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Facts
The assessee filed an appeal before the ITAT with a delay of 1114 days. The delay arose from a mistaken belief that the CIT(A) was the appropriate authority to appeal against an order passed under section 263, leading to a dismissal by the CIT(A) and subsequent delayed filing before the ITAT. The assessee sought condonation of this delay.
Held
The Tribunal found the delay of 1114 days to be inordinate and unexplainable by any sufficient cause. Citing numerous Supreme Court judgments, the Tribunal emphasized that a liberal approach to condoning delay cannot be used to defeat the law of limitation and that a sufficient cause is a prerequisite for condonation.
Key Issues
Whether an inordinate delay of 1114 days in filing an appeal before the ITAT can be condoned in the absence of a sufficient cause, despite a mistaken belief about the appellate forum.
Sections Cited
263, 143(3), 250, 253(5)
AI-generated summary — verify with the full judgment below
O R D E R PER BIJYANANDA PRUSETH, AM:
This appeal filed by the assessee emanates from the order passed under section 263 of the Income-tax Act, 1961 (in short, ‘Act’) by the learned Principal Commissioner of Income-Tax, Mumbai-27 dated 16.03.2025 for the assessment year (AY) 2017-18.
The grounds of appeal raised by the assessee are as under:
“1. In the facts and circumstances of the case and in law, the Learned Principal CIT, Mumbai-27 erred in assuming Jurisdiction under section 263 and holding that the assessment order dated 10.12.2019 passed by the learned assessing officer is erroneous and prejudicial to the interest of Revenue. 2. The appellant craves leave to add, alter, modify, amend or substitute all or any of the above grounds of appeal.”
The facts of the case in brief are that the assessee is a partnership firm. It filed the return of income for AY 2017-18 on 31.10.2017 declaring total income of Rs.9,11,21,970/-. The assessment order u/s 143(3) of the Act was passed on 10.12.2019 assessing the total income at Rs.9,28,16,250/-. Thereafter, an order u/s 263 was passed by the PCIT, Mumbai-27 on 16.03.2022 directing the AO to make fresh assessment order. Accordingly, the AO passed order u/s 143(3) r.w.s.
263 r.w.s 144B of the Act on 15.03.2023 by adding Rs.6,63,204/- as notional rent.
The assessee filed the appeal before the CIT(A), who dismissed the said appeal u/s 250 of the Act dated 25.02.2025 stating that it was not maintainable because the assessment order was passed as per the direction of the PCIT. An appeal could be filed against the order of the PCIT before the ITAT and not CIT(A). Thereafter, the appellant has filed appeal before the Tribunal on 15.07.2025 after a delay of 1114 days.
The Ld. AR of the assessee has filed affidavit of the partner of the assessee firm praying for condonation of delay in filing appeal against the order of PCIT u/s 263 of the Act. In the affidavit, the chronology of the events has been mentioned stating that order of the PCIT was passed on 16.03.2022. Against the consequential order of the AO giving effect to the order u/s 263 of the Act, appeal was filed before CIT(A), who dismissed the appeal as non-maintainable. In view of the above, there was delay of 1114 days in filing appeal before the ITAT. The 2017-18 M/s Sai Builders and Developers appellant has sought condonation of delay u/s 253(5) of the Act stating that it was under genuine belief that the CIT(A) was the appropriate authority for filing appeal against the impugned order. The assessee had filed an appeal before ITAT against order u/s 143(3) rws 263 of the Act instead of filing appeal against the order u/s 263 of the Act. The same was dismissed by the ITAT as withdrawn.
Thereafter, the present has been filed after a delay of 1114 days. It was submitted that the delay was purely technical and due to circumstances beyond control of the appellant. The appellant has relied on the decision of the Hon’ble Supreme Court in case of Collector, Land Acquisition Vs. Mst. Katiji and Ors., 167 ITR 471 (SC). It is also submitted that the appellant has a strong prima facie case on merit.
The Ld. AR also relied on the decision in case of Thunuguntla Jagan Mohan Rao Vs. DCIT, (2020) 120 taxmann.com 427 (Telangana) and requested to condone the delay.
