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Facts
The appellant, Swapnashilp Co-op. Housing Society Limited, filed its income tax return for AY 2020-21, which resulted in a disallowance under section 80P(2)(d). The appeal filed before the CIT(A) against this disallowance was dismissed as not maintainable due to being filed beyond the time limit. The appellant contended that the delay was due to their Chartered Accountant recovering from angioplasty.
Held
The Income Tax Appellate Tribunal found that the CIT(A) adopted a hyper-technical approach and that there was sufficient cause for condoning the delay in filing the appeal. Citing Supreme Court precedents emphasizing substantial justice over technicalities, the tribunal set aside the CIT(A)'s order and directed the CIT(A) to restore the case and dispose of it on its merits.
Key Issues
Whether the CIT(A) was justified in dismissing the appeal as time-barred without condoning the delay, and whether the appellant demonstrated sufficient cause for the delay in filing the appeal.
Sections Cited
250, 249, 143(1), 80P(2)(d), 51 (Limitation Act of 1963)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, MUMBAI BENCH “B”, MUMBAI
Before: SHRI. PRASHANT MAHARSHI & SHRI. RAJ KUMAR CHAUHAN
O R D E R PER RAJ KUMAR CHAUHAN (J.M.): 1. This appeal is filed by the appellant/assessee against the order dated 14.12.2023 of Learned Commissioner of Income Tax (Appeals), ADDL/JCIT (A)-2 Jaipur [hereinafter referred to as the “CIT(A)”], passed under section 250 of the Income Tax Act, 1961 [hereinafter referred to as Swapnashilp Co. Op. Hsg. Soc.; A.Y. 2020-21 “the Act”] for the A.Y. 2020-21, wherein the appeal of the assessee by the Ld. CIT(A) was dismissed as not maintainable because it was found that the appeal has been filed beyond the time limit permitted u/s. 249 of the act without any sufficient cause for condonation of delay.
The appellant has filed its return of income for A.Y. 2020-21 on 15.02.2021 declaring an income of Rs. 7,610/-. The return was processed u/s. 143(1) on 23.10.2021 and the AO had disallowed the claim u/s. 80P (2)(d) amounting to Rs. 3,38,667/-. Aggrieved by the said order of the Ld. AO, the appellant has filed the appeal before the Ld. CIT(A) requesting condonation of delay but no separate application was filed for condonation of delay with the ground mentioned in form no. 35 at column no. 15 that: - “The Chartered Accountant appointed by the society was recovering from Angioplasty and therefore could not attend the office for a prolonged period of time. Therefore, on sympathetic grounds, we request you to kindly condone the delay in the matter.”
The Ld. CIT(A) did not find those grounds justified and sufficient cause for condonation of delay and has dismissed the appeal without considering the merit of the appeal. Aggrieved by the said impugned order, the assessee is in appeal before us and has raised following grounds in the appeal: Page | 2 Swapnashilp Co. Op. Hsg. Soc.; A.Y. 2020-21 “1. On facts & circumstances of the case and in law, the Addl./JCIT appeals has erred in treating the appeal filed by the appellant as not maintainable on the grounds that the appeal had been filed beyond time limits, prescribed u/s.249 of the Income Tax Act. The delay in filing of the appeal before the first appellate authority should be condoned and appeal be admitted, as there was a reasonable cause in the delay in filing of the appeal.
2. On facts & circumstances of the case and in law, the Addl./JCIT appeals has erred in turning down the appellant's application for adjournment dtd.13.11.2023, which was uploaded on the Income Tax portal on 15.11.2023. The turning down of this application is against principles of natural justice.
3. On facts & circumstances of the case and in law, the Addl./JCIT appeals has erred in upholding the restriction in respect of the claim for deduction u/s.80P(2)(d) of the Income Tax Act at Rs.3.38 Lakh as against Rs.7.64 Lakh. The action taken by the CPC being bad in law, the claim for deduction as made by the appellant u/s.80P(2)(d) of the Income Tax Act be restored at Rs.7.64 Lakh.”
