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Facts
The assessee failed to file an appeal within the stipulated time due to medical reasons, resulting in a significant delay of approximately 400 days. The assessee claimed to be unaware of the orders passed by the lower authorities due to these medical circumstances and a lack of participation in online proceedings. The assessee also sought to admit additional evidence.
Held
The Tribunal condoned the delay in filing the appeal, citing substantial justice over technicalities and referencing Apex Court judgments on the matter. The Tribunal admitted the additional evidence presented by the assessee, stating it was essential for proper adjudication. However, instead of deciding the appeal on merits with the new evidence, the Tribunal remitted the entire issue back to the Assessing Officer for fresh adjudication.
Key Issues
Whether the delay in filing the appeal should be condoned, and whether additional evidence should be admitted for adjudication.
Sections Cited
Sec. 144, Sec. 148, Sec. 250, Sec. 69A, Sec. 234-A, Sec. 234-B, Sec. 234-C, Sec. 253(5)
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Income Tax Appellate Tribunal, “A’’ BENCH: BANGALORE
Before: SHRI LAXMI PRASAD SAHU & SHRI KESHAV DUBEY
PER KESHAV DUBEY, JUDICIAL MEMBER:
This Appeal at the instance of the assessee is directed against the order of ld. CIT(A)/NFAC dated 31/01/2024 vide DIN and Order No: ITBA/NFAC/S/250/2023-24/1060311062(1) passed u/s. 250 of the income Tax Act, 1961 (in short “the act”) for the AY 2012-13.
3. At the outset, the ld. A.R. of the assessee submitted that there is a delay of 400 days in filing the appeal before this Tribunal. The ld. A.R. of the assessee also drew our attention on application for condonation of delay dated 2.5.2025 along with an affidavit in original and medical certificate which are reproduced below for ease of reference and record:
Kowlanahalli Ningegowda Somashekar, Bengaluru Page 9 of 18 4. On going through the application for condonation, we find that the assessee could not file the appeal in time for the reason that the assessee had undergone medical surgery and was advised for complete bedrest. The assessee was not regularly checking the mails sent to him as he abstained from all business activities. However, after noticing that an order was passed after receiving a call from the department, he preferred an appeal before this Tribunal with a delay of 400 days. The assessee was completely unaware of the order passed by the ld. CIT(A) due to his medical condition. The ld. A.R. also submitted that the delay is unintentional and no benefit can be attributed to the assessee in filing the appeal belatedly. He thus prayed to condone the delay and requested to consider the issues raised by the assessee on merits.
On the contrary the ld. D.R. vehemently objected for granting the condonation of delay and submitted that the assessee had neither appeared before the AO nor before the ld. CIT(A) which clearly demonstrate the careless attitude of the assessee.
We have perused the details filed by the assessee to justify the delay and we are satisfied that there is no malafide intention on the part of the assessee in filing the appeal belatedly before us. It is to be noted that u/s 253(5) of the Act the Tribunal may admit the appeal filed beyond the period of limitation where it has established that there exists a sufficient cause on the part of the assessee for not presenting the appeals within the prescribed time. The explanation therefore, becomes relevant to determine whether the same reflect sufficient and reasonable cause on the part of the assessee in not filing these appeals within the prescribed time. We have gone through the reasons explained by the assessee in which the assessee claimed that he was completely unaware of the order passed by the ld.CIT(A). It is only after receiving a call from the department, the assessee Kowlanahalli Ningegowda Somashekar, Bengaluru Page 10 of 18 came to know that the order has already been passed by the ld. CIT(A) and thereafter he approached the present counsel to take necessary action.
6.1 While considering a similar issue the Apex Court in the case of Collector, Land Acquisition v. Mst. Katiji and Ors. (167 ITR 471) laid down six principles. For the purpose of convenience, the principles laid down by the Apex Court are reproduced hereunder:
(1) Ordinarily, a litigant does not stand to benefit by lodging an appeal late.
(2) Refusing to condone delay can result in a meritorious matter being thrown 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. (3) '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, commonsense and pragmatic manner.
(4) When substantial justice and technical consideration are pitted against each other, the 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 nondeliberate delay. (5) 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. (6) It must be grasped that the judiciary is respected not on account of its power to legalise injustice on technical grounds but because it is capable of removing injustice and is expected to do so.
6.2 When substantial justice and technical consideration are pitted against each other, the cause of substantial justice deserves to be preferred, for the other side cannot claim to have vested right for injustice being done because of nondeliberate delay. Therefore, we have to prefer substantial justice rather than technicality in deciding the issue. As observed by Apex Court, if the application of the assessee for condoning the delay is rejected, it would amount to Kowlanahalli Ningegowda Somashekar, Bengaluru Page 11 of 18 legalize injustice on technical ground when the Tribunal is capable of removing injustice and to do justice. Therefore, this Tribunal is bound to remove the injustice by condoning the delay on technicalities. If the delay is not condoned, it would amount to legalizing an illegal order which would result in unjust enrichment on the part of the State by retaining the tax relatable thereto. Under the scheme of Constitution, the Government cannot retain even a single pie of the individual citizen as tax, when it is not authorized by an authority of law. Therefore, if we refuse to condone the delay, that would amount to legalize an illegal and unconstitutional order passed by the lower authority.
