MS. KENZO INTERNATIONAL,DELHI vs. DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE- 43(1), DELHI, DELHI

We have heard both the parties and perused the material available on record. The Co-ordinate Bench of the Tribunal in Assessee’s sister concern while condoning the delay of 1411 days held as under:-

“6. From the conspectus of the circumstances, we are of the view that the assessee has demonstrated the circumstances resulting in delay in filing the captioned appeal in question. Needless to say, there can be no straight jacket formula to come to conclusion as to whether the sufficient and good grounds have been made out or not while seeking condonation of delay. We do not see any malafide written large on the conduct of the assessee for alleged delay. It is trite that an attempt should also be made to allow the matter to be contested on merits rather than to throw it out on such technicalities. Apart from the above, the assessee does not stand to gain in any manner whatsoever by not filing appeal within the period of limitation. Keeping in view the diligent attendance in the assessment proceedings, one cannot say that the assessee had been callous and negligent in prosecuting the matter.

7. At this point, reference is made to the decision of the Hon'ble Supreme Court in Improvement Trust Vs. Ujagar Singh, (2010) 6 SCC 786 (SC) and Bombay Mercantile Co-op. Bank vs. CBDT (2010) 45 DTR 377 (Bom) for the proposition that in the matter of condonation of delay, a highly pedantic approach should be eschewed and a justice oriented approach should be adopted and a party should not be made to suffer on account of technicalities. The test of 'sufficient cause is purely an individualistic test. It is not an objective of test as observed by the Hon'ble Bombay High Court in the case of Vithhal Dhondiba Chawan vs. Madhav Rao (Bom) Civil Application No.9464 of 2008 judgment dated 06.082009.

" 1. Ordinarily, a litigant does not stand to benefit by lodging an appeal late.

3. "Every day's delay must be explained" does not mean that 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 and pragmatic manner.

4. When substantial justice and technical considerations 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 non- deliberate 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 serious risk.

“5. At the outset, we find that the ld. CIT(A) had not adjudicated the issue on merits of the additions. The appeal has been dismissed by the ld. CIT(A) only on the ground of not condoning the delay thereon. It is not in dispute that there was a delay in filing of appeal by the assessee by 1081 days. But we find that assessee has duly explained the circumstances under which a decision was taken for not preferring any appeal. We also find that the Chartered Accountant who advised the assessee has also filed an affidavit confirming the aforesaid facts which is enclosed in page 13 of the paper book. Subsequently, when the penalty and prosecution proceedings were launched on the assessee, the assessee based on an expert advice (second opinion), decided to file an appeal before the ld. CIT(A). This, in our considered opinion, constitute a reasonable cause, as the law is very well settled that mistake of the Counsel in not suggesting the assessee to prefer an appeal should not result in assessee getting fastened with penal damages together with tax and interest liability thereon. Before us, the ld. AR vehemently argued that the assessee had got a good case on merits and that the said disallowance of interest, among others, cannot be made at all in the hands of the assessee company. But we are not inclined to get into the merits of the additions in this appeal as the ld. CIT(A) had not addressed the merits at all. Considering the totality of facts and circumstances, we direct the ld. CIT(A) to condone the delay in filing of the appeal by the assessee, admit the appeal of the assessee for adjudication and adjudicate the issues on merits. Needless to mention that assessee be given reasonable opportunity of being heard. The assessee is also directed to co- operate with the ld. CIT(A) for expeditious disposal of this appeal and not to take any adjournment except due to unavoidable or exceptional circumstances. Accordingly, the grounds raised by the assessee are allowed for statistical purposes.”

6. In the present case, also the Ld. CIT(A) has dismissed the Appeal on delay in latches. The Assessee has specifically contended before the Ld. CIT(A) that the Assessee was unaware of fact of non filing of the Appeal before the Tribunal on time and Assessee came to the know when the new tax consultant appointed to Review the tax records. When the said fact was confronted to earlier tax consultant, he has confessed to the same that the Appeal was not filed against the assessment order as he was under the bona-fide belief that the intimation of the CIT(A) was not appealable.

Thereafter immediately the Assessee filed Appeal on 04/02/2023 along with application for condonation of delay as adverse by the new consultant. The Assessee was claimed to be under the false impression that appeal has been filed, therefore, there was delay in filing the appeal. As observed above, on the similar facts and circumstances, the Coordinate Bench of the Tribunal in the case of a sister concern of the Assessee, condoned the delay in filing the Appeal before the Ld. CIT(A) and remanded the matter to the file of the A.O. for deciding afresh. In view of the above discussion, we condone the delay of 1987 days in filing the Appeal before the Ld. CIT(A) and remand the matter to the file of the Ld. CIT(A) to decide the Appeal on its merit in accordance with law after hearing the Assessee.