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Income Tax Appellate Tribunal, DELHI “SMC” BENCH: NEW DELHI
Before: SHRI KUL BHARAT & DR. B.R.R.KUMAR
ORDER
PER KUL BHARAT, JM :
1. The present appeal filed by the assessee is directed against the order of Ld. CIT(A), National faceless Appeal Centre (“NFAC”), Delhi dated 15.02.2023 for the assessment year 2012-13.
The assessee has raised following grounds of appeal:-
1. “That the Ld. CIT. (Appeals) has erred both law and facts for confirming the Addition of Rs. 77,82,451/- made by the Ld. 1. T. Officer without giving opportunity and looking to the facts and circumstances of the case.
2. That the Ld. C.I.T. (Appeals) has erred both in law and facts as the addition is made on: i) Failure to Non Deduction of TDS as per Income Tax Act, Rs. 62,11,772/- ii) Disallowance 10% of exp of Rs.1,57,06,795.00/ Addition Rs.15,70,679 without going into the merits of the case.
3. That the Ld. C.I.T. (Appeals) has erred in making ex parte order without considering condonation of delay the reasons and the epidemic conditions prevailing and the Supreme Court ruling for the said period and the facts on record and without giving an adequate opportunity, done hastily and by not observing the principles of natural justice. The delay in filing in appeal was reasons beyond the assessee control which prevented the Assesssee in filing appeal within reasonable time.
4. The Appellant prays that the additions/disallowance of Rs 77,82,451/ made in respect of above by the Order of the CIT(A) be deleted.” 3. At the outset, Ld. Counsel for the assessee submitted that the assessee was not given opportunity of being heard by the lower authorities as the Assessing Officer (“AO”) has passed ex-parte order making the impugned addition. He submitted that the assessee may be given adequate opportunity to represent his case. He further submitted that that the appeal was dismissed by Ld.CIT(A) on the basis of delay in filing the appeal by 11 days. Ld. Counsel for the assessee submitted that Ld.CIT(A) failed to appreciate the fact that the delay in the filing the appeal was caused due to unprecedented conditions of Covid-19 pandemic.
On the other hand, Ld. Sr. DR opposed the submissions and supported the orders of the authorities below. He further reiterated the submissions as made in the written submissions. For the sake of clarity, the relevant contents of the written submissions are reproduced as under:-
“The main issue involved in this matter is that there was delay of 490 days in filing appeal before the Ld. CIT[A] which was not found to be due to reasonable cause and thus not condoned. Resultantly the appeal was dismissed without any discussion on merits of the case. Considering the facts and circumstances of the case the impugned order is an appropriate one factually and legally. There is no scope for any relief on this issue to the assessee and the present appeal is liable to be dismissed. Reasons cited for delay occurred are reproduced as under: "1. That the said company is non functional and non operational for the number of years due to heavy losses.
