THE KARNATAKA CHEMISTS & DRUGGISTS ASSOCIATION®,BANGALORE vs. INCOME TAX OFFICER, WARD-5(2)(1), BANGALORE

PER CHANDRA POOJARI, ACCOUNTANT MEMBER:

These appeals by same assessee, wherein ITA Nos.699 & 702/Bang/2024 are emanated from quantum appeals for the assessment years 2013-14 & 2014-15 passed u/s 147 r.w.s. 144 r.w.s. 144B of the Income Tax Act, 1961 (in short “The Act”), which are directed against order of NFAC both are dated 15.3.2024,

ITA Nos.699 to 704/Bang/2024 The Karnataka Chemists & Druggists Association, Bangalore Page 2 of 23 ITA Nos.701 & 704/Bang/2024 are with regard to sustaining penalty u/s 271(1)(c) of the Act for the assessment years 2013-14 & 2014-15 which are directed against the different orders of NFAC dated 15.3.2024 and ITA Nos.700 & 703/Bang/2024 are with regard to sustaining penalty u/s 271(1)(b) of the Act for the assessment years 2013-14 & 2014-15, which are directed against the different orders of NFAC dated 15.3.2024. Since the issue in all these appeals is common in nature, these are clubbed together, heard together and disposed of by this common order for the sake of convenience and brevity. 2. First, we deal with delay in filing appeals before NFAC. The assessee has raised various grounds of appeals on merit as well as non-admitting of appeals by NFAC on the reason of delay in filing these appeals before NFAC as follows: ITA No. AY Particulars Penalty/ Date of Appeal before CIT(A) Quantum passing Due date Date of Delay Appeal order of filing filing in appeal appeal days 699/ 2013-14 Order u/s Quantum 23.03.22 24.04.22 06.01.23 259 Bang/ 147 r.w.s. 2024 144 r.w.s. 144B 702/ 2014-15 -do- -do- 17.03.22 16.04.22 06.01.23 265 Bang/ 2024 701/ 2013-14 Penalty Penalty 20.09.22 20.10.22 01.10.23 346 Bang/ u/s 2024 271(1)(c) 704/ 2014-15 -do- -do- 20.09.22 20.10.22 01.10.23 346 Bang/ 2024 700/ 2013-14 Penalty -do- 20.09.22 20.10.22 06.10.23 351 Bang/ u/s 2024 271(1)(b) 703/ 2014-15 -do- -do- 20.09.22 20.10.22 01.10.23 351 Bang/ 2024

2.1 Before NFAC, the assessee pleaded that there was a delay in filing appeals before NFAC as above stating as follows: “The appellant wishes to submit that there is a delay in preferring an appeal before your Honours. The appellant craves leave to file a detailed condonation petition

ITA Nos.699 to 704/Bang/2024 The Karnataka Chemists & Druggists Association, Bangalore Page 3 of 23 stating the cause for delay and praise that your Honours condone the delay and adjudicate the matter on merits of the matter in the interest of justice and equity.”

2.2 The ld. CIT(A), NFAC not condoned the delay by observing that assessee has not shown any sufficient cause in filing the appeals belatedly before NFAC and accordingly dismissed the appeals. Against this, assessee filed appeals before this Tribunal in all these cases. 3. The ld. A.R. submitted that the ld. CIT(A), NFAC is not justified in dismissing the appeals of assessee by holding that there was no sufficient cause for delay in filing the appeals, on the facts and circumstances of the case. He submitted that the ld. CIT(A), NFAC has failed to appreciate that the reasons furnished for delay in filing the appeals constitutes ‘reasonable cause’ and ought to have condoned the delay by exercising the powers conferred u/s 249(3) of the Act, on the facts and circumstances of the case. 3.1 The ld. A.R. submitted a chart showing the particulars of appeals as follows:

Assess- Particulars Date of Appeal Before CIT(A) ment passing Years order Due Date Date of Delay in to file filing days appeal appeal

Order u/s 147 23.03.2022 22.04.2022 06.01.2023 259 2013-14 r.w.s 144 r.w.s 144B Penalty u/s 20.09.2022 20.10.2022 06.10.2023 351 271(1)(b) Penalty u/s 20.09.2022 20.10.2022 01.10.2023 346 271(1)(c) Order u/s 147 17.03.2022 16.04.2022 06.01.2023 265 2014-15 r.w.s 144 r.w.s 144B Penalty u/s 20.09.2022 20.10.2022 06.10.2023 351 271(1)(b) Penalty u/s 20.09.2022 20.10.2022 01.10.2023 346 271(1)(c)

3.2 He submitted that the assessee has filed condonation petition for quantum proceedings upon receiving deficiency letter and no

ITA Nos.699 to 704/Bang/2024 The Karnataka Chemists & Druggists Association, Bangalore Page 4 of 23 deficiency letter was received for appeal filed against penalty orders. The assessee was under a bonafide belief that the penalty appeal will be decided only after adjudication of quantum proceedings wherein a remand report was to be obtained from the assessing officer on mutuality aspect and opportunity of hearing will be provided for penalty appeal. However, the NFAC dismissed the quantum & penalty appeal together on the same day. Thus, the assessee was prevented by reasonable cause in filing the condonation petition with regard to the penalty appeals. He submitted that the professional who filed the appeal against the quantum order was of the belief that there was no requirement to file a separate appeal against the penalty order and if the assessee succeeds on quantum appeal, the penalty would be deleted automatically. He submitted that the professional while discussing a separate matter with the present counsel was advised that appeal against penalty order was also required to be filed, though the quantum appeal was challenged, thus, there was a further delay in filing the appeal against the penalty order.

