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Income Tax Appellate Tribunal, DELHI
Before: YOGESH KUMAR U.S. & SHRI MANISH AGARWAL
Brief facts of the case are that, an Intimation orders have been passed u/s 143(1) of the Income Tax Act, 1961 ('Act' for short) on 28/02/2016 for Assessment Year 2014-15 and on 07/03/2017 for Assessment Year 2015-16 respectively.Aggrieved by those Intimations, Appellate preferred Appeal before the Ld. CIT(A) on 04/05/2024 with a delay of 2,959 days 2,585 days respectively. The Ld. CIT(A) vide order dated 27/03/2025 and 01/04/2025, dismissed the Appeals filed by the Appellate on delay in latches. Aggrieved by the orders dated 27/03/2025 and 01/04/2025, Appellatepreferred the captioned appeals.
The Ld. Counsel for the Appellate vehemently submitted that the Appellateis an Educational Society running a Senior Secondary School in the remote area of Hisar District at Barwala, Haryana, wherein the students of rural area are educated. The trustees of the Appellate are not well conversant in the legal process. Further contended that for the years under consideration, the claim of the Appellate was denied u/s 10(23C) (iiiad) of the Act without affording opportunity to the Assessee. Further, the Appellate has also preferred a rectification application u/s 154 of the Act which has not been disposed of by the CPC till date. The Appellate has also brought to our notice that the exemption claimed by the Appellate trust u/s 10(23C)(iiiad) of the Act on identical facts have been already considered and allowed by the Department for Assessment Years 2012-13, 2016-17, 2017-18, 2020- 21, 2021-2022 and 2022-23.
The Hon'ble Supreme Court in the case of Inder Singh (supra), while condoning the delay of more than 2 years held that although a delay cannot be condoned without sufficient cause, the case’s merit cannot be discarded solely on the technical grounds of limitation, a liberal approach should be taken in condoning delays when the limitation ground undermines the merits of the case and obstructs substantial justice. The relevant portion of the said Judgment is as under:-
“ANALYSIS, REASONING & CONCLUSION:
In the present case, the contentions of the appellant, on first blush appears to be attractive, inasmuch as the State cannot be given any undue indulgence as compared to an ordinary litigant, especially in matters of limitation. There is no doubt that all parties, whether or not State under Article 123 of the Constitution, are required to act with due diligence and promptitude.
There can be no quarrel on the settled principle of law that delay cannot be condoned without sufficient cause, but a major aspect which has to be kept in mind is that, if in a particular case, the merits have to be examined, it should not be scuttled merely on the basis of limitation.
In the present case, the filing of the Review Petition before the First Appellate Court was with a delay of two years and four months and the Second Appeal before the High Court was delayed by about a year from the date of the dismissal of the Review Petition i.e., 30.09.2019. Pausing for a moment, it is necessary to indicate that in the present case, the dispute over title of a land is not between private parties, but rather between the private party and the State. Moreover, when the land in question was taken possession of by the State and allotted for public purpose to the Youth Welfare Department and the Collectorate and has continued in the possession of the State, the claim of the State that it is government land cannot be summarily discarded.We find, upon a perusal of the record, that the appellant had, in fact, filed an execution case for taking over possession of the land, which would demonstrate clearly the admitted position that he was not in possession thereof. Thus, the matter would, in our considered view, require adjudication on its own merits due to various reasons, inter alia, the fact that a new district has been formed after the initial claim of the appellant of being allotted the land in the years 1975- 1976/1977-1978.Therefore, the delay of 1537 days reckoned from 01.10.2015 i.e. when the First Appellate Court decreed the suit, includes two years and four months delay in filing a Review Petition (which was itself dismissed on the ground of delay by the First Appellate Court) and of about a year thereafter for filing the Second Appeal before the High Court, in the peculiar facts and circumstances of the case, which, at the cost of repetition relate to land claimed by the State as government land and in its possession, persuade us to not interfere with the Impugned Order. Relevantly, initially the suit was dismissed by the Trial Court, which decision was reversed by the First Appellate Court.
The Court in Ramchandra Shankar Deodhar v State of Maharashtra, (1974) 1 SCC 317 held:
'10. There was a delay of more than ten or twelve years in filing the petition since the accrual of the cause of complaint, and this delay, contended the respondents, was sufficient to disentitle the petitioners to any relief in a petition under Article 32 of the Constitution. We do not think this contention should prevail with us. In the first place, it must be remembered that the rule which says that the Court may not inquire into belated and stale claims is not a rule of law, but a rule of practice based on sound and proper exercise of discretion, and there is no inviolable rule that whenever there is delay, the Court must necessarily refuse to entertain the petition.
Each case must depend on its own facts. The question, as pointed out by Hidayatullah, C.J., in TilokchandMotichand v. H.B. Munshi [(1969) 1 SCC 110, 116 :(1969) 2 SCR 824] "is one of discretion for this Court to follow from case to case. There is no lower limit and there is no upper limit. It will all depend on what the breach of the fundamental right and the remedy claimed are and how the delay arose".'
