ACIT, CC-14, DELHI vs. LAKSHYA CONSULTANTS PVT. LTD., NEW DELHI

7. The period of limitation prescribed u/s 253 of the Act is 60 days from the date on which the order sought to be appealed against is communicated to the assessee, PCIT or CIT. However, in clause (v), powers have been vested by the Tribunal to admit an appeal if it is satisfied that there was sufficient cause for not presenting it within that time.

“5.2 While construing the expression "sufficient cause" in the context of Section 5 Limitation Act, a plethora of judicial pronouncements held that the said expression must be construed liberally in favour of the applicant keeping in mind the cardinal principle of justice that disputes should be decided on merits and not on defaults; and that in the cases involving governmental bodies, the court must keep in mind that owing to the impersonal State machinery, delays and defaults have to be accepted with latitude to a certain extent.

5.3 At the same time, law related to interpretation of the expression "sufficient cause" while dealing with the issue of limitation developed also to the extent that the concepts of liberal interpretation and substantial justice cannot be overstretched to render the law of limitation otiose, especially where the court finds absolutely no justification for the delay in question. While looking for "sufficient cause" as an explanation of delay, the court must bear in mind that expiration of limitation period for filing an appeal gives rise to a substantive right in favour of the decree holder to treat the decree as final and binding between the parties.

5.4 In the case of Finolux Auto Pvt. Ltd. vs Finolex Cables Ltd., 136(2007) DLT 585(DB), a Division Bench of this court held thus :

"6. In this regard, we may refer to a decision of the Supreme Court in P.K. Ramachandran vs State of Kerala, IV(1997) CLT 95 (SC). In the said decision, the Supreme Court has held that unless and until a reasonable or satisfactory explanation is given, the inordinate delay should not be condoned. In para 6 of the judgment, the Supreme Court has laid down in the following manner :

"Law of Limitation may harshly affect a particular party but it has to be applied with all its rigour when the statute so prescribes and the Courts have no power to extend the period of limitation on equitable grounds. The discretion exercised by the High Court was, thus, neither proper nor judicious. The order condoning the delay cannot be sustained. This appeal, therefore, succeeds and the impugned order is set aside. Consequently, the application for condonation of delay filed in the High Court would stand rejected and the Miscellaneous First Appeal shall stand dismissed as barred by time. No costs." (emphasis is ours)

5.5 In the case of Pundlik Jalam Patil (dead) by LRs vs Executive Engineer Jalgaon Medium Project, (2008) 17 SCC 448, the Hon'ble Supreme Court held that basically the laws of limitation are founded on public policy and the courts have expressed at least three different reasons supporting the existence of statutes of limitation, namely (i) that long dormant claims have more of cruelty than justice in them, (ii) that a defendant might have lost the evidence to dispute the stated claim, and (iii) that persons with good causes of action should pursue them with reasonable diligence. While dealing with the issue of condonation of delays on the part of the governmental bodies in filing the appeals, the Apex Court held thus:

"31. It is true when the State and its instrumentalities are the applicants seeking condonation of delay they may be entitled to certain amount of latitude but the law of limitation is same for citizen and for Governmental authorities. Limitation Act does not provide for a different period to the government in filing appeals or applications as such. It would be a different matter where the Government makes out a case where public interest was shown to have suffered owing to acts of fraud or collusion on the part of its officers or agents and where the officers were clearly at cross purposes with it. In a given case if any such facts are pleaded or proved they cannot be excluded from consideration and those factors may go into the judicial verdict. In the present case, no such facts are pleaded and proved though a feeble attempt by the learned counsel for the respondent was made to suggest collusion and fraud but without any basis. We cannot entertain the submission made across the Bar without there being any proper foundation in the pleadings". (emphasis is ours)

5.6 The concepts of "liberal approach" and "reasonableness" in the exercise of discretion by the courts in condoning delay were again considered by the Hon'ble Supreme Court in the case of Balwant Singh(dead) vs Jagdish Singh & Others, (2010) 8 SCC 685, holding thus :

"25. We may state that even if the term "sufficient cause" has to receive liberal construction, it must squarely fall within the concept of reasonable time and proper conduct of the party concerned. The purpose of introducing liberal construction is normally to introduce the concept of "reasonableness" as it is understood in its general connotation.

