AKANSHA YOGESH DESHMUKH,BPCL STAFF COLONY vs. ITO/DCIT INTERNATIONAL TAXATION MUMBAI, INCOME TAX BUILDING

5. Failure to Appreciate That Entire Investment Was Made by Assessee’s Husband: The learned CIT(A) as well as the Assessing Officer erred in not appreciating that the major consideration was funded by the assessee’s husband through his own earnings and bank borrowings. The assessee had no taxable income in India and being an NRI, no part of the investment could be attributed to her. The addition made is therefore arbitrary, excessive, and unsustainable.

6. Invalid Assumption of Jurisdiction – Notices Served at an Incorrect Address: On the facts and in law, the learned Assessing Officer erred in assuming jurisdiction u/s 147 r.w.s. 144 even though all earlier Income Tax Returns consistently reflected the assessee’s address as Indore, and the Income Tax Portal Profile reflected the assessee’s Abu Dhabi address since 2018. Despite this, the AO issued notices only to a Mumbai address, which does not exist in any tax records of the assessee. The alleged service of notices is therefore invalid, and the entire reassessment is void ab initio.

8. General Ground: The appellant denies her liability to be assessed at the income and tax determined. The additions confirmed by the learned CIT(A) are arbitrary, unjustified, and liable to be deleted in toto. The appellant craves leave to add, amend, modify, alter, revise, substitute, or delete any or all grounds of appeal at the time of hearing”

2. None appeared on behalf of the Assessee when the case was called. We have noticed from the records that the notice in the present appeal was served upon the Assessee through email on 08.01.2026 and RPAD/Speed Post was also sent to the Assessee on the address mentioned by the Assessee in Form-36, therefore while drawing inference from the General Clauses Act it is presumed that the service has been duly effected on the Assessee.

3. Since nobody has appeared on behalf of the Assessee. Whereas Ld. DR present in the court is ready with the arguments, therefore we have decided to proceed with the hearing of the case ex parte.

4. After having heard the Ld. DR and perused the materials placed on record and orders passed by the Revenue authorities we noticed that the appeal filed by the Assessee before CIT(A) was delayed and in this regard Assessee has sought condonation of delay on which a detailed order has been passed by the Ld. CIT(A). The operative portion of the said order of Ld. CIT(A) are contained in Para Nos. 1.2 to 9, which are reproduced herein below:

1.2 It is proposed to first look at the statutory provisions governing the matter of condonation of delay Thereafter the specific facts of case including the reason/justification cited by the petitioner, would be examined in light of the statutory provisions. Finally, the broad principles of law on the subject of condonation of delay, as precipitated by landmark court rulings, shall be discussed vis-à-vis the statutory provisions and the peculiar facts of the case.

1.3 However, before adverting to the specific deliberation in the case, it is deemed appropriate to set forth the tone and tenor of the overall all law on condonation of delay Some of the broad principles of law laid down by the Hon'ble Apex Court in a relatively recent 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 to 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.

2. Statutory Position 2.1 At the outset, it is critical to note that the Income-tax Act, being a special enactment, is a complete self-contained code and not governed in the matter of limitation or condonation of delay under Limitation Act, 1963. Limitation Act applies only to civil courts and not to quasi-judicial Tribunals. Hence, a delay in the making of an application or the filing of an appeal for which a period of limitation is prescribed under the Act is condoned only if there is a specific provision in the relevant section itself enabling such condonation. It is in this context that Section 249 lays down the law on condonation of delay under the Act.

2.2 The appellant is required to file appeal within the prescribed time limit of 30 days from date of service as per Section 249(2) of the Act and, hence, any delay in doing so is to be condoned only subject to the satisfaction that the appellant had sufficient cause for not presenting it within that period. This position emanates from the plain reading of the Section 249 which stipulates thus:

“..249 (2) the appeal shall be presented within thirty days of (a) Where the appeal is date of payment of the tax, or (b) Where the appeal relates to any assessment or penalty, the date of service of the notice of demand relating to the assessment or penalty:

Provided that, where an application has been made under section 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 served on the assessee shall be excluded: Provided further that where an application has been made under sub- section (1) of section 270AA, the period beginning from the date on which the application is made, to the date on which the order rejecting the application is served on the assessee, shall be excluded, or

1. in any other case, the date on which intimation of the order sought to be appealed against is served.

The Commissioner (Appeals) may admit an appeal after the expiration of the said period if he is satisfied that the appellant had sufficient cause for not presenting it within that period..."

[Emphasis Supplied] 2.3 It, thus, follows that delay may be condoned and the appeal may be admitted u/s 249(3) only if the appellant could successfully demonstrate that it had sufficient cause for not presenting the appeal within the period of 30 days. The exercise of 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 carried out within the meaning of "sufficient cause".

2.4 There are two essential ingredients for condoning delays: (i) the existence of 'sufficient cause', and (ii) the satisfaction of the competent authority that such sufficient cause was proved as present. The onus to demonstrate the factual matrix that can establish the existence of sufficient cause, is squarely on the litigant. It is trite that the expression 'sufficient cause' has to be understood to mean a cause beyond the control of the appellant or one which the appellant even with the exercise of due care and attention, could not avoid. It is a general principle of law that whenever a Court is vested with a discretionary power, such a discretion must be exercised not in an arbitrary vague or fanciful manner but on judicial principles. The fundamental principle, which has been universally recognized as the true rule of guidance for the exercise of discretion to condone delays is to see whether the party claiming indulgence has been reasonably diligent in prosecuting his appeal.

3. Facts Of The Present Case Pertinent To Delay 3.1 The appellant has stated the facts of case as well as the reason for such delay in Form No. 35. The reason/justification for delay is reproduced as under "Being an NRI and does not have any Taxable Income in India hence we are not going to login frequently to Income Tax Portal. But intension it is not in such a way that we should not cooperate to Income Tax department.”

3.2 The contention of the appellant petitioner has been perused but not found sustainable. The petitioner impliedly admits that she did not check the portal frequently due to non-taxable income in India. This is not a sustainable ground for condonation of delay and reflects lack of due diligence and neglect of the appellant petitioner Accordingly, the explanation offered for delay is not admissible as sufficient cause. Condonation of delay is a discretionary remedy which is to be exercised in deserving cases. In these proceedings, the appellant has not convincingly brought out the reasons and circumstances, which caused the delay and whether such reasons can be sustained as sufficient cause.

4. Legal Position:

4.1 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:

2. The explanation has to cover the entire period of 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.

4.2 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"

4.3 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? The doctrine must be applied in a rational common sense pragmatic manner. iv. 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. v. There is no presumption that delay is occasioned deliberately, or on account of culpable negligence, or on account of mala fides. A litigant does not stand to benefit by resorting to delay. In fact he runs a serious risk. vi. 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." (p. 229)

5. Onus of Proof 5.1 The onus of proving which lies on the appellant/application as clearly laid down in the judicial pronouncements by the Highest Courts of law. In the case of Perumon Bhagvathy Devaswom, perinadu village v. hargavi Amma (Dead) by LRs. (2008) 8 SCC 321. the Hon'ble Court observed thus:

"13...the words "sufficient cause for not making the application within the period of limitation should be understood and applied in a reasonable, pragmatic, practical and liberal manner, depending upon the facts and circumstances of the case, and the type of case. The words "sufficient cause" in Section 5 of the Limitation Act should receive a liberal construction so as to advance substantial justice, when the delay is not on account of any dilatory tactics, want of bona fides, deliberate inaction or negligence on the part of the appellant."

5.2 When an appeal is filed beyond the statutory time limit, the appellant needs to provide a valid reason or demonstrate exceptional circumstances for the delay. It is the duty of the assessee to file the appeal within the stipulated time provided under the Act unless the assessee is prevented by a reasonable cause from filing of the appeal in time.

6.2 Against this backdrop, the contention of the petitioner was carefully evaluated. There is a delay of 140 days, which is not explained at all as pointed out in Para 3.2 above. In the present appeal, therefore, the petitioner is found to have failed to demonstrate sufficient cause for having not filed the instant appeal within due time.

6.3 Hon. Courts have cautioned regarding the necessity of distinguishing cases where delay is of few days, as against 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 exists inordinate delay and the same is attributable to the party's inaction and negligence, the Courts have to take a strict approach.

6.4 The expression 'sufficient cause' has relevancy to reasonableness and actions, which can be condoned by the Court and it should fall within realm of normal human conduct or normal conduct of a litigant; pre-occupation of an officer or officials can be a reasonable excuse, but for a short period and nothing justifies inaction for a pretty long period running into months, as has been held in Omate Traders (P.) Ltd. v. ITO [2008] [2009] 312 ITR 193 (Bom.).

6.5 The laws of limitation are found upon the maxims "Interest Reipublicae Ut Sit Finis Litium" that litigation must come to an end in the interest of society as a whole and "vigilantibus non dormientibus Jura subveniunt that the law assists those that are vigilant with their rights, and not those that sleep thereupon. The law of limitation in India identifies the need for limiting litigation by striking a balance between the interests of the state and the litigant.

6.6 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.

6.7 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 State, 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."

6.8 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.

6.9 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."

6.10 It, therefore, follows that for qualifying u/s 249(3) for condonation of delay, the appellant must show that he was diligent all along with taking appropriate steps, and the delay was caused notwithstanding his due diligence; and if he appears to be guilty of lapses or negligence, then he must be prepared to have his remedy barred without expecting condonation.

6.11 Causes which show negligence, callousness, inaction, want of bona fide, irresponsibility, dilatory tactics, recklessness or ruse, oversight or inexcusable indifference, or waiting for favourable judgments cannot treated as sufficient for condoning delays.

7. In light of the above, it is found that there is no merit in the reasons mentioned in Form No. 35 of appeal for condonation of delay. The appellant has not been able to demonstrate that sufficient cause existed for non-filing the appeal within due time. Delay of 140 days is unjustified for a person who is vigilant about his affairs. The appellant assessee has neglected/omitted to assert his rights of appeal in a timely manner Hence the request for condonation of delay is rejected.

8. Therefore, the present appeal is not maintainable on this issue alone. In view of the above discussion appeal 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.

6. As per the explanation put forth by the Assessee before Ld. CIT(A) we found that the same do not fall with the ambit of “sufficient cause” and thus application for seeking condonation was rightly rejected by Ld. CIT(A).

7. No new facts or circumstances or documents have been placed on records by Ld. DR in order to controvert or rebut the lawful findings so recorded by the Ld. CIT(A), therefore, we see no reasons to interfere with or to deviate from the findings so recorded by Ld. CIT(A), hence we dismiss the grounds raised by the Assessee.

उि/सहायक िंजीकार ( Asst. Registrar) आयकर अिीिीय अतिकरण, मुम्बई / ITAT, Mumbai