ITA No.699/Bang/2024 (AY 2013-14) (Quantum appeal):

5.1 There was a delay of 259 days in filing the appeal before NFAC. The assessee filed a condonation petition before NFAC explaining the reasons for the inordinate delay in filing the appeal before NFAC as follows:

ITA Nos.699 to 704/Bang/2024 The Karnataka Chemists & Druggists Association, Bangalore Page 5 of 23 “The appellant is an association registered in the state of Karnataka under the Karnataka Societies Registration Act, 1960. It collects the fees from members and applies the same for the benefit of such members. It also receives voluntary contributions.

The appellant submits that during the assessment proceedings for the 2. year under consideration the notices under section 148 and 142(1) of the Income Tax Act, 1961 (hereinafter "the Act") were issued during the period March 2021 to March 2022, such notices were issued through e-mail and were sent to the said e-mail address (i.e., sf.incometax@gmail.com) which did not belong to the appellant and simultaneously these notices were not sent to the secondary e-mail address as provided by the appellant in the e- filing portal. 3. The appellant submits that the e-mail address to which the said notices were sent belonged to the employee of the Chartered Accountant's Office. The employee who had created the same and utilized it for multiple assessees, in order to ensure that the notices were replied on time, has left the employment and did not intimate the assessee or the Chartered Accountant about such email or share the password for regular verification. The appellant was not aware of the on-going assessment proceedings 4. and for the same reason it could not comply with the notices issued during such period. Further, it provided a secondary e-mail address in the profile section of the e-filing portal of income tax (i.e. fpwco.madikere@gmail.com) to which the Chartered Accountant had access and the said notices were sent only to the former e-mail address and not the secondary email. Thus, the appellant had no opportunity to respond and had no intention of not responding to the notices issued during the assessment proceedings for the year under consideration. The appellant submits that upon obtaining the password of the 5. primary email id, the Chartered Accountant has ascertained that the notices were served on the primary mail id and upon the appellant being informed of the outstanding demand raised by the department, the appellant thereafter approached the present counsel who sought documents and records relating to the year under consideration, the same were collated by the appellant and produced before the counsel in early January 2023.

The appellant was given an advice by the present counsel, that is has 6. very good and prima facie on merits of the matter, to file an appeal against the order of the Assessing officer before the learned CIT(A) and advised the appellant to file an appeal against the order passed by the learned Commissioner. 7. The appellant submits that immediately after the advice was given by the present counsel, within a few days thereafter, all the efforts were made to files this appeal challenging the order passed by the Assessing Officer before your Honours and accordingly the appeal came to be filed before your Honours on 06.01.2023.

ITA Nos.699 to 704/Bang/2024 The Karnataka Chemists & Druggists Association, Bangalore Page 6 of 23 In view of the above, the Appellant could not file the Appeal before 8. the Hon'ble CIT(A) well in time and by the time the appellant sought the present counsel's advice and filed the appeal, there arose 259 days delay in filing this appeal before this Hon'ble Tribunal. It is humbly prayed that your Honours take a lenient and 9. compassionate view and condone the delay of 259 days in filing the present appeal against the order of the Assessing officer before the learned CIT(A) and hear the same on merits for the advancement of substantial cause of justice... . . ."

5.1.1 On the above explanation of assessee requesting for condonation of delay in filing the appeal, the NFAC has observed as follows:

“5…………………..The appellant has stated that this inordinate delay in presenting the appeal took place as it was not aware of the ongoing assessment proceedings, and for that reason it could not comply with the notices. The appellant has further stated that the notices were issued at the e-mail id an employee of its Chartered Accountant, who had left the employment, without intimating the appellant about the emails.”

5.1.2 The NFAC further observed as follows:

“I do not find any merit in the plea taken by the appellant. The grounds for condonation of delay as mentioned by the appellant, are merely a bald assertion without any basis, which is not supported by cogent and proper evidence, and the same would not, as such, constitute "sufficient cause" within the meaning of section 249 (3) of the Act. In fact, the reasons put forward only show lack of due diligence on part of the appellant company in making statutory compliances viz. presenting of appeal within the prescribed period, and attending to statutory notices.”

ITA No.702/Bang/2024 (AY 2014-15) (Quantum appeal):

5.2 There was a delay of 265 days in filing the appeal before NFAC. The assessee filed a condonation petition before NFAC explaining the reasons for the inordinate delay in filing the appeal before NFAC and the NFAC has observed as follows:

“5………………………….The appellant has stated that this inordinate delay in presenting the appeal took place as it was not aware of the ongoing assessment proceedings, and for that reason it could not comply with the notices. The appellant has further stated that the notices were issued at the e-mail id of an employee of its

ITA Nos.699 to 704/Bang/2024 The Karnataka Chemists & Druggists Association, Bangalore Page 7 of 23 Chartered Accountant, who had left the employment, without intimating the appellant about the emails.”

5.2.1 The NFAC further observed as follows:

“I do not find any merit in the plea taken by the appellant. The grounds for condonation of delay as mentioned by the appellant, are merely a bald assertion without any basis, which is not supported by cogent and proper evidence, and the same would not, as such, constitute "sufficient cause" within the meaning of section 249 (3) of the Act. In fact, the reasons put forward only show lack of due diligence on part of the appellant company in making statutory compliances viz. presenting of appeal within the prescribed period, and attending to statutory notices.”

