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Income Tax Appellate Tribunal, ‘B’ BENCH : BANGALORE
Before: SMT. BEENA PILLAI & SHRI LAXMI PRASAD SAHU
ORDER PER BEENA PILLAI, JUDICIAL MEMBER Present appeals arises out of order dated 21.03.2018 for A.Y. 2013-14 and 23.03.2022 for A.Y. 2015-16.
At the outset, it is submitted that there is a delay of 1999 days in filing the appeal for A.Y. 2013-14 and a delay of 536 days in filing appeal for A.Y. 2015-16 before the Ld.CIT(A).
Page 2 of 10 & 871/Bang/2023 3. The Ld.AR has filed an affidavit dated 26.02.2024 stating the delay in filing the appeals before the Ld.CIT(A). It is submitted that the assessee has been held to be a non- performing asset as on 27.02.2018 on the enforcement notice issued by the Union Bank of India dated 13.06.2018. It is submitted by the Ld.AR that all the assets of the assessee have been seized by the Union Bank of India and assessee could not produce anything before the authorities below to represent its case.
In the process of ongoing litigation between the assessee and the Union Bank of India, the delay occurred in filing the appeals before the Ld.CIT(A). He placed reliance on the decision of Hon’ble Supreme Court in the case of Collector, Land Acquisition vs. Mst. Katiji reported in [1987] 167 ITR 471(SC) and prayed for consideration of the merits by condoning the delay. The Ld.DR though vehemently opposed the condonation of delay before Ld.CIT(A), submitted that assessee continues to be a non- performing asset and no purpose will be served as assessee is not in a position to establish its claim.
We have perused the submissions advanced by both sides in the light of records placed before us. We note that substantial justice must be pitted before technicalities.
The Ld.AR has submitted that assessee is in the process of making the payments to the Union Bank of India as per the Page 3 of 10 & 871/Bang/2023 approval of OTS dated 30.03.2024 placed on record in Appeal Memo. It is submitted that uptil now the assessee has made payment of Rs. 2 crores upfront, which has been recorded in the approval of OTS dated 30.03.2024. The Ld.AR submitted that the assessee is making arrangements for making balance payment of Rs. 17.5 crores approx. in order to get the assets released from the custody of Union Bank of India. He submitted that all the records relevant for considering the issue on merits is in the structure that is attached by the Union Bank of India.
The Ld.DR though objected however could not controvert the reasoning given by the Ld.AR for the delay that was caused in filing the appeals before Ld.CIT(A).
We have perused the submissions advanced by both sides in the light of records placed before us. Admittedly there is considerable delay in the appeals filed before the Ld.CIT(A).
On examining whether the reason stated by the assessee in condonation petitions are sufficient to condone the delay and there exists sufficient cause for not presenting the appeals within the period of limitation under the statute, the assessee must show that it was diligent in taking appropriate steps and the delay was caused notwithstanding with its due diligence. If it appears to be guilty of latches or negligence and does not take appropriate steps to pursue its remedy till about the close of the period prescribed for filing of appeal, it must be prepared to have Page 4 of 10 & 871/Bang/2023 its remedy barred without expecting condonation. Still, it is for the party concerned to explain the reasons for delay and it is not the function of concerned authorities often to find cause for delay. The Court/authority has to examine whether the sufficient cause has been shown by the party for condoning the delay, and whether such cause is reasonable or not. In the present case in hand, the assessee explained the delay in filing the appeals before the ld. CIT(A) was on the reason that the assessee presumed the appeals were filed by the representative who was handling the case at that point of time, and it was only on receipt of the recovery notice that the lapse was realized. This being the position, it constitutes a sufficient cause for filing the appeals belatedly. Further, on perusal of the affidavit filed by the then representative, we are of the opinion that due to the circumstances that existed, the lapse that occurred on behalf of the representative cannot be attributed to the assessee for which assessee could be punished.
In case of People Education & Economic Development Society Vs. ITO reported in 100 ITD 87 (TM) (Chen), it was held that; “when substantial justice and technical consultation are pitted against each other, the cause of substantial justice deserves to be preferred for the other side cannot claim to have vested right in injustice being done because of non-deliberate delay”.
Page 5 of 10 & 871/Bang/2023 10. The next question may arise whether delay was excessive or inordinate. There is no question of any excessive or inordinate when the reason stated by the assessee was a reasonable cause for not able to file the appeals within the period of limitation. The cause for the delay therefore deserves to be considered, when there exist a reasonable cause, and therefore the period of delay may not be relevant factor. In support, we rely on the decision of Hon’ble Madras High Court in the case of CIT vs. K.S.P. Shanmugavel Nadai and Ors. (153 ITR 596) considered the condonation of delay and held that there was sufficient and reasonable cause on the part of the assessee for not filing the appeal within the period of limitation. Hon’ble Madras High Court thus condoned nearly 21 years of delay in filing the appeal. As compared to 21 years, delay of about 1000 to 2000 days cannot be considered to be inordinate or excessive.
