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Facts
The assessee filed an appeal after a delay of 747 days. The assessee claimed that the delay was due to illiteracy and entrusting the appeal to a friend's father who subsequently passed away, leading to a lack of knowledge about the proceedings. The Revenue opposed the condonation of delay, arguing negligence.
Held
The Tribunal held that the explanation for the delay was vague, general, and lacked demonstrable bona fides, indicating indifference on the part of the assessee. The court found that the assessee did not act with due diligence.
Key Issues
Whether the delay of 747 days in filing the appeal is liable to be condoned under Section 5 of the Limitation Act, 1963.
Sections Cited
147, 148, 69, 144, 5 of the Limitation Act, 1963
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Income Tax Appellate Tribunal, SURAT BENCH “SMC” SURAT
Before: SHRI SANDEEP GOSAIN & SHRI OM PRAKASH KANT
ORDER PER OM PRAKASH KANT, AM
This appeal by the assessee is directed against order dated 21.06.2022 passed by the Ld. Commissioner of Income-tax (Appeals) – National Faceless Appeal Centre, Delhi [in short ‘the Ld. CIT(A)’] for assessment year 2010-11, raising following grounds:
1. On the facts and in circumstances of the case as well as law on the subject, the learned CIT(A) has erred in passing ex-parte order without giving reasonable and sufficient opportunity of being heard.
2. On the facts and circumstances of the case as well as law on the subject, the learned CIT(A) has erred in dismissing the appeal without passing speaking order.
3. On the facts and circumstances of the case as well as law on the subject, the learned CIT(A) has erred in confirming the action of assessing officer in re-opening assessment u/s. 147 by issuing notice u/s. 148 of the I.T. Act, 1961.
4. On the facts and circumstances of the case as well as law on the subject, the learned CIT(A) has erred in confirming the action of assessing officer in making an addition of Rs. 19,21,071/- u/s. 69 on account of alleged unexplained cash deposits made in bank account.
5. It is therefore prayed that the assessment framed u/s. 144 r.w.s. 147 of the Act may kindly be quashed and/or the matter may please be set aside to the lower authority for fresh adjudication.
At the very outset, the learned Counsel for the assessee submitted that there is a delay of 747 days in filing the present appeal. It was submitted that the assessee was required to file the appeal on 20.08.2022, whereas the same has been instituted only on 05.09.2024. In support of the application seeking condonation of delay, the learned Counsel placed reliance upon the affidavit of the assessee explaining the reasons which, according to him, constitute a “sufficient cause” within the meaning of section 5 of the Limitation Act, 1963, as applicable to proceedings under the Income-tax Act.
3. The learned Counsel drew our attention to the averments in the affidavit wherein it is stated, inter alia, that the assessee is an illiterate person who had entrusted the task of filing the first appeal to the father of a friend, one Shri Bavanbhai Fuljibhai Patel, who unfortunately expired on 23.05.2021. Consequently, the assessee remained under the bona fide belief that necessary steps had been taken in the matter. It was only when the assessee’s bank account came to be attached for recovery of demand that he became aware that the appeal before the learned CIT(A) had been disposed of ex parte. The relevant portion of the affidavit, setting out the factual sequence is reproduced as under:
“2. THAT, for A.Y. 2010-11, I had received an assessment order dated 23.10.2017 passed by the Income Tax Officer, Ward 4, Navsari wherein an addition of Rs. 19,31,071/- was made on account of cash deposits in bank account and the total income was assessed at the said amount.
THAT I had informed my friend ManishbhaiBavanbhai Patel, residing at 46, Anand Park B, Behind Supreme Hotel, Kabilpore, Navsari, about the above referred assessment order wherein an addition of Rs. 19,31,071/- was made and explained to him that I was a salaried person and my main source of income was agriculture income and I had deposited the said amount out of my nominal savings from salary as well as accumulated agriculture income from our ancestral agricultural land. I explained to him that I was not having any taxable income and I have never earned such a huge income in any year, even in the past from any source and therefore, the income determined by the assessing officer was not correct. My said friend, Shri Manishbhai Patel is a teacher and working in a school as a Principaland therefore, I sought his advice about the future course of action. His father, Shri BavanbhaiFuljibhai Patel was working in the Police Department and therefore, he had handed over the relevant papers to his father. 4. 4. THAT, my friend Shri ManishbhaiBavanbhai Patel informed me that his father BavanbhaiFuljibhai Patel, would assign the matter to some consultant / Chartered Accountant to do the needful in the matter and to file the appeal before the appellate authority. THAT, myself and my friend Manishbhai Patel were not having any information about the consultant / Chartered Accountant through whom my appeal was filed. In the meantime, my friend's father Shri BavanbhaiFuljibhai Patel expired on 23.05.2021.
