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Facts
The assessee filed an appeal before the CIT(A) with a delay of 205 days. The assessee explained the delay by stating they were searching for consultancy services for filing the appeal, but such services were unavailable. The CIT(A) dismissed the appeal in limine due to the unexplained delay.
Held
The Tribunal held that while the assessee is a large organization, it has responsibilities in marketing and managing its workforce. The delay, though significant, was considered a short delay in the context of substantial justice. The Tribunal decided to condone the delay.
Key Issues
Whether the delay of 205 days in filing the appeal before the CIT(A) should be condoned, and if so, the matter should be remitted for fresh adjudication.
Sections Cited
Section 143(3) of the Income Tax Act, 1961
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Income Tax Appellate Tribunal, “C’’ BENCH: BANGALORE
Before: SHRI CHANDRA POOJARI & SHRI KESHAV DUBEY
PER CHANDRA POOJARI, ACCOUNTANT MEMBER:
This appeal by assessee is directed against order of CIT(A)-11, Bangalore for the assessment year 2020-21. 2. The assessee is in appeal before us on dismissing the appeal of the assessee in limine on the reason that there was a delay of 205 days in filing the appeal before ld. CIT(A). In this case, the assessment order was passed on 31.3.2022 and received on the same date. The time limit to file appeal before first appellate authority i.e. CIT(A) was on or before 30.4.2022 i.e. 30 days from the date of receipt of the order by assessee. However, the same was filed before ld. CIT(A) on 21.11.2022. Thus, there was 205 days delay in filing the appeal before ld. CIT(A). The assessee explained the delay before ld. CIT(A) as follows:
ITA No.877/Bang/2024 Subramanyam Vijai, Bangalore Page 2 of 5 “I have received the assessment order under section 143(3) o the Income Tax Act, 1961 for the AY 2020-21 demand Rs.1,84,74,696/-. I was searching for the consultancy services for filing appeal and preparing the grounds of appeal. Unfortunately, they were preoccupied in their professional assignments and were not available to render the services. By considering above reason, I pray before your goodself to condone the delay and accept the appeal.”
The ld. CIT(A) has not condoned the delay by observing as under: “5.1.1 The appellant, serving as a director of Royaloak Incorporation Private Limited, a company with a notable annual turnover of approximately Rs.1,000 crore in FY 23, along side a widespread operational base encompassing over 150 retail stores and a workforce exceeding 2000 employees, presents a contention regarding the unavailability of consultancy services and professionals for hire. This claim, however, appears implausible given the established stature and resources of the company. The assertion lacks credibility, especially in the absence of any documented evidence such as correspondence (letters, emails, or any fo of communication) with potential consultancy services. Such documentation would have been pivotal in demonstrating the dates of communication, the nature of the discussions, and the efforts made towards o engaging professional services for the purpose of filing the appeal and preparing the grounds thereof. 5.1.2 Moreover, the absence of any form of engagement documentation, including letters of intent or contracts with consultancy services— irrespective of whether such agreements were finalized—significantly undermines the appellant's justification for the delay in filing the appeal. Documents evidencing attempts to engage professional services, or an affidavit detailing the appellant's endeavors to file the appeal timely and the challenges faced, could have substantiated the claim. The lack of such evidence or an affidavit explaining the specific efforts to secure consultancy services and the obstacles encountered therein fails to establish a credible reason for the delay. The AR for the appellant appeared and was informed on 13.03.2024 to submit any additional information regarding the delay, yet no such submission has been made. This lack of action further implies that the reasons cited by the appellant in Form 35 are unfounded and lack merit.
5.1.3 Subsequent to the search operation, assessment orders for the AYs 201415 to 2020-21 were passed on 28.03.2022. Following these orders, the appellant filed appeals for AY 2016-17, 2017-18, and 2020-21. Appeals for AY 2016-17 and 2017-18 were duly filed in April 2022. Nonetheless, the appellant's rationale file for AY 2020-21. The inconsistency in the appellant's actions questions the validity of the reasoning provided for the delay in appealing the assessment AY 2020-21. Consequently, this argument presented by the appellant is deemed to lack sufficient merit.