ITA No.700/Bang/2024 (AY 2013-14) (Penalty appeal):

5.3 This appeal emanated from the penalty levied u/s 271(1)(b) of the Act. There was a delay of 351 days in filing the appeal before NFAC. The assessee filed a condonation petition before NFAC explaining the reasons for the inordinate delay in filing the appeal before NFAC and the NFAC has observed as follows:

“5……………………….The penalty order, which is subject matter of present appeal, was passed by the AO in September, 2022; whereas the appeal against the same has been presented in October' 2023. The appellant has stated that this inordinate delay in presenting the appeal took place as it was not aware of the ongoing assessment/penalty proceedings, and for that reason it could not comply with the notices. The appellant has further stated that the notices were issued at the e-mail id of an employee of its Chartered Accountant, who had left the employment, without intimating the appellant about the emails. 5.3.1 The NFAC further observed as follows: I do not find any merit in the plea taken by the appellant. The grounds condonation of delay as mentioned by the appellant, are merely a bald assertion without any basis, which is not supported by cogent and proper evidence, and the same would not, as such, constitute "sufficient cause" within the meaning of section 249 (3) of the Act. In fact, the reasons put forward only show lack of due diligence on part of the appellant company in making statutory compliances viz. presenting of appeal within the prescribed period, and attending to statutory notices.” ITA No.701/Bang/2024 (AY 2013-14) (Penalty appeal):

5.4 This appeal emanated from the penalty levied u/s 271(1)(c) of the Act. There was a delay of 346 days in filing the appeal before NFAC. The assessee filed a condonation petition before NFAC

ITA Nos.699 to 704/Bang/2024 The Karnataka Chemists & Druggists Association, Bangalore Page 8 of 23 explaining the reasons for the inordinate delay in filing the appeal before NFAC and the NFAC has observed as follows:

“5……………………The appellant has stated that this inordinate delay in presenting the appeal took place as it was not aware of the ongoing assessment/penalty proceedings, and for that reason it could not comply with the notices. The appellant has further stated that the notices were issued at the e-mail id of an employee of its Chartered Accountant, who had left the employment, without intimating the appellant about the emails.”

5.4.1 The NFAC further observed as follows:

“I do not find any merit in the plea taken by the appellant. The grounds for condonation of delay as mentioned by the appellant, are merely a bald assertion without any basis, which is not supported by cogent and proper evidence, and the same would not, as such, constitute "sufficient cause" within the meaning of section 249 (3) of the Act. In fact, the reasons put forward only show lack of due diligence on part of the appellant company in making statutory compliances viz. presenting of appeal within the prescribed period, and attending to statutory notices.”

ITA No.703/Bang/2024 (AY 2014-15) (Penalty appeal):

5.5 This appeal emanated from the penalty levied u/s 271(1)(b) of the Act. There was a delay of 351 days in filing the appeal before NFAC. The assessee filed a condonation petition before NFAC explaining the reasons for the inordinate delay in filing the appeal before NFAC and the NFAC has observed as follows:

“5………………………The appellant has stated that this inordinate delay in presenting the appeal took place as it was not aware of the ongoing assessment/penalty proceedings, and for that reason it could not comply with the notices. The appellant has further stated that the notices were issued at the e-mail id of an employee of its Chartered Accountant, who had left the employment, without intimating the appellant about the emails. 5.5.1 The NFAC further observed as follows: I do not find any merit in the plea taken by the appellant. The grounds for condonation of delay as mentioned by the appellant, are merely a bald assertion without any basis, which is not supported by cogent and proper evidence, and the same would not, as such, constitute "sufficient cause i' within the meaning of section 249 (3) of the Act. In fact, the reasons put forward only show lack of due diligence on part of the appellant company in making statutory compliances viz. presenting of appeal within the prescribed period, and attending to statutory notices.”

ITA Nos.699 to 704/Bang/2024 The Karnataka Chemists & Druggists Association, Bangalore Page 9 of 23 ITA No.704/Bang/2024 (AY 2014-15) (Penalty appeal):

5.6 This appeal emanated from the penalty levied u/s 271(1)(c) of the Act. There was a delay of 346 days in filing the appeal before NFAC. The assessee filed a condonation petition before NFAC explaining the reasons for the inordinate delay in filing the appeal before NFAC and the NFAC has observed as follows:

“5………………..The appellant has stated that this inordinate delay in presenting the appeal took place as it was not aware of the ongoing assessment/penalty proceedings, and for that reason it could not comply with the notices. The appellant has further stated that the notices were issued at the e-mail id of an employee of its Chartered Accountant, who had left the employment, without intimating the appellant about the emails.

5.6.1 The NFAC further observed as follows:

I do not find any merit in the plea taken by the appellant. The grounds for condonation of delay as mentioned by the appellant, are merely a bald assertion without any basis, which is not supported by cogent and proper evidence, and the same would not, as such, constitute "sufficient cause" within the meaning of section 249 (3) of the Act. In fact, the reasons put forward only show lack of due diligence on part of the appellant company in making statutory compliances viz. presenting of appeal within the prescribed period, and attending to statutory notices.”