(emphasis supplied)
No doubt, Ramchandra Shankar Deodhar (supra) relates to a writ petition, but the statement of law laid down is clear. Sheo Raj Singh (supra) has also considered the impersonal nature of the functioning of the State, taking note of what was observed in State of Manipur v KotinLamkang, (2019) 10 SCC 408. In A B Govardhan v P Ragothaman, (2024) 10 SCC 613, the Court considered as under:
'37. In Collector (LA) v .Katiji [Collector (LA) v. Katiji, (1987) 2 SCC 107], the Court noted that it had been adopting a justifiably liberal approach in condoning delay and that "justice on merits" is to be preferred as against what "scuttles a decision on merits". Albeit, while reversing an order of the High Court therein condoning delay, principles to guide the consideration of an application for condonation of delay were culled out in EshaBhattacharjee v . RaghunathpurNafar Academy [EshaBhattacharjee v. RaghunathpurNafar Academy, (2013) 12 SCC 649: (2014) 1 SCC (Civ) 713: (2014) 4 SCC (Cri) 450: (2014) 2 SCC (L&S) 595]. One of the factors taken note of therein was that substantial justice is paramount [Para 21.3 of EshaBhattacharjee [Esha Bhattacharjee v. RaghunathpurNafar Academy, (2013) 12 SCC 649: (2014) 1 SCC (Civ) 713: (2014) 4 SCC (Cri) 450: (2014) 2 SCC (L&S) 595]].
In N.L. Abhyankarv . Union of India [N.L. Abhyankar v. Union of India, 1994 SCC OnLineBom 574: (1995) 1 Mah LJ 503], a Division Bench of the Bombay High Court at Nagpur considered, though in the context of delay vis-à-vis Article 226 of the Constitution, the decision in DehriRohtas Light Railway Co. Ltd. v . District Board, Bhojpur [DehriRohtas Light Railway Co. Ltd. v. District Board, Bhojpur, (1992) 2 SCC 598], and held that: (N.L. Abhyankar case [N.L. Abhyankar v. Union of India, 1994 SCC OnLineBom 574: (1995) 1 Mah LJ 503], SCC OnLineBom para 22) "22. The real test for sound exercise of discretion by the High Court in this regard is not the physical running of time as such, but the test is whether by reason of delay there is such negligence on the part of the petitioner, so as to infer that he has given up his claim or whether before the petitioner has moved the writ court, the rights of the third parties have come into being which should not be allowed to be disturbed unless there is reasonable explanation for the delay." (emphasis supplied) 39. The Bombay High Court's eloquent statement of the correct position in law in N.L. Abhyankar case [N.L. Abhyankar v. Union of India, 1994 SCC OnLineBom 574: (1995) 1 Mah LJ 503] found approval in Municipal Council, Ahmednagar v. Shah HyderBeig [Municipal Council, Ahmednagar v. Shah HyderBeig, (2000) 2 SCC 48] and Mool Chandra v. Union of India [Mool Chandra v. Union of India, (2025) 1 SCC 625: 2024 SCC OnLine SC 1878].
In the wake of the authorities abovementioned, taking a liberal approach subserving the cause of justice, we condone the delay and allow IA No. 16203 of 2019, subject to payment of costs of Rs 20,000 (Rupees twenty thousand) by the appellant to the respondent.'(emphasis supplied) 18. Considering the above pronouncements and on an overall circumspection, we are of the opinion that the Second Appeal deserves to be heard, contested and decided on merits. However, a note of caution is sounded to the respondent to exhibit promptitude in like matters henceforth and in futuro, failing which the Court may not be as liberal.
Accordingly, the present appeal stands dismissed. The Impugned Order is upheld with the imposition of costs infra.
No order as to costs. I.A.s No.62432/20244 and 62433/20245 are allowed.
To offset, to some extent, the hardship of the appellant in pursuing his legal remedies, we deem it appropriate that costs of Rs.50,000/- (Rupees Fifty Thousand) be paid by the respondent to the appellant, subject to which the delay in filing the Second Appeal shall be treated as condoned. Let such payment be made within one month from today. Failure to do so shall entail peremptory dismissal of the Second Appeal.
Further, if the payment is made within the timeline stipulated above, the High Court is requested to take up the Second Appeal on priority and endeavour to dispose it of expeditiously.
Our observations are in the context of the Impugned Order alone. They will neither aid nor prejudice either party in the Second Appeal. Parties are at liberty to raise all contentions of fact and law before the High Court on merits.”
Taking into consideration of the activities of the Appellate trust and also the fact that, in the previous year as well as in the subsequent years the deduction/exemptions claimed by the Appellate Trust u/s 10(23C)(iiiad) of the Act have been duly considered by the Revenue and allowed, by following the Judgment of Hon'ble Supreme Court in the case of Inder Singh (supra), by applying liberal approach considering the peculiar facts and circumstances of the case, we condone the delay in filing the Appeals before the Ld. CIT(A) subject to payment of cost of Rs. 15,000/- which shall be payable by the Appellateto the Prime Minister National Relief Fund.
Thus, we set aside the impugned orders of the Ld. CIT(A) and remand the appeals to the file of the Ld. CIT(A) with a direction to decide the Appeals on merits. Needless to say, the Assessee shall be provided with opportunity of being heard before passing the order.
In the result, the Appeals of the Assessee in ITA Nos.
3435/Del/2025 and 3436/Del/2025 are partly allowed for statistical purpose.