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Facts
The assessee company engaged in manufacturing and supply of chemicals filed TDS quarterly statements. The TDS-CPC raised a demand for short payment and consequential interest. The assessee filed an appeal before the CIT(A) after a significant delay of over 11 years, failing to provide sufficient cause or documentary evidence for the delay.
Held
The CIT(A) rightly refused to condone the delay, citing the lack of sufficient cause and the precedents established by the Supreme Court regarding the law of limitation and the principles of condoning delays. The Tribunal found no infirmity in the CIT(A)'s order.
Key Issues
Whether the CIT(A) was justified in refusing to condone the inordinate delay in filing the appeal, and consequently, whether the appeal merits consideration on its grounds.
Sections Cited
250 of the Income-tax Act, 1961, 200A(1) of the Act, 249(3) of the Act, Section 3 of the Limitation Act, Section 5 of the Limitation Act, Rule 34 of ITAT Rules, 1963
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Before: SHRI DINESH MOHAN SINHA & SHRI BIJAYANANDA PRUSETH
Consolidated Appeals (2)
आदेश / O R D E R to 818 & 855/SRT/2024 Altret Industries Pvt. Ltd. PER BIJAYANANDA PRUSETH, AM: These appeals by the assessee emanate from the separate orders, all dated 04.06.2024, passed under section 250 of the Income-tax Act, 1961 (in short, ‘the Act’) by the learned Addl./Jt. Commissioner of Income-tax (Appeals) - 9, Delhi [in short, ‘the CIT(A)’] for the different assessment years (AYs) 2011-12, 2013-14, 2014-15, 2015-16 and 2016-17. All these appeals before the CIT(A) were against orders passed u/s 200A(1) of the Act by the TDS, CPC, Bengaluru for the above years. Since facts are same, with consent of both parties, the cases were heard together and a common order is passed for the sake of convenience and brevity.
for AY.2011-12 is taken as ‘lead’ case.
The grounds of appeal
raised by assessee in ‘lead’ case are as follows:
1. The learned ADDL/JCIT(A) has grossly erred in not condoning the delay & dismissing the appeal ex-party.
2. The Ld. Assessing officer (TDS - CPC) has grossly erred in holding short payment of Rs.10,750/- and levying consequential interest of Rs.3,420/- charged on same, resulting in erroneous demand of Rs.14,170/-.
3. The deductees have received TDS certificates from the appellant, which they have used to claim credit for TDS while filing their income tax returns. If in any instance, there was a shortfall in TDS payment, it would have been paid by respective taxpayers through self-assessment tax payments. Thus, there has been no loss of tax revenue, and the tax liability has been wrongly thrust upon the appellant.
4. Furthermore, the appellant has not been communicated any instance for Short Deduction of TDS of deductees & therefore also the demons is illegal.
5. In absence of any revenue loss, levy of Interest is also absolutely unwarranted and liable to be quashed as illegal.
6. The said demand is liable to be deleted by giving the Benefit of Proposal of withdrawal of outstanding direct tax demands provided in Order No. to 818 & 855/SRT/2024 Altret Industries Pvt. Ltd. 375/02/2023 IT Budget Dt. 13.02.2024 and also liable to take benefit of Vivad se Vishwas Scheme, 2024 as stated in BUDGET 2024-2025. 7. The appellant Craves leave to add, to alter or amend present grounds of Appeal
.”
3. The facts of the case in brief are that the assessee is a private limited company. The assessee company was engaged in the business of manufacturing of and supply of water and fuel treatment chemicals, hygiene care products and cleaning solutions etc. As per the ‘Statement of Facts’, the assessee had filed its TDS quarterly statement of FY.2010-11. The TDS - CPC (in short, ‘AO’) raised demand of Rs.14,170/- due to short payment of tax of Rs.10,750/- and consequential interest of Rs.3,240/-.
4. Aggrieved by the order of AO, the assessee filed appeals before the CIT(A). The CIT(A) issued 4 notices, which is at para 2 of the appellate order. There was non-compliance on the part of the appellant. Since the appeal was filed late after a gap of 11 years, the appellant was also asked to produce documentary evidence of service of demand notice and also explain the reasons for the inordinate delayed in filling appeals. There was neither any compliance nor any request for adjournment. The CIT(A) found that there was delay of more than 11 years because order u/s 200A(1) of the Act was passed on 31.07.2012 but appeal before the CIT(A) was filed on 14.02.2024. Neither any convincing reasons of the grounds for the inordinate delay in filing appeal was adduced nor any documentary evidence in support of the submissions was filed. As per provisions of section 249(3) of the Act, the CIT(A) may admit appeal after expiration of the period of 30 to 818 & 855/SRT/2024 Altret Industries Pvt. Ltd. days, if the appellant had sufficient cause for not presenting appeal within the period of 30 days. The CIT(A) observed that the Courts and Appellate Authorities are not ‘walk-in-place’ where appellants can approach whenever they want. He has discussed the scope of ‘sufficient cause’ by placing reliance on the decision of the Hon’ble Supreme Court in case of Basawaraj and Ors. vs. The Special Land Acquisition Officer, AIR 2014 SC 746, where it was held that sufficient cause does not include negligent manner, want of bona fide, inaction and lack of diligence on part of the appellant. The CIT(A) has also relied upon the decisions in the following cases: (i) Ram Lal & Ors vs. Rewa Coalfields Ltd., AIR 1962 SC 361, (ii) Anshul Agarwal vs. New Okhla Industrial Development Authority (2011) 14 SCC 578, Mewa Ram (deceased by L. Rs) & Ors vs. State of Haryanna, AIR 1987 SC 13, (iii) Sate of Nagaland vs. Lipok AO & Ors, AIR 2005 SC 291 and (iv) D. Gopinathan Pillai vs. State of Kerala & Anrs., AIR 2007 SC 2624. After considering the facts of the case, grounds of appeal and the above decisions, he held that there was no sufficient cause for not presenting the appeal for such a long time. He also held that the mistake was not bona fide. Accordingly, the delay was not condoned and the appeal was rejected.
5. Aggrieved by the order of CIT(A), the assessee filed present appeal before the Tribunal. The learned Authorized Representative (ld. AR) of the assessee submitted that the deductees have received TDS certificate and they have claimed credit for TDS while filing the ITRs. The appellant had received the order of the AO on 02.01.2024 and hence appeal was filed to 818 & 855/SRT/2024 Altret Industries Pvt. Ltd. within the time allowed u/s 249(2) of the Act. The ld. AR reiterated the submission made before the CIT(A). He has relied on the decisions in cases of (i) Jamini Ashokkumar Dave vs. DCIT, WP(C) No. 17145/2022, daed 27.02.2024 (Delhi), (ii) Munjal BCU Centre of Innovation & Entrepreneurship vs. CIT(A), 463 ITR 560 (P & H) and (iii) Chhering Tomdan vs. ITO, dated 04.09.2024 (Chennai – Trib.) and some other decisions in appeals of Sales-tax, Commercial tax, GST, CGST etc.
6. On the other hand, learned Senior Departmental Representative (ld. Sr. DR) for the revenue supported the order of the CIT(A). He submitted that in all cases, there were inordinate delays in filling appeal before the CIT(A). The assessee was unable to establish sufficient cause for delay in filing the appeals before the CIT(A).
We have heard both parties on this preliminary issue of condonation of delay. We have also deliberated on the decision relied on by the ld. AR. There was a delay of more than 11 years and 5 months in filing appeal before the CIT(A). The appellant had requested the CIT(A) to condone the delay on the ground that the demands raised by the revenue came to its knowledge recently and neither any intimation or order was served on the appellant. There was neither any mala fide intention or ill-motive on part of the appellant. The appellant had relied on the decision of Hon’ble Supreme Court in case of Collector, Land Acquisition vs. Mst. Katiji, 167 ITR 471 (SC). The request for condition of delay was rejected because the CIT(A) did not find sufficient cause for the inordinate delay of more than 11 years in filing to 818 & 855/SRT/2024 Altret Industries Pvt. Ltd. appeal. He has relied on various decision, which are cited at para 4 of this order. On going through the facts of the case and the material on record, we find that there has been inordinate delay of more than 11 years and 5 months in filing appeal by the assessee before the CIT(A). Even before us, the assessee has not been able to give any cogent reason for such inordinate delay in filing appeal before CIT(A). The appellant has not furnished any documentary evidence of service of the order, as mentioned in Form 35. The appellant is a limited company and it has been filing TDS quarterly statements regularly for different financial years. The appellant has also filed its return of income regularly. Therefore, it is not possible to accept the contention of ld. AR that the appellant was not aware of the orders passed u/s 200A(1) of the Act by the AO (TDS – CPC) for various impugned AYs. 7.1 The ld. AR has relied on the decisions in cases of Jamini Ashokkumar Dave (supra), Munjal BCU Centre of Innovation & Entrepreneurship (supra), Chhering Tomdan (Supra) and Collector, Land Acquisition vs. Mst. Katiji (supra). In case of Jamini Ashokkumar Dave (supra), the question of service of notice was a disputed question of fact due to which the notice was not quashed by the Hon’ble High Court. Since the order was ex-parte, the matter was remanded to the AO. In case of Munjal BCU Centre (supra), the show cause notice was only in the e-portal of the department and not served on the assessee. Hence, the assessee was entitled to file reply and department was entitled to examine the same and passed order thereafter. In case of Cherring Tomdan (supra), the ITAT, Chandigarh has followed the decision of to 818 & 855/SRT/2024 Altret Industries Pvt. Ltd. Hon’ble Punjab and Haryana High Court in case of Munjal BCU Centre (supra). The facts in these cases are not similar and are distinguishable from the facts of the present case. In these cases, there was no inordinate delay of more than 11 years. In fact, in case of Munjal BCU Centre (supra), the AY was 2023-24. In case of Jamini Ashokkumar Dave (supra), the notice u/s 148 was not quashed but matter was remanded to the AO. The Hon’ble Bombay High Court in case of Ashish Gandhi Builders & Developers Pvt. Ltd. vs. ITAT, in WP No.2844 of 2016, dated 12.01.2017 held that mere filing of the paper book is no indication of the fact that case laws referred to in the paper book was relied upon and submission made on it during the course of hearing of appeal. Be that as it may, there are a number of decisions by the Hon’ble Supreme Court where inordinate delay in filling appeal has not been favourably considered. The same would be clear from the discussion made herein below.