4. It is argued by the Ld. AR that there was sufficient cause for condonation of delay as mentioned in form no. 35 and the impugned order is therefore liable to be set aside and an opportunity of hearing need to be granted. The Ld. DR has relied upon the judgment of the Ld. CIT(A) stating that there was no sufficient cause for condonation of delay and the judgment is legally perfect.
5. We have considered the rival submissions made on behalf of the appellant as well as the respondent. The observation of the Ld. CIT(A) shows that the Ld. CIT(A) has adopted a hyper-technical approach while considering the grounds of condonation of delay in the case of the appellant. The right Swapnashilp Co. Op. Hsg. Soc.; A.Y. 2020-21 of appeal to the Ld. CIT(A) u/s. 248 is a statutory right granted to the appellant/assessee. The statutory right cannot be denied to an assessee unless there is inordinate delay or gross negligence on the part of the assessee. It is settled law that the rules and procedure is handmade of justice and the adjudicating authorities should not deny a statutory right of appeal on technical grounds. Para no. 61 of judgment of Hon’ble Supreme Court in the case of Sesh Nath Singh & Anr. Vs. Baidyabati Sheoraphuli Co-operative Bank Ltd. & Anr. in Civil Appeal No. 9198 of 2019 order dated 22.3.2023 can be relied with profit. “61. The condition precedent for condonation of the delay in filing an application or appeal, is the existence of sufficient cause. Whether the explanation furnished for the delay would constitute ‘sufficient cause’ or not would dependent upon facts of each case. There cannot be any straight jacket formula for accepting or rejecting the explanation furnished by the applicant/appellant for the delay in taking steps. Acceptance of explanation furnished should be the rule and refusal an exception, when no negligence or inaction or want of bonafides can be imputed to the defaulting party.” Similarly, Para no. 29 and 31 of judgment of Hon’ble Supreme Court in the case of Sheo Raj Singh (Deceased) Through LRS. & Ors. Vs. Union of India & Anr. in Civil Appeal No. 5897 of 2015 order dated 09.10.2023 are relevant and reproduced herein:
Swapnashilp Co. Op. Hsg. Soc.; A.Y. 2020-21 “29. Considering the aforementioned decisions, there cannot be any quarrel that this Court has stepped in to ensure that substantive rights of private parties and the State are not defeated at the threshold simply due to technical considerations of delay. However, these decisions notwithstanding, we reiterate that condonation of delay being a discretionary power available to courts, exercise of discretion must necessarily depend upon the sufficiency of the cause shown and the degree of acceptability of the explanation, the length of delay being immaterial. Sometimes, due to want of sufficient cause being shown or an acceptable explanation being proffered, delay of the shortest range may not be condoned whereas, in certain other cases, delay of long periods can be condoned if the explanation is satisfactory and acceptable. Of course, the courts must distinguish between an ‘explanation’ and an ‘excuse’. An ‘explanation’ is designed to give someone all of the facts and lay out the cause for something. It helps clarify the circumstances of a particular event and allows the person to point out that something that has happened is not his fault, if it is really not his fault. Care must however be taken to distinguish an ‘explanation’ from an ‘excuse’. Although people tend to see ‘explanation’ and ‘excuse’ as the same thing and struggle to find out the 15 difference between the two, there is a distinction which, though fine, is real. An ‘excuse’ is often offered by a person to deny responsibility and consequences when under attack. It is sort of a defensive action. Calling something as just an ‘excuse’ would imply that the explanation proffered is believed not to be true. Thus said, there is no formula that caters to all situations and, therefore, each case for condonation of delay based on existence or absence of sufficient cause has to be decided on its own facts. At this stage, we cannot but lament that it is only excuses, and not explanations, that are more often accepted for condonation of long delays to safeguard public interest from those hidden forces whose sole agenda is to ensure that a meritorious claim does not reach the higher courts for adjudication.
