SONMRUG CO-OPERATIVE HOUSING SOCIETY LTD,PEDDER ROAD vs. CIT(APPEAL), MUMBAI

All the grounds raised by the Assessee are interrelated and interconnected and relates to challenging the order of Ld. CIT(A) in upholding the additions made by the AO, therefore we have decided to adjudicate these grounds through the present consolidated order.

Apart from this the appeal of the Assessee before Ld. CIT(A) was also dismissed on the ground that the same was filed beyond the period of limitation and there was also delay of 3615 days.

On perusal of the application, filed with regard to condonation of delay we find that the only reason mentioned in the application for seeking condonation of delay is that there was dispute between the ex-committee members and the Assessee’s society and certain allegations were levelled between present committee members and the ex-committee members. It was also submitted that the members were completely hostile and non- cooperative because of which the Assessee could not file the respective documents before ld. CIT(A) and also before the ITAT within time.

We noticed that the Ld. CIT(A) has categorically dismissed this entire issue of condonation of delay in its order and the operative portion of which, is at Para Nos. 2 to 4 and the same is reproduced below:

As mentioned above, the appeal against the intimation under section 143(1) dated 27.02.2013, served on the same date, has been filed on 20.02.2023 as against the limitation date of 27.03.2013. This shows that the delay in filing the appeal as per the provisions of section 249(2) of the Act was 3615 days. On perusal of Form No. 35, it is observed that regarding delay in filing the appeal, the appellant has submitted as under: - “Sub: An Application for condonation of delay in filing of appeal. Respected Sir/Madam, under instructions from my client and in respect of aforesaid appeal hearing for the Assessment Year 2012- 13, we have to plead before you honor to kindly condone the delay in filling of appeal and adjudge the matter on merit. There was grave dispute between the ex- committee members of the appellant society and the present one. The previous outgoing committee which was ousted under unpleasant circumstances through AGM, was in complete command of the day-to-day financial affairs was seized of the society s books of accounts and records and were not parting records There are severe allegations between the present committee and ex. Committee members. The Committee Members and office bearers who did not the societies books of the accounts documents present status and password as they were completely hostile and uncooperative. The present Committee which was elected in the AGM held later on following hue and cry and demand of the majority members of the society did not have any idea of non-filing of Return of Income and status of the Income tax matter. There was no customary handing over and taking over of records and documents. Thus present the committee completely ignorant and unaware of the intimation issued by the Income tax department and received u/s 143 (1) of the Income tax Act. By the previous Committee. The discord and extent of dispute between ex Committee heads and present Committee is the matter of records. Subsequently much after when new Committee actually started working it was discovered from the Income Tax portal that an intimation 143(1) of the Income tax Act 1961 had been issued with tax payable by the society. Therefore, in the peculiar circumstance the assesse their assessee Society was not been able to file the appeal on time. The delay in filing the appeal was due to unavoidable circumstances. which may be construed as circumstances beyond the control of the Assessee Society as present Committee could not foresee the mistakes and default committed by the previous committee. We would like to submit that there was neither a malafide intention nor deliberate intention in not co-operating with the department in assessee Cooperative Housing Society Limited is not filing appeal in time The appellant is fully aware that if an appeal is not filed under the stipulated time frame, ultimate suffer will only be the assessee and nobody will Intentionally Act against his own interest. In view of above, I have to request you to kindly condone the delay in filing appeal and oblige.”

After having gone through the facts of the case we find that no plausible explanation for such a huge delay before Ld. CIT(A) and also before ITAT has been explained/ furnished by the Assessee. Assessee has not submitted any substantive document. The reliance has been placed on the decision of Hon’ble Supreme Court in the case of “Assistant Commissioner (CT) LTU, Kakinada & Ors. v. MIs Glaxo Smith Kline Consumer Health Care Limited 2020[36] G.S.T.L. 305.”

After having considered the facts of the case we also noticed that no specific action either civil or criminal has been initiated against the ex-committee members and also no details of such a huge inordinate delay has been mentioned by the Assessee.

However, before adverting to the specific deliberation in the case, it is deemed appropriate to set forth the tone and tenor of the overall law on condonation of delay Some of the broad principles of law laid down by the Hon'ble Apex Court has been dealt with in the caes titled Pathapati Subba Reddy (Died) By L.Rs. & Ors. Vs. The Special Deputy Collector (LA) [in SLP (Civil) No. 31248 of 2018 decided on 08/04/2024], which are found relevant for condonation of delay under the Income-tax Act, are given below: 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. 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. iv. 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; v. 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, vi. Merits of the case are not required to be considered in condoning the delay: vii, 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. tantamount to disregarding the statutory provision.

In this regard, we also place reliance on the decision of Hon’ble Supreme Court, in the case of State of Gujarat v. Sayed Mohd. Baquir El Edross [AIR 1981 SC 1921], the Supreme Court laid down the following principles that should govern the exercise of powers of condonation under section 5 of the Limitation Act, 1963:

The party seeking relief has to satisfy the Court that he had sufficient cause for not preferring the appeal, etc., within the prescribed time.