The appellant had also relied upon the decision of the Hon'ble Supreme Court in the case of Collector, Land Acquisition vs. Mst. Katiji (supra), which was pronounced on 19.02.1987. There was delay only 4 days in the said case. However, we find that in the subsequent decisions, namely, (i) P. K. Ramachandran vs State of Kerala & Anr. (1997) 7 SCC 556, (ii) Pundik Jalam Patil vs. Executive Engineers, Jalgaon Medium Project, (2008) 17 SCC 448 and (iii) Basawaraj and Anr vs. Special Land Acquisition Officer, (2013) 14 SCC 81, (iv) Pathapati Subba Reddy (dies) By L. Rs. & Ors. Vs The Special Deputy Collector (LA), SLP(C) No.31248 of 2018 (SC), dated to 818 & 855/SRT/2024 Altret Industries Pvt. Ltd. 08.04.2024, it has been held that condonation of delay should not be granted only on the ground that ordinarily a litigant does not stand to benefit by lodging an appeal late.
The Hon'ble Supreme Court in the case of Basawaraj (supra) summarized the law on the subject issue by stating that where a case has been presented in the Court beyond limitation of time, the applicant has to explain as to what was the “sufficient cause” which means an adequate and enough reason, which prevented him to approach the Court within the limitation. In case a party is found to be negligent, or for want of bonafide on his part in the facts and circumstances of the case, or found to have not acted diligently or remained inactive, there cannot be a justified ground to condone the delay.
We find that in a recent decision pronounced on 28.04.2024, in the case of Pathapati Subba Reddy (dies) & Ors. vs. The Special Deputy Collector (LA), in SLP (Civil) No. 31248 of 2018 (SC), the Hon'ble Supreme Court referred to and discussed various decisions of Hon'ble Supreme Court namely (i) Bhag Mal (Alias) Ram Bux & Ors vs. Munshi (Dead) by LRs & Ors (2007) 11 SCC 285 (SC), (ii) Collector, Land Acquisition vs. Mst. Katiji (supra) (iii) Ramlal, Motilal and Chhotelal vs. Rewa Coalfields Ltd. (1962) 2 SCR 762, (iv) Maqbul Ahmad and Ors vs. Onkar Pratap Narain Singh and Ors, AIR 1935 PC 85 (v) Brijesh Kumar and Ors vs. State of Haryana and Ors. 2014 (4) SCALE 50 (vi) Lanka Venkateswarlu vs. State of Andhra Pradesh & Ors, (2011) 4 SCC 363 (vii) State of Jharkhand & Ors vs. Ashok Kumar to 818 & 855/SRT/2024 Altret Industries Pvt. Ltd. Chokhani & Ors. AIR 2009 SC 1927 (viii) Basawaraj and Anr. (supra) and held as under: “7. The law of limitation is founded on public policy. It is enshrined in the legal maxim “interest reipublicae ut sit finis litium” i.e. it is for the general welfare that a period of limitation be put to litigation. The object is to put an end to every legal remedy and to have a fixed period of life for every litigation as it is futile to keep any litigation or dispute pending indefinitely. Even public policy requires that there should be an end to the litigation otherwise it would be a dichotomy if the litigation is made immortal vis-a- vis the litigating parties i.e. human beings, who are mortals.”