Hon’ble Madras High Court in the case of Sreenivas Charitable Trust reported in 280 ITR 357 held that, no hard and fast rule can be laid down in the matter of condonation of delay and the Court should adopt a pragmatic approach and the Court should exercise their 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 and the expression "sufficient cause" should receive a liberal construction. Therefore, this Judgment of the Hon’ble Madras High Court (supra) clearly says that in order to advance substantial justice which is of prime importance, the expression "sufficient cause" should receive a liberal
Page 6 of 10 & 871/Bang/2023 construction. Therefore, for the purpose of advancing substantial justice which is of prime importance in the administration of justice, the expression "sufficient cause" should receive a liberal construction. In opinion of this Tribunal, this decision of Hon’ble Madras High Court is applicable to the present facts of the case. A similar view was taken by Hon’ble Madras High Court in the case of Venkatadri Traders Ltd. v. CIT (2001) 168 CTR (Mad) 81 : (2001) 118 Taxman 622 (Mad).
Hon’ble Mumbai Bench of this Tribunal in the case of Bajaj Hindusthan Ltd. v. Jt. CIT (AT) reported in 277 ITR 1 condoned the delay of 180 days when, the appeal was filed after the pronouncement of the Judgment of the Hon’ble Supreme Court. It is also to be noted that the Revenue has not filed any counter-affidavit opposing the application of the assessee for condonation of delay. Hon’ble Supreme Court in the case of Mrs. Sandhya Rani Sarkar vs. Smt. Sudha Rani Debi reported in AIR 1978 SC 537 held that, non-filing of affidavit in opposition to an application for condonation of delay may be a sufficient cause for condonation of delay. In this case, the Revenue has not filed any counter-affidavit opposing the application of the assessee, therefore, as held by Hon’ble Supreme Court, there is sufficient cause for condonation of delay. Hon’ble Supreme Court also observed that; “It does not mean that when the delay was for longer period, the delay should not be condoned even though there was sufficient cause. Condonation of delay is the discretion of the Court/Tribunal. Therefore, it would depend
Page 7 of 10 & 871/Bang/2023 upon the facts of each case. In our opinion, when there is sufficient cause for not filing the appeal within the period of limitation, the delay deserves to be condoned, irrespective of the duration/period.”
Hon’ble Supreme Court has clarified the distinction between an 'explanation' and an 'excuse', emphasizing that, mere excuses wouldn't suffice; a satisfactory and acceptable explanation was required. The Court added, “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. We therefore feel that we feel that the reasons assigned by the assessee and the then representative for condonation of delay on account of the assessee and inability to present the appeals within time, deserves consideration. We are therefore of the view that, there is a reasonable cause in filing the appeals belatedly before ld. CIT(A), as delay was neither willful nor wanton but was due to the circumstances beyond the control of the assessee.
It is noted that there is no malafide intention on behalf of assessee in not filing the appeals before Ld.CIT(A) within time. In our opinion there is a sufficient cause for condoning the delay as observed by Hon’ble Supreme Court in case of Collector Land Acquisition Vs. Mst. Katiji & Ors., reported in (1987) 167 ITR 471 in support of his contentions, wherein, Hon’ble Court observed as under:-
Page 8 of 10 & 871/Bang/2023 “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 a 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. 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. ......................................................1.Any appeal or any application, other than an application under any of the provisions of Order XXI of the Code of Civil Procedure, 1908, may be admitted after the prescribed period if the appellant or the applicant satisfies the court that he had sufficient cause for not preferring the appeal or making the application within such period.”
In view of the above discussion, we condone the delay in filing the appeals before ld. CIT(A) belatedly and the appeals are admitted for adjudication by exercising the power u/s 253(5) of the Act. The Ld.CIT(A) dismissed the appeal without considering and appreciating the contentions urged by the assessee in the affidavit filed before him. Consequently, the impugned orders are in violation of principles of natural justice, and the same deserves to be quashed. We thus remit the entire issue disputed in all these appeals to the file of Ld.CIT(A) to decide afresh in Page 9 of 10 & 871/Bang/2023 accordance with law after giving a fair opportunity of being heard to the assessee. Accordingly, the delay in filing the appeals before Ld.CIT(A) is condoned. Accordingly, the delay in filing the appeals before Ld.CIT(A) for A.Y. 2013-14 and 2015-16 stands condoned.
As the Ld.CIT(A) has not decided the issues on merits, in the interest of justice, we deem it appropriate to remit the appeals back to the Ld.CI(T(A) to consider the issues raised by the assessee based on the evidences filed by the assessee in support of its claim. Needless to say that proper opportunity of being heard must be granted to the assessee in accordance with law. Accordingly, the grounds raised by assessee in both the appeals stands partly allowed for statistical purposes. In the result, both the appeals filed by the assessee stands partly allowed for statistical purposes. Order pronounced in the open court on 24th June, 2024.