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Facts
The assessee filed an appeal before the CIT(A) with a delay of 196 days. The delay was attributed to the sister's accident and difficulty in accessing online notices. The CIT(A) dismissed the appeal as not maintainable without condoning the delay.
Held
The Tribunal held that a delay of 196 days is not necessarily inordinate, especially when there is a sufficient cause. The court emphasized that substantial justice should be preferred over technical defects and that the reasons provided by the assessee for the delay, including the sister's medical emergency and issues with accessing online notices during the Covid period, constitute a sufficient cause.
Key Issues
Whether the delay in filing the appeal before the CIT(A) should be condoned based on the grounds presented by the assessee.
Sections Cited
144 of the Act
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, ‘C’ BENCH, BANGALORE
Before: SHRI WASEEM AHMED & SHRI SOUNDARARAJAN K
PER WASEEM AHMED, ACCOUNTANT MEMBER:
These appeals filed by the assessee are against the order passed by the learned CIT(A) - 15, Bangalore, both dated 25/03/2024 in DIN Nos. ITBA/APL/M/250/2023-24/1063327437(1) and ITBA/APL/M/250/2023-24 /1063327474(1) respectively for the assessment years 2016-17 and 2017-18.
ITA No.989-990/Bang/2004 Page 2 of 9
ITA 989/Bang/2024 for the Assessment Year 2016-17
At the outset, we note that there was a delay of 196 days in filing the appeal by the assessee before the ld. CIT-A. There was condonation petition filed by the assessee before the ld. CIT-A. The reasons specified therein for the delay was that the sister of the assessee met with the accident who was depending upon him. The assessee also filed the discharged summery in support of his contention. In view of above the assessee before the ld. CIT-A submitted that the delay in filing the appeal occurred due to unavoidable situations. Therefore, the delay in filing the appeal should be condoned. But the ld. CIT-A was not convinced and therefore he dismissed the appeal filed by the assessee as not maintainable.
Being aggrieved by the order of the ld. CIT-A, the assessee is in appeal before us.
The ld. AR before us filed the affidavit stating the reasons for the delay filing the appeal before the Ld. CIT-A and filed discharge summary of the sister of the assessee issued by the hospital in support of his contention. The learned AR besides the medical ground, also submitted that the notices during the assessment proceedings and the assessment order were submitted online which he could not access and therefore the delay in filing the appeal has occurred. It was also pointed out by the learned AR that the ld. CIT-A has issued only two notices that too in the month of March 2024. As per the Ld. AR, the learned CIT-A should have given more opportunities to the assessee to represent the case instead of dismissing the appeal of the assessee inlimine. As such the ld. AR
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before us prayed to give direction to the ld. CIT-A to admit the appeal of the assessee after condonation of the delay and decide the issue afresh on merit.
On the other hand, the Ld. DR before vehemently opposed to condone the delay and relied on the order of the authorities below.
We have perused the records and heard the rival submissions of both the sides. There was a delay of 196 days in filing the appeal by the assessee before ld. CIT-A. Certainly, the delay is significant. But length of the delay becomes insignificant if there was sufficient cause for such delay which prevented the assessee in filing the appeal. As such we need to consider the cause of the delay and not the length of the delay. Accordingly, in our considered view when there was a reasonable cause, the period of delay may not be relevant factor. The Hon’ble Madras High Court in the case of CIT v. K.S.P. Shanmugavel Nadai and Ors reported in 153 ITR 596 held as under:
“Since in this case the assessee had been prosecuting other remedies, the time taken by those proceedings should naturally be taken while determining the question whether the assessee had sufficient cause for not presenting the appeal in time. Therefore, the revenue was not right in submitting that the appeal filed under section 17 was an appeal against the original order of assessment under the Act, which was passed about 20 years ago, as it was evident that the appeal was against an order of rejection of relief by the assessing authority. Thus, though the Tribunal's view that there was no question of limitation in such cases, was not correct yet the AAC was right in condoning the delay and entertaining the appeal.”
6.1 From the above, we note that the Hon’ble Madras High Court was pleased to condone the delay for 20 years approximately by holding that there was sufficient and reasonable cause on the part of the assessee
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for not filing the appeal within the period of limitation. Thus, the delay in the instant case is 196 days cannot be inordinate or excessive in comparison to the delay of 20 years approximately.
