Loading judgment…
Facts
The assessee was treated as a non-filer, and the Assessing Officer made a best judgment assessment of Rs. 22,28,765/-. The assessee appealed to the CIT(A), who dismissed the appeal due to delay. The assessee then appealed to the Tribunal.
Held
The Tribunal held that the CIT(A) erred in not adjudicating the appeal on merits and passing a non-speaking order. The Tribunal also noted that while a sufficient cause is a prerequisite for condoning delay, a liberal approach should be adopted in the interest of substantial justice, especially if the delay is not deliberate and does not lead to any advantage for the assessee.
Key Issues
Whether the CIT(A) was justified in dismissing the appeal solely on the ground of delay without considering the merits, and whether the delay in filing the appeal should have been condoned.
Sections Cited
69A of the Income Tax Act, 1961, 263 of IT Act, 9161, 119(2)(b) of the Act
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, JABALPUR BENCH “DB”, JABALPUR
Before: SHRI KUL BHARAT & SHRI, NIKHIL CHOUDHARY
PER KUL BHARAT, VICE PRESIDENT.:
1. This appeal, by the assessee, is directed against the order of the Learned Commissioner of Income-tax (Appeals)/National Faceless Appeal Centre (NFAC), Delhi dated 26.12.2024 pertaining to the assessment year 2018-19. The assessee has raised the following grounds of appeal: - “1. That the NFAC has grossly erred in facts and circumstances of the case to confirmed the addition at Rs.22,28,765/-
2. That the assessment has been set-aside by Ld. CIT, Exemption vide order u/s 263 of IT Act, 9161, dated 09.01.2025, hence, the appeal order passed by NFAC is bad in law and unjustified.
3. That the assessee craves leave to raise any other ground/s on or before the date of hearing to prove that the order is bad.”
2. The facts giving rise to the present appeal are that the assessee was treated as non-filer of the Income Tax Return. Thereafter, the Assessing Officer issued statutory notices but there was no compliance on behalf of the assessee. Therefore, the Page 2 of 8 Assessing Officer invoking the provision u/s 69A of the Income Tax Act, 1961 (“Act”, for short) made best judgment assessment and assessed income at Rs.22,28,765/-. Aggrieved by this, the assessee preferred appeal before the Ld. CIT(A) who also dismissed the appeal on the basis of delay in preferring the appeal ex-parte to the assessee. Now, the assessee is in appeal before this Tribunal.
3. Apropos to the grounds of appeal, the Ld. Counsel for the assessee contended that the Ld. CIT(A) has erred in not adjudicating the appeal on merits and has passed a non- speaking order by ignoring the merit-based submission duly filed by the assessee. He also contended that the Ld. CIT(A) has not condoned the delay in filing of appeal without appreciating the sufficient and genuine cause of delay as explained by the assessee. Thus, he prayed that the delay may kindly be condoned and matter may be restored back to the file of the ld. CIT(A) with the directions to decide the appeal on merits by passing a speaking order.
On the other hand, the Ld. Departmental Representative (DR) opposed the submissions and supported the orders of the lower authorities.
