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Facts
The assessee received a proposal for refund adjustment related to AY 2024-25 against demands for AY 2015-16, which alerted them to ex-parte assessment and penalty orders. The assessee claimed that notices were missed due to working abroad and emails going into spam folders, and thus filed appeals with a delay. The assessing officer rejected the condonation of delay due to a lack of sufficient evidence.
Held
The Tribunal noted that the assessee's explanation for the delay constituted a reasonable cause, especially considering the inconsistency of the Ld. CIT(A) condoning delay in penalty appeals but not in quantum appeals on identical facts. The Tribunal found the delay was not deliberate or due to culpable negligence.
Key Issues
Whether the delay in filing the appeal for quantum assessment proceedings should be condoned, and if the CIT(A)'s rejection of condonation was justified.
Sections Cited
Section 245, Section 249(2), Section 249(3), Section 5 of Limitation Act, Section 146, Section 270AA, Section 201, Section 148A(d), Section 148, Section 144
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Income Tax Appellate Tribunal, MUMBAI BENCH “B” MUMBAI
Before: SHRI OM PRAKASH KANT & MS. KAVITHA RAJAGOPAL
ORDER PER OM PRAKASH KANT, AM PER OM PRAKASH KANT, AM These appeals by the assessee are directed against two These appeals by the assessee are directed against two These appeals by the assessee are directed against two separate orders, both dated 11.09.2025 passed by the Ld. separate orders, both dated 11.09.2025 passed by the Ld. separate orders, both dated 11.09.2025 passed by the Ld. Commissioner of Income Commissioner of Income-tax (Appeals) – National Faceless Appeal National Faceless Appeal Centre, Delhi [in short the Ld. CIT(A)’] for assessment year 2015-16, Centre, Delhi [in short the Ld. CIT(A)’] for assessment year 2015 Centre, Delhi [in short the Ld. CIT(A)’] for assessment year 2015 relating to o o quantum quantum quantum assessment assessment assessment proceedings proceedings proceedings and and and penalty penalty penalty proceedings respectively. proceedings respectively.
Before us, the Ld. counsel for the assessee submitted that the Before us, the Ld. counsel for the assessee submitted that the Before us, the Ld. counsel for the assessee submitted that the Ld. CIT(A) has not condoned the delay in filing the appeal in against Ld. CIT(A) has not condoned the delay in filing the appeal Ld. CIT(A) has not condoned the delay in filing the appeal quantum assessment proceedings quantum assessment proceedings and accordingly and accordingly dismissed the appeal as non-maintainable. The relevant finding of the Ld. CIT(A) maintainable. The relevant finding of the Ld. CIT(A) maintainable. The relevant finding of the Ld. CIT(A) in quantum proceedings in quantum proceedings is reproduced as under:
“5.1. Condonation of delay: 5.1. Condonation of delay: The appellant has mentioned in the statement of facts that he came The appellant has mentioned in the statement of facts that he came The appellant has mentioned in the statement of facts that he came to know the assessment order and to know the assessment order and the penalty orders only after the penalty orders only after receipt of the proposal dated 17.08.2025 to adjust refund u/s 245 receipt of the proposal dated 17.08.2025 to adjust refund u/s 245 receipt of the proposal dated 17.08.2025 to adjust refund u/s 245 determined for A.Y. 2024 determined for A.Y. 2024- 25. The appellant has also mentioned in 25. The appellant has also mentioned in the form 35, the date of service of order / notice of demand as the form 35, the date of service of order / notice of demand as the form 35, the date of service of order / notice of demand as 17.08.2024, however, he has no 17.08.2024, however, he has not attached any supporting t attached any supporting documents to verify the genuineness of the claim. Whereas, various documents to verify the genuineness of the claim. Whereas, various documents to verify the genuineness of the claim. Whereas, various notices have been issued through email and also issued centralized notices have been issued through email and also issued centralized notices have been issued through email and also issued centralized communication through speed post No.: JA50086034IN, hence, the communication through speed post No.: JA50086034IN, hence, the communication through speed post No.: JA50086034IN, hence, the reason for the delayed filing of reason for the delayed filing of appeal of around 176 days is not appeal of around 176 days is not acceptable. The delay of around 176 days as it appears to be only due to the The delay of around 176 days as it appears to be only due to the The delay of around 176 days as it appears to be only due to the lax approach of the appellant. The reason for delay in filing appeal lax approach of the appellant. The reason for delay in filing appeal lax approach of the appellant. The reason for delay in filing appeal appellant assessee has neither accepted nor forwarded the reason appellant assessee has neither accepted nor forwarded the reason appellant assessee has neither accepted nor forwarded the reason for the delayed appeal which is not acceptable in absence of any yed appeal which is not acceptable in absence of any yed appeal which is not acceptable in absence of any cogent evidence. It is nothing else but camouflage for the gross cogent evidence. It is nothing else but camouflage for the gross cogent evidence. It is nothing else but camouflage for the gross
Naushad Ali Abdul Haq Shaikh Naushad Ali Abdul Haq Shaikh SA No.