It has also discussed the case of Collector, Land Acquisition vs. Mst. Katiji (supra) relied upon by the appellant, and held that the phrases “liberal approach”, “justice-oriented approach” and “cause of advancement of substantial justice” cannot be employed to defeat the law of limitation. For ready reference of equality, the same is reproduced hereunder: “16. …………….In Collector, Land Acquisition, Anantnag and Ors. vs. Katiji and Ors.2, this Court in advocating the liberal approach in condoning the delay for ‘sufficient cause’ held that ordinarily a litigant does not stand to benefit by lodging an appeal late; it is not necessary to explain every day’s delay in filing the appeal; and since sometimes refusal to condone delay may result in throwing out a meritorious matter, it is necessary in the interest of justice that cause of substantial justice should be allowed to prevail upon technical considerations and if the delay is not deliberate, it ought to be condoned. Notwithstanding the above, howsoever, liberal approach is adopted in condoning the delay, existence of ‘sufficient cause’ for not filing the appeal in time, is a condition precedent for exercising the discretionary power to condone the delay. The phrases ‘liberal approach’, ‘justice- (1987) 2 SCC 107 = AIR 1987 SC 1353 oriented approach’ and cause for the advancement of ‘substantial justice’ cannot be employed to defeat the law of limitation so as to allow stale matters or as a matter of fact dead matters to be revived and re-opened by taking aid of Section 5 of the Limitation Act.”
After discussion on various cases in its order, the Hon'ble Supreme Court at Para 26, has summed up the law laid down by it as under: “26. On a harmonious consideration of the provisions of the law, as aforesaid, and the law laid down by this Court, it is evident that: to 818 & 855/SRT/2024 Altret Industries Pvt. Ltd. (i) Law of limitation is based upon public policy that there should be an end to litigation by forfeiting the right to remedy rather than the right itself; (ii) A right or the remedy that has not been exercised or availed of for a long time must come to an end or cease to exist after a fixed period of time; (iii) The provisions of the Limitation Act have to be construed differently, such as Section 3 has to be construed in a strict sense whereas Section 5 has to be construed liberally; (iv) In order to advance substantial justice, though liberal approach, justice- oriented approach or cause of substantial justice may be kept in mind but the same cannot be used to defeat the substantial law of limitation contained in Section 3 of the Limitation Act; (v) Courts are empowered to exercise discretion to condone the delay if sufficient cause had been explained, but that exercise of power is discretionary in nature and may not be exercised even if sufficient cause is established for various factors such as, where there is inordinate delay, negligence and want of due diligence; (vi) Merely some persons obtained relief in similar matter, it does not mean that others are also entitled to the same benefit if the court is not satisfied with the cause shown for the delay in filing the appeal; (vii) Merits of the case are not required to be considered in condoning the delay; and (viii) Delay condonation application has to be decided on the parameters laid down for condoning the delay and condoning the delay for the reason that the conditions have been imposed, tantamounts to disregarding the statutory provision.”
The Hon'ble Supreme Court refused to interfere with the decision of the Hon'ble High Court refusing to condone the delay in filing the appeal.
We also find that the Hon’ble Supreme Court in case of H. Guruswamy & Ors. vs. A. Krishnaiah Since Deceased by LRS., in Civil Appeal No. 317 of 2025, dated 08.01.2025, has set aside the order of Hon’ble High Court of Karnataka in WP No.7220 of 2014 wherein the Hon’ble High Court allowed the Writ Petition by condoning the delay of about 6 years. The Hon’ble Supreme Court at para 13 observed as under: to 818 & 855/SRT/2024 Altret Industries Pvt. Ltd. ‘13. We are at our wits end to understand why the High Court overlooked all the aforesaid aspects. What was the good reason for the High Court to ignore all this? Time and again, the Supreme Court has reminded the District judiciary as well the High courts that the concepts such as “liberal approach”, “Justice oriented approach”, “substantial justice” should not be employed to frustrate or jettison the substantial law of limitation.’ 15. We also find that this Tribunal in a very recent case, Navagam Vibhag Seva Sahkari Mandli Ltd. Vs. ITO, in to 89/SRT/2025, date 15.07.2025 had dismissed the appeal by the assessee against refusal of CIT(A) to condone the inordinate delay of 10 years in filing appeal before CIT(A). The facts and circumstances of the present case are similar. The assessee in the present case before us has filed the appeal before CIT(A) after a delay of more than 11 years and 5 months.
In view of the above facts and respectfully following the authoritative precedents cited supra, we find no infirmity in the order of CIT(A) in refusing to condone the inordinate delay in filing appeals before him in terms of provisions of section 249(3) of the Act, in absence of any sufficient cause. Accordingly, the appeal of the assessee is dismissed. Since, delay has not been condoned; it becomes academic in nature to discuss the merit of the case. Hence, the other grounds are not discussed.
In the result, appeal filed by the assessee in dismissed.
In case of the other appeals before us, there were inordinate delays in filling appeals before the CIT(A), which would be clear from the table given below: Sl. ITA Nos. AY(s). Delay in filing appeal No. before CIT(A)