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Facts
The assessee appealed against the order of the CIT(A) which dismissed their appeal, primarily due to a delay in filing. The delay in filing the appeal before the CIT(A) was 30 days.
Held
The Tribunal held that the delay in filing the appeal was covered by the period extended by the Hon'ble Supreme Court due to COVID-19. Therefore, the appeal was within the limitation period and admitted. The Tribunal also noted that the CIT(A) did not decide the issue on merit, which is not in accordance with law.
Key Issues
Whether the 30-day delay in filing the appeal before the CIT(A) should be condoned, considering the Supreme Court's orders regarding limitation period extension due to COVID-19.
Sections Cited
249(2), 249(3), Section 5 of the Limitation Act
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Income Tax Appellate Tribunal, MUMBAI BENCH “F”, MUMBAI
Before: SHRI OM PRAKASH KANT & SHRI SANDEEP SINGH KARHAIL
Per : OM PRAKASH KANT, Accountant Member:
This appeal has been preferred by the assessee against the order dated 31/07/2024 passed by the Ld. Commissioner of Income Tax Appeals- National Faceless Appeal Center (NFAC),
“1. The Ld. CIT(A) has erred in law and in facts in passing order u/s.250 of the Act and dismissing the appeal of the appellant.
The Ld. CIT(A) has erred in law and in facts in holding that the appellant has not produced anything to substantiate the reasonable cause for delay in filling the appeal and thereby not condoning the delay in filling the appeal.
The Ld. CIT(A) has erred in law and in facts in confirming the addition of Rs. 33,98,000/- made by Ld. A.O. as income from other sources on account of difference between valuation adopted by stamp valuation authority and actual consideration received by appellant amounting
The appellant craves leave to add to, amend, alter or delete all or any of the foregoing grounds of appeal.”
2. With reference to ground no. 2 of the appeal, we find that Ld. CIT(A) has not condone the delay of 30 days in filing of the appeal. The relevant finding of Ld. CIT(A) is reproduced as under: “8. Condonation of delay: 8.0. The dictionary meaning of the word condonation is the Act of condoning, overlooking or implied forgiving of an offense. The word offence is an implicit part of word condonation.
8.1. The word "condonation" has to be seen as an act of default -to be construed with a uniform meaning to all the provisions of Income Tax Act of late filing under any clause. Thus, it applies to all delays where a time frame for procedural way is overlooked, and not brought to notice of income tax authority.
8.2. No condonation which is without sufficient cause, may be considered as deliberate, an act of negligence, an act of non- acknowledgment of an offense, not admitting of a lapse which is prima facie, which only reflects a lack of accountability, a casual approach to provisions of law.
8.3. The issue of sufficient cause arises only when the assessee has filed those reasons in the form of an affidavit explaining the reasons, to be evaluated by the CIT(APPEALS) of the bonafide or otherwise, or at least to be taken in the form of an petition and the grounds of the appeal.
8.4. On the issue of rights and duties of an appellant, the right to appeal to the appellant arises only when it exercises its duty rightfully within a due process of law under provision of income tax act- adhering to time frame to file appeal, and within the framework of the statute.
8.5. In Briji Inder Singh v. Kanshi Ram AIR 1917 PC 156, it was observed that true guide for a Court to exercise the discretion under section 5 is whether the appellant acted with reasonable diligence in processing the appeal 8.6. INCOME-TAX: Where assessee sought for condonation of delay of four and half years in filing appeal against order of Tribunal on ground of ailment of manager but High Court declined to condone delay on ground that there was nothing on record to show that manager was suffering from ailments which did not permit him to take initiative for of appeal, SLP against said decision was to be dismissed 8.7. IT: SLP dismissed on ground of delay in filing appeal against impugned order holding that addition under section 68 could be made even for an unexplained credit amount on account of supply of goods, and not necessarily only for a cash credit.
[2017] 85 taxmann.com 256 (SC) SUPREME COURT OF INDIA Rekha Krishnaraj v. Income-tax officer, Ward No. 1, Hospet.
8.8. The fact of condonation should be considered with respect to filing of any document before income tax authorities as per the statute governing it within statutory timelines as legislated and strictly as per Income-Tax Act provisions.
8.9. As per Section 249(2) of the Act appeal shall be presented within 30 days to the CIT(A) which can be condoned by the CIT(A) u/s 249(3) of the Act, if he satisfies that the appellant on sufficient cause for not presenting the appeal within the said period.
8.10. It has been held that such delay in filing the appeal should be ordinarily accompanied by a petition showing and explaining the cause of the appellant not being able to file the appeal within the period of limitation and praying for the condonation of delay and also submitted evidences in this regard.
8.11. In the following Supreme Court judgment as cited below, a deliberate inordinate delay holds the appellant responsible for an act of negligence and not abiding by the provision of the statute, despite being a responsible organisation.
The case of JCIT Vs. Tractors & Farm Equipments Ltd., (2007) 104 ITD 149 (Chennai)(TM) is that the delay was not condoned by the ITAT on the ground that as the delay was due to negligence and in action on the part of the assessee and the assessee could have very well avoided the delay by exercise of due care and attention.
Similarly, the decision of ITAT in the case of ITO V. Hemraj Onkarji Mali, [2009] 311 ITR (AT) 416 (Indore). In that case there was no reasonable cause for delay. The assessee had not taken proper steps to show that the cause is beyond reasonable doubt for the delay.
In the case of Madhu Dadha Vs. ACIT. [2009] 317 ITR 458 (Mad.)