ITA Nos.699 to 704/Bang/2024 The Karnataka Chemists & Druggists Association, Bangalore Page 10 of 23 other set of orders i.e. on 1.10.2023 and 6.10.2023. Being so, the explanation given by assessee is not bonafide. 6.1 The assessee herein has not made any affidavit on oath neither before us nor before NFAC to give any details. The notice of hearing has been sent by NFAC to the e-mail address of the employee of assessee’s Chartered Accountant who had left the employment, instead the assessee made averments in a general way that the notice of hearing by NFAC has been sent to e-mail of an employee of assessee’s Chartered Accountant. This is only hearsay statement and no facts were verified whether true or not. It is to be noted that provisions of Limitation Act must not be considered so liberally that it would have an effect of taking away the benefit accruing to the other party in the mechanical manner, where the legislature spells out a period of limitation and provides for power to condone the reasons supported by the cogent and proper evidence. It is settled principle of law that the provisions relating to specific period of limitation must be applied with their rigor and effective consequences.

6.2 At this stage, we may refer to decision in the case of CIT vs. Ram Mohan Kalra 257 ITR 773 (P&H). It was held in this case, that delay can be condoned only for sufficient and good reasons supported by cogent and proper evidence. In this case, Hon’ble High Court upheld the decision of ITAT refusing to condone delay of five days in filing of Revenue’s appeal because of the reasons that (a) affidavit of person who was dealing with file, was not filed (b) the relevant records were not produced before the authorities concerned (c) affidavit filed on behalf of the applicant was based on hearsay and no facts were true to the knowledge of the person who filed the affidavit in support of the application for condonation of delay. In this case, Hon’ble Punjab and Haryana High Court held as under: “The provisions relating to prescription of limitation in every statute must not be construed so liberally that it would have the effect of taking away the benefit accruing to the other party in a mechanical manner. Where the Legislature

ITA Nos.699 to 704/Bang/2024 The Karnataka Chemists & Druggists Association, Bangalore Page 11 of 23 spells out a period of limitation and provides for power to condone the reasons supported by cogent and proper evidence. Now it is a settled principle of law that the provisions relating to specified period of limitation must be applied with their regour and effective consequences. In this regard, reference can be made to the latest law in the case of P.K. Ramachandran vs. State of Kerala, AIR 1998 SC 2276. The relevant portion reads as under: “Law of limitation may harshly affect a particular party but it has to be applied with all its rigour when the statute so prescribes and the courts have no power to extend the period of limitation on equitable grounds. The discretion exercised by the High Court, was, thus, neither proper nor judicious. The order condoning the delay cannot be sustained. This appeal, therefore, succeeds and the impugned order is set aside. Consequently, the application for condonation of delay filed in the High Court would stand rejected and the miscellaneous first appeal shall stand dismissed as barred by time. No costs.”

Once the concerned authority applies its mind and declines to condone the delay in filing the appeal for good and appropriate reasons, in that event it cannot give rise to a question of law for determination. It is clear from the impugned order that the authorities concerned have given three reasons for not condoning the delay. a) Affidavit of person who was dealing with the file, was not filed. b) The relevant records were not produced before the authorities concerned. c) Affidavit filed on behalf of the applicant was based on hearsay and no facts were true to the knowledge of the persons who filed the affidavit in support of the application for condonation of delay. It will be appropriate to refer to the findings recorded by the Ld. Tribunal in the impugned order, which reads as under: “It is quite clear that the Ld. Departmental Representative himself asked time to produce the relevant affidavit of the relevant person, i.e., ‘receipt clerk’. Even at the time of reference application no such ‘affidavit’ is available. The Income-tax Appellate Tribunal has given finding of fact and as such no question of law arises out of the finding of the Income- tax Appellate Tribunal. The reference application filed by the Revenue is accordingly dismissed.” The Supreme Court of India in the case of Oriental Investment Co. Ltd. vs. CIT [1957] 32 ITR 664, AIR 1957 SC 852, held as under (857 of AIR 1957 SC):

ITA Nos.699 to 704/Bang/2024 The Karnataka Chemists & Druggists Association, Bangalore Page 12 of 23 “A finding on a question of fact is open to attack under section 66(1) as erroneous in law if there is no evidence to support it or if it is perverse.” A full Bench of the Orissa High Court, in the case of Brajabandhu Nanda vs. CIT (1962) 44 ITR 668, considering a somewhat similar question where the appeal was barred by time and reference of the question was declined, held as under: “That the questions referred were not questions of law but questioners of fact since it was a matter of discretion for the Tribunal to condone delay for sufficient cause on the facts and circumstances of each case.” The consistent view is that such question would be a question of fact simpliciter and would not be covered under the provisions of section 256 of the Act unless such exercise of discretion or conclusion arrived at was perverse or so illogical that no reasonable person could come to such a conclusion. The authorities have exercised their discretion and we find nothing perverse in the impugned orders. Specific reasons have been given in the order which are not only logical but even reflect the conduct of the appellant before the authorities in not producing the record in spite of seeking time. The authorities which are exercising quasi-judicial powers in discharge of their statutory functions, inevitably have to be vested with some element of discretion in exercise of such powers. Merely because another view was possible or permissible on the same facts and circumstances, per se would not make such controversy a “question of law”. So far as such decision of the authority is in conformity to the principle of law and is apparently a prudent one, the court would normally be reluctant to interfere in such exercise of discretion.” 6.3 Thus, in the present case on viewing the reasons advanced by the assessee, in our opinion, there is no proper explanation from the assessee’s side for filing the appeals belatedly before NFAC. Leave alone “sufficient cause” the fact is that no cause has been advanced by the assessee for the delay. As there is no explanation for the delay, the appeal deserves to be dismissed in limine, being barred by limitation. In our opinion, it was only negligence on the part of assessee for the above inordinate delay. It was the utmost duty of the assessee to keep track of this matter of filing appeal before NFAC and this gross negligence on the part of assessee to keep track of this important matter cannot constitute “sufficient cause” for inordinate delay within the meaning of section 253(5) of the Act. In other words,

