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Income Tax Appellate Tribunal, AHMEDABAD “SMC” BENCH
Before: Shri Waseem Ahmed & Shri Siddhartha Nautiyal
आदेश/ORDER PER : SIDDHARTHA NAUTIYAL, JUDICIAL MEMBER:-
This is an appeal filed by the assessee against the order of the ld. Commissioner of Income Tax (Appeals)-5, Ahmedabad in Appeal no. CIT(A)-5/ITO Wd.5(1)(1)/10682/2018-19 vide order dated 23/07/2019 passed for the assessment year 2011-12.
I.T.A No. 1459/Ahd/2019 A.Y. 2011-12 Page No. 2 Tejus Karshanbhai Dari vs. ITO
The assessee has raised following grounds of appeal:-
“1. That Lrd CIT(A)-5, Ahmedabad has erred in law in rejecting delay Condon application filed by the appellant which has not been done in right perspective therefore, considering the totality of facts, deem it appropriate to set aside this case back to the file of the Ld. CIT(A) to be adjudicated afresh in accordance with law after providing due and reasonable opportunity of being heard to the assessee.
That your appellant reserve right to amend/ alter/ modify any ground or grounds during the pendency of the appeal.
That your appellant shall ever prays for justice.”
The brief facts of the case are that assessment order u/s. 147 r.w.s. 144 of the Act was passed by the Assessing Officer on 24-12-2018 and the same was served on the assessee on 03-01-2019. However, the appeal was filed by the assessee on 23-03-2019 i.e. there was a delay of 49 days beyond the prescribed period, in filing the appeal before Commissioner of Income Tax (Appeals). Along with form 35, the assessee also filed an application for condonation of delay citing the below reasons for delay in filing appeal:
“The assessee has immediately approached the consultant once he received the order raising whooping demand of Rs 26 lac as he was fully dependent on his consultant in the tax matter and he himself does not know the legal intricacies of tax law. He was then by his previous consultant was advised that this order being passed us 144 rws 147 cannot be appealed with. Thereafter, he during one social function
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mat a chartered accountant and being cautious about such a huge demand, assessee has narrated the entire sequence of events to that chartered accountant. The chartered accountant has advised him to file instant appeal against the order passed u/s 144 as it appealable before CIT(A) and thereafter drawn assessee attention to 156 demand notice which itself shows that order can be appealed with. On his advice, the assessee is now preferring this appeal. Hence in this view of the facts the assessee most humbly request that delay in filing appeal may kindly condoned.”
3.1 However, the ld. CIT(A) rejected assessee’s application for condonation of delay in filing the appeal and dismissed the assesee’s appeal by observing as below:
“3.2. I have carefully considered the facts of the appeal under consideration and contention of the appellant. It is noticed that the appeal is filed late by 49 days. The facts mentioned in the condonation of delay is vague for the reason that on verification of assessment records, it is noticed that the appellant received the order u/s.147 r.w.s. 144 on 03.01.209. The contention of the appellant that he was misguided by the Chartered accountant is not supported with any evidence has not tenable. It is well settled law that delay in filing the appeal can be condoned if there is a reasonable and sufficient cause which prevented the assessee to file the appeal within the stipulated time. In the instant case, the appellant failed to show any
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reasonable or sufficient cause which has prevented him to file the appeal within stipulated time.
3.3 There are various judicial pronouncements which laid down the principle for condonation of delay. The basic essence of all the judgment says that delay should not be malafide and there should not be any negligence on the part of the appellant. Some of the decisions are relied upon are as under:
……………………………………..
3.4 In view of the above judicial pronouncements, the basic principle emerges that me delay should be bonafide and there should not be any negligence on the part of the appellant. However, in the appeal under consideration, the appellant has taken the vague and unsupported plea for the delay and which is not verifiable from the records. The appellant has not submitted any evidence either along with the appeal or during appellate proceedings. Therefore, the delay made in filing the appeal does not deserve to be condoned and hence appellant's request for condonation of delay is not entertained and rejected. Therefore the appeal is dismissed on this count.”