Heard, the Ld. Representatives of the parties and perused the material available on record. We find that the Ld. CIT(A) vide his order dated 26.12.2024 has dismissed the appeal of the assessee by observing as under:-
“5.2 At the time of filing of appeal, the appellant had filed a petition for condonation of delay, The same has been taken on record and perused. 5.3 Section 119(2)(b) o the Act provides for condonation of delay of any application or claims filed under the Act. The CBDT will authorize income tax authorities to accept any application or claim if it considers to be expedient to do so to avoid genuine hardship of the party. The income tax Page 3 of 8 authority will allow the delayed claim, provided, making the claim within the prescribed due date was genuinely out of the control of the taxpayer. 5.4 in the present case, there was a delay of 135 days in filing the appeal wherein the appellant stated that assessee is charitable institution more particularly in educational activity. However, the secretary of the assessee institution is not computer friendly and has not received any SMS regarding the passing the order on real time basis while received the intimation about the initiation of the penalty, assessee has approached to the counsel and on verification of portal it is found that there is an assessment order for the said assessment year. The reasons brought in before me found to be unrealistic since, the appellant himself confirmed in Form-35 that the service of the impugned order was done on 20.03.2023 and the explanation is not convincing either. The delay of 135 days in filing appeal due to negligence on part of the appellant, the appellant should have approached any other tax consultant at a correct time to avoid the delay in filing. Further, no medical records were furnished substantiating the claim of appellant being bed ridden. I hold that the reasons mentioned by the appellant were not genuine and valid as no proper evidence in support of it has been adduced. The appellant needs to provide a genuine and valid reason for the delay in filing the appeal. This could be due to circumstances beyond the control of appellant, such as illness and natural disasters, even for that also need to be substantiated with evidence. For the exercise of discretion in condoning the delay, it must be established beyond the shadow of doubt that the appellant was diligent and was not guilty of negligence on its part. An application of condonation should not be acceptable unless and until the applicant satisfies the authority that he was prevented by a sufficient cause while doing so. Further, longer delays may require more compelling reasons and evidence to be condoned. The reasons mentioned by the appellant do not suffice the delay to be condoned. Thus, the delay is not condoned. In the light of above facts, I would like to draw the support from the below case laws: 5.5 Reliance is placed on the following case law to discuss the delay in filing the appeal.
MajjiSannemma & Sanyasirao Vs. Reddy Sridevi& Others: Hon'ble Supreme Court in the case of Majji Sannemma & Sanyasirao Vs. Reddy Sridevi & Others in Civil Appeal No.7696 of 2021 dated 16th 2021 while reversing the order of the Hon’ble A.P High Court at Amaravati at Para 6.1 and 6.2 of the order has observed as under: “6. At the outset, it is noted that by the impugned order the High Court has condoned a huge delay of 1011 days in preferring the Second Appeal by respondent Nos. 1 and 2 herein original defendants appellants before the High Court. While condoning the delay, the High Court has observed as under: In these circumstances, when there are certain questions, which require a debate in the second appeal, it is not necessary that this matter be rejected at this stage, without inviting a decision on merits. If the delay is condoned though enormous, what happens at best is to give an opportunity to the parties to canvass their respective case. Since this question being of procedure, the attempt of the court should be to encourage a healthy discussion on merits than rejecting at threshold. Viewed from such perspective, accepting the reasons assigned by the petitioner, the delay in presenting this second appeal should be condoned. Apparently, there is no willful negligence on the part of the petitioners nor this attempt suffers from want of due diligence. It appears being a bonafide attempt on the part of the petitioners to canvass their claim particularly when the trial court had accepted their plea, which was subjected to reversal by the appellate court. However, the petitioners should compensate the respondent by means of costs for this delay. The contention of the respondent that valuable rights are accrued to her on account of inaction of the petitioners in failing to prefer the Second Appeal within time, cannot be a significant factor in the backdrop of the circumstances found in this case. In the result, this petition is allowed condoning the delay of 1011 days in filing the second appeal subject to payment of costs of Rs.2,000/- (Rupees Two thousand only) to the learned counsel for the respondent on or before 05.10.2021.” Thus from the aforesaid, it can be seen that the High Court has not observed that any sufficient cause explaining the huge delay of 1011 days has been made out. 6.1 The High Court has observed that if the delay is condoned no prejudice will be caused to the appellant as the appeal would be heard on merits. The High Court has also observed that there is no willful negligence on the part of the respondents herein nor it suffers from want of due diligence. However, from the averments in the application for condonation of delay, we are of the opinion that it was a case of a gross negligence and/or want of due diligence on the part of the respondents herein — appellants before the High Court in filing such a belated appeal. 6.2 We have gone through the averments in the application for the condonation of delay. There is no sufficient explanation for the period from 15.03.2017 till the Second Appeal was preferred in the year 2021. In the application seeking condonation of delay it was stated that she is aged 45 years and was looking after the entire litigation and that she was suffering from health issues and she had fallen sick from 01.01.2017 to 15.03.2017 and she was advised to take bed rest for the said period. However, there is no explanation for the period after 15.03.2017. Thus, the period of delay from 15.03.2017 till the Second Appeal was filed in the year 2021 has not at all been explained. Therefore, the High Court has not exercised the discretion judiciously.