& 7339/MUM/2025 164 & 163/Mum/2025 negligence and inaction of the appellant assessee has not accepted negligence and inaction of the appellant assessee has not accepted negligence and inaction of the appellant assessee has not accepted the delay and had not given any documentary evidence in support the delay and had not given any documentary evidence in support the delay and had not given any documentary evidence in support of the delay during the ongoing appellate proceedings. The delay during the ongoing appellate proceedings. The delay during the ongoing appellate proceedings. The appellant assessee has miserably failed to demonstrate sufficient appellant assessee has miserably failed to demonstrate sufficient appellant assessee has miserably failed to demonstrate sufficient evidence for non evidence for non-filing the appeal within due time. Section 249 (2) of the Income Tax Act 1961, mentions as under: Section 249 (2) of the Income Tax Act 1961, mentions as under: Section 249 (2) of the Income Tax Act 1961, mentions as under: The appeal shall be pre The appeal shall be presented within thirty days of the following sented within thirty days of the following date, that is to say date, that is to say- (a) Where the appeal is under section 248, the date of payment of (a) Where the appeal is under section 248, the date of payment of (a) Where the appeal is under section 248, the date of payment of the tax, or (b) Where the appeal relates to any assessment or penalty, the date (b) Where the appeal relates to any assessment or penalty, the date (b) Where the appeal relates to any assessment or penalty, the date of service of the notice of demand relating t of service of the notice of demand relating to the assessment or o the assessment or penalty: Further, section 249(3) reads as under Further, section 249(3) reads as under: The Commissioner (Appeals) may admit an appeal after the The Commissioner (Appeals) may admit an appeal after the The Commissioner (Appeals) may admit an appeal after the expiration of the said period if he is satisfied that the appellant had expiration of the said period if he is satisfied that the appellant had expiration of the said period if he is satisfied that the appellant had sufficient cause for not presenting it within that period. sufficient cause for not presenting it within that period. sufficient cause for not presenting it within that period. When an appeal is filed beyond the statutory time limit, the When an appeal is filed beyond the statutory time limit, the When an appeal is filed beyond the statutory time limit, the Appellant needs to provi de a valid reason or demonstrate Appellant needs to provi de a valid reason or demonstrate Appellant needs to provi de a valid reason or demonstrate exceptional circumstances for the delay. It is the duty of the exceptional circumstances for the delay. It is the duty of the exceptional circumstances for the delay. It is the duty of the assessee to file the appeal within the stipulated time provided assessee to file the appeal within the stipulated time provided assessee to file the appeal within the stipulated time provided under the Act unless the assessee is prevented by a reasonable Act unless the assessee is prevented by a reasonable Act unless the assessee is prevented by a reasonable cause from filing the appeal in time. cause from filing the appeal in time. 5.2 The appellant ought to have filed the appeal within the 5.2 The appellant ought to have filed the appeal within the 5.2 The appellant ought to have filed the appeal within the prescribed time limit of 30 days from date of service as per section prescribed time limit of 30 days from date of service as per section prescribed time limit of 30 days from date of service as per section 249(2) of the Act and any delay the 249(2) of the Act and any delay therein may be condoned only rein may be condoned only subject to the satisfaction that the appellant had sufficient cause for subject to the satisfaction that the appellant had sufficient cause for subject to the satisfaction that the appellant had sufficient cause for not presenting it within that period, as evident from the plain not presenting it within that period, as evident from the plain not presenting it within that period, as evident from the plain language of section 249 extracted as under: language of section 249 extracted as under: "249(2) the appeal shall be presented within thirt "249(2) the appeal shall be presented within thirty days of the y days of the following date, that is to say, following date, that is to say, (a) Where the appeal is under section 248, the date of payment of (a) Where the appeal is under section 248, the date of payment of (a) Where the appeal is under section 248, the date of payment of the tax, or (b) Where the appeal relates to any assessment or penalty, the date (b) Where the appeal relates to any assessment or penalty, the date (b) Where the appeal relates to any assessment or penalty, the date of service of the notice of demand relating to the assessment or of service of the notice of demand relating to the assessment or of service of the notice of demand relating to the assessment or penalty:
Naushad Ali Abdul Haq Shaikh Naushad Ali Abdul Haq Shaikh SA No.
& 7339/MUM/2025 164 & 163/Mum/2025 Provided that, where an application has been made under section Provided that, where an application has been made under section Provided that, where an application has been made under section 146 for reopening an assessment, the period from the date on which 146 for reopening an assessment, the period from the date on which 146 for reopening an assessment, the period from the date on which the application is made to the date on which the order passed on the application is made to the date on which the order passed on the application is made to the date on which the order passed on the application is served on the assessee shall be the application is served on the assessee shall be the application is served on the assessee shall be excluded: Provided further that where an application has been made under Provided further that where an application has been made under Provided further that where an application has been made under sub- section (1) of section 270AA, the period beginning from the date section (1) of section 270AA, the period beginning from the date section (1) of section 270AA, the period beginning from the date on which the application is made, to the date on which the order on which the application is made, to the date on which the order on which the application is made, to the date on which the order rejecting the application is served on the asse rejecting the application is served on the assessee, shall be ssee, shall be excluded, or (1). In any other case, the date on which intimation of the order (1). In any other case, the date on which intimation of the order (1). In any other case, the date on which intimation of the order sought to be appealed against is served. sought to be appealed against is served.
Notwithstanding anything contained in sub 1. Notwithstanding anything contained in sub-section (2), where an section (2), where an order has been made under section 201 on or after the order has been made under section 201 on or after the order has been made under section 201 on or after the 1st day of October, 1998 but before the 1st day of June, 2000 and the October, 1998 but before the 1st day of June, 2000 and the October, 1998 but before the 1st day of June, 2000 and the assessee in default has not presented any appeal within the time assessee in default has not presented any appeal within the time assessee in default has not presented any appeal within the time specified in that sub specified in that sub-section, he may present such appeal before the section, he may present such appeal before the 1st day of July, presen 2000. 1st day of July, presen 2000.
