S 778 R PATTANAM PRIMARY AGRICULTURAL CO-OP CREDIT SOCIETY ,NAMAKKAL vs. ITO, WARD 2, NAMAKKAL, NAMAKKAL

The ld.AR submitted that the ld.CIT(A) has not considered the reason that Secretary suffered COVID-19 and occupied with the activity of documentation for State Govt. change of policy in loan waiver of Agricultural Jewel Loan and Mahalir Crop Loan. Further, the ld.AR stated that due to increase of workload inadvertently the impugned order has been left out without taking necessary action. Therefore, ld.AR prayed for one more opportunity to be provided to the assessee to represent his case before the ld.CIT(A) in the interest of natural justice. Further, the ld.AR assured the bench that he will undertake to represent on behalf of the assessee before the ld.CIT(A), in case one more opportunity is provided.

Per contra, the ld.DR submitted that the appeal was to be filed before the ld.CIT(A) by the assessee within 30 days of the service, but the assessee has filed an appeal with delay of 23 months 15 days. The assessee has been negligent in filing an appeal within the time limit provided and hence prayed for confirming the order of the ld.CIT(A).

We have heard the rival submissions and perused the material available on record, including the impugned order of the Ld. CIT(A) and the reasons assigned by the assessee for the delay in filing the appeal. The short question that arises for our consideration is whether the delay of 23 months and 15 days in presenting the appeal before the Ld. CIT(A) merits condonation in terms of section 249(3) of the Income-tax Act, 1961.

At the outset, it is a settled principle of law that the expression “sufficient cause” occurring in section 249(3) of the Act should receive a liberal and justice-oriented interpretation. The Hon’ble Supreme Court in Collector, Land Acquisition v. Mst. Katiji (167 ITR 471) has emphatically held that a liberal approach must be adopted while considering applications for condonation of delay and that substantial justice should prevail over technical considerations. Their Lordships observed that when substantial justice and technical considerations are in conflict, the cause of substantial justice deserves to be preferred, for the other side cannot claim to have a vested right in injustice being done because of a non-deliberate delay.

In N.Balakrishnan v. M.Krishnamurthy (7 SCC 123), the Hon’ble Apex Court further clarified that the length of delay is not decisive; what is material is the acceptability and bona fides of the explanation. It was held that if the explanation does not smack of mala fides or is not intended as a dilatory tactic, the Court should ordinarily condone the delay so as to advance substantial justice.

Again, in Improvement Trust, Ludhiana v. Ujagar Singh (6 SCC 786), the Hon’ble Supreme Court reiterated that a pragmatic and justice-oriented approach must guide the adjudication of condonation applications, particularly when refusal to condone would result in foreclosing a party’s right to have the matter examined on merits.

The Hon’ble Jurisdictional High Court of Madras in CIT v. K.S.P. Shanmugavel Nadar (153 CTR 81) has also held that when sufficient cause is demonstrated, the appellate authority is duty-bound to adopt a liberal approach in order to render substantial justice rather than shutting the doors of adjudication on technical grounds.

Adverting to the facts of the present case, it is not in dispute that the assessee is a primary agricultural co-operative credit society functioning in a rural area. The reasons assigned for the delay disclose that the Secretary of the society was affected by COVID-19 and also that the society was simultaneously burdened with implementation and documentation work arising out of State Government policies relating to agricultural jewel loan waiver and Mahalir crop loan schemes. Further, society faced practical and infrastructural constraints in adapting to the faceless appellate regime. These factors, taken cumulatively, explain the circumstances leading to the delay.

We find that there is no material on record to indicate that the delay was wilful, deliberate or actuated by mala fide intention. The Ld.CIT(A), in our considered view, has dismissed the appeal on the sole ground of limitation without undertaking a proper examination of whether the explanation offered constituted “sufficient cause” within the meaning of section 249(3) of the Act.

It is trite that quasi-judicial authorities are expected to adopt a justice- oriented approach. Denial of adjudication on merits in fiscal matters, which carry civil consequences, should be confined to cases of gross negligence or deliberate inaction. In the case on hand, the explanation tendered by the assessee, viewed in the totality of facts and surrounding circumstances, cannot be said to be either mala fide or lacking in bona fides. On the contrary, it constitutes sufficient cause warranting condonation.

Respectfully following the ratio laid down by the Hon’ble Supreme Court and the Hon’ble Jurisdictional High Court, as referred to above, we hold that the delay of 23 months and 15 days in filing the appeal before the Ld. CIT(A) deserves to be condoned. Accordingly, in the interest of substantial justice, we condone the delay in filing the appeal before the Ld. CIT(A). The impugned order dated 05.09.2025 passed by the Ld. CIT(A) is hereby set aside and the matter is restored to the file of the Ld. CIT(A) with a direction to adjudicate the appeal afresh on merits, in accordance with law, after affording reasonable and adequate opportunity of being heard to the assessee.

The assessee is directed to extend full cooperation in the appellate proceedings and to furnish all requisite details and documents as may be called for by the Ld. CIT(A), without seeking unwarranted adjournments.

In the result, the appeal of the assessee is allowed for statistical purposes.