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Income Tax Appellate Tribunal, LUCKNOW BENCH ‘A’, LUCKNOW
Before: SHRI SUDHANSHU SRIVASTAVA & SHRI ANADEE NATH MISSHRA
(A) These three appeals have been filed by the assessee against the impugned appellate orders dated 18/11/2022 for assessment year 2010-11, dated 06/02/2023 for assessment year 2015-16 and dated 06/02/203 for assessment year 2016-17 of learned Commissioner of Income Tax (Appeals) [“CIT(A)” for short]. For the sake of convenience and brevity, these three appeals are hereby disposed of through this consolidated order. The grounds of appeal are as under: (A.Y. 2010-11)
“1. Because the learned Ld. Commissioner of Income Tax (Appeals)-3, Lucknow has grossly erred in rejecting the appellants claim of credit of TDS amounting to Rupees 15986379 Rupees 9415124 Rupees 4525171 and Rupees 2016084 deducted by PWD Azamgarh Lucknow and Sultanpur , 90 & 91/Lkw/2023 Assessment Years:2010-11, 15-16 & 16-17 2 respectively on the ground that the claimed TDS is not reflected in 26AS of the assessee appellant.
Because the Ld. Commissioner of Income Tax (Appeals)-3, Lucknow while rejecting the above claim of the appellant to allow credit of TDS has not sight of Instruction Circular issued by Central Board of Direct Taxes directing the assessing, officer to allow credit of TDS certificate furnished by the assessee as evidence against any mismatched amount after proper verification Reliance is placed on CBDTs Instructions No 5/2013 dated 08. 07. 2013.
Because the Ld. Commissioner of Income Tax (Appeals)-3, Lucknow while rejecting the appellant claim for credit of rupees 15986397 towards TDS has not doubted the genuineness correctness of the above claim of TDS and has simply rejected the same on the ground that the same is not reflecting in 26AS of the appellant.
Because the order dated 31/03/2016 is against the essence of order dated 06/05/2014 passed by the Hon'ble Allahabad High Court in the case of Rakesh Kumar Gupta Versus Union of India and another The Hon'ble High Court while deciding the above petition on mismatch between the TDS claimed and 26AS of the assessee has been pleased to direct the assessing officer to refund the amount of TDS claimed The Hon'ble High Court also imposed cost of Rupees 25000 on the assessing officer to be paid to the petitioner in that case.
Because the Hon'ble Delhi High court in on its own motion Vs CIT Delhi reported in 352 ITR Pg 273 has issued mandamus regarding credit of TDS to the assessee when the tax has been deposited with the revenue by the deductor.
Because the Hon'ble Delhi High Court while issuing the above mandamus has directed that when an assessee approaches the Assessing Officer with requisite details and particulars the said Assessing Officer will verify whether or not the deductor has made payment of the TDS and if the payment has been made credit of the same should be given to the assessee These details or the TDS certificate should be starting point for the Assessing Officer to ascertain and verify the true and correct position.
, 90 & 91/Lkw/2023 Assessment Years:2010-11, 15-16 & 16-17 3
Because pursuant to the above order passed by the Hon'ble Delhi High Court CBDT issued Instruction No. 5 of 2013 dated 08/07/2013 directing that where the assessee approaches the assessing officer with requisite details and particulars in the form of TDS certificate as an evidence against any mismatch amount the Assessing Officer would verify whether or not the deduct or had made payment of the TDS in the government account and in the event the payment had been made credit of the same would be given to the assessee.
Because by rejecting the claim of TDS the appellant has been put to unnecessary hardship who urgently requires additional finances in the form of claimed refund to meet out its business and taxation obligations for the smooth running of business.
Because the delay in allowing credit of TDS a mount and consequential refund to the appellant on account of mismatch that is not attributable to the appellant entitles the appellant for payment of refund and also interest thereon.
Because, the Ld. CIT (A) has grossly erred in rejecting the appeal of the assessee as the assessee company underwent CIRP Proceeding and the Hon'ble NCLT has approved resolution plan vide order Dt. 24.12.2020 in CP(IB)NO. 1581(PB) OF 2018.
Because, the Ld. CIT (A) has grossly erred in rejecting the appeal of the assessee as the Ld. Commissioner of Income Tax (Appeals)-3, Lucknow has not considered the application regarding condonation of delay filed by the assessee and has not adjudicated the appeal on merits.
Because, the Ld. CIT (A) has grossly erred in rejecting the appeal of the assessee without providing the assessee with a due and proper opportunity of hearing and therefore the impugned order deserves to be set-aside being bad in law.