6.2 The next controversy arises what is the sufficient cause, it has not been defined anywhere under the Act but refers to an occasion which is beyond the control of a normal person. What is beyond the control of a person, the test of reasonable approach under normal circumstances should be applied. As such no hard and fast rule can be applied to figure out whether there was sufficient cause for the delay. It depends upon case-to-case basis. However, the Hon’ble Courts in the series of judgements have held that while condoning the delay the expression of sufficient cause should be construed for advancing substantial justice to the party concerned. For evaluating sufficiency of cause and then, for deciding condonation of delay, following principles laid down by Hon'ble Apex Court in the case of Mst. Katiji (167 ITR 471) should be kept in mind:
(i) 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 the 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 after hearing the parties. (iii) "Every day's delay must be explained" does not mean that a pedantic approach should be taken. Why not every hour's delay, every second's delay? The doctrine must be applied in a rational common-sense pragmatic manner. (iv) When substantial justice and technical considerations are pitted against each other, cause of substantial justice deserves to be preferred for the
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other side cannot claim to have vested right in injustice being done because of anon-deliberate delay. (v) 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 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 injustice on technical grounds but because it is capable of removing in justice and is expected to do so
6.3 From the above judgment of the Hon’ble Apex Court, we note that the substantial justice deserves to be preferred rather than deciding the matter on the basis of technical defect.
6.4 It is trite law that where a case has been presented in the Court beyond limitation, the petitioner has to explain the Court as to what was the "sufficient cause" which means an adequate and enough reason which prevented him to approach the Court within limitation as held by Hon’ble Supreme Court in the following cases:
(a) Basawaraj v. Land Acquisition Officer, (2013) 14 SCC 81: "9. Sufficient cause is the cause for which the defendant could not be blamed for his absence. The meaning of the word "sufficient" is "adequate" or "enough", in as much as may be necessary to answer the purpose intended. Therefore, the word "sufficient" embraces no more than that which provides a platitude, which when the act done suffices to accomplish the purpose intended in the facts and circumstances existing in a case, duly examined from the viewpoint of a reasonable standard of a cautious man. In this context, "sufficient cause" means that the party should not have acted in a negligent manner or there was a want of bona fide on its part in view of the facts and circumstances of a case or it cannot be alleged that the party has "not acted diligently" or "remained in active". However, the facts and circumstances of each case must afford sufficient ground to enable the court concerned to exercise discretion for the reason that whenever the court exercises discretion, it has to be exercised judiciously. The applicant must satisfy the court that he was prevented by any "sufficient cause" from prosecuting his case, and unless a satisfactory explanation is furnished, the court should not allow the application for condonation of delay. The court has to examine whether the mistake is bona fide or was merely a device to
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cover an ulterior purpose. (See Manindra Land and Building Corpn. Ltd. v. Bhutnath Banerjee (AIR 1964 SC 1336 Mata Din v. A. Narayanan [(1969) 2 SCC770),Parimal v. Veena [(2011) 3 SCC 545] and Moniben Devraj Shah v. Municipal Corpn.of Brihan Mumbai (2012) 5- SCC 157].)”
(b) Ajay Dabre v. Pyare Ram 2023 SCC Online SC 92: ‘13. This Court in the case of Basawaraj v. Special Land Acquisition Officer while rejecting an application for condonation of delay for lack of sufficient cause has concluded in Paragraph 15 as follows: "15. The law on the issue can be summarised to the effect that where a case has been presented in the court beyond limitation, the applicant has to explain the court as to what was the "sufficient cause" which means an adequate and enough reason which prevented him to approach the court within limitation. In case a party is found to be negligent, or for want of bona fide on his part in the facts and circumstances of the case, or found to have not acted diligently or remained inactive, there cannot be a justified ground to condone the delay. No court could be justified in condoning such an inordinate delay by imposing any condition whatsoever. The application is to be decided only within the parameters laid down by this Court in regard to the condonation of delay. In case there was no sufficient cause to prevent a litigant to approach the court on time condoning the delay without any justification, putting any condition whatsoever, amounts to passing an order in violation of the statutory provisions and it tantamounts to showing utter disregard to the legislature." 14. Therefore, we are of the considered opinion that the High Court did not commit any mistake in dismissing the delay condonation application of the present appellant.
6.5 Thus, it is crystal clear from the above legal proposition that the discretion to condone the delay has to be exercised judiciously based on facts and circumstances of each case.
6.6 We also note that the Hon’ble Gujarat High Court in the case of Vareli textile industry versus CIT reported in 154 Taxman 33 has held as under: It is equally well-settled that where a cause is consciously abandoned (as in the present case) the party seeking condonation has to show by cogent evidence sufficient cause in support of its claim of condonation. The onus is greater. One of the propositions of settled legal position is to ensure that a meritorious case is not thrown out on the ground of limitation. Therefore, it is necessary to examine, at least prima facie, whether the assessee has or has not a case on merits.
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6.7 From the above, it is transpired that a meritorious case of the assessee should not be thrown away due to negligence or on account of technical lapses.
6.8 In the light of the above stated discussion, we proceed to evaluate whether the delay in the present case needs to be condoned in the given facts and circumstances. Considering the reasons for the delay discussed above, we are of the opinion that it is the fit case where the delay has to be condoned irrespective of the duration/period of the delay. In this case, the non-filing of an affidavit by the Revenue for opposing the condonation of delay itself is sufficient for condoning the impugned delay. We also note that there is no allegation from the Revenue that the appeal was not filed by the assessee within the time deliberately. Therefore, we are inclined to prefer substantial justice rather than technicality in deciding the issue. We also find that if we reject the application of the assessee for condoning the delay then it would amount to legalise injustice on technical ground whereas the Tribunal is capable of removing injustice and to do justice. Thus, we condone the impugned in filing the appeal by the assessee and proceed to hear the appeal on merit for the adjudication.
6.9 As the appeal was dismissed by the ld. CIT-A on technical ground which we have decided in favour of the assessee, therefore, we are inclined to set aside the issue to the file of the ld. CIT-A for fresh adjudication on merit as per the provisions of law.
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6.10 Before parting, we also note that there was also non-appearance during the assessment proceedings and therefore the assessment was framed by the AO to the best of his knowledge under the provisions of section 144 of the Act. However, we note that the notices were issued during the Covid Period by the AO for the necessary compliance which the assessee failed to do so and thereafter the assessment was framed immediately after the end of the Covid period vide order dated 25th of March 2022. The Hon’ble SUPREME COURT OF INDIA in Cognizance for Extension of Limitation reported in 134 taxmann.com 307 has identified covid period between 15-3-2020 till 28-2-2022 and further relaxation was given by extending the period of 90 days from 1-3-2022 for necessary compliance. As such, we find that there was also sufficient cause which prevented the assessee from making the compliance during the assessment proceedings. Furthermore, if we set aside the issue to the file of the learned CIT-A who has to call for the remand report from the AO which is certainly a time taking exercise. As such, to dispense speedy justice, we are inclined to set aside the finding of the learned CIT-A and restore the issue to the file of the AO for fresh adjudication as per the provisions of law. Hence, the ground of appeal of the assessee is allowed for statistical purposes.
In the result, the appeal of the assessee is hereby allowed for the statistical purposes.
Coming to ITA 990/Bang/2024 for the Assessment Year - 2017-18
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The facts of the case on hand are identical to the facts of the case discussed above, therefore, respectfully following the same, we set aside the finding of the learned CIT-A and restore the issue to the file of the AO for fresh adjudication as per the provisions of law. Hence, the ground of appeal of the assessee is allowed for the statistical purposes.
In the result, the appeal of the assessee is hereby allowed for the statistical purposes.
In the combined result, both the appeals of the assessee are hereby allowed for statistical purposes.
Order pronounced in court on 23rd day of July, 2024 Sd/- Sd/- (SOUNDARARAJAN K) (WASEEM AHMED) Judicial Member Accountant Member Bangalore Dated 23rd July, 2024 / vms / Copy to: 1. The Applicant 2. The Respondent 3. The CIT 4. The CIT(A) 5. The DR, ITAT, Bangalore. 6. Guard file By order Asst. Registrar, ITAT, Bangalore
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