Phoenix Mills Ltd, the court while dismissing the appeal noticed that the assessee had not explained the cause delay in filing the of appeal 8.12. In other words, where there is sufficient cause shown and the application for condonation of delay has been moved bonafide, the court would normally condone the delay but where the delay has not been explained at all and, in fact, there is unexplained and inordinate delay coupled with negligence or sheer carelessness, the discretion of the court in such cases would normally tilt against the applicant.
8.13. The law of limitation is normally to be construed strictly as it has the effect of vesting for one and taking away right from the other. To condone the delays in a mechanical or a routine manner may amount to jeopardizing the legislative intent behind Section 5 of the Limitation Act.
8.14. It is enshrined in the maxim "interest reipublicae ut sit finis litium" (it is for the general welfare that a period be part to litigation). The very scheme of proper administration of justice pre-supposes expediency in disposal of cases and avoidance of frivolous litigation. Where the parties chose to sleep over their rights for prolonged periods without any just cause, can hardly claim equity in justice particularly faced with the statutory provisions of Section 5 of the Act.
8.15. It is expected of every litigant, to act within the period of limitation. It is only by way of an exception and upon showing sufficient cause that Appeals, if otherwise permissible, could be entertained beyond the prescribed period of limitation.
8.16. In exercising discretion under section 5 of the Limitation Act, the Courts should adopt a pragmatic approach. The Court has to exercise discretion on the facts of each case keeping in mind that in construing the expression 'sufficient cause', the principle of advancing substantial justice is of prime importance.
8.17. Limitation Act provides for condoning delay with respect to all applications except applications filed for the execution of decrees and order, in exceptional cases as in imprisonment, appellant is illiterate etc. There are no reasons mentioned by the appellant as also there is no acknowledgment of delay on part of the appellant.
8.18. On the issue of rights and duties of an assessee, the right to appeal to the appellant arises only when it exercises its duty rightfully within a due process of law under provision of income tax act- 8.19. In Briji Inder Singh v. Kanshi Ram AIR 1917 PC 156, it was observed that true guide for a Court to exercise the discretion under section 5 is whether the appellant acted with reasonable diligence in processing the appeal.
8.20. INCOME-TAX: Where assessee sought for condonation of delay of four and half years in filing appeal against order of Tribunal on ground of ailment of manager but High Court declined to condone delay on ground that there was nothing on record to show that manager was suffering from ailments which did not permit him to take initiative for filing of appeal, SLP against said decision was to be dismissed [2020] 119 taxmann.com 383 (SC)SUPREME COURT OF INDIAMani Mandir Sewa Nyas Samiti Ramghat Ayodhya v. Commissioner of Income-tax)
8.21. IT: SLP dismissed on ground of delay in filing appeal against impugned order holding that addition under section 68 could be made even for an unexplained credit amount on account of supply of goods, and not necessarily only for a cash credit. [2017] 85 taxmann.com 256 (SC) SUPREME COURT OF INDIA Rekha Krishnaraj v. Income-tax officer, Ward No.1, Hospet.
In view of the facts and circumstances of the case, it is noticed that the appellant has not produced anything on record to substantiate any reasonable cause for delay in filing of appeal.”
We find that though the Ld. CIT(A) has not admitted the appeal, still he decided the issue on merit, which is not in accordance with law.
Umashankar Bhagwati Patwa 4. As far as issue of delay in filing the appeal of 30 days before the Ld. CIT(A) is concerend, the Ld. Counsel for the assessee submitted that assessment order was passed on 30/03/2021, whereas the appeal which was due on 30/04/2021 was filed on 30/05/2021, thereby a delay of 30 days. He submitted that this delay is covered by the order of Hon'ble Supreme Court , wherin The Hon’ble Supreme Court extended the period of limitation in filing petition/ suits/ applications/ appeals/all other proceedings, initially up to 08.03.2021. Thereafter, again, due to spread of new variant of COVID-19, the Hon'ble Supreme Court took suo motu cognizance and restored the order dated 23.03.2020 extending the period of limitation and held that period from 15.03.2020 till 28.02.2022 shall stand excluded for the period of limitation. Therefore appeal is within the limitation period.
We have heard rival submissions of the parties and on the issue of the condonation of the delay of 30 days in filing appeal before the Ld. CIT(A). We find that period of delay is falling within the period extended by the Hon’ble Supreme Court in Civil Writ petition (supra). Accordingly, the appeal filed by the assessee before the Ld. CIT(A) is within the limitation period and hence admitted for adjudication. since the Ld. CIT(A) has not considered the submission of the assessee while adjudicating the appeal , therefore, we set aside the order of the Ld. CIT(A) on the issue and dispute and restore the matter back to him for deciding afresh after considering submission of the assessee.
Since we have already restored the appeal to the file of the Ld. CIT(A) for deciding afresh, the other grounds raised are adjudicating upon at this stage. Hence same are dismissed as infructuous.
In the result, appeal of the assessee is allowed for statistical purposes.
Order pronounced in the open court on 29.11.2024.
Sd/- Sd/- (SANDEEP SINGH KARHAIL) (OM PRAKASH KANT) JUDICIAL MEMBER ACCOUNTANT MEMBER Mumbai, Dated: 29/11/2024 Poonam Mirashi, Stenographer Copy to: The Appellant The Respondent The Pr. CIT, Concerned, Mumbai The DR Concerned Bench //True Copy//
By Order Dy/Asstt. Registrar, ITAT, Mumbai.