The Commissioner (A 1. The Commissioner (Appeals) may ) may admit an appeal after the ppeals) may ) may admit an appeal after the expiration of the said period if he is satisfied that the appellant had expiration of the said period if he is satisfied that the appellant had expiration of the said period if he is satisfied that the appellant had sufficient cause for not presenting it within that period." sufficient cause for not presenting it within that period." sufficient cause for not presenting it within that period." 5.3 It is pertinent to note that the delay may be condoned, and the 5.3 It is pertinent to note that the delay may be condoned, and the 5.3 It is pertinent to note that the delay may be condoned, and the appeal may b appeal may be admitted u/s 249(3) only if the appellant could e admitted u/s 249(3) only if the appellant could successfully demonstrate that it had sufficient cause for not successfully demonstrate that it had sufficient cause for not successfully demonstrate that it had sufficient cause for not presenting the appeal within the period of 30 days. The exercise of presenting the appeal within the period of 30 days. The exercise of presenting the appeal within the period of 30 days. The exercise of discretion in condonation of delay in matters of limitation, such as discretion in condonation of delay in matters of limitation, such as discretion in condonation of delay in matters of limitation, such as in the present case u/s 249(3) of the Income tax act, 1961 has to be present case u/s 249(3) of the Income tax act, 1961 has to be present case u/s 249(3) of the Income tax act, 1961 has to be carried out within the meaning of "sufficient cause" as envisaged in carried out within the meaning of "sufficient cause" as envisaged in carried out within the meaning of "sufficient cause" as envisaged in Section 5 of Limitation act. Hence the general rule of law of Section 5 of Limitation act. Hence the general rule of law of Section 5 of Limitation act. Hence the general rule of law of limitation is that an extension shall not be granted under sect limitation is that an extension shall not be granted under sect limitation is that an extension shall not be granted under section 5 if there is no sufficient cause or cogent ground for the condonation of there is no sufficient cause or cogent ground for the condonation of there is no sufficient cause or cogent ground for the condonation of delay. In the present set of appeals the appellant assessee has delay. In the present set of appeals the appellant assessee has delay. In the present set of appeals the appellant assessee has miserably failed to demonstrate that sufficient cause existed for non miserably failed to demonstrate that sufficient cause existed for non miserably failed to demonstrate that sufficient cause existed for non filing the appeal within due time. The onus filing the appeal within due time. The onus of proving which lies on of proving which lies on the appellant/application as clearly laid down in the judicial the appellant/application as clearly laid down in the judicial the appellant/application as clearly laid down in the judicial pronouncements by the Highest Courts of law. pronouncements by the Highest Courts of law. In the case of Perumon Bhagvathy Devaswom, perinadu village v. In the case of Perumon Bhagvathy Devaswom, perinadu village v. In the case of Perumon Bhagvathy Devaswom, perinadu village v. Bhargavi Amma (Dead) by LRs, (2008) 8 SCC 321, it was observ Bhargavi Amma (Dead) by LRs, (2008) 8 SCC 321, it was observ Bhargavi Amma (Dead) by LRs, (2008) 8 SCC 321, it was observed by the Hon'ble Court that by the Hon'ble Court that "13... the words "sufficient cause for not making the application "13... the words "sufficient cause for not making the application "13... the words "sufficient cause for not making the application within the period of limitation* should be understood and applied in within the period of limitation* should be understood and applied in within the period of limitation* should be understood and applied in a reasonable, pragmatic, practical and liberal manner, depending a reasonable, pragmatic, practical and liberal manner, depending a reasonable, pragmatic, practical and liberal manner, depending
Naushad Ali Abdul Haq Shaikh Naushad Ali Abdul Haq Shaikh SA No.
& 7339/MUM/2025 164 & 163/Mum/2025 upon the facts and circumst upon the facts and circumstances of the case, and the type of case. ances of the case, and the type of case. The words "sufficient cause" in Section 5 of the Limitation Act The words "sufficient cause" in Section 5 of the Limitation Act The words "sufficient cause" in Section 5 of the Limitation Act should receive a liberal construction so as to advance substantial should receive a liberal construction so as to advance substantial should receive a liberal construction so as to advance substantial justice, when the delay is not on account of any dilatory tactics, justice, when the delay is not on account of any dilatory tactics, justice, when the delay is not on account of any dilatory tactics, want of bona fide want of bona fides, deliberate inaction or negligence on the part of s, deliberate inaction or negligence on the part of the appellant." (Emphasis supplied) the appellant." (Emphasis supplied) The aforesaid view was reiterated in the case of Balwant Singh The aforesaid view was reiterated in the case of Balwant Singh The aforesaid view was reiterated in the case of Balwant Singh (Dead) v. Jagdish Singh, (2010) 8 SCC 685, where in the Court held (Dead) v. Jagdish Singh, (2010) 8 SCC 685, where in the Court held (Dead) v. Jagdish Singh, (2010) 8 SCC 685, where in the Court held that: "25. We may state that even if t "25. We may state that even if the term "sufficient cause" has to he term "sufficient cause" has to receive liberal construction, it must squarely fall within the concept receive liberal construction, it must squarely fall within the concept receive liberal construction, it must squarely fall within the concept of reasonable time and proper conduct of the party concemed. The of reasonable time and proper conduct of the party concemed. The of reasonable time and proper conduct of the party concemed. The purpose of introducing liberal construction normally is to introduce purpose of introducing liberal construction normally is to introduce purpose of introducing liberal construction normally is to introduce the concept of "r the concept of "reasonableness as it is understood in its general easonableness as it is understood in its general connotation. The law of limitation is a substantive law and has connotation. The law of limitation is a substantive law and has connotation. The law of limitation is a substantive law and has definite consequences on the right and obligation of a party to arise. definite consequences on the right and obligation of a party to arise. definite consequences on the right and obligation of a party to arise. These principles should be adhered to and applied appropriately These principles should be adhered to and applied appropriately These principles should be adhered to and applied appropriately depending on the facts and circumstances of a given case. Once a g on the facts and circumstances of a given case. Once a g on the facts and circumstances of a given case. Once a valuable right has accrued in favor of one party as a result of the valuable right has accrued in favor of one party as a result of the valuable right has accrued in