ITA Nos.699 to 704/Bang/2024 The Karnataka Chemists & Druggists Association, Bangalore Page 13 of 23 the assessee acted in a non-challant way with lackadaisical propensity for delay and the grounds on which condonation of delay has been sought, not only lack bonafides completely, but also, are not only fanciful and seems to be fully concocted on over all consideration of the facts and circumstances of this case. This gross negligence is absent from sufficient cause. The assessee seeking an unfettered free play in filing the appeal at whatever time it pleases even after substantial delay without sufficient cause. The assessee sought the condonation of delay on fanciful and without any reasonable grounds. We do not wish to promote the notion that this Tribunal is required to condone the delay in filing the appeal even when there is complete absence of “sufficient cause” for the delay. We wish to discourage the tendency of perceive delay as a non- serious matter. The lackadaisical propensity exhibited for delay in a non-challant way needs to be curbed as the facts and circumstances of the present case before us, when there is a complete absence of sufficient cause within the meaning of section 253(5) of the Act.

6.4 The guiding principles are: (a) that lack of bonafides imputable to a party seeking condonation of delay is a significant and relevant fact; (b) that concept of liberal approach has to encapsulate the conception of reasonableness and it cannot be allowed a totally unfettered free play; (c) that the conduct, behavior and attitude of a party relating to its inaction or negligence are relevant factors to be taken into consideration; (d) that if the explanation referred is concocted or the grounds urged in the application are fanciful, the courts should be vigilant not to expos the other side unnecessarily to face Litigation; (e) that the entire gamut of facts are to be carefully scrutinized and the approach should be based on the paradigm of judicial discretion which is founded on objective reasoning and not on individual perception; and,(f) that the increasing tendency to perceive delay as a nonserious matter and hence lackadaisical propensity can be exhibited in a non-challant manner requires to be

ITA Nos.699 to 704/Bang/2024 The Karnataka Chemists & Druggists Association, Bangalore Page 14 of 23 curbed within legal parameters. If we apply these principles, are against assessee.

6.5 The plea of the assessee before us is that the Tribunal expected to be considered the condonation liberally so as to advance cause of justice. However, in our opinion, there was no proper reasons advanced by the assessee before us and the reason advanced by the assessee is not free from doubt as it is not supported by any positive materials to support the case of the assessee. The reason advanced by the assessee shows the negligence and reckless approach of the assessee, which cannot be considered as a reasonable cause/sufficient cause and this gross carelessness shown by the assessee could not be a ground for condonation.

6.6 It is well settled, that a legal adviser’s mistake in order to justify condonation of delay, must be a bona fide mistake; for which reference may be made to Amritlal vs. Phool Chand AIR 1938 Lah 81; Nazia Hasan Khan vs. Ganga Din AIR 1939 Dulh 245; Sajadhaa Bhagat vs. Moi Chand AIR 1941 Pat 1800; J.N. Surty vs. T.S. Chattiyar Firm AIR 1927 Rang 20; Sarmukh Singh vs. Chanan Singh AIR 1960 Purj 512 and Pandit Krisha Rao vs. Trimbak AIR 1938 Nag 156. It is also settled that a mistaken advice given by a lawyer negligently and without due care is not a sufficient cause; as held in Rejputana Trading Co. Ltd. vs. Malaya Trading Agency AIR 1971 Cal 313; Constancie vs. Casteano AIR 1971 Goa 38; Badrinath vs. Hari Bhagat AIR 1971 J&K 41 (FB); Chunilal vs. State of MP AIR 1967 MP 127, Municipal Board, Lucknow vs. Kali Krishna Narain AIR 1944 Oudh 135 and Sahai vs. Devi Chand AIR 1968 J&K. It is not as if mistake of a legal advisor, however, gross and inexcusable, will not entitle an assessee to condonation of delay in filing of appeal. The facts of the case are to be examined to ascertain if there had been negligence or gross want of skill, competence or knowledge on the part of the legal advisor; or whether there was only a mistake that

ITA Nos.699 to 704/Bang/2024 The Karnataka Chemists & Druggists Association, Bangalore Page 15 of 23 even a skilled legal advisor, well-versed and experienced in law might make that mistake. It is only in the latter case that an assessee may justifiably seek condonation of delay. In any case, the assessee, in the case before us, has not proved that the assessee had indeed received wrong advice by Counsel or its counsel not informed the assessee with regard to passing of orders by ld. AO. As held in Paggopala Rao vs. Dalgonina Saha AIR 1959 Ori 31; Gulsher Ahmed vs. Election Tribunal AIR 1959 Ori 31; Gulsher Ahmed vs. Election Tribunal AIR 1959 MP 108 and Bhakti Mandal vs. Kagendra AIR 1968 Cal 69; the fact that there was lawyer’s wrong advice has to be proved by the party seeking condonation of delay. Elaborating this further, it was held in Bhakti Mandal vs. Kagendra (supra) that an applicant applying for condonation of delay on the ground of wrong advice given by his Counsel has to establish by evidence. (a) that the advice was given by a skilled or competent lawyer; (b) that such lawyer had exercised reasonable case; (c) that the view taken by the lawyer was such as would have bene entertained by a competent person exercising reasonable skill. It was also held in Bhakti Mandal vs. Kagendra (supra) that a copy of legal opinion of the Counsel must be filed of the opinion was in writing; and if the opinion was oral, then sufficient material should be made available to establish that there was no negligence or want of reasonable skill on the part of the lawyer concerned. At this stage, we may also refer to two orders of Hon’ble Delhi High Court, reported in Smt. Phool Sabharwal vs. CIT 141 ITR 774 (Del) and Haro Singh vs. Ajay Kumar Chawla 109 (2004) DLT 297/2004 (72) DRJ 639/2004 AIHC 996 (Del). In the case of Smt. Phool Sabharwal vs. CIT (supra) it was held by Hon’ble Delhi High Court that a reference application filed beyond limitation period due to alleged error on the part of Counsel’s clerk was not maintainable. In the case of Haro Singh vs. Ajay Kumar Chawla (supra), request for condonation of delay was rejected and it was held by the Hon’ble Delhi High Court; referring to Babu Ram vs. Devinder

ITA Nos.699 to 704/Bang/2024 The Karnataka Chemists & Druggists Association, Bangalore Page 16 of 23 Mohan Kaura AIR 1981 Delhi 14, Kankala Gurunath Patro vs. D. Dhanu Patro AIR 1984 Ori 173, and Jagannath Prasad vs. Sant Hardasram Sevashaam AIR 1978 All 250; as under:

“6. …….the Counsel must disclose the circumstances in which incorrect advice was given and it is not sufficient to make a perfunctory and general statement that the wrong advice was given bona fide …..”. In the case of Babu Ram vs. Devinder Mohan Kaura (supra) it was so held by Hon’ble Delhi High Court that: “31. There is no formula that person is merely to plead mistaken legal advice.” The basis of mistaken legal advice should also be disclosed to enable the court to see whether the advice tendered was bona fide or reckless……” (emphasis added by us)

6.7 In view of the foregoing, we are of the unequivocal view, in the facts and circumstances of this case; that there was absence of “sufficient cause”, within the meaning of Section 253(5) of I.T. Act, for not presenting the appeal within period referred to in Section 253(3) of I.T. Act, leading us unhesitatingly to reject assessee’s request for condonation of delay in filing of this appeal within time prescribed U/s 253(3) of I.T. Act.

6.8 Further, at this stage, it is pertinent to mention the various precedents as follows:

(i) Hon’ble Supreme Court in the case of Ramlal, Motilal and Chhotelal Vs. Rewa Coalfields Ltd. (1962) 2 SCR 762, observed as under:

“In construing s.5 it is relevant to bear in mind two important considerations. The first consideration is that the expiration of the period of limitation prescribed for making an appeal gives rise to a right in favour of the decree-holder to treat the decree as binding between the parties. In other words, when the period of limitation prescribed has expired the decree-holder has obtained a benefit under the law of limitation to treat the decree as beyond challenge, and this legal right which has accrued to the decree-holder by lapse of time should not be lightheartedly disturbed. The other consideration which can t be ignored is that if sufficient cause for excusing dela is shown discretion is given to the Court to condone delay and admit the appeal. This discretion has been deliberately conferred on the Court in order that judicial

ITA Nos.699 to 704/Bang/2024 The Karnataka Chemists & Druggists Association, Bangalore Page 17 of 23 power and discretion in that behalf should be exercised to advance substantial justice. As has been observed by the Madras High Court in Krishna v. Chattappan, (1890) J.IJ.R. 13 Mad. 269, "s. 5 gives the Court a discretion which in respect of jurisdiction is to be exercised in the way in which judicial power and discretion ought to be exercised upon principles which are well understood; the words 'sufficient cause' receiving a liberal construction so as to advance substantial justice when no negligence nor inaction nor want of bona fide is imputable to the appellant.” (ii) Further, Hon’ble Supreme Court in the case of P.K. Ramachandran Vs. State of Kerala & Anr. (1997) 7 SCC 556, wherein held as under:

“In the absence of reasonable, satisfactory or even appropriate explanation for seeking condonation of delay, the same is not to be condoned lightly. It is further observed that the law of limitation may harshly affect a particular party but it has to be applied with all its rigour when the statute so prescribes and the courts have no power to extend the period of limitation on equitable grounds. It is further observed that while exercising discretion for condoning the delay, the court has to exercise discretion judiciously.”

(iii) Hon’ble Supreme Court in the case of Pundlik Jalam Patil Vs. Executive Engineer, Jalgaon Medium Project (2008) 17 SCC 448, held as under:

"The laws of limitation are founded on public policy. Statutes of limitation are sometimes described as "statutes of peace". An unlimited and perpetual threat of limitation creates insecurity and uncertainty; some kind of limitation is essential for public order. The principle is based on the maxim "interest reipublicae ut sit finis litjum", that is, the interest of the State requires that there should be end to litigation but at the same time laws of limitation are a means to ensure private justice suppressing fraud and perjury, quickening diligence and preventing oppression. The object for fixing time limit for litigation is based on public policy fixing a lifespan for legal remedy for the purpose of general welfare. They are meant to see that the parties do not resort to dilatory tactics but avail their legal remedies promptly. Salmond in his Jurisprudence states that the laws come to the assistance of the vigilant and not of the sleepy."