The order under challenge in this appeal is dated 21st December 2011. It was rendered at a point of time when the decisions in Page | 5 Swapnashilp Co. Op. Hsg. Soc.; A.Y. 2020-21 Mst. Katiji (supra), Ramegowda (supra), Chandra Mani (supra), K.V. Ayisumma (supra) and Lipok AO (supra) were holding the field. It is not that the said decisions do not hold the field now, having been overruled by any subsequent decision. Although there have been some decisions in the recent past [State of M.P. v. Bherulal14 is one such decision apart from University of Delhi (supra)] which have not accepted governmental lethargy, tardiness and indolence in presenting appeals within time as sufficient cause for condonation of delay, yet, the exercise of discretion by the High Court has to be tested on the anvil of the liberal and justice oriented approach expounded in the aforesaid decisions which have been referred to above. We find that the High Court in the present case assigned the following reasons in support of its order: a. The law of limitation was founded on public policy, and that some lapse on the part of a litigant, by itself, would not be sufficient to deny condonation of delay as the same could cause miscarriage of justice. b. The expression sufficient cause is elastic enough for courts to do substantial justice. Further, when substantial justice and technical considerations are pitted against one another, the former would prevail. c. It is upon the courts to consider the sufficiency of cause shown for the delay, and the length of delay is not always decisive while exercising discretion in such matters if the delay is properly explained. Further, the merits of a claim were also to be considered when deciding such applications for condonation of delay. d. Further, a distinction should be drawn between inordinate unexplained delay and explained delay, where in the present case, the first respondent had sufficiently explained the delay on account of negligence on part of the government functionaries Swapnashilp Co. Op. Hsg. Soc.; A.Y. 2020-21 and the government counsel on record before the Reference Court. e. The officer responsible for the negligence would be liable to suffer and not public interest through the State. The High Court felt inclined to take a pragmatic view since the negligence therein did not border on callousness.”
Nothing contrary has been brought on record by the respondents which may contradict and falsify facts alleged by the appellant in support of seeking condonation of delay. The Hon'ble Supreme Court in the case of Collector, Land Acquisition Vs. MST. Katiji & Ors., [1987] 167 ITR 471 (SC), dated 19.02.1987, was pleased to hold regarding the condonation of delay as under:
“The Legislature has conferred the power to condone delay by enacting section 51 of the Limitation Act of 1963 in order to enable the courts to do substantial justice to parties by disposing of matters on de merits”. The expression “sufficient cause” employed by the Legislature is adequately elastic to enable the courts to apply the law in a meaningful manner which subserves the ends of justice that being the life-purpose of the existence of the institution of courts. It is common knowledge that this court has been making of justifiably liberal approach in matters instituted in this court. But the message does not appear to have percolated down to all the other courts in the hierarchy. And such a liberal approach is adopted on principle as it is realized that:
1. 1. Ordinarily, a litigant does not stand to benefit by lodging an appeal late.
2. Refusing to condone delay can result in a meritorious matter being thrown out at the very threshold and cause of justice being defeated.
Swapnashilp Co. Op. Hsg. Soc.; A.Y. 2020-21 As against this, when delay is condoned, the highest that can happen is that a cause would be decided on merits after hearing the parties.”
In the facts and circumstances as discussed above and because of the law laid down by the Hon’ble Supreme Court in Sesh Nath Singh & Anr. and Sheo Raj Singh (Deceased) Through LRS. & Ors. referred (supra), we are of the considered opinion that there was sufficient cause for condoning the delay for filing this appeal before the Ld. CIT(A) by the assessee.
For the above reasons, the impugned order of the Ld. CIT(A) is not sustainable in the eyes of law and accordingly set aside with the directions to restore the case of the appellant on the file of Ld. CIT(A) who shall dispose the same on merit after duly considering the material brought on record by the appellant before the Ld. CIT(A). The appellant/assessee shall present its case before the Ld. CIT(A) within 90 days of this order.
In the result, appeal filed by the assessee is allowed in the above terms.