6.3 Further, in the case of People Education & Economic Development Society Vs/ ITO reported in 100 ITD 87 (TM) (Chen), wherein held that “when substantial justice and technical consultation are pitted against each other, the cause of substantial justice deserves to be preferred for the other side cannot claim to have vested right in injustice being done because of non-deliberate delay”.
6.4 The next question may arise whether delay was excessive or inordinate. There is no question of any excessive or inordinate when the reason stated by the assessee was a reasonable cause for not filing the appeal. We have to see the cause for the delay. When there was a reasonable cause, the period of delay may not be relevant factor. In fact, the Madras High Court in the case of CIT vs. K.S.P. Shanmugavel Nadai and Ors. (153 ITR 596) considered the condonation of delay and held that there was sufficient and reasonable cause on the part of the assessee for not filing the appeal within the period of limitation. Accordingly, the Madras High Court condoned nearly 21 years of delay in filing the appeal. When compared to 21 years, 400 days cannot be considered to be Kowlanahalli Ningegowda Somashekar, Bengaluru Page 12 of 18 inordinate or excessive. Furthermore, the Chennai Tribunal by majority opinion in the case of People Education and Economic Development Society (PEEDS) v. ITO (100 ITD 87) (Chennai) (TM) condoned more than six hundred days delay. Therefore, in our opinion, by preferring the substantial justice, the delay of 400 days has to be condoned and accordingly we condone the delay and admit the appeal for adjudication.
Before us, the assessee has also filed an application for admission of additional evidences, which are reproduced below:
Kowlanahalli Ningegowda Somashekar, Bengaluru Page 16 of 18 7.1 The ld. A.R. submitted that the order passed by the ld. CIT(A)/NFAC as well as AO are ex-parte orders. Owing to medical grounds, the assessee was unable to participate in the appellate proceedings. Further, all the notices were sent electronically to the assessee leaving him unaware of the appeal proceedings. It is only after receiving a call from the income tax office regarding outstanding demand, the assessee became aware of the said proceedings. Further, the ld. A.R. of the assessee submitted that this Tribunal being highest fact-finding authority may consider the additional evidences produced and adjudicate upon the same by admitting the same since these evidences goes to the very root of the issue under appeal and hence it is very important. On the other hand, no loss or hardship will be caused to the respondent, if this application is allowed.
The ld. D.R. on the other hand strongly opposed the admission of the additional evidences at this stage.
We have heard the rival submissions on the admission of additional evidences. According to Rule 29 of the I.T. Rules, 1963, generally the parties to the appeal shall not be entitled to produce additional evidences either oral or documentary before the Tribunal but if the Tribunal requires any document to be produced to enable it to pass orders or for any other substantial cause or if the income tax authorities have decided the case without giving sufficient opportunity to the assessee to adduce evidence either on points specified by them or not specified by them, the Tribunal for reasons to be recorded, may allow such documents to be produced or may allow such evidences to be adduced. In the present case, it is undisputed fact that the assessee could neither represent his case before the AO nor could produce any documents/records/statements to refute the allegation. The AO passed an ex-parte order u/s Kowlanahalli Ningegowda Somashekar, Bengaluru Page 17 of 18 r.w.s. 147 of the Act based on the material available on record by holding that assessee is the owner of the cash in the bank account and the assessee has not given any satisfactory reply regarding source of funds. Further, before us, the ld. A.R. of the assessee vehemently submitted that the assessee could not represent his case before the ld. CIT(A) because of the medical grounds. This being so, we find good and sufficient reason in not submitting these additional evidences before the lower authorities. Accordingly, we admit these additional evidences as these are essential for adjudication of the issue in the present appeal. After admitting the same, in our opinion, these additional evidences are filed for the first time before the Tribunal and the ld. AO as well as ld. CIT(A)/NFAC have no occasioned to examine these additional evidences. This being so, in the interest of justice and fair play and as requested by the ld. A.R. of the assessee, we remit the entire issue in dispute to the file of AO for deciding afresh after taking into consideration the additional evidences produced before us and decide the same in accordance with law. Needless to say, a reasonable opportunity of being heard must be granted to the assessee. The assessee is also directed to produce further documents/submissions as may be required by the AO for completion of the assessment. It is ordered accordingly.
In the result, appeal filed by the assessee is partly allowed for statistical purposes.