Because, the Ld. CIT (A) has grossly erred in rejecting the appeal of the assessee purely on the basis of conjectures and surmises and hence bad in law and liable to be set-aside and quashed.”
I.T.A. No.90/Lkw/2023 (A.Y. 2015-16)
, 90 & 91/Lkw/2023 Assessment Years:2010-11, 15-16 & 16-17 4 “1. Because, the Ld. CIT (A) has grossly erred in rejecting the appeal of the assessee as the ld AO treating assessee as an assessee in default and consequently directing the appellant to pay a sum of Rs.67,70,610/- being alleged TDS deducted and not paid interest u/s 201(1A) of the Income tax Act, being Rs.36,56,129/ - in aggregating, Rs.1,04,26.740/ - wholly on notions. conjectures and surmises.
2. Because, the Ld. CIT (A) has grossly erred in rejecting the appeal of the assessee as the Ld. Assessing Officer was not at all justified in raising the demand of Rs.67,70,610/- and Rs.36,56,129/ - out of which a payment of Rs.10,57,110/ has been made and further that as the department has withheld huge refunds the appellant was not in a position to pay the same and moreover as the amount is lying with the department the same should be treated as payment already made to the department and thus no liability shall remain and no interest can be at all charged on it and therefore the appellant Co. was never in default and thus the demand so raised wholly on misconstrued notions, is not valid in law and may kindly be ordered to be deleted.
3. Because, the Ld. CIT (A) has grossly erred in rejecting the appeal of the assessee as the demand so raised for the alleged nonpayment of TDS deducted as well as the interest there upon is highly excessive, contrary to facts, laws and principles of natural justice and fair play and thus may kindly be ordered to be quashed.
4. Because, the Ld. CIT (A) has grossly erred in rejecting the appeal of the assessee the assessee company underwent CIRP Proceeding and the Hon'ble NCLT has approved resolution plan vide order Dt. 24.12.2020 in CP(IB)NO. 1581(PB) OF 2018.
5. Because, the Ld. CIT (A) has grossly erred in rejecting the appeal of the assessee as the Ld. Commissioner of Income Tax (Appeals)-3, Lucknow has not considered the application regarding condonation of delay filed by the assessee and has not adjudicated the appeal on merits.
6. Because, the Ld. CIT (A) has grossly erred in rejecting the appeal of the assessee without providing the assessee with a , 90 & 91/Lkw/2023 Assessment Years:2010-11, 15-16 & 16-17 5
due and proper opportunity of hearing and therefore the impugned order deserves to be set-aside being bad in law.
7. Because, the Ld. CIT (A) has grossly erred in rejecting the appeal of the assessee purely on the basis of conjectures and surmises and hence bad in law and liable to be set-aside and quashed.”
“1. Because, the Ld. CIT (A) has grossly erred in rejecting the appeal of the assessee as the Id AO treating assessee as an assessee in default and consequently directing the appellant to pay a sum of Rs.76,16,225/ - being alleged TDS deducted and not paid interest u/s 201(1) of the Income tax Act, being Rs.31,98,814/- in all totaling Rs.1,08,15.040/ - wholly on notions. conjectures and surmises.
2. Because, the Ld. CIT (A) has grossly erred in rejecting the appeal of the assessee as the Ld. Assessing Officer was not at all justified in raising the demand of Rs.76,16,225/- and Rs.31,98,814/- out of which a payment of Rs.4,690/- has been made and further that as the department has withheld huge refunds the appellant was not in a position to pay the same and moreover as the amount is lying with the department the same should be treated as payment already made to the department and thus no liability shall remain and no interest can be at all charged on it and therefore the appellant Co. was never in default and thus the demand so raised wholly on misconstrued notions, is not valid in law and may kindly be ordered to be deleted.
3. Because, the Ld. CIT (A) has grossly erred in rejecting the appeal of the assessee as the demand so raised for the alleged nonpayment of TDS deducted as well as the interest there upon is highly excessive, contrary to facts, laws and principles of natural justice and fair play and thus may kindly be ordered to be quashed.
4. Because, the Ld. CIT (A) has grossly erred in rejecting the appeal of the assessee the assessee company underwent CIRP Proceeding and the Hon'ble NCLT has approved resolution plan vide order Dt. 24.12.2020 in CP(IB)NO. 1581(PB) OF 2018.
, 90 & 91/Lkw/2023 Assessment Years:2010-11, 15-16 & 16-17 6
5. Because, the Ld. CIT (A) has grossly erred in rejecting the appeal of the assessee as the Ld. Commissioner of Income Tax (Appeals)-3, Lucknow has not considered the application regarding condonation of delay filed by the assessee and has not adjudicated the appeal on merits.