Finally at Para 8 & 9 of the order has observed as under: “8. Applying the law laid down by this Court in the aforesaid decisions to the facts of the case on hand and considering the averments in the application for condonation of delay, we are of the opinion that as such no explanation much less a sufficient or a satisfactory explanation had been offered by respondent Nos.1 and 2 herein — appellants before the High Court for condonation of huge delay of 1077 days in preferring the Second Appeal. The High Court is not at all justified in exercising its discretion to condone such a huge delay. The High Court has not exercised the discretion judiciously. The reasoning given by the High Court while condoning huge delay of 1011 days is not germane. Therefore, the High Court has erred in condoning the huge delay of 1011 days in preferring the appeal by respondent Nos.1 and 2 herein — original defendants. Impugned order passed by the High Court is unsustainable both, on law as well as on facts.
In view of the above and for the reasons stated above, the present Appeal is allowed. The impugned order dated 16.09.2021 passed by the High Court condoning the delay of 1011 days in preferring the Second Appeal by respondent Nos.1 and 2 herein is hereby quashed and set aside. Consequently, Second Appeal No.331 of 2021 preferred by respondent Nos.1 and 2 herein stands dismissed on the ground of delay. The present Appeal is accordingly allowed. However, there shall be no order as to costs.”
Esha Bhattacharjee vs. Management Committee of RaghunathpurNafar in Civil Appeal Nos. 8183 & 8184 of 2013 dated 13.9.2013 (S.C) “22. At this juncture, we are obliged to state that the persons who are nominated or inducted as members or chosen as Secretaries of the managing committees of schools are required to behave with Page 5 of 8 responsibility and not to adopt a casual approach. It is a public responsibility and anyone who is desirous of taking such responsibility has to devote time and act with due care and requisite caution. Becoming a member of the committee should not become a local status syndrome. A statutory committee cannot remain totally indifferent to an order passed by the court and sleep like “Kumbhakarna”. The persons chosen to act on behalf of the Managing Committee cannot take recourse to fancy and rise like a phoenix and move the court. Neither leisure nor pleasure has any room while one moves an application seeking condonation of delay of almost seven years on the ground of lack of knowledge or failure of justice. Plea of lack of knowledge in the present case really lacks bona fide. The Division Bench of the High Court has failed to keep itself alive to the concept of exercise of judicial discretion that is governed by rules of reason and justice. It should have kept itself alive to the following passage from N. Balakrishnan: “The law of limitation fixes a lifespan for such legal remedy for the redress of the legal injury so suffered. Time is precious and wasted time would never revisit. During the efflux of time, newer causes would sprout up necessitating newer persons to seek legal remedy by approaching the courts. So a lifespan must be fixed for each remedy. Unending period for launching the remedy may lead to unending uncertainty and consequential anarchy. The law of limitation is thus founded on public policy. It is enshrined in the maxim interest reipublicaeut sit finis litium (it is for the general welfare that a period be put to litigation). Rules of limitation are not meant to destroy the rights of the parties. They are meant to see that parties do not resort to dilatory tactics but seek their remedy promptly. The idea is that every legal remedy must be kept alive for a legislatively fixed period of time.” We have painfully re-stated the same.
Ex consequenti, the appeals are allowed and the order passed by the Division Bench condoning delay is set aside.......... .