(iv) Hon’ble Supreme Court in the case of Basawaraj and Anr. Vs. Special Land Acquisition Officer (2013) 14 SCC 81, held as under: “The discretion to condone the delay has to be exercised judiciously based on facts and circumstances of each case. It is further observed that the expression "sufficient cause" cannot be liberally interpreted if negligence, inaction or lack of bona fides is attributed to the party. It is further observed that even though limitation may harshly affect rights of a party but it has to be applied with all its rigour when

ITA Nos.699 to 704/Bang/2024 The Karnataka Chemists & Druggists Association, Bangalore Page 18 of 23 prescribed by statute. It is further observed that in case a party has acted with negligence, lack of bona fides or there is inaction then Chere cannot be any justified ground for condoning the delay even by imposing conditions. It is observed that each application for condonati011 of delay has to be decided within the framework laid down by this Court. It is further observed that if courts start condoning delay where no sufficient cause is made out by imposing conditions then that would amount to violation of statutory principles and showing utter disregard to legislature.”

(v) Further, in the case of R. Ramakrishnan Vs. CBDT (2020) (422 ITR 257), wherein the Hon’ble High Court of Karnataka held as under: “14. Undisputedly, the petitioner has not questioned the validity of para 8 of the Circular which relates to pending application as on June 9, 2015. The petitioner had submitted application on May 24, 2011 before the Central Board of Direct Taxes and it was pending consideration as on June 9, 2015, the date on which the circular was issued. As long as the petitioner has not questioned the validity of para 8 of the circular, the petitioner is not entitled for relief sought in the present petition. That apart, conduct of the petitioner is required to be taken into consideration for the purpose of deciding whether the petitioner is entitled for the relief in the present petition or not?

(vi) Hon’ble Karnataka High Court in the case of Praxair India (P) Ltd. Vs. CIT 78 CCH 70 (Karn.), held as under: “9. If the Tribunal had exercised its discretion to appreciate the explanation offered by the petitioner-company in its appeal before the Tribunal for condoning the delay and found there was no sufficient cause made out by the petitioner and had consequently dismissed the application seeking for condonation of delay and as a sequel of the dismissal of the application and also the appeal. We do not find any illegality in the order of the Tribunal. The Tribunal is justified in observing as to in

ITA Nos.699 to 704/Bang/2024 The Karnataka Chemists & Druggists Association, Bangalore Page 19 of 23 what manner the petitioner-company runs its business is its own concern and that cannot be accepted as a legitimate or bona fide reason for seeking a delay of 229 days in preferring the appeal.

(vii) In the case of Catholic Syrian Bank Ltd. & Ors. Vs. DCIT (2018) 54 CCH 228 (Coch. Trib), where in it was held as under: “There were no affidavits from the concerned persons who are handling the impugned issues and who are required to take proper steps in filing the appeals before the CIT(A). The reason as come out from the condonation petitions filed by the assessee, is that there was transfer of the officer who was handljng the issue. We cannot accept such proposition as it cannot be considered as good and sufficient reason to condone the delay. It was submitted that the delay is to be condoned since the issue on merit covered in favour of the assessee. This submission ignores the fact that the object of the law of limitation is to bring certainty and finality to litigation. Merely because the assessee is not vigilant, it cannot follow that the assessee is bestowed with a right to the delay being condoned. We are conscious of the fact that the period of limitation should not come as a hindrance to do substantial justice between the parties. However, at the same time, a party cannot sleep over its right ignoring the statute of limitation and without giving sufficient and reasonable explanation for the delay, except its appeal to be entertained merely because the assessee is a Bank. Appeals filed beyond a period of limitation have been entertained by us where the delay has been sufficiently explained such as in cases of bonafide mistake. Thus, the assessee should be well aware of the statutory provisions and the period of limitation and should pursue its remedies diligently. It cannot expect their appeals be entertained because they are after all the assessee, notwithstanding the fact that delay is not sufficiently explained. Hence, the delay is not condoned and the appeals are unadmitted.

ITA Nos.699 to 704/Bang/2024 The Karnataka Chemists & Druggists Association, Bangalore Page 20 of 23 (Para 6)” (viii) In the case of T. Kishan Vs. ACIT (2012) 32 CCH 463, where in it was held as under: “There is no hard and fast rule which can be laid down in the matter of condonation of delay and Courts should adopt a pragmatic approach and discretion on the facts of each case keeping in mind that in considering the expression 'sufficient cause' the principles of advancing substantial justice is of prime importance and the expression 'sufficient cause' should receive a liberal construction. A liberal view ought to be taken in terms of delay of few days. However, when there is inordinate delay, one should be very cautious while condoning the delay. The delay of 2491 cannot be condoned simply because the assessee's case is hard and calls for sympathy or merely out of benevolence to the party seeking relief. In granting the indulgence and condoning the delay, it must be proved beyond the shadow of doubt that the assessee was diligent and was not guilty of negligence whatsoever. The sufficient case within the contemplation of the limitation provision must be a cause which is beyond the control of the party invoking the aid of the provisions. The cause for the delay in filing the appeal which by due care and attention could have been avoided cannot be a sufficient cause within the meaning of the limitation provision. WOere no negligence, nor inaction, or want of bona fides can be imputed to the assessee a liberal construction of the provisions has to be made in order to advance substantial justice. Seekers of justice must come with clean hands. In the present case, the reasons advanced by the assessee do not show any good and sufficient reason to condone the delays. The delays are not properly explained by the assessee. There is no reason for condoning such delay in this case. The delay is nothing but negligence and inaction of the assessee which could have been very well avoided by the exercise of due care and attention. There exists no sufficient or good reason for condoning inordinate delays of more than 2491 days in filing appeal. Accordingly, this appeal is dismissed as barred by limitation. Accordingly, condonation of delay of 2491 days was declined, and dismiss this appeal of the assessee as barred by limitation.”

