No. 96, 198, 356, 355, 367, 370, 371, 496, 1502, 617, 37 Mouza Vaishakhare, Taluka Murbad, Dist. Thane, belongs and owned be the assessee company in the year 2022.
Since the order passed by Hon'ble CIT(A) was not served to the assessee company, hence the assessee company requested the Hon'ble CIT(A)-III, Nagpur to kindly provide the copy of order passed by Hon'ble CIT(A)-III Nagpur for filing appeal before Hon'ble Income Tax Appellate Tribunal on 19.01.2024 and Hon'ble CIT(A)-III Nagpur has provided the copy of appellate
5 M/s. Phoenix Infra Estate International Ltd. and 417/Nag./2024 order on 25.01.2024 but the form no 35, grounds and facts of appeal etc. were not provided by the Hon'ble CIT (A)-III Nagpur.
The assessee has made an application on 29.01.2024 before the hon'ble ACIT Circle-1 Nagpur requesting him to kindly provide us the documents related to the first appeal filed by the assessee but the learned ACIT has provide the documents to the assessee on 17.05.2024.
The last day for filing appeal was 13/04/2018, as the appeal was filed on 22/07/2024 there is a delay of 2261 days in filing of appeal. We therefore pray that the delay in filing the appeal may kindly be condoned.
In support of this application appellant is filing affidavit of Director Mr. Vijay Gautam. B. In view of the above facts the appellants submit that the delay was unintentional, for bona fide reasons. C. In N. Balakrishnan V/s. M. Krishnamurthy (1998) 7 SCC 123, the Court made the following observations: "It is axiomatic that condonation of delay is a matter of discretion of the court. Section 5 of the Limitation Act does not say that such discretion can be exercised only if the delay is written a certain limit. Length of delay is no matter, acceptability of the explanation is the only criterion, sometimes delay of the shortest range may be uncondonable due to a want of acceptable explanation whereas in certain other cases, delay of a very long range can be condoned as the explanation thereof is satisfactory. Once the curt accepts the explanation as sufficient, it is the result of positive exercise of discretion and normally the superior court should not disturb such finding, much less in revisional jurisdiction, unless the excersie of discretion was on wholly untenable grounds of arbitrary or perverse. But it is a different matter when the first court fuses to condone the delay. In such cases, the superior court would be free to consider the cause shown for the delay afresh and it is open to such superior court to come to its own finding even untrammelled by the conclusion of the lower court." D. The assessee further relies on the observation of the Apex Court the case of Collector Land Acquition V/s. Mst. Katiji (1987) 167 ITR 471/1987 taxmann.com 1072 (SC). "When substantial justice and technical considerations are pitted against each other the cause of substantial justice deserves to be preferred, for the other side cannot claim to have a vested right injustice being done because of a non-deliberate delay." E. It is submitted that the expression sufficient cause must receive a liberal construction so as to advance substantial justice and generally delay in preferring the appeals are required to be condoned in interest of justice. A litigation does not stand to benefit by resorting to delay, therefore a justice- oriented approach is required by courts, In every case of delay there can be some lapses on the part of the litigant concerned, but that alone is not enough to shut the door against him. The assessee further submits that refusing to condone delay can result in a meritorious matter being thrown out at the very
6 M/s. Phoenix Infra Estate International Ltd. and 417/Nag./2024 threshold and cause of justice being defeated. In matters of condonation of delay a highly pedantic approach should be eschewed and a justice-oriented approach should be adopted and a party should not be made to suffer on account of technicalities. F. The assessee therefore prays to condone the delay of 2261 days, more so when the assessee has a good cause on merits.”
On a perusal of the aforesaid application, we find that the assessee failed to show sufficient cause for the delay in filing these appeals. Before the learned CIT(A) we find that the abnormal delay in filing of appeals was not condoned, as no sufficient cause was shown under section 249(3) of the Act for the failure to file the appeals within the prescribed period of limitation as contained under section 249(2) of the Act r/w section 5 of the Limitation Act, 1963 and hence, as delay in filing of appeals was not condoned and as a result of which the appeals were not admitted and were rejected accordingly. Before us also, there is a delay of 2,292 days. The assessee failed to furnish sufficient cause for the abnormal delay in filing the appeals before the Tribunal. No proper explanation has been provided to enable this Bench to condone the abnormal delay. Hence, the application filed for condonation of abnormal delay is hereby dismissed. Accordingly, both these appeals filed by the assessee are dismissed in limine.
In the result, appeals by the assessee stand dismissed in limine. Order pronounced in the open Court on 05/03/2025
Sd/- Sd/- K.M. ROY V. DURGA RAO ACCOUNTANT MEMBER JUDICIAL MEMBER NAGPUR, DATED: 05/03/2025
7 M/s. Phoenix Infra Estate International Ltd. and 417/Nag./2024