Vama Apparels (India) Private Ltd vs. ACIT (2019): 102 com 395 (Bombay) Hon'ble Bombay High Court in the case of Vama Apparels (India) (P) Ltd vs. ACIT held that ‘where assessee filed appeal before High Court with a delay JB Advani & Co. (P) Ltd vs. R.D. Shah, CIT (1969) 72 ITR 395 (S. C) dated 22.8.1968. of 507 days and Sought condonation of delay stating that ex-employee of assessee who received order of Tribunal put it in his drawer and left company without informing anybody about such orders and it was only about a month before filing of instant appeal when his substitute new employee found papers from drawer, there was no sufficient explanation for delay.’ Held that the reasons given in the condonation application for the delay are not sufficient for condonation of such huge delay of 930 days. We therefore, hold that the delay in filing of the appeal by 930 days by the assessee cannot be condoned. Accordingly, the appeal filed by the assessee is dismissed being barred by limitation. 5.6 Respectfully following the judgments in the above cases, I am of the view that there is clear failure on the part of the appellant and lack of diligence and inaction on its part which would have been avoided by the appellant if it had exercised due care and attention. Therefore, I am not inclined to condone the huge delay of 135 days without any valid and cogent reasons and thereby, the request of condonation is hereby rejected.”
From the above findings, it transpires that ld. CIT (A) has observed that assessee has not furnished the plausible Page 6 of 8 explanation for delay in filing of appeal, accordingly, the appeal was dismissed. Now the question is whether the action of Ld. CIT(A) is justified under facts and circumstances of the present case. The Ld. CIT(A) failed to consider the fundamental aspect of the matter. He needed to find out whether any injustice would cause for not condoning the delay. In our considered view that it was not a deliberate attempt by the assessee for gaining any benefit. The Ld. CIT(A) ought to have verified about the correctness of the contention of the assessee, it was prevented by “sufficient cause”. Moreover, the assessee would have no advantage of any kind. The Hon'ble Supreme Court in the case of Collector of Land Acquisition Vs. MST. Katiji & Ors 167 ITR 471 (SC) held that “this court in advocating the liberal approach in condoning the delay for “sufficient cause” held that ordinarily a litigant does not stand to benefit by lodging an appeal late; it is not necessary to explain every day’s delay in filing the appeal; and since sometimes refusal to condone delay may result in throwing out a meritorious matter, it is necessary in the interest of justice that cause of substantial justice should be allowed to prevail upon technical consideration and if the delay is not deliberate, it ought to be condoned. Notwithstanding the above, howsoever, liberal approach is adopted in condoning the delay, existence of “sufficient cause” for not filing the appeal in time, is a condition precedent for exercising the discretionary power to condone the delay. The phrase ‘liberal approach’, justice oriented approach’ and cause for the advancement of ‘substantial justice’ cannot be employed to defeat the law of limitation so as to allow stale matters or as a matter of fact dead matters to be revived and re-opened by taking aid of Section 5 of the Limitation Act.”, Further, the Hon'ble Apex Court in the case of Special Leave Petition (Civil) No.31248 of 2018 has “13. It is very elementary and well understood that courts should not adopt an injustice-oriented approach in dealing with the applications for condonation of the delay in filing appeals and rather follow a pragmatic line to advance substantial justice.”
In the light of above, under the facts of the present case, we deem it fit and proper and to sub-serve the interest of principles of natural justice to set aside the impugned order and restore the grounds of the appeal to the Ld. CIT(A) for deciding the grounds afresh and by giving clear finding on the grounds raised by the assessee by way of speaking order. Needless to say that the assessee would provide all the information which is relevant and necessary for adjudication of grounds of appeal. Grounds raised in this appeal are allowed for statistical purpose.
In the result, the appeal of the assessee is allowed for statistical purposes.
Order pronounced in the open Court on 30/06/2025.