6. Because, the Ld. CIT (A) has grossly erred in rejecting the appeal of the assessee without providing the assessee with a due and proper opportunity of hearing and therefore the impugned order deserves to be set-aside being bad in law.
7. Because, the Ld. CIT (A) has grossly erred in rejecting the appeal of the assessee purely on the basis of conjectures and surmises and hence bad in law and liable to be set-aside and quashed.”
(A.1) The learned CIT(A) did not admit the assessee’s appeals as the appeals were filed beyond the time limit prescribed u/s 249(2) of the Income Tax Act, 1961 (“IT Act” for short). The assessee’s request for condonation of delay was not accepted by the learned CIT(A) and the appeals were dismissed in limine on the ground that the appeals filed by the assessee in the office of the CIT(A) were not maintainable. During the course of appellate proceedings in ITAT, hearings were fixed from time to time since 29/05/2023. However, repeatedly adjournments were sought from the assessee’s side. Another request was filed for adjournment of hearing fixed on 09/09/2024 on the ground that the assessee company was in the process of engaging counsel to represent the matter before the Bench of the ITAT. The letter seeking adjournment is purportedly signed by authorized signatory; but the name or designation of the authorized signatory is not mentioned. Further, on perusal of records, it is found that there is nothing to show that the assessee company had authorized this person to sign on behalf of the assessee regarding appellate proceedings in ITAT. As sufficient time has elapsed since the appeals first came up for hearing before ITAT on 29/05/2023, and as repeatedly adjournments have , 90 & 91/Lkw/2023 Assessment Years:2010-11, 15-16 & 16-17 7 been sought from the assessee’s side, and also as the assessee company is stated to be still in the process of engaging counsel to represent the matter in ITAT, we are of the view that the assessee is not sincere in prosecuting these appeals. Therefore, the request for adjournment of hearing fixed on 09/09/2024 was rejected and the matter was heard ex-parte qua the appellant assessee.
(B) On perusal of records, we find that the appeals filed by the assessee in the office of the learned CIT(A) were beyond the time limit prescribed u/s 249(2) of the IT Act. Further, we find that the assessee requested for condonation of delay on the ground that the Assistant Manager (Accounts) forgot to hand over the papers to the advocate and he also resigned from the service of the company on 26/05/2016. The learned CIT(A) rejected the assessee’s request for condonation of delay in filing of appeals, holding as under: “6.2 The above facts have been carefully examined. On going through the reasons explained by the appellant it has been observed that there was no sufficient cause for late filing of appeal. It is an afterthought reasons and any stretch it cannot be a reasonable cause. As such it was the responsibility of the assessee company account section and the concerned director looking after the financial affairs of the assessee company. In every organization employees come and go but no important works get delayed specially wherein limitation involves. Under the circumstances it is admitted fact that the appellant did not comply with the provisions of sec. 249 pertaining to the procedure for filing of an appeal, the appeal filed on 26- 01-2017 is held to be not maintainable.
6.3 The exercise of discretion in condonation of delay in matters of limitation, such as in the present case u/s.249(3) of the income tax act, 1961 has to be carried out within the meaning of "sufficient cause" as envisaged in section 5 of limitation act. Hence, the general rule of law of limitation is that an extension shall not be granted under section 5 if there is no sufficient cause or cogent ground for the condonation of delay, the onus of proving which lies on the appellant/applicant as clearly laid down in the judicial pronouncements by the highest court of law.
, 90 & 91/Lkw/2023 Assessment Years:2010-11, 15-16 & 16-17 8 6.4 In the case of Perumon Bhagvathy Devaswom, Perinadu Village V. Bhargavi Amma (Dead) by LRs, (2008) 8 SCC 321, the Hon'ble apex court had pronounced certain principles in which are applicable while considering applications for condonation of delay under section 5 which may be summarized as follows:
* the words "sufficient cause", as appearing in section 5 of Limitation Act, should receive a liberal construction when the delay is not on account of any dilatory tactics, want of bona fides, deliberate inaction or negligence on the part of the applicant/appellant, in order to advance substantial justice. The words "sufficient cause for not making the application within the period of limitation" should be understood and applied in a reasonable, pragmatic, practical and liberal manner, depending upon the facts and circumstances of the case. * The decisive factor in condonation of delay is not the length of delay but sufficiency of a satisfactory explanation.
* The degree of leniency to be shown by a court depends on the nature of application and facts and circumstances of the case. For example, courts view delays in making applications in a pending appeal more leniently than delays in the institution of an appeal. The courts view applications relating to lawyer's lapses more leniently than applications relating to litigant's lapses.