2. That there is no employee or any regular professional to look after the day to day matters. 3. That the assessment order was not delivered at the registered office of the company hence the same was not received late. 4. That due to pandemic conditions due to COVID-19 in the country. I the Principal Director of the company who is he senior citizen was maintaining very low activities. That I was not able to avail the services of my counsel and therefore appeal could not file well within the stipulated time." 2. So far as sufficiency of cause for not filing the appeal before the Ld. CIT[A] and considering the grounds taken by the appellant in the condonation application/affidavit are concerned, it is apparent that appellant did not have sufficient cause for not filing the appeal in time. The reasons quoted are factually incorrect and appear to be a mere story in the absence of any corroborative evidence in support of the contentions made. As per the Form No.35 itself the service of the Assessment Order was noted as 24.12.2019. It is also pertinent to note here that COVID-19 started in fag end of March 2020 much after the expiry of limitation period of 60 days. The assessee is a corporate entity and must be having professional assistances at all the times for various compliance under different laws. The ground of condonation was thus apparently irrelevant, incomplete, very general and vague and it was rightly rejected by the Ld. CIT[A]. 3. In view of these facts and circumstances of the case it is not believable that the appellant was prevented with sufficient cause/reasons to file the present appeal before the Hon'ble Tribunal well within time allowed. 4. [Whether the appellant acted with reasonable diligence?] In the case of Baroda Rayon Corporation Ltd. (Gujarat 87 STC 266), BaldeoLal Roy Vs State of Bihar (Patna 11 STC 104) and M Loganathan VS CIT (Madras 302 ITR 139) it has been held that appellate authority needs to look into the fact that appeal. In the present case I do not think that the appellant has acted with reasonable diligence in the prosecuting of appeal. In the present case I do not think that the appellant has acted with reasonable diligence. 5. [Whether the appellant has shown reason for delay on the last date of limitation period and thereafter for each day?] In the case of Ramlal and others Vs Rewa Coalfields Ltd (AIR 1962 SC 361), Tractors and Farm Equipments Ltd (ITAT Chennai 104 ITD 149) and MadhuDadha (Madras 317 ITR 458) it has been held that party has to show reason for delay on the last date of limitation period and thereafter for each day. Further, condonation of delay is not a matter of right. Court has to exercise the discretionary Jurisdiction. 6 Whether the inordinate delay was not due to negligence and inaction on the part of the appellant?] Reference is also made to the decision in the case of Agricultural Market Committee vs. ADIT (Exemptions-1), of Hon'ble ITAT, Hyderabad & 1276/Hyd/2022 (Asstt. Years: 2003-04 & 2004-05), 10-02-2012. The Tribunal while refusing to condone the dealy. Inter-alia, observed as under :- "In the case of Vedabai allas Vaijayanatbai Baburao Patil (253 ITR 798) the Apex Court clearly laid down that the distinction must be made between a case where delay is inordinate and a case where the delay is of a few days. The law assists those who are vigilant, not those who sleep over their rights.
6. The delay 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. Page | 4
The sufficient cause 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 Hon'ble Supreme Court in the case of Ramlal v. Rewa Coalfields Limited: AIR 1962 SC 361 has held that 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. Where 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. We find no reason for condoning such delays for the assessment years under consideration. The delay is nothing but negligence and inaction of the assessee which have been very well avoided by the exercise of due care and attention." 7 [Whether the appellant has proved that he was diligent and was not guilty of negligence?] In the case of Sri Venkatesa Paper & Boards Ltd. [2006) 98 ITD 200, Hon'ble ITAT Chennai held that in granting indulgence and condoning delay, appellate authority must be satisfied that there had been 'diligence on part of appellant and it was not guilty of negligence. It is further held that sufficient cause within contemplation of provisions of Section 249(3) must be a cause which is beyond control of party invoking aid of provisions. In the case of T. Kishan [2012] 23 taxmann.com 383, Hon'ble ITAT Hyderabad has held that in granting indulgence and condonation delay in filing appeal, it must be proved beyond shadow of doubt that assessee was diligent and was not guilty of negligence whatsoever. 8 [Why the ignorance of law should be accepted as reason for delay when the appellant was represented before the AO and CIT[A]?] Hon'ble ITAT Delhi in Mewat Grit Udyog Vs PCIT [2017-TIOL-607-ITAT-DEL] held that an assessee cannot claim ignorance of law for condoning the huge delay for 312 days, when the assessee was properly represented by the Page | 5 competent Legal Practiceners before the Revenue authorities and there was no plausible reason for such condonation. 9. [Whether the explanation given satisfies the test of sufficient cause?] Hon'ble Bombay High Court in Shri Subodh Parkash Vs JCIT (2017-TIOL- 2249-HC-P&H- IT held that when the explanation submitted by the Assessee does not satisfy the test of 'sufficient cause' as required u/s 5 of the Limitation Act, 1963, the delay cannot be condoned. 10. **Whether condoning of inordinate delay will not frustrate the legitimate expectation or corresponