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Facts
The assessee's appeal was dismissed by the Ld. CIT(A) for being time-barred by 1136 days. The assessee attributed the delay to a bonafide mistake by their staff, supported by an affidavit. The Revenue Department did not file a counter-affidavit.
Held
The Tribunal, citing several Supreme Court judgments on condonation of delay, held that substantial justice should be preferred over technical considerations. Given the assessee's affidavit and the lack of counter-affidavit from the Revenue, the delay was condoned.
Key Issues
Whether the delay of 1136 days in filing the appeal before the Ld. CIT(A) should be condoned.
Sections Cited
40(a)(ia), 249(2), 249(3)
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Income Tax Appellate Tribunal, MUMBAI BENCH “F” MUMBAI
Before: SHRI OM PRAKASH KANT & SHRI SUNIL KUMAR SINGH
This appeal by the assessee is directed against order dated 09.02.2024 passed by the Ld. Commissioner of Income-tax (Appeals) – National Faceless Appeal Centre, Delhi [in short ‘the Ld. CIT(A)’] for assessment year 2012-13, raising following ground:
The Ld. Assessing Officer has erred in disallowing an amount of Rs.8,31,107/- u/s 40(a)(ia) of the I.T. Act, 1961.
At the outset, the Ld. counsel for the assessee submitted that At the outset, the Ld. counsel for the assessee submitted that At the outset, the Ld. counsel for the assessee submitted that the Ld. CIT(A) has declined to condone the delay of 1136 days in the Ld. CIT(A) has declined to condone the delay of 1136 days in the Ld. CIT(A) has declined to condone the delay of 1136 days in filing appeal before him and accordingly he rejected the appeal as before him and accordingly he rejected the appeal as before him and accordingly he rejected the appeal as un-admitted in limine ne. The Ld. counsel for the assessee . The Ld. counsel for the assessee referred to an affidavit filed by the Director of the assessee company Shri Niraj an affidavit filed by the Director of the assessee company Shri Niraj an affidavit filed by the Director of the assessee company Shri Niraj Khanna, wherein he has deposed , wherein he has deposed that on receipt of the assessment that on receipt of the assessment order the staff was directed to prepare and file the appeal as was order the staff was directed to prepare and file the appeal as was order the staff was directed to prepare and file the appeal as was done in earlier years, however done in earlier years, however, inadvertently due oversight due oversight, the staff as well as he omitted to file the appeal before the Ld. CIT(A) and on as well as he omitted to file the appeal before the Ld. CIT(A) as well as he omitted to file the appeal before the Ld. CIT(A) receipt of subsequent order of the Ld. CIT(A) dated 23.10.201 of subsequent order of the Ld. CIT(A) dated 23.10.201 of subsequent order of the Ld. CIT(A) dated 23.10.2018 for assessment year 2011 assessment year 2011-12, the assessee came to know that appeal he assessee came to know that appeal for assessment year 2012 for assessment year 2012-13 was required to be file was required to be filed but was not filed. Shri Niraj Khanna further submitted that on realizing the filed. Shri Niraj Khanna further submitted that on realizing the filed. Shri Niraj Khanna further submitted that on realizing the mistake , appeal was immediately filed before the Ld. CIT(A) on appeal was immediately filed before the Ld. CIT(A) on appeal was immediately filed before the Ld. CIT(A) on 10.12.2018 with the request to condone 018 with the request to condone the delay of 1136 days. the delay of 1136 days.
On the other hand, the On the other hand, the Ld. Departmental Representative (DR) Ld. Departmental Representative (DR) opposed and submitted that and submitted that assessee has not justified any assessee has not justified any sufficient cause for condonation of delay sufficient cause for condonation of delay, therefore, the Ld. CIT(A) is therefore, the Ld. CIT(A) is justified in rejecting the appeal as un justified in rejecting the appeal as un-admitted.
We have heard rival submission of We have heard rival submission of the parties and perused the the parties and perused the relevant material on record. The limitation period for filing in appeal relevant material on record. The limitation period for filing in appeal relevant material on record. The limitation period for filing in appeal before Ld. CIT(A) u/s 249(2) of the Income before Ld. CIT(A) u/s 249(2) of the Income-tax Act, 1961 (in short tax Act, 1961 (in short ‘the Act’) is of 30 days, but the section 249(3) of the Act empowers ‘the Act’) is of 30 days, but the section 249(3) of the Act emp ‘the Act’) is of 30 days, but the section 249(3) of the Act emp the Ld. CIT(A) to condone ndone the delay if he is satisfied that assessee satisfied that assessee had sufficient cause for not presenting the appeal within the had sufficient cause for not presenting the appeal within the had sufficient cause for not presenting the appeal within the limitation limitation limitation period. period. period. For For For evaluating evaluating evaluating sufficiency sufficiency sufficiency of of of cause cause cause for condonation of delay, the Hon’ble Supreme Court in the case of condonation of delay, the Hon’ble Supreme Court in the case of condonation of delay, the Hon’ble Supreme Court in the case of Collector of Land Acqui Collector of Land Acquisition v. Katiji AIR (1987) tion v. Katiji AIR (1987) 167 ITR 471 (SC) has laid down following six principles: has laid down following six principles:
(i) Ordinarily, a litigant does not stand to benefit by lodging an appeal late. Ordinarily, a litigant does not stand to benefit by lodging an appeal late. Ordinarily, a litigant does not stand to benefit by lodging an appeal late. (ii) Refusing to condone delay can result in a meritorious matter being thrown out at Refusing to condone delay can result in a meritorious matter being thrown out at the Refusing to condone delay can result in a meritorious matter being thrown out at very threshold and cause of justice being defeated. As against this when delay is very threshold and cause of justice being defeated. As against this when delay is 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 condoned the highest that can happen is that a cause would be decided on merits condoned the highest that can happen is that a cause would be decided on merits after hearing the parties. after hearing the parties. (iii) "Every day's delay must be explained" does not mean "Every day's delay must be explained" does not mean that a pedantic approach that a pedantic approach should be taken. Why not every hour's delay, every second's delay? The doctrine should be taken. Why not every hour's delay, every second's delay? The doctrine should be taken. Why not every hour's delay, every second's delay? The doctrine must be applied in a rational common must be applied in a rational common-sense pragmatic manner. (iv) When substantial justice and technical considerations are pitted against each othe When substantial justice and technical considerations are pitted against each other, When substantial justice and technical considerations are pitted against each othe cause of substantial justice deserves to be preferred for the other side cannot claim to cause of substantial justice deserves to be preferred for the other side cannot claim to 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 have vested right in injustice being done because of a non-deliberate delay. deliberate delay. (v) There is no presumption that delay is occasioned deliberately, or on account of There is no presumption that delay is occasioned deliberately, or on account of 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 culpable negligence, or on account of mala fides. A litigant does not stand to benefit 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. by resorting to delay. In fact, he runs a serious risk. (vi) It must be grasped that judiciary is respected not on account of its power to legalize It must be grasped that judiciary is respected not on account of its power to legalize It must be grasped that judiciary is respected not on account of its power to legalize injustice on technical grounds but because it is capable of removing injustice and is ical grounds but because it is capable of removing injustice and is ical grounds but because it is capable of removing injustice and is expected to do so."
4.1 We find that assessee in the instant case has filed an affidavit We find that assessee in the instant case has filed an affidavit We find that assessee in the instant case has filed an affidavit to support his contention that to support his contention that on same issue appeals were filed in same issue appeals were filed in earlier years however due to however due to bonafide mistake omitted to file mistake omitted to file appeal for the year under consideration. for the year under consideration. We note that Revenue Department Revenue Department has not filed any counter affidavit against the contention of the has not filed any counter affidavit against the contention of the has not filed any counter affidavit against the contention of the affidavit filed by the assessee. The Co affidavit filed by the assessee. The Co-ordinate Bench of the ordinate Bench of the Tribunal in the case of Bajaj Hindustan Ltd. v. JCIT (2005) 92 Bajaj Hindustan Ltd. v. JCIT (2005) 92 Tribunal in the case o ITD 11 has condoned the delay for one of the reason that Revenue has condoned the delay for one of the reason that Revenue has condoned the delay for one of the reason that Revenue had not filed any counter affidavit opposing the application for had not filed any counter affidavit opposing the application for had not filed any counter affidavit opposing the application for condonation of the delay. The Hon’ble Supreme Court in the case of condonation of the delay. The Hon’ble Supreme Court in the case of condonation of the delay. The Hon’ble Supreme Court in the case of Sandhya Rani Sarkar v. Sudha Rani Debi AIR 1978 SC 537 Sarkar v. Sudha Rani Debi AIR 1978 SC 537 held Sarkar v. Sudha Rani Debi AIR 1978 SC 537 that non-filing of affidavit in opposition to an application for filing of affidavit in opposition to an application for filing of affidavit in opposition to an application for condonation of the delay may be sufficient cause for condonation of condonation of the delay may be sufficient cause for condonation of condonation of the delay may be sufficient cause for condonation of the delay. The Coordinate bench of Coordinate bench of Tribunal in the case of Bajaj Tribunal in the case of Bajaj Hindustan Ltd. (supra) Ltd. (supra), accordingly, condoned the more the more than 180 days. The Hon’ble Madras High Court in the case of Sreenivas days. The Hon’ble Madras High Court in the case of days. The Hon’ble Madras High Court in the case of Charitable Trust v Dy. CIT Charitable Trust v Dy. CIT [2006] 154 Taxman 377/280 ITR [2006] 154 Taxman 377/280 ITR 357 held that in order to advance held that in order to advance substantial justice which is of stice which is of prime importance, the expression "sufficient cause" should receive a prime importance, the expression "sufficient cause" should receive a prime importance, the expression "sufficient cause" should receive a The Hon’ble Supreme Court in the case of OP liberal interpretation. . The Hon’ble Supreme Court in the case of Kathpaliya v. Lakhmir Singh AIR 1984 SC 1744 has held that Kathpaliya v. Lakhmir Singh AIR 1984 SC 1744 Kathpaliya v. Lakhmir Singh AIR 1984 SC 1744 refusal to condone the delay results in gr refusal to condone the delay results in grave miscarriage of justice, ave miscarriage of justice, thus it would be a ground to condo it would be a ground to condoning the delay. The Hon’ble the delay. The Hon’ble Supreme court in the case of Ornate Traders (P.) Ltd. v. ITO Ornate Traders (P.) Ltd. v. ITO Supreme court in the case of (2008) 312 ITR 193 (Bombay) (2008) 312 ITR 193 (Bombay) held that expression 'sufficient expression 'sufficient cause' will always have relevancy to reasona cause' will always have relevancy to reasonableness and actions, bleness and actions, which can be condoned by Court and it should fall within realm of which can be condoned by Court and it should fall within realm of which can be condoned by Court and it should fall within realm of normal human conduct or normal conduct of a litigant. In the case normal human conduct or normal conduct of a litigant normal human conduct or normal conduct of a litigant of Concord of India Insurance Co. Ltd. v. Smt. Nirmala Devi Concord of India Insurance Co. Ltd. v. Smt. Nirmala Devi Concord of India Insurance Co. Ltd. v. Smt. Nirmala Devi (1979) 118 ITR 507 (SC) (1979) 118 ITR 507 (SC) Hon’ble Supreme Court held that what is Hon’ble Supreme Court held that what is to be looked into is whether there is any taint of mala fide or to be looked into is whether there is any taint of mala fide or to be looked into is whether there is any taint of mala fide or element of recklessness or ruse and if neither is present, legal element of recklessness or ruse and if neither is present, legal element of recklessness or ruse and if neither is present, legal advice honestly sought and actually given, must be treated as advice honestly sought and actually given, must be treated as advice honestly sought and actually given, must be treated as sufficient cause for cond sufficient cause for condoning the delay. The Hon’ble Supreme oning the delay. The Hon’ble Supreme Court in the case of Ram Nath Sao v. Gobardhan Sao, AIR 2002 Ram Nath Sao v. Gobardhan Sao, AIR 2002 Court in the case of SC 1201 held that by held that by taking a pedantic or hyper-technical technical view, the explanation furnished by the assessee for condonation of delay explanation furnished by the assessee for condonation of delay explanation furnished by the assessee for condonation of delay should not be rejected should not be rejected particularly where assessee had where assessee had arguable points of law on merits and refusal points of law on merits and refusal for condonation of delay will condonation of delay will cause erroneous loss and irreparable injury to the aggrieved party cause erroneous loss and irreparable injury to the aggrieved party cause erroneous loss and irreparable injury to the aggrieved party by terminating lis at the inception at the inception.
4.2 The object of prescribing the time period The object of prescribing the time period for filing of the appeal filing of the appeal is to expedite the proceedings proceedings before the concerned authorities before the concerned authorities and advance cause of the substantial justice advance cause of the substantial justice. In view of ratio of the view of ratio of the decisions referred above and uncontroverted a decisions referred above and uncontroverted affidavit filed by the ffidavit filed by the assessee, we feel it appropriate to condone the delay in filing the e feel it appropriate to condone the delay in filing the e feel it appropriate to condone the delay in filing the appeal before the ld. ld. First Appellate Authority. Though the Ld. First Appellate Authority. Though the Ld. counsel for the assessee has filed order of the Co counsel for the assessee has filed order of the Co-ordinate Bench of ordinate Bench of the Tribunal on the merit of the issue involved, h he merit of the issue involved, however, in view owever, in view of the fact that the Ld. CIT(A) has not adjudicated on the merit, the fact that the Ld. CIT(A) has not adjudicated on the merit the fact that the Ld. CIT(A) has not adjudicated on the merit therefore, we restrain ourselves in respect of merit of the case. therefore, we restrain ourselves in respect of merit of the case. therefore, we restrain ourselves in respect of merit of the case. Accordingly, the finding of the Ld. CIT(A) is set aside and matter is Accordingly, the finding of the Ld. CIT(A) is set aside and matter is Accordingly, the finding of the Ld. CIT(A) is set aside and matter is restored back to him for passing order afresh on merit in restored back to him for passing order afresh restored back to him for passing order afresh accordance with law. Needless to mention that the First Appellate accordance with law. Needless to mention that the First Appellate accordance with law. Needless to mention that the First Appellate Authority shall ensure adequate opportunity of being heard to the Authority shall ensure adequate opportunity of being heard to the Authority shall ensure adequate opportunity of being heard to the assessee.
In the result, the appeal of the assessee is allowed for In the result, the appeal of the assessee is allowed for In the result, the appeal of the assessee is allowed for statistical purposes. statistical purposes.
Order pronounced in the o Order pronounced in the open Court on 19/08/2024. /08/2024.