5.7 In the case of Union of India vs C.L. Jain Woolen Mills Pvt. Ltd., 131 (2006) DLT 360, one of the arguments of the applicant Union of India seeking condonation of delay in filing the appeal was that the power to condone delay has been conferred to do substantial justice and the court should adopt a liberal approach and the delay resulting from official Digitally Signed ITA 401/2023 Page 7 of 15 pages procedures should normally be condoned. This court rejected the argument, placing reliance on the judgment in the case of P.K. Ramachandran (supra) and observed that although the provisions under Section 5 Limitation Act have to receive liberal construction, but the court cannot ignore the fact that where an appeal gets barred by time, a definite right accrues to the opposite party and such right should not be taken away in a routine manner without disclosure of good and a sufficient cause for condonation of delay.

5.8 As regards the delays in appeals filed by the government departments on account of impersonal official machinery, this court dealt with the issue in the case of Union of India vs Wishwa Mittar Bajaj & Sons, 141 (2007) DLT 179 and held thus:

"41. It is well settled that administrative delays which are urged by the respondents have to be properly and adequately explained. Negligence or indifference on the part of the authority or its officers in pursuing a matter cannot be condoned simply because the applicant is a State or government undertaking. The law of limitation remains the same and certainly there cannot be two laws, one governing the State and the other governing individuals. Cryptic and routine explanations for condonation of delay cannot be accepted as adequate explanation or sufficient cause for condonation of delay. (Re: DDA vs Ramesh Kumar) This Court in several judgments has noted the manner in which matters are proceeded with utmost casualness on the part of the State and its officials. In this behalf, in a decision rendered on 2nd December, 1988 reported as UOI vs Mangat, noticing the judgments of the Apex Court where delay was condoned observed thus:

"4. ...The Supreme Court was thus concerned with isolated cases of said aberrations. What we are facing in this Court is a spate of delayed appeals without any proper and convincing explanation or even an attempt in doing so. It is a common experience of Benches of this Court that the condonation applications are in a cyclostyled form and only the dates and Digitally Signed ITA 401/2023 Page 8 of 15 pages days are filled in hand. The stay applications are also mechanically drafted and are in one standard cyclostyled form. Usually, the appeals are filed with defects. After the Registry points out the defects, the defects are not removed for months together. We do not think that the Supreme Court judgments can be usefully availed of by the Union of India in the colossal situation of negligence and delays as we find in this Court. In fact, it appears that the liberal approach of the higher courts and the understanding of the difficulties of the Government departments shown by the courts have not been appreciated in its proper perspective by the Government departments. Nobody in the Government Department feels any responsibility or takes any responsibility for the delay caused in the movement of files. There is no conscious and systematic effort to keep the deadline of limitation in view and to speed up the disposal at various stages. If a serious effort is made in the Government Departments to fix the responsibility on the persons causing delay the present sorry state of affairs can be rectified substantially within short time. Occasionally, important questions of law or principles of compensation or heavy financial stakes are involved in land acquisition matters. The agencies of the Government involved in the acquisition, unfortunately, seem to be completely oblivious of these considerations. In some cases there is great urgency of acquisition of land for urgent developmental projects. They are likely to be frustrated by the habitual negligence of Government departments.

"In interpreting these provisions the court must keep in view on the one hand the public interest which compels such acquisition and on the other the interest of the person who is being deprived of his land without his consent." The Supreme Court further held: "the provisions of the statute must be strictly construed as it deprives a person of his land without his consent." A golden rule for reconciliation of these conflicting considerations would be to use the discretion with common sense. Extreme positions of either not condoning the delay howsoever negligible it may be or to condone the delay howsoever large and unjustifiable it may be should be avoided. The discretion has to be exercised on the basis of the facts of each case with common sense and public interest in view." (emphasis is ours)

5.9 Recently, in the case of Bherulal (supra), the Hon'ble Supreme Court observed thus :

"3. No doubt, some leeway is given for the Government inefficiencies but the sad part is that the authorities keep on relying on judicial pronouncements for a period of time when technology had not advanced and a greater leeway was given to the Government (Collector, Land Acquisition, Anantnag & Anr vs. Mst. Katiji & Ors. (1987) 2 SCC 107). This position is more than elucidated by the judgment of this Court in Office of the Chief Post Master General & Ors. v. Living Media India Ltd. & Anr. (2012) 3 SCC 563 where the Court observed as under:

"27) It is not in dispute that the person(s) concerned were well aware or conversant with the issues involved including the prescribed period of limitation for taking up the matter by way of filing a special leave petition in this Court. They cannot claim that they have a separate period of limitation when the Department was possessed with competent persons familiar with court proceedings. In the absence of plausible and acceptable explanation, we are posing a question why the delay is to be condoned mechanically merely because the Government or a wing of the Government is a party before us.