favor of one party as a result of the failure of the other party to explain the delay by showing sufficient failure of the other party to explain the delay by showing sufficient failure of the other party to explain the delay by showing sufficient cause and its own conduct, it will be unreasonable to take aw cause and its own conduct, it will be unreasonable to take aw cause and its own conduct, it will be unreasonable to take away that right on the mere asking of the applicant, particularly when the that right on the mere asking of the applicant, particularly when the that right on the mere asking of the applicant, particularly when the delay is directly a result of negligence, default or inaction of that delay is directly a result of negligence, default or inaction of that delay is directly a result of negligence, default or inaction of that party. Justice must be done to both parties equally. Then alone the party. Justice must be done to both parties equally. Then alone the party. Justice must be done to both parties equally. Then alone the ends of justice can be achieved. If a party h ends of justice can be achieved. If a party has been thoroughly as been thoroughly negligent in implementing its rights and remedies, it will be equally negligent in implementing its rights and remedies, it will be equally negligent in implementing its rights and remedies, it will be equally unfair to deprive the other party of a valuable right that has accrued unfair to deprive the other party of a valuable right that has accrued unfair to deprive the other party of a valuable right that has accrued to it in law as a result of his acting vigilantly." to it in law as a result of his acting vigilantly." The Courts in the abovementioned cases, high The Courts in the abovementioned cases, highlighted upon the lighted upon the importance introducing the concept of "reasonableness" while giving importance introducing the concept of "reasonableness" while giving importance introducing the concept of "reasonableness" while giving the clause "sufficient cause" a liberal interpretation. In furtherance the clause "sufficient cause" a liberal interpretation. In furtherance the clause "sufficient cause" a liberal interpretation. In furtherance of the same, the Courts has cautioned regarding the necessity of of the same, the Courts has cautioned regarding the necessity of of the same, the Courts has cautioned regarding the necessity of distinguishing cases where delay is distinguishing cases where delay is of few days, as against the of few days, as against the cases where the delay is inordinate as it might accrue to the cases where the delay is inordinate as it might accrue to the cases where the delay is inordinate as it might accrue to the prejudice of the rights of the other party. In such cases, where there prejudice of the rights of the other party. In such cases, where there prejudice of the rights of the other party. In such cases, where there exists inordinate delay and the same is attributable to the party's exists inordinate delay and the same is attributable to the party's exists inordinate delay and the same is attributable to the party's inaction and negligence, t inaction and negligence, the Courts have to take a strict approach he Courts have to take a strict approach so as to protect the substantial rights of the parties. so as to protect the substantial rights of the parties. The Division bench of the Hon'ble Bombay HC in Ornate Traders The Division bench of the Hon'ble Bombay HC in Ornate Traders The Division bench of the Hon'ble Bombay HC in Ornate Traders Private Limited v. The income Tax Officer, Mumbai emphasized the Private Limited v. The income Tax Officer, Mumbai emphasized the Private Limited v. The income Tax Officer, Mumbai emphasized the need for reasonableness and hen need for reasonableness and hence, the actions which can be ce, the actions which can be condoned by the court should fall within the scope of normal human condoned by the court should fall within the scope of normal human condoned by the court should fall within the scope of normal human conduct or normal conduct of a litigant. The Hon'ble Bombay HC conduct or normal conduct of a litigant. The Hon'ble Bombay HC conduct or normal conduct of a litigant. The Hon'ble Bombay HC
Naushad Ali Abdul Haq Shaikh Naushad Ali Abdul Haq Shaikh SA No.
& 7339/MUM/2025 164 & 163/Mum/2025 further observed that while Section 5 of the Limitation Act is being further observed that while Section 5 of the Limitation Act is being further observed that while Section 5 of the Limitation Act is being interpreted liberally, it ca interpreted liberally, it cannot be so liberally that it is without any nnot be so liberally that it is without any justification, since condonation of delay in a mechanical or routine justification, since condonation of delay in a mechanical or routine justification, since condonation of delay in a mechanical or routine manner will jeopardize the legislative intent behind Section 5. manner will jeopardize the legislative intent behind Section 5. manner will jeopardize the legislative intent behind Section 5. The Hon'ble SC in the case of Shiv Dass v. Union of India (UOI) and The Hon'ble SC in the case of Shiv Dass v. Union of India (UOI) and The Hon'ble SC in the case of Shiv Dass v. Union of India (UOI) and Ors., AIR 2007 SC 1330 held that the High Courts, while exercising 007 SC 1330 held that the High Courts, while exercising 007 SC 1330 held that the High Courts, while exercising their discretionary powers under Article 226, should consider delay their discretionary powers under Article 226, should consider delay their discretionary powers under Article 226, should consider delay or laches and, refuse to invoke its extraordinary powers if it is or laches and, refuse to invoke its extraordinary powers if it is or laches and, refuse to invoke its extraordinary powers if it is found that the applicant had neglected/omitted to assert its right found that the applicant had neglected/omitted to assert its right found that the applicant had neglected/omitted to assert its rights in a timely manner; however, this discretion has to be exercised in a timely manner; however, this discretion has to be exercised in a timely manner; however, this discretion has to be exercised judicially and reasonably. judicially and reasonably. 5.4 From the above decisions, it becomes clear that in the case of 5.4 From the above decisions, it becomes clear that in the case of 5.4 From the above decisions, it becomes clear that in the case of condonation of delay where the appeal was filed beyond the condonation of delay where the appeal was filed beyond the condonation of delay where the appeal was filed beyond the limitation of period, the courts/aut limitation of period, the courts/authorities are empowered to horities are empowered to condone the delay, provided that the Appellant can prove his claim condone the delay, provided that the Appellant can prove his claim condone the delay, provided that the Appellant can prove his claim of inability to file appeal within the prescribed period. Litigant must of inability to file appeal within the prescribed period. Litigant must of inability to file appeal within the prescribed period. Litigant must be able to demonstrate that there was "sufficient cause" which be able to demonstrate that there was "sufficient cause" which be able to demonstrate that there was "sufficient cause" which obstructed his action to fil obstructed