ITA No.877/Bang/2024 Subramanyam Vijai, Bangalore Page 3 of 5 5.2 The appellant even after filing of appeal with delay has not filed any condonation of delay application and affidavit, aiming to justify the significant delay of more than 200 days. Which shows that the appellant has not taken the necessary legal steps to rectify or provide a legitimate justification for the considerable delay in filing the appeal. This omission indicates a lack of diligence and responsibility on the part of the appellant in adhering to the prescribed timelines and procedures, underscoring a disregard for the statutory requirements. Consequently, this failure to file a condonation of delay application and affidavit further undermines the appellant's position and complicates their ability to seek relief for the delayed submission.”
Against this assessee is in appeal before us.
The ld. A.R. reiterated the submissions what he has made before the ld. CIT(A). 5. The ld. D.R. submitted that there was no good and sufficient reason to condone the delay. In this case, she relied on the order of ld. CIT(A). 6. We have heard the rival submissions and perused the materials available on record. The assessee explained the delay in filing the appeals belatedly before CIT(A) in these cases as follows:
“I have received the assessment order under section 143(3) o the Income Tax Act, 1961 for the AY 2020-21 demand Rs.1,84,74,696/-. I was searching for the consultancy services for filing appeal and preparing the grounds of appeal. Unfortunately, they were preoccupied in their professional assignments and were not available to render the services. By considering above reason, I pray before your goodself to condone the delay and accept the appeal.”
6.1 As seen from the above, assessee after receiving the assessment order was taken time to find out a suitable counsel to file appeal before ld. CIT(A) it took short time of 205 days. It was noted by the ld. CIT(A) that assessee is a big organization having turnover of more Rs.1000 crores in the financial year 2022-23 and having more than 2000 employees. As such, the ld. CIT(A) opined that the said reason given by assessee is not possible explanation and he dismissed the appeal in limine by not condoning the delay of 205 days. In our opinion, the assessee being a big organization
ITA No.877/Bang/2024 Subramanyam Vijai, Bangalore Page 4 of 5 having more than 2000 employees, the assessee have its own responsibility in pursuing its sales by engaging in various marketing activities and also in managing such huge labour force and considering the size of turnover of the assessee, the liability caused by the assessee by the impugned assessment order is very low and assessee was given more importance on marketing activities so as to optimize its profit and to take care of its labour management. In these circumstances, it cannot be said that assessee is very callous in its approach in filing the appeal before the ld. CIT(A). In the case of Collector, Land Acquisition v. Mst. Katiji and Ors. (167 ITR 471), Hon’ble Supreme Court laid down six principles. For the purpose of convenience, the principles laid down by the Apex Court are reproduced hereunder: “(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 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. (3) 'Every day's delay must be explained' does not mean that a pedantic approach should be made. Why not every hour's delay, every second's delay? The doctrine must be applied in a rational, commonsense and pragmatic manner. (4) When substantial justice and technical consideration 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 a nondeliberate delay. (5) 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. (6) It must be grasped that the judiciary is respected not on account of its power to legalise injustice on technical grounds but because it is capable of removing injustice and is expected to do so.
ITA No.877/Bang/2024 Subramanyam Vijai, Bangalore Page 5 of 5 6.2 Being so, when substantial justice and technical consideration are pitted against each other, the cause of substantial justice deserves to be preferred, for the other side cannot claim to have vested right for injustice being done because of non-deliberate delay. In our opinion, this is a fit case to condone the short delay of 205 days in filing the appeal before ld. CIT(A). Accordingly, the delay is condoned. 6.3 After condoning the delay, in our opinion, it is appropriate to remit the issue in dispute with regard to merit of the addition made by ld. AO to the file of ld. CIT(A) as he failed to adjudicate the same. Accordingly, the issue in dispute is remitted to the file of ld. CIT(A) for fresh adjudication. 7. In the result, appeal of the assessee is partly allowed for statistical purposes. Order pronounced in the open court on 24th June, 2024
Sd/- Sd/- (Keshav Dubey) (Chandra Poojari) Judicial Member Accountant Member
Bangalore, Dated 24th June, 2024. VG/SPS
Copy to:
The Applicant 2. The Respondent 3. The CIT 4. The DR, ITAT, Bangalore. 5 Guard file By order
Asst. Registrar, ITAT, Bangalore.