* Want of 'diligence' or 'inaction' can be attributed to an applicant/appellant only when something, required to be done by him, is not done. When nothing is required to be done, courts do not expect the applicant/appellant to be diligent. Where an appeal is admitted by the high court and is not expected to be listed for final hearing for a few years, an appellant is not expected to visit the court regularly to ascertain the current position but await information from his counsel about the listing of the appeal.
6.5 To quote their lordships' decision verbatim in the case cited supra –
3....The words "sufficient cause for not making the application within the period of limitation" should be understood and applied in a reasonable, pragmatic, practical and liberal manner, depending upon the facts and circumstances of the , 90 & 91/Lkw/2023 Assessment Years:2010-11, 15-16 & 16-17 9 case, and the type of case. The words "sufficient cause" in section 5 of the limitation act should receive a liberal construction so as to advance substantial justice, when the delay is not on account of any dilatory tactics, want of bona fides, deliberate inaction or negligence on the part of the appellant." (emphasis supplied)".
6.6 The aforesaid view was reiterated in the case of Balwant Singh (Dead) v. Jagdish Singh, (2010) 8 SCC 685, where in the Hon'ble court held that:
"25. We may state that even if the term "sufficient cause" has to receive liberal construction, it must squarely fall within the concept of reasonable time and proper conduct of the party concerned. The purpose of introducing liberal construction normally is to introduce the concept of "reasonableness" as it is understood in its general connotation.
The law of limitation is a substantive law and has definite consequences on the right and obligation of a party to arise. These principles should be adhered to and applied appropriately depending on the facts and circumstances of a given case. Once a valuable right has accrued in favour of one party as a result of the failure of the other party to explain the delay by showing sufficient cause and its own conduct, it will be unreasonable to take away that right on the mere asking of the applicant, particularly when the delay is directly a result of negligence, default or inaction of that party. Justice must be done to both parties equally. Then alone the ends of justice can be achieved. If a party has been thoroughly negligent in implementing its rights and remedies, it will be equally unfair to deprive the other party of a valuable right that has accrued to it in law as a result of his acting vigilantly."
6.7 The hon'ble courts in the above mentioned cases, highlighted upon the importance introducing the concept of "reasonableness" while giving the clause "sufficient cause" a liberal interpretation. In furtherance of the same, the hon'ble courts have cautioned regarding the necessity of distinguishing cases where delay is of few days, as against the cases where the delay is inordinate as it might accrue to the prejudice of the rights of the other party. In such cases, where there exists inordinate delay and the same is attributable to the , 90 & 91/Lkw/2023 Assessment Years:2010-11, 15-16 & 16-17 10 party's inaction and negligence, the courts have to take a strict approach so as to protect the substantial rights of the parties.
6.8 The division bench of the hon'ble Bombay High Court in Ornate Traders Private Limited v. The Income Tax Officer, Mumbai emphasized the need for reasonableness and hence, the actions which can be condoned by the court should fall within the scope of normal human conduct or normal conduct of a litigant. The hon'ble Bombay High Court further observed that while section 5 of the limitation act is being interpreted liberally, it cannot be so liberally that it is without any justification, since condonation of delay in a mechanical or routine manner will jeopardize the legislative intent behind section 5.
6.9 The hon'ble Apex Court in the case of Shiv Dass v. Union of India (UOI) and Ors., AIR 2007 SC 1330 held that the High Courts, while exercising their discretionary powers under article 226, should consider delay or laches and, refuse to invoke its extraordinary powers if it is found that the applicant had neglected/omitted to assert its rights in a timely manner; however, this discretion has to be exercised judicially and reasonably.
6.10 In a recent judgment in the case of University of Delhi vs Union of India & Ors, in civil appeal no. 9488 of 2019 vide order dated 17/12/2019; the hon'ble Supreme Court has refused to condone delay by holding that,
"the entire explanation as noted above, depicts the casual approach unmindful of the law of limitation despite being aware of the position of law. That apart when there is such a long delay and there is no proper explanation, laches would also come into play while noticing as to the manner in which a party has proceeded before filing an appeal.
In the matter of condonation of delay and laches, the well accepted position is also that the accrued right of the opposite party cannot be lightly dealt with."
6.11 From the above decisions it becomes clear that in the case of condonation of delay where the appeal was filed beyond the limitation of period, the courts are empowered to condone the delay, provided that the appellant can prove its claim of inability to file appeal within the prescribed period. Litigant must be able to demonstrate that there , 90 & 91/Lkw/2023 Assessment Years:2010-11, 15-16 & 16-17 11 was "sufficient cause" which obstructed its action to file appeal beyond the prescribed time limit.