his action to file Appeal beyond the prescribed time limit. e Appeal beyond the prescribed time limit. The law of limitation is found upon the maxims Interest The law of limitation is found upon the maxims Interest The law of limitation is found upon the maxims Interest ReipublicaeUt Sit FinisLitium" that litigation must come to an end in ReipublicaeUt Sit FinisLitium" that litigation must come to an end in ReipublicaeUt Sit FinisLitium" that litigation must come to an end in the interest of society as a whole and "vigilantibus non the interest of society as a whole and "vigilantibus non the interest of society as a whole and "vigilantibus non dormientibus Jura subveniunt" dormientibus Jura subveniunt" that the law assists those that are that the law assists those that are vigilant with their rights, and not those that sleep thereupon. The vigilant with their rights, and not those that sleep thereupon. The vigilant with their rights, and not those that sleep thereupon. The law of limitation in India identifies the need for limiting litigation by law of limitation in India identifies the need for limiting litigation by law of limitation in India identifies the need for limiting litigation by striking a balance between the interests of the state and the litigant. striking a balance between the interests of the state and the litigant. striking a balance between the interests of the state and the litigant. 5.5 COM The delay should not be condoned simply be because the COM The delay should not be condoned simply be because the COM The delay should not be condoned simply be because the appellant's case is hard and calls for sympathy or merely out of appellant's case is hard and calls for sympathy or merely out of appellant's case is hard and calls for sympathy or merely out of benevolence to the party seeking relief. In granting the indulgence benevolence to the party seeking relief. In granting the indulgence benevolence to the party seeking relief. In granting the indulgence and condoning the delay it must be proved beyond the shadow of and condoning the delay it must be proved beyond the shadow of and condoning the delay it must be proved beyond the shadow of doubt that the appellant was diligent and was not guilty of oubt that the appellant was diligent and was not guilty of oubt that the appellant was diligent and was not guilty of negligence negligence negligence whatsoever. whatsoever. whatsoever. The The The sufficient sufficient sufficient cause cause cause within within within the the the contemplation of the limitation provision must be a cause which is contemplation of the limitation provision must be a cause which is contemplation of the limitation provision must be a cause which is beyond the control of the party invoking the aid of the provisions. beyond the control of the party invoking the aid of the provisions. beyond the control of the party invoking the aid of the provisions. The Hon'ble Supreme Court in the case of Ramlal vs. Rewa 'ble Supreme Court in the case of Ramlal vs. Rewa 'ble Supreme Court in the case of Ramlal vs. Rewa Coalfields Ltd. AIR 1962 SC 361 has held that the cause for the Coalfields Ltd. AIR 1962 SC 361 has held that the cause for the Coalfields Ltd. AIR 1962 SC 361 has held that the cause for the delay in filing the appeal which by due care and attention could delay in filing the appeal which by due care and attention could delay in filing the appeal which by due care and attention could have been avoided cannot be a sufficient cause within the meaning have been avoided cannot be a sufficient cause within the meaning have been avoided cannot be a sufficient cause within the meaning of the limitation provision. Where no negligence, nor inaction, or tation provision. Where no negligence, nor inaction, or tation provision. Where no negligence, nor inaction, or want of bona fides can be imputed to the appellant a liberal want of bona fides can be imputed to the appellant a liberal want of bona fides can be imputed to the appellant a liberal construction of the provisions has to be made in order to advance construction of the provisions has to be made in order to advance construction of the provisions has to be made in order to advance substantial justice. Seekers of justice must come with clean hands. substantial justice. Seekers of justice must come with clean hands. substantial justice. Seekers of justice must come with clean hands. [JCIT Vs Tractors & Farm Equipment Ltd. (ITAT, Chennai) 104 ITD Vs Tractors & Farm Equipment Ltd. (ITAT, Chennai) 104 ITD Vs Tractors & Farm Equipment Ltd. (ITAT, Chennai) 104 ITD 149 followed]. 149 followed].
Naushad Ali Abdul Haq Shaikh Naushad Ali Abdul Haq Shaikh SA No.
& 7339/MUM/2025 164 & 163/Mum/2025 5.6 Thus, there exists no sufficient and good reason for a delay of 5.6 Thus, there exists no sufficient and good reason for a delay of 5.6 Thus, there exists no sufficient and good reason for a delay of around 176 days Such a delay cannot be condoned as condonation around 176 days Such a delay cannot be condoned as condonation around 176 days Such a delay cannot be condoned as condonation in the present case would not be in accordance with in the present case would not be in accordance with the exposition emanating out of the Hon'ble apex Court and Hon'ble High Court emanating out of the Hon'ble apex Court and Hon'ble High Court emanating out of the Hon'ble apex Court and Hon'ble High Court decisions. It will rather be grave prejudice to the Department. As decisions. It will rather be grave prejudice to the Department. As decisions. It will rather be grave prejudice to the Department. As already expressed by the apex Court in the case cited supra that already expressed by the apex Court in the case cited supra that already expressed by the apex Court in the case cited supra that the State is also a litigant and need not be the State is also a litigant and need not be given a step given a step-motherly treatment. In this context, the decision of Hon'ble Punjab and treatment. In this context, the decision of Hon'ble Punjab and treatment. In this context, the decision of Hon'ble Punjab and Haryana High Court in the case of CIT vs. Ram Mohan Kabra (2002) Haryana High Court in the case of CIT vs. Ram Mohan Kabra (2002) Haryana High Court in the case of CIT vs. Ram Mohan Kabra (2002) 178 CTR (P& H) 274 is relevant, which reads as under: 178 CTR (P& H) 274 is relevant, which reads as under: 178 CTR (P& H) 274 is relevant, which reads as under: The provisions relating to prescription of limitatio The provisions relating to prescription of limitation in every statute n in every statute must not be construed so liberally that it would have the effect of must not be construed so liberally that it would have the effect of must not be construed so liberally that it would have the effect of taking away the benefit accruing to the other party in a mechanical taking away the benefit accruing to the other party in a mechanical taking away the benefit accruing to the other party in a mechanical manner. Where the legislature spells out a period of limitation and manner. Where the legislature spells out a period of limitation and manner. Where the legislature spells out a period of limitation and provides for power to condone the provides for power to condone the delay as well, then such delay delay as well, then such delay can be condoned only for sufficient and good reasons supported by can be condoned only for sufficient and good reasons supported by can