28) Though we are conscious of the fact that in a matter of condonation of delay when there was no gross negligence or deliberate inaction or lack of bonafide, a liberal concession has to be adopted to advance substantial justice, we are of the view that in the facts and circumstances, the Department cannot take advantage of various earlier decisions. The claim on account of impersonal machinery and inherited bureaucratic methodology of making several notes cannot be accepted in view of the modern technologies being used and available. The law of limitation Digitally Signed ITA 401/2023 Page 10 of 15 pages undoubtedly binds everybody including the Government.

29) In our view, it is the right time to inform all the government bodies, their agencies and instrumentalities that unless they have reasonable and acceptable explanation for the delay and there was bonafide effort, there is no need to accept the usual explanation that the file was kept pending for several months/years due to considerable degree of procedural red- tape in the process. The government departments are under a special obligation to ensure that they perform their duties with diligence and commitment. Condonation of delay is an exception and should not be used as an anticipated benefit for government departments. The law shelters everyone under the same light and should not be swirled for the benefit of a few". (emphasis is ours)

circumstances with no fault on the part of the appellant; that earnest efforts were made to expedite the process at various stages of finalizing the appeal; that the appeal has to be processed through official channel/hierarchy are completely nebulous and cannot be scrutinized to understand if the delay of 498 days in filing the appeal was on account of sufficient cause.

8. The appellant/revenue, to expect the least, ought to have explained explicitly the circumstances that led to delay, in the sense that there ought to have been in the very least a broad disclosure of movement of the file to explain such enormous delay of 498 days. But, what to say of that, even the time, if any, spent by the appellant/revenue in obtaining copies of the relevant orders has not been disclosed. Rather, as mentioned above, it appears that the concerned department of appellant/revenue has stocked a cyclostyled proforma of delay condonation applications, which are filed after simply inserting the number of days of delay. Can such laxity on the part of one of the litigants be ignored so as to snatch away from the other party a right which accrued to it on account of non-filing of appeal in time? The answer, according to us, has to be in negative.

9. We are unable to fathom why the State despite having at its disposal an enormous paraphernalia is unable to act with due expedition. In such cases, plea of the State that it could not obtain copies or even certified copies in time sounds pathetically absurd and hence is unacceptable.

10. Similar was the situation before the Hon'ble High Court [supra].

Yet, referring to the decision of the Hon'ble Supreme Court in the case of Bheru Lal [supra] the Hon'ble High Court declined to condone the inordinate delay.

Consequently, the appeal also stands dismissed as time barred.

“During the year the assessee had given advance of Rs.3,28,OO,000/- as advance to six companies for properly as reflected in the balance sheet. The assessee during the assessment as well as re-assessment proceedings has failed to provide any evidence regarding source and purpose or the advance. The source of loan -and advance of Rs.9,78,OO,000/- seems to be sourced from the money tying in the 'Security premium account. As discussed in assessment order for the assessment year 2003-04, the entire security premium or Rs.9,SO,0O,OOO/- is nothing but bogus entry. Assessee has not submitted bank account reflecting these transactions. Therefore, it can be said that assessee took over the company with bogus book entry of Rs,9,SO,O0,000/- in the form of security premium with the source intention or routing 'in its unaccounted income by way of providing loan and advances to its sister concerns. As far as business activity of the assessee i:) concerned. the assessee following AS-17 has disclosed its business activity in only one segment i.e. real estate, whereas stocking trade which it has 'So1I.i is fabric, suit length etc. as disclosed by the company in earlier year. Thus, the entire transaction in the company seems to be shown as non-genuine. Thus the entire loan and advances given by the assessee are added to the income of the assessee. Penalty proceedings u/s 27I (i)(c) of the Income Tax Ad is initiated for-concealment of income and for furnishing or inaccurate particulars

[Rs. 9,78,00,000/- income from unexplained sources]”

Therefore, the ratio laid down by the Hon'ble High Court of Delhi in the case of Kabul Chawla 281 CTR 45 squarely apply which has now been affirmed by the Hon'ble Supreme Court in the case of Abhisar Buildwell 454 ITR 212.

The order is pronounced in the open court on 22.01.2024.