The explanation has to cover the entire period of delay 3. A litigant should not be permitted to take away a right which has accrued to his adversary by lapse of time. 4. After sufficient cause is shown, the Court is to inquire whether in its discretion, it should condone the delay. 5. The discretion conferred on the Court is a judicial discretion and must be exercised to advance substantial justice. 6. Even if there was a strong case for acceptance of the appeal on merits that could not be a ground for condonation of delay. 7. When there is remiss on the part of the advocate, the question that comes up for consideration is whether the mistake was bona fide or was merely a device to cover the ulterior purpose such as latches on the part of the litigant or an attempt to save limitation in an underhand way.

It was also held in an earlier decision in the case of Ramlal Motilal v. Rewa Coalfields [AIR 1962 SC 361], that 'every day's delay must be explained' The appellant is also required to demonstrate that the 'cause' for the delay must have arisen before the expiry of the limitation period, and, as held by the Supreme Court in the case of Ajit Singh Thakur Singh v State of Gujarat (MR 1981 SC 733], "no event or circumstance arising after the expiry of limitation period can constitute sufficient cause"

At the same time, the Hon. Apex Court has, in the case of Collector, Land Acquisition Mst. Katiji [1987] 66 STC 228 (SC), advised for a balanced and pragmatic approach: i. Ordinarily a litigant does not stand to benefit by lodging an appeal late. ii. Refusing to condone the delay can result in a 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. iii. 'Every day's delay must be explained does not mean that a pedantic approach should be made. Why not every hour's delay, every second's delay?

Thus in our view, the delay should not be condoned simply because the appellant's case is hard and calls for sympathy or merely out of benevolence to the party seeking relief. In granting the indulgence and condoning the delay it must be proved beyond the shadow of doubt that the appellant was diligent and was not guilty of negligence whatsoever. Sufficient cause within the contemplation of the limitation provision must be a cause which is beyond the control of the party invoking the aid of the provisions. The Hon'ble Supreme Court in the case of Ramlal vs. Rewa 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 have been avoided cannot be a sufficient cause within the meaning of the limitation provision.

In the instant case, there exists no sufficient reason for the delay. Such inordinate delay cannot be condoned as condonation in the present case would not be in accordance with the exposition of law. It will rather be grave prejudice to the Respondent, which is also a litigant in the appeal and doesn't deserve a step-motherly treatment. In this context, the decision of Hon'ble Punjab and Haryana High Court in the case of CIT vs. Ram Mohan Kabra (2002) 178 CTR (P& H) 274 is relevant, which reads as under "Where the legislature spells out a period of limitation and provides for power to condone the delay as well, then such delay can be condoned only for sufficient and good reasons supported by cogent and proper evidence. Now, it is a settled principle of law that hat the the provisio provisions relating to specified period of limitation must be applied with their rigour and 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 failure to file the appeal within the prescribed period of limitation u/s.249(2) of the Income Tax Act, 1961 r.w.s. 5 of Limitation Act. The abnormal delays cannot be condoned."

In a judgment in the case of University of Delhi Vs Union of India & Ors. In Civil Appeal No. 9408 of 2019 vide order dated 17/12/2019, the Hon'ble Supreme Court has refused to condone delay by holding that, "The entire explanation as noted above, depicts the casual approach unmindful of the law of limitation despite being aware of the position of law. That apart when there is 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 has proceeded before filing an appeal. In the matter of condonation of delay and laches, the well accepted position is also that the accrued right of the opposite party cannot be lightly dealt with. It was, therefore, held that the appeal had been filed beyond the prescribed time limit of section 249(2) of the Act, hence the delay could not be condoned.

The Hon’ble Supreme Court in the case of R.B. Ramlingam Petitioner vs R.B. Bhavaneshwari vide order dated 13.1.2009 (2009) (SC2) GJX 106 (SC), held as under “Section 5 of the Limitation Act, 1963 does not lay down any standard or objective test. The test of “sufficient cause” is purely an individualistic test. It is not an objective test. Therefore, no two cases can be treated alike. The statute of Limitation has left the concept of “sufficient cause” delightfully undefined, thereby leaving to the Court a well- intentioned discretion to decide the individual cases whether circumstances exist establishing sufficient cause. There are no categories of sufficient cause. The categories of sufficient cause are never exhausted. Each case spells out a unique experience to be dealt with by the Court as such.”

Therefore, in light of our above discussions we find that there are no merits in the reasons mentioned by the Assessee in its application seeking condonation of delay. As the Assessee has not been able to demonstrate “sufficient cause” existed for not filing the appeal within due time either before Ld. CIT(A) or before us. As such an inordinate delay is unjustified for a person who is vigilant about his affairs. Since the Assessee/Appellant has neglected/omitted to assert his rights of appeal in a timely manner. Therefore, the request for seeking condonation of delay is hereby rejected and also the orders passed by the Ld. CIT(A) stands upheld.

Since we have dismissed the application for seeking condonation of delay, therefore, the present appeal filed by the Assessee is not maintainable on this issue. The same is rendered inadmissible.

Before parting, it is deemed necessary to mention that it is a settled legal proposition that law of limitation may harshly affect a particular party but it has to be applied with all its rigour when the statute so prescribes. A court has no power to extend the period of limitation on equitable grounds. A result flowing from a statutory provision is never an evil. A court has no power to ignore that provision to relieve what it considers a distress resulting from its operation. The statutory provision may cause hardship or inconvenience to a particular party but the court has no choice but to enforce it giving full effect to the same. The legal maxim dura lex sed lex which means "the law is hard but it is the law" stands attracted in such a situation.