be condoned only for sufficient and good reasons supported by cogent and proper evidence. cogent and proper evidence. Now, it is a settled principle of law that the provisions relating to Now, it is a settled principle of law that the provisions relating to Now, it is a settled principle of law that the provisions relating to specified period of limitation must be applied with their ri specified period of limitation must be applied with their ri specified period of limitation must be applied with their rigour and effective Since the appellant has failed to show any "sufficient effective Since the appellant has failed to show any "sufficient effective Since the appellant has failed to show any "sufficient cause" u/s. 249(3) of the Income Tax Act, 1961 for the appellant's cause" u/s. 249(3) of the Income Tax Act, 1961 for the appellant's cause" 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 failure to file the appeal within the prescribed period of limitation failure to file the appeal within the prescribed period of limitation u/s.249(2) of the Income Tax Act, 1961 r.w.s. u/s.249(2) of the Income Tax Act, 1961 r.w.s. 5 of Limitation Act. 5 of Limitation Act. The abnormal delays cannot be condoned. The abnormal delays cannot be condoned. 5.7 In a recent judgment in the case of University of Delhi Vs Union 5.7 In a recent judgment in the case of University of Delhi Vs Union 5.7 In a recent judgment in the case of University of Delhi Vs Union of India & Ors. In Civil Appeal No. 9408 of 2019 vide order dated of India & Ors. In Civil Appeal No. 9408 of 2019 vide order dated of India & Ors. In Civil Appeal No. 9408 of 2019 vide order dated 17/12/2019, the Hon'ble Supreme Court has refused to condon 17/12/2019, the Hon'ble Supreme Court has refused to condon 17/12/2019, the Hon'ble Supreme Court has refused to condone delay by holding that, "The entire explanation as noted above, delay by holding that, "The entire explanation as noted above, delay by holding that, "The entire explanation as noted above, depicts the casual approach unmindful of the law of limitation depicts the casual approach unmindful of the law of limitation depicts the casual approach unmindful of the law of limitation despite being aware of the position of law. That apart when there is despite being aware of the position of law. That apart when there is despite being aware of the position of law. That apart when there is such a long delay and there is no proper explanation, lache such a long delay and there is no proper explanation, lache such a long delay and there is no proper explanation, laches would also come into play while noticing as to the manner in which a party also come into play while noticing as to the manner in which a party also come into play while noticing as to the manner in which a party has proceeded before filing an appeal. In the matter of condonation has proceeded before filing an appeal. In the matter of condonation has proceeded before filing an appeal. In the matter of condonation of delay and laches, the well accepted position is also that the of delay and laches, the well accepted position is also that the of delay and laches, the well accepted position is also that the accrued right of the opposite party cannot be accrued right of the opposite party cannot be lightly dealt with." I, lightly dealt with." I, therefore, hold that the appeal has been filed beyond the prescribed therefore, hold that the appeal has been filed beyond the prescribed therefore, hold that the appeal has been filed beyond the prescribed time limit of section 249(2) of the Act, hence the Delay cannot be time limit of section 249(2) of the Act, hence the Delay cannot be time limit of section 249(2) of the Act, hence the Delay cannot be condoned, and appeal cannot be admitted for adjudication hence condoned, and appeal cannot be admitted for adjudication hence condoned, and appeal cannot be admitted for adjudication hence rendered as inadmissible. rendered as inadmissible.
In the light of the above, the appellant has not accepted the delay he light of the above, the appellant has not accepted the delay he light of the above, the appellant has not accepted the delay in filing of appeal and had not given any substantive evidence for in filing of appeal and had not given any substantive evidence for in filing of appeal and had not given any substantive evidence for the late filing of appeal. The appellant assessee has not been able the late filing of appeal. The appellant assessee has not been able the late filing of appeal. The appellant assessee has not been able to demonstrate that sufficient cause existed for non to demonstrate that sufficient cause existed for non-fili filing the appeal
Naushad Ali Abdul Haq Shaikh Naushad Ali Abdul Haq Shaikh SA No.
& 7339/MUM/2025 164 & 163/Mum/2025 within due time. In fact, the appellant assessee tried to within due time. In fact, the appellant assessee tried to within due time. In fact, the appellant assessee tried to hide/mislead the fact of late filing of around 176 days. The hide/mislead the fact of late filing of around 176 days. The hide/mislead the fact of late filing of around 176 days. The appellant assessee has neglected/omitted to assert its rights of appellant assessee has neglected/omitted to assert its rights of appellant assessee has neglected/omitted to assert its rights of appeal in a timely manner. It is seen that there was no pr appeal in a timely manner. It is seen that there was no pr appeal in a timely manner. It is seen that there was no priority in the mind of the appellant to file the appeal. Hence, the appeal filed the mind of the appellant to file the appeal. Hence, the appeal filed the mind of the appellant to file the appeal. Hence, the appeal filed by the appellant is dismissed as not maintainable. by the appellant is dismissed as not maintainable.”
We have heard the rival submissions and perused the material We have heard the rival submissions and perused the material We have heard the rival submissions and perused the material on record. The primary issue before us concerns the refusal of the on record. The primary issue before us concerns the refusal on record. The primary issue before us concerns the refusal Ld. CIT(A) to condone the delay in filing the quantum appeal, Ld. CIT(A) to condone the delay in filing the quantum appeal, Ld. CIT(A) to condone the delay in filing the quantum appeal, despite having condoned the delay in the interconnected penalty despite having condoned the delay in the interconnected penalty despite having condoned the delay in the interconnected penalty proceedings arising from the same set of facts. The assessee has proceedings arising from the same set of facts. The assessee has proceedings arising from the same set of facts. The assessee has filed an affidavit before us, the relevant portions of which are filed an affidavit before us, the relevant portions of whi filed an affidavit before us, the relevant portions of whi extracted below:
“2. I say that during the Financial Year 2014 2. I say that during the Financial Year 2014-15 relevant to 15 relevant to Assessment Year 2015 Assessment Year 2015-16, I was working in India and was a 16, I was working in India and was a salaried employee. TDS was deducted from salary. No return of salaried employee. TDS was deducted from salary. No return of salaried employee. TDS was deducted from salary. No return of income was filed for Assessment Year 2015 income was filed for Assessment Year 2015-16.