The assessee is in appeal before us against the order of ld. CIT(A), who summarily dismissed assessee’s appeal by not condoning the delay in filing the appeal and also did not go into the merits of the case. On going
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through the order passed by the ld. CIT(A), we note that while Ld. CIT(A) has relied on various judicial precedents regarding the law relating to condonation of delay, however, he had not specifically dealt with the reasons submitted by the assessee for the delay in filing the appeal, and why in the instant facts delay should not be condoned. The ld. CIT(A) simply brushed aside the reasons filed by the assessee for delay in filing appeal, by stating “the appellant has taken the vague and unsupported plea for the delay and which is not verifiable from the records. The appellant has not submitted any evidence either along with the appeal or during appellate proceedings”. The ld. CIT(A) did not specifically point out any mala-fide intention on part of the assessee which could be attributed to the delay in filing the appeal. Moreover, we also note that even if the application for condonation of delay in filing appeal is rejected, even then the ld. CIT(A) should have disposed of the appeal on the merits and should not have summarily dismissed the assessee’s appeal on account of mere 49 days delay in filing appeal, without deciding the appeal on merits.
The Supreme Court in the case of Collector, Land Acquisition v. Mst. Katiji 1987 taxmann.com 1072, analyzed the provisions of law qua limitation Act and held that the expression 'sufficient cause' employed by the legislature in the Limitation Act is adequately elastic to enable the Courts to apply the law in a meaningful manner which sub-serves the ends of justice- that being the life purpose for the existence of the institution of Courts. It was further observed that a liberal approach is requires to be adopted on principle as ordinarily a litigant does not stand to benefit by lodging an appeal late. Further refusing to condone delay can result in a
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meritorious matter being thrown out at the very threshold and cause of justice being defeated. As against this when delay is condoned the highest that can happen is that a cause would be decided on merits after hearing the parties. The Apex Court further held that when substantial justice and technical considerations are pitted against each other, cause of substantial justice deserves to be preferred for the other side cannot claim to have vested right in injustice being done because of a non-deliberate delay. It must be grasped that 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 Supreme Court in N. Balakrishnan v. M. Krishnamurthy 2008 (228) ELT 162, while condoning the delay of 883 days in filing an application for setting aside the ex parte decree held "That the purpose of Limitation Act was not to destroy the rights. It is founded on public policy fixing a life span for the legal remedy for the general welfare. The primary function of a Court is to adjudicate disputes between the parties and to advance substantial justice. The time limit fixed for approaching the Court in different situations is not because on the expiry of such time a bad cause would transform into a good cause. The object of providing legal remedy is to repair the damage caused by reason of legal injury. If the explanation given does not smack mala fides or is not shown to have been put forth as a part of a dilatory strategy, the Court must show utmost consideration to the suitor."
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In the case of S.S.M. Ahmed Hussain v. ITO [2017] 85 taxmann.com 351 (Madras), the assessee filed an appeal before the Commissioner (Appeals) along with an application for condonation of delay of 175 days. The assessee claimed that delay occurred since he was waiting outcome of penalty order. The Commissioner (Appeals) however refused to condone the delay.
The ITAT as later (as also confirmed by the High Court) held that that the reason stated by the assessee in these cases is that he was waiting for the outcome of the penalty proceedings. Therefore, one has to consider, whether reasonable prudent person would do so. The inference of such delay has to be drawn on the basis of circumstances available on record and conduct of the assessee. After considering the surrounding circumstances and applying the test of human probabilities, one has to reasonably conclude that the plea of the assessee is genuine. The explanation offered by the assessee for the delay cannot be rejected as false or devoid of merits. Therefore, this short delay of 175 days is condoned.