(ix) Further, in the case of State of Uttar Pradesh & Ors. Vs. M/s. Satish Chand Shivhare and Brothers (2022) LiveLaw (SC) 430, where in it was held as under: “22. When consideration of an appeal on merits is pitted against the rejection of a meritorious claim on the technical ground of the bar of limitation, the Courts lean towards consideration on merits by adopting a liberal approach towards 'sufficient cause' to condone the delay. The Court considering an application under Section 5 of the Limitation A may also look into the prima facie merits of an appeal. However, in this case, the Petitioners failed to make out a strong prima facie case for appeal. Furthermore, a liberal approach, may adopted when some plausible cause for delay is shown. Liberal approach does not mean that an appeal should be allowed even if the cause for delay shown is glimsy. The Court should not wave limitation for all practical purposes by condoning inordinate delay caused by a tardy lackadaisical negligent manner of functioning.

ITA Nos.699 to 704/Bang/2024 The Karnataka Chemists & Druggists Association, Bangalore Page 21 of 23 23. It is true that the High Court has rejected the appeal on the misconceived ground that delay in filing an appeal under Section 37 of the Arbitration and Conciliation Act is not condonable beyond 120 days by relying upon a two Judge Bench judgment of this Court in N.V. International v. State of Assam and Ors. 2, which has since been overruled by a three Judge Bench of this Court in Government of Maharashtra (Water Resources Department) Represented by Executive Engineer v. Borse Brothers Engineers and Contractors Private Limited 1 . 24. Mr. Rana Mukherjee, Senior Advocate appearing on behalf of the Petitioners strenuously argued, and rightly, that the High Court had erred in holding that delay beyond 120 days in filing an appeal under Section 37 of the Arbitration and Conciliation Act was not condonable. 25. This Court is, however, not inclined to entertain this Special Leave Petition since the Petitioners have failed to show sufficient cause for the condonation of the inordinate delay of 337 days in filing the Appeal in the High Court. Moreover, there are no grounds for interference with the arbitral award impugned.”

(x) Further, in the case of Vama Apparels (India) (P) Ltd. Vs. ACIT reported in (2019) 102 taxmann.com 398 (Bombay), Hon’ble Bombay High Court held as under: 7. “Having heard the learned counsel for the applicant and having perused the documents on record, we do n find that the applicant has appropriately explained the delay which is of 507 days. We are not insisting on the applicant explaining each day of delay. Nevertheless, when the delay is substantial, at least a proper explanation for the bulk of the period should be necessary. In the present case, principally, the explanation of the applicant, as noted above is that the ex- employee who received the order of the Tribunal put it in his drawer and left the company without intimating anybody. It was only about a month before filing or the appeal when his substitute new employee found the papers from the drawer. 8. For multiple reasons, this explanation does not inspire confidence. We had inquired with the learned counsel for the applicant why the ex-employee had not filed affidavit. It was stated that he was a part time employee and now having left the service was not traceable. It is intriguing that the applicant- company had entrusted such an important task of receiving Court’s order to a part time employee whose whereabouts within short time of his leaving the service are not be available with the company. Further, there are inconsistencies in the declaration made by and on behalf of the applicant. 111 the present Motion, Mrs. Jaya Patel, the director of the company states that she came to know about the Tribunal's order on 30.5.2018. It is also stated, as noted earlier, that the new employee Mr. Naidu was the first one to tumble upon the, order lying in the drawer of the previous employee. The applicant has filed affidavit of said Mr. Naidu who states that he had found the order of the Tribunal on 8.8.2()18 and showed the same to Mrs. Jaya Patel who was surprised to see it as she was not shown the same earlier.

ITA Nos.699 to 704/Bang/2024 The Karnataka Chemists & Druggists Association, Bangalore Page 22 of 23

6.8.2 In the case of Majji Sannemma @ Sanyasirao cited (supra) the Hon’ble Supreme Court held 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 1011 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 1 011 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. I and 2 herein — original defendants. Impugned order passed by the High Court is unsustainable both, on law as well as on facts.

ITA Nos.699 to 704/Bang/2024 The Karnataka Chemists & Druggists Association, Bangalore Page 23 of 23 No.331 of 2021 preferred by respondent Nos. I 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.”

6.9 In view of the above, we are of the opinion that assessee was not able to establish “sufficient cause” for filing the appeals belatedly before the NFAC and the assessee has made very bald and general statement that the orders of the lower authorities were delivered to the e-mail address of the employee of assessee’s Chartered Accountant and he has left the job without informing his principal that causes the delay, without furnishing name and address of that person and the details with regard to the fact that when he has left his job with its Chartered Accountant. Being so, we are not in a position to consider the reason advanced by assessee as good and sufficient reason so as to condone the delay in filing the appeal before NFAC. Accordingly, all these appeals deserve to be dismissed in limine without admitting all these appeals. 7. In the result, all the appeals of the assessee are dismissed. Order pronounced in the open court on 4th June, 2024

Sd/- Sd/- (Soundararajan K.) (Chandra Poojari) Judicial Member Accountant Member

Bangalore, Dated 4th June, 2024. VG/SPS

Copy to: 1. The Applicant 2. The Respondent 3. The CIT 4. The DR, ITAT, Bangalore. 5 Guard file By order

Asst. Registrar, ITAT, Bangalore.