I say that I received on 17.08.2024 a proposal dated say that I received on 17.08.2024 a proposal dated say that I received on 17.08.2024 a proposal dated 17.08.2024 to adjust refund u/s. 245 of the Income Tax Act, 1961 17.08.2024 to adjust refund u/s. 245 of the Income Tax Act, 1961 17.08.2024 to adjust refund u/s. 245 of the Income Tax Act, 1961 determined for AY 2024 determined for AY 2024-25 against the demand raised in the 25 against the demand raised in the Assessment Order and the Penalty Order for AY 2015 Assessment Order and the Penalty Order for AY 2015- -16.
I say that thereafter, 4. I say that thereafter, I approached one tax consultant firm I approached one tax consultant firm namely M/s Laddha & Laddha, Chartered Accountants, Mumbai namely M/s Laddha & Laddha, Chartered Accountants, Mumbai namely M/s Laddha & Laddha, Chartered Accountants, Mumbai and handed over the letter issued u/s. 245 of the Income Tax Act, and handed over the letter issued u/s. 245 of the Income Tax Act, and handed over the letter issued u/s. 245 of the Income Tax Act, 1961 dated 17.08.2024. Thereafter, the tax consultant informed 1961 dated 17.08.2024. Thereafter, the tax consultant informed 1961 dated 17.08.2024. Thereafter, the tax consultant informed the appellant that the assessmen the appellant that the assessment order, penalty orders, various t order, penalty orders, various notices and order passed u/s. 148A(d) & also notice u/s. 148 of notices and order passed u/s. 148A(d) & also notice u/s. 148 of notices and order passed u/s. 148A(d) & also notice u/s. 148 of the Income Tax Act, 1961 are passed. the Income Tax Act, 1961 are passed.
I say that, I am not regular to assessment proceedings therefore 5. I say that, I am not regular to assessment proceedings therefore 5. I say that, I am not regular to assessment proceedings therefore I don't check the Income Tax Portal. Hence, I was not I don't check the Income Tax Portal. Hence, I was not aware of the aware of the various notices/communications, order passed u/s. 148A(d), various notices/communications, order passed u/s. 148A(d), various notices/communications, order passed u/s. 148A(d), notice u/s. 148 of the Income Tax Act, 1961 and even that the notice u/s. 148 of the Income Tax Act, 1961 and even that the notice u/s. 148 of the Income Tax Act, 1961 and even that the Assessment Order was passed ex Assessment Order was passed ex-parte u/s. 144 of the of the parte u/s. 144 of the of the Income Tax Act, 1961. Income Tax Act, 1961.
Naushad Ali Abdul Haq Shaikh Naushad Ali Abdul Haq Shaikh SA No.
& 7339/MUM/2025 164 & 163/Mum/2025
I say that only when I received mess 6. I say that only when I received message of proposal of age of proposal of adjustment of my refund, I approached tax consultant for the adjustment of my refund, I approached tax consultant for the adjustment of my refund, I approached tax consultant for the refund matter and he informed me about the assessment refund matter and he informed me about the assessment refund matter and he informed me about the assessment proceedings.
I say that, I was not having any regular tax consultant and all 7. I say that, I was not having any regular tax consultant and all 7. I say that, I was not having any regular tax consultant and all the notices/orders/communications were com the notices/orders/communications were communicated on mail municated on mail which went in the spam folder and went inadvertently went which went in the spam folder and went inadvertently went which went in the spam folder and went inadvertently went unnoticed.
I say that, since the facts and circumstances of quantum appeal 8. I say that, since the facts and circumstances of quantum appeal 8. I say that, since the facts and circumstances of quantum appeal as well as penalty appeal are same & identical as far as delay in as well as penalty appeal are same & identical as far as delay in as well as penalty appeal are same & identical as far as delay in filing of appeal before Ld. CIT (A) filing of appeal before Ld. CIT (A) are concerned. However, In the are concerned. However, In the penalty appeal Ld. CIT (A) suo moto condoned the delay in filing of penalty appeal Ld. CIT (A) suo moto condoned the delay in filing of penalty appeal Ld. CIT (A) suo moto condoned the delay in filing of appeal but in the quantum appeal he did not condoned the delay appeal but in the quantum appeal he did not condoned the delay appeal but in the quantum appeal he did not condoned the delay in filing of appeal. The Ld. CIT(A) ought to have given same in filing of appeal. The Ld. CIT(A) ought to have given same in filing of appeal. The Ld. CIT(A) ought to have given same treatment in both appeals on same treatment in both appeals on same set of facts. The Ld. CIT(A) did set of facts. The Ld. CIT(A) did not grant opportunity to explain the delay considered by him & not grant opportunity to explain the delay considered by him & not grant opportunity to explain the delay considered by him & straight away dismissed the appeal. straight away dismissed the appeal.
I say that since I am working abroad from the year 2023 the 9. I say that since I am working abroad from the year 2023 the 9. I say that since I am working abroad from the year 2023 the notice which was sent by speed post was also not received by notice which was sent by speed post was also not received by notice which was sent by speed post was also not received by me.