In the case of Kiran Laxmikant Joshi v. ITO [2004] 3 SOT 822 (AHD.), the facts were that the assessee moved an application under section 154, which was disposed of by the Assessing Officer. The appeal against the said order was filed before the Commissioner (Appeals) with a delay of more than 6 months. The assessee explained that the delay was on account of earthquake and ill health of his wife coupled with change of his address due to certain family dispute. The Commissioner (Appeals), however, rejected the explanation of the assessee on the ground that the reasons
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were very general in nature and did not explain specifically as to why the delay had occurred. On second appeal, ITAT held the Courts and the quasi-judicial bodies are empowered to condone the delay if a litigant satisfies the court that there were sufficient reasons for availing the remedy after expiry of the limitation. Such reasoning should be to the satisfaction of the Court. In the instant case, on account of earthquake and ill health of his wife, the assessee had been facing many problems, simultaneously. According to him, order under section 154 was served upon him at the old address. That communication had also consumed time. Therefore, the assessee could not gain anything by filing the appeal late. There was no mala fide imputable to the assessee. The delay in filing the appeal was the result of ill health coupled with the change of his address thrice in a short span. In every case of delay there can be some lapse of the litigant concerned. That alone is not enough to turn down the plea and to shut the doors against him. If the explanation does not smack of mala fide or it is not put-forth as a part of dilatory strategy, the Courts must show utmost consideration to such litigant. At the most for the inaction or a little negligence, the assessee could be burdened with the cost. But his right of hearing of the appeal on merit ought not to be shut. Therefore, the delay in filing the appeal before the Commissioner (Appeals) was condoned and the matter restored to the first appellate authority to decide the appeal on merit.
In the case of Rameshbhai V. Prajapati v. DCIT [2021] 127 taxmann.com 674 (Ahmedabad - Trib.), the Ahmedabad ITAT held that where previous tax consultant of assessee had not attended tax matter
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satisfactorily and new tax consultant had obtained various documents, and that these circumstances and his ill health caused delay in filing Miscellaneous Application against ex parte order passed on account of non- prosecution, keeping in view of rule 24 of Income-tax Appellate Tribunal, 1963, delay in filing Miscellaneous Application was to be condoned.
In the case of Kashmir Road Lines v. DCIT 2021] 123 taxmann.com 5 (Amritsar - Trib.), ITAT held that where assessee claimed condonation of delay of 124 days in filing appeal due to reason that appeal papers were prepared and handed over to Assistant of assessee's counsel for filling who failed to do so and ultimately appeal was filed belatedly through another local counsel and such contention was also supported by affidavit of previous counsel, since assessee had demonstrated bona fide reason and sufficient cause for such delay, same was to be condoned.
In our considered view, the Ld. CIT(A) has not approached the matter judiciously and has dismissed the appeal of the assessee, by rejecting the application for condonation of delay, without assigning any specific reasons why the delay in filing appeal should not be condoned. There is no allegation to the effect that the assessee acted in a mala-fide manner. Further, Ld. CIT (A) has not brought anything on record as to how the assessee would stand to gain by not filing the appeal in time. There is a minor delay of 43 days, for which, in our view, the assessee has given a plausible explanation. In the assessment framed on the assessee, Ld. Assessing Officer has made a huge addition of 33,00,000/- as undisclosed income in the hands of the assessee. The assessee, in our view, should not be
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precluded an opportunity of hearing merits, simply on account of a delay of mere 49 days in filing appeal. Even otherwise, as held by ITAT in the case of Kashmir Road Lines v. DCIT 2021] 123 taxmann.com 5 (Amritsar - Trib.), even when the assessee is not interest in pursuing the appeal, even then the Ld. CIT(A) should dispose of the appeal on merits. Therefore, in view of the above, the delay in filing the appeal before the Commissioner (Appeals) is being condoned and the matter restored to the first appellate authority to decide the appeal on merit.
In the result, appeal of the assessee is allowed.
Order pronounced in the open court on 29-04-2022
Sd/- Sd/- (WASEEM AHMED) (SIDDHARTHA NAUTIYAL) ACCOUNTANT MEMBER JUDICIAL MEMBER Ahmedabad : Dated 29/04/2022 आदेश क� ��त�ल�प अ�े�षत / Copy of Order Forwarded to:- 1. Assessee 2. Revenue 3. Concerned CIT 4. CIT (A) 5. DR, ITAT, Ahmedabad 6. Guard file. By order/आदेश से,
उप/सहायक पंजीकार आयकर अपील�य अ�धकरण, अहमदाबाद