On the other hand, learned Senior Departmental Representative (ld. Sr. DR) for the revenue supported the order of the CIT(A). He submitted that there was inordinate delay in filling appeal before the Tribunal. The assessee has not been able to establish sufficient cause for delay in filing the appeals before the Tribunal.
We have heard both parties on this preliminary issue of condonation of delay. We have also deliberated on the decisions relied on by the ld. AR. There was a delay of more than 1114 days in filing appeal before the ITAT. The Ld. AR 2017-18 M/s Sai Builders and Developers submitted that there was neither any mala fide intention or ill-motive on part of the appellant. The appellant has relied on the decision in case of Thunuguntla Jagan Mohan Rao (Supra) where the delay was 154 days. The appellant has also relied on the decision of Hon’ble Supreme Court in case of Collector, Land Acquisition vs. Mst. Katiji (Supra). On going through the facts of the case and the material on record, we find that there is inordinate delay of more than 1114 days in filing appeal by the assessee before the ITAT. The assessee has not been able to give any cogent reason for such inordinate delay in filing appeal before ITAT. That the delay was purely technical in nature and was not due to any deliberate intention of the assessee cannot be a “sufficient cause” in terms of provisions of section 253(5) of the Act for the inordinate delay of 1114 days. The appellant had relied upon the decision of the Hon'ble Supreme Court in the case of Collector, Land Acquisition vs. Mst. Katiji (supra), which was pronounced on 19.02.1987.
There was delay only 4 days in the said case. However, we find that in the subsequent decisions, namely, (i) P. K. Ramachandran vs State of Kerala & Anr.
(1997) 7 SCC 556, (ii) Pundik Jalam Patil vs. Executive Engineers, Jalgaon Medium Project, (2008) 17 SCC 448 and (iii) Basawaraj and Anr vs. Special Land Acquisition Officer, (2013) 14 SCC 81, (iv) Pathapati Subba Reddy (dies) By L. Rs. & Ors. Vs The Special Deputy Collector (LA), SLP(C) No.31248 of 2018 (SC), dated 08.04.2024, it has been held that condonation of delay should not be granted only on the 2017-18 M/s Sai Builders and Developers ground that ordinarily a litigant does not stand to benefit by lodging an appeal late.
The Hon'ble Supreme Court in the case of Basawaraj (supra) summarized the law on the subject issue by stating that where a case has been presented in the Court beyond limitation of time, the applicant has to explain as to what was the “sufficient cause” which means an adequate and enough reason, which prevented him to approach the Court within the limitation. In case a party is found to be negligent, or for want of bonafide on his part in the facts and circumstances of the case, or found to have not acted diligently or remained inactive, there cannot be a justified ground to condone the delay.
We also find that in a subsequent decision pronounced on 28.04.2024, in the case of Pathapati Subba Reddy (dies) & Ors. vs. The Special Deputy Collector (LA), in SLP (Civil) No. 31248 of 2018 (SC), the Hon'ble Supreme Court referred to and discussed various decisions of Hon'ble Supreme Court namely (i) Bhag Mal (Alias) Ram Bux & Ors vs. Munshi (Dead) by LRs & Ors (2007) 11 SCC 285 (SC), (ii)
Collector, Land Acquisition vs. Mst. Katiji (supra) (iii) Ramlal, Motilal and Chhotelal vs. Rewa Coalfields Ltd. (1962) 2 SCR 762, (iv) Maqbul Ahmad and Ors vs. Onkar Pratap Narain Singh and Ors, AIR 1935 PC 85 (v) Brijesh Kumar and Ors vs. State of Haryana and Ors. 2014 (4) SCALE 50 (vi) Lanka Venkateswarlu vs. State of Andhra Pradesh & Ors, (2011) 4 SCC 363 (vii) State of Jharkhand & Ors vs. Ashok
“7. The law of limitation is founded on public policy. It is enshrined in the legal maxim “interest reipublicae ut sit finis litium” i.e. it is for the general welfare that a period of limitation be put to litigation. The object is to put an end to every legal remedy and to have a fixed period of life for every litigation as it is futile to keep any litigation or dispute pending indefinitely. Even public policy requires that there should be an end to the litigation otherwise it would be a dichotomy if the litigation is made immortal vis-a-vis the litigating parties i.e. human beings, who are mortals.”
It has also discussed the case of Collector, Land Acquisition vs. Mst. Katiji (supra) relied upon by the appellant, and held that the phrases “liberal approach”, “justice-oriented approach” and “cause of advancement of substantial justice” cannot be employed to defeat the law of limitation. For ready reference of equality, the same is reproduced hereunder:
“16. …………….In Collector, Land Acquisition, Anantnag and Ors. vs. Katiji and Ors.2, this Court in advocating the liberal approach in condoning the delay for ‘sufficient cause’ held that ordinarily a litigant does not stand to benefit by lodging an appeal late; it is not necessary to explain every day’s delay in filing the appeal; and since sometimes refusal to condone delay may result in throwing out a meritorious matter, it is necessary in the interest of justice that cause of substantial justice should be allowed to prevail upon technical considerations and if the delay is not deliberate, it ought to be condoned. Notwithstanding the above, howsoever, liberal approach is adopted in condoning the delay, existence of ‘sufficient cause’ for not filing the appeal in time, is a condition precedent for exercising the discretionary power to condone the delay. The phrases ‘liberal approach’, ‘justice- (1987) 2 SCC 107 = AIR 1987 SC 1353 oriented approach’ and cause for the advancement of ‘substantial justice’ cannot be employed to defeat the law of limitation so as to allow stale matters or as a matter of fact dead matters to be revived and re-opened by taking aid of Section 5 of the Limitation Act.”
After discussion on various cases in its order, the Hon'ble Supreme Court at Para 26, has summed up the law laid down by it as under:
26. On a harmonious consideration of the provisions of the law, as aforesaid, and the law laid down by this Court, it is evident that: (i) Law of limitation is based upon public policy that there should be an end to litigation by forfeiting the right to remedy rather than the right itself; (ii) A right or the remedy that has not been exercised or availed of for a long time must come to an end or cease to exist after a fixed period of time; (iii) The provisions of the Limitation Act have to be construed differently, such as Section 3 has to be construed in a strict sense whereas Section 5 has to be construed liberally; (iv) In order to advance substantial justice, though liberal approach, justice- oriented approach or cause of substantial justice may be kept in mind but the same cannot be used to defeat the substantial law of limitation contained in Section 3 of the Limitation Act; (v) Courts are empowered to exercise discretion to condone the delay if sufficient cause had been explained, but that exercise of power is discretionary in nature and may not be exercised even if sufficient cause is established for various factors such as, where there is inordinate delay, negligence and want of due diligence; (vi) Merely some persons obtained relief in similar matter, it does not mean that others are also entitled to the same benefit if the court is not satisfied with the cause shown for the delay in filing the appeal; (vii) Merits of the case are not required to be considered in condoning the delay; and (viii) Delay condonation application has to be decided on the parameters laid down for condoning the delay and condoning the delay for the reason that the conditions have been imposed, tantamounts to disregarding the statutory provision.
The Hon'ble Supreme Court refused to interfere with the decision of the Hon'ble High Court refusing to condone the delay in filing the appeal.
We also find that the Hon’ble Supreme Court in case of H. Guruswamy & Ors. vs. A. Krishnaiah Since Deceased by LRS., in Civil Appeal No. 317 of 2025, dated 08.01.2025, has set aside the order of Hon’ble High Court of Karnataka in WP No.7220 of 2014 wherein the Hon’ble High Court allowed the Writ Petition by 2017-18 M/s Sai Builders and Developers condoning the delay of about 6 years. The Hon’ble Supreme Court at para 13 observed as under:
‘13. We are at our wits end to understand why the High Court overlooked all the aforesaid aspects. What was the good reason for the High Court to ignore all this? Time and again, the Supreme Court has reminded the District judiciary as well the High courts that the concepts such as “liberal approach”, “Justice oriented approach”, “substantial justice” should not be employed to frustrate or jettison the substantial law of limitation.’ 13. In view of the above facts and respectfully following the authoritative precedents cited supra, we find no reason to condone the inordinate delay of 1114 days in filing appeal before the Tribunal in absence of any sufficient cause.
Accordingly, the appeal of the assessee is dismissed. Since delay has not been condoned, it becomes academic in nature to discuss the merit of the case. Hence, the other grounds are not discussed.
In the result, appeal filed by the assessee is dismissed.
Order is pronounced on 28.01.2026.