I say that, due to the aforementioned circumstances, I received 10. I say that, due to the aforementioned circumstances, I received 10. I say that, due to the aforementioned circumstances, I received the Assessment Order dated 30.01.2024 on 17.08.2024 and the the Assessment Order dated 30.01.2024 on 17.08.2024 and the the Assessment Order dated 30.01.2024 on 17.08.2024 and the appeal before Ld. CIT(A) was filed within 10 days of the receipt appeal before Ld. CIT(A) was filed within 10 days of the receipt appeal before Ld. CIT(A) was filed within 10 days of the receipt i.e., on 27.08.2024 i.e., on 27.08.2024 11. I say that, the failure to file th 11. I say that, the failure to file the appeal within the prescribed e appeal within the prescribed time was neither deliberate nor intentional but occurred due to time was neither deliberate nor intentional but occurred due to time was neither deliberate nor intentional but occurred due to bona fide and unavoidable circumstances beyond the control. bona fide and unavoidable circumstances beyond the control. bona fide and unavoidable circumstances beyond the control.” 4. A perusal of the affidavit reveals a sequence of bona fide A perusal of the affidavit reveals a sequence of bona fide A perusal of the affidavit reveals a sequence of bona fide circumstances. The assessee, being a s circumstances. The assessee, being a salaried employee with taxes alaried employee with taxes deducted at source, was under the impression that no further deducted at source, was under the impression that no further deducted at source, was under the impression that no further compliance was necessitated. It was only upon receiving a proposal compliance was necessitated. It was only upon receiving a proposal compliance was necessitated. It was only upon receiving a proposal for adjustment of refund under for adjustment of refund under Section 245 of the Act on of the Act on 17.08.2024, pertaining to AY 2024 pertaining to AY 2024-25 against demands for AY t demands for AY 2015-16, that the assessee became aware of the ex that the assessee became aware of the ex that the assessee became aware of the ex-parte assessment and penalty orders. Furthermore, the assessee’s assessment and penalty orders. Furthermore, the assessee’s assessment and penalty orders. Furthermore, the assessee’s
Naushad Ali Abdul Haq Shaikh Naushad Ali Abdul Haq Shaikh SA No.
& 7339/MUM/2025 164 & 163/Mum/2025 professional commitments abroad and the inadvertent filtration of professional commitments abroad and the inadvertent filtration of professional commitments abroad and the inadvertent filtration of electronic notices into 'spam' folders contributed to the lack of electronic notices into 'spam' folders contributed to the electronic notices into 'spam' folders contributed to the knowledge regarding the proceedings. knowledge regarding the proceedings.
4.1 It is a settled principle of law that the expression It is a settled principle of law that the expression It is a settled principle of law that the expression "sufficient cause" under the Limitation Act must receive a liberal construction under the Limitation Act must receive a liberal construction under the Limitation Act must receive a liberal construction to advance the cause of substantial justice. When technicalities and to advance the cause of substantial justice. When technicalities and to advance the cause of substantial justice. When technicalities and substantial justice are pitted against each other, the latter must antial justice are pitted against each other, the latter must antial justice are pitted against each other, the latter must prevail. We find it particularly inconsistent that the Ld. CIT(A) prevail. We find it particularly inconsistent that the Ld. CIT(A) prevail. We find it particularly inconsistent that the Ld. CIT(A) condoned the delay in the penalty appeal while dismissing the condoned the delay in the penalty appeal while dismissing the condoned the delay in the penalty appeal while dismissing the quantum appeal on the same grounds of delay. Such a bifurcated quantum appeal on the same grounds of delay. Such a bifurcated quantum appeal on the same grounds of delay. Such a bifurcated approach on identical facts lacks judicial parity. roach on identical facts lacks judicial parity. In our considered In our considered view, the explanation tendered by the assessee constitutes a view, the explanation tendered by the assessee constitutes a view, the explanation tendered by the assessee constitutes a "reasonable cause." The delay was neither deliberate nor a result of "reasonable cause." The delay was neither deliberate nor a result of "reasonable cause." The delay was neither deliberate nor a result of culpable negligence.
4.2 However, the specific contents of this affidavit were not However, the specific contents of this affidavit were not However, the specific contents of this affidavit were not available before the ld CIT(A) before the ld CIT(A), in the interest of substantial justice, in the interest of substantial justice, we deem it appropriate appropriate to restore the matte back to the file of ld back to the file of ld CIT(A) for reconsideration of the issue of condonation of delay in CIT(A) for reconsideration of the issue of condonation of d CIT(A) for reconsideration of the issue of condonation of d accordance with law accordance with law without influenced by any of any of our observation above.
4.3 Accordingly, we set aside th Accordingly, we set aside the impugned order of the Ld. CIT(A) of the Ld. CIT(A) in quantum. As the penalty appeal is consequent to the appeal in to the appeal in respect of quantum respect of quantum proceedings, the order of ld CIT(A) on penalty the order of ld CIT(A) on penalty
Naushad Ali Abdul Haq Shaikh Naushad Ali Abdul Haq Shaikh SA No.
& 7339/MUM/2025 164 & 163/Mum/2025 matter is also setaside and restored back for deciding afresh after matter is also setaside and restored back for deciding afresh after matter is also setaside and restored back for deciding afresh after the order passed in quantum appellate proceedings. the order passed in quantum appellate proceedings. the order passed in quantum appellate proceedings.
4.4 Since the main appeals are being restored for fresh Since the main appeals are being restored for fresh Since the main appeals are being restored for fresh adjudication, the Stay Petitions filed by th adjudication, the Stay Petitions filed by the assessee e assessee do not survive now for adjudication now for adjudication as same are rendered themselves infructuous as same are rendered themselves infructuous and are dismissed accordingly. and are dismissed accordingly.
In the result, both the appeals of the assessee are allowed for In the result, both the appeals of the assessee are allowed for In the result, both the appeals of the assessee are allowed for statistical purposes whereas the stay petitions filed by the assessee statistical purposes whereas the stay petitions filed by the asses statistical purposes whereas the stay petitions filed by the asses are dismissed.