THAT, I was not having any information about the appellate proceedings going on and through whom the appeal was filed and who was handling the appeal matter. My friend was also having no knowledge or information about the same. Moreover, I had also not received any further communication or notice from the department about this matter and about the appellate proceedings.
THAT, when my bank account was attached and thetax amount was recovered, I came to know about the same through my bankers. Therefore, I inquired with my friend who was also not knowing as to whom the matter was assigned by his father for the appellate proceedings and therefore, I approached a local Tax Consultant Shri Sanjaybhai Gandhi who came to know about passing of the Appellate Order on the ITBA Portal and then he informed me that the appeal matter was already decided against me by an ex-parte order dated 21.06.2022 and further advised me to file an appeal before the Honourable Income Tax Appellate Tribunal, Surat. Accordingly, I myself with the help of my Tax Consultant Shri Sanjay Gandhi approached M/s. Rasesh Shah & Co., Chartered Accountants, Surat to carry out further proceedings. Accordingly they filed the appeal before the Honourable Tribunal which was filed belated.
The e-mail ID mentioned in Form No. 35 is of desaikapadia@hotmail.com to whom I am not knowing. The e-mail ID on my profile is spgthg123@gmail.com. I did not receive the appellate order at the e-mail ID mentioned in my profile. 8 From the above facts, it is clear that the delay in filing the appeal was not intentional and I was prevented by sufficient and reasonable cause for not filing the appeal in time.” 4.The learned Counsel submitted that the delay in filing the present appeal is neither intentional nor deliberate but occasioned due to the peculiar circumstances narrated above. It was further submitted that if the period during which the Covid- 19 pandemic was operationally excluded the effective delay would stand substantially reduced. It was thus urged that the appeal deserves to be admitted by condoning the delay in the interest of substantial justice.
5.Per contra, the learned Departmental Representative vehemently opposed the condonation, contending that the explanation furnished by the assessee does not inspire confidence and merely reflects negligence and lack of diligence. It was contended that the assessee, having been duly served with the assessment order, failed to take appropriate steps to pursue his remedy in time and cannot now take refuge under a plea of ignorance or miscommunication. The learned DR accordingly submitted that no sufficient cause has been made out so as to warrant condonation of such an inordinate delay.
6.We have given our thoughtful consideration to the rival submissions and carefully perused the material placed on record. The issue before us is whether the delay of 747 days in filing the appeal deserves to be condoned under section 5 of the Limitation Act, 1963.
7.It is by now well settled that though the provisions relating to limitation must ordinarily be applied with their full rigour, the expression “sufficient cause” occurring in section 5 of the Limitation Act should receive a liberal construction in order to advance the cause of substantial justice, as held by the Hon’ble Supreme Court in Collector, Land Acquisition v. Mst. Katiji & Ors. (1987) 167 ITR 471 (SC). At the same time, the discretion vested in the Tribunal to condone delay is not unbounded or to be exercised as a matter of routine. The party seeking condonation must demonstrate that the delay was occasioned by circumstances beyond his control and that he had acted with reasonable diligence in prosecuting his rights.
8.The test, therefore, is whether the assessee has acted bona fide and whether there exists a reasonable explanation for the delay which is not tainted by negligence, inaction, or lack of bona fides. The mere fact that the assessee is a layperson or unfamiliar with legal processes cannot, in itself, constitute a sufficient cause when the record reveals indifference in pursuing the statutory remedy available under the law.
9.In the present case, the explanation offered by the assessee rests primarily on the assertion that the matter was handed over to the father of a friend, who passed away in 2021, and that thereafter no steps were taken by the assessee to ascertain the status of the appeal or to follow up on the proceedings before the learned CIT(A). The affidavit does not disclose any attempt made by the assessee to verify the filing or progress of the appeal for several years thereafter. The explanation, therefore, is vague, general, and lacking in demonstrable bona fides.
10.The Hon’ble Supreme Court in P.K. Ramachandran v. State of Kerala (1997) 7 SCC 556 has held that while the courts are empowered to condone delay to advance justice, such discretion cannot be exercised in favour of a litigant who has not acted with due diligence. The law of limitation, though sometimes harsh, must be applied with its full force where no convincing justification is shown for the delay.
11.Applying these settled principles to the facts of the case before us, we find that the cause shown by the assessee does not constitute a sufficient cause within the contemplation of section 5 of the Limitation Act. The delay in question is attributable solely to the assessee’s own indifference and failure to pursue the appellate remedy with due care and attention. The explanation furnished falls short of establishing any bona fide reason preventing the filing of the appeal within the prescribed period.
12.In view of the foregoing discussion, we are not satisfied that the assessee was prevented by any sufficient or reasonable cause from filing the appeal within the period of limitation. Accordingly, the application for condonation of delay is dismissed. As a necessary corollary, the appeal being barred by limitation is not admitted for adjudication and is consequently dismissed in- limine.
In the result, appeal of the assessee is unadmitted.