6.12 The law of limitation is found upon the maxims "interest Reipublicae Ut Sit Finis Litium" that litigation must come to an end in the interest of society as a whole, and "vigilantibus non dormientibus jura subveniunt" that the law assists those that are vigilant with their Rights, and not those that sleep thereupon. The law of limitation in India identifies the need for limiting litigation by striking a balance between the interests of the state and the litigant.
6.13 The single judge bench of the hon'ble Madras High Court, while exercising writ jurisdiction in Kathiravan Pipes Pvt. Ltd., v. Cestat, 2007 [5] STR 9 (Mad.) has observed that the period of limitation prescribed is not for destruction of a statutory right but only to give finality without protracting the matter endlessly.
6.14 In the case of Senior Bhosle Estate (HUF) vs Assistant Commissioner of Income Tax, the hon'ble Apex Court allowed the condonation of delay in filing the concerned appeal pronouncing the principles behind condoning the delay in filing appeals before the courts by applying section 5 of the limitation act, 1963. The hon'ble Apex Court is of the view that the law of limitation is founded on public policy. The idea behind the law of limitation is not to destroy the rights of the parties but to ensure that they do not resort to dilatory tactics and seek remedy without delay. The objection of the law of limitation is to keep alive the legal remedy within a prescribed limited time but does not restrict courts to condone the delay in the interest of justice. There are certain genuine grounds which the courts may consider for the condonation of delay in cases where appeals are filed after the expiry of period as laid down under the limitation act, 1963. In the case of condonation of delay where the appeal was filed beyond the limitation of period, the courts are empowered to condone the delay, provided that the appellant can prove his claim of inability to file the appeal within the prescribed period. Litigant must be able to demonstrate that there was "sufficient cause" which obstructs its action to file appeal in the prescribed time limit. Courts have also held that the expression "sufficient cause" Shall receive liberal consideration for the sake of justice. Thus, the condonation of delay is not automatic but is based upon on the facts of the case. Courts while condoning delay in filing appeals have power to Examine the case and after ascertaining the facts, if delay was due to "sufficient cause" may condone the delay.
, 90 & 91/Lkw/2023 Assessment Years:2010-11, 15-16 & 16-17 12 6.15 In the present case, the appellant failed to justify that there was any reasonable cause which prevented it from filing the appeal within the 30 days time limit. Unless and until it is demonstrated that there was sufficient cause that prevented the appellant from exercising its legal remedy of filing appeal within that prescribed period of 30 days, the delay thereafter cannot be condoned without there being compelling grounds as advocated by the hon'ble courts. The reason given by the appellant was only general and cannot be held as sufficient cause for delay in filing of appeal.
6.16 From the facts of the case, it is clear that the statutory right to appeal which was vested with the appellant was not exercised within the stipulated time u/s. 249(2) of income tax act, 1961. Thus, this clearly is a case of laches and is directly the result of deliberate inaction on the part of the appellant.
6.17 This is not a case of change in law which is beneficial to the appellant and hence the delay in seeking such remedy may be condoned in the furtherance of substantial justice. Therefore, there is no denial or destruction of a statutory right in this case, by adhering to the prescribed period of limitation as otherwise it will only lead to protract the matter endlessly and will undoubtedly render the legislative scheme and intention behind the concerned provision otiose as held by the hon'ble Supreme Court in the case of Assistant Commissioner (CT) LTU, Kakinada & Ors. V. M/s Glaxo Smith Kline Consumer Health Care Limited 2020 [36] G.S.T.L. 305.
6.18 It has been noted that rectification order was served on 31/03/2016, as per claim of the appellant; still appeal was filed after nine months and 25 days i.e. on 26.01.2017 that implies the appellant's attitude and Deliberate inaction on the part of the appellant.
7. Considering the above discussion and facts, the appeal filed is not in conformity with the provisions of sec 249(2) of the act, and there is no sufficient cause for condonation of the delay in filing of the appeal, the present appeal is dismissed as not maintainable. Thus, the appeal filed by the appellant is dismissed as not maintainable.”
(C) In the absence of any representation from the assessee’s side, we heard the learned Departmental Representative, who placed reliance on the , 90 & 91/Lkw/2023 Assessment Years:2010-11, 15-16 & 16-17 13 impugned orders passed by the learned CIT(A). We are of the view that the learned CIT(A) has passed detailed and reasoned orders. No material has been brought for our consideration to persuade us to take a view different from the view taken by the learned CIT(A) who held that the assessee did not deserve condonation of delay in filing of the appeals. Accordingly, we dismiss all the appeals.
(D) In the result, these three appeals are dismissed.
(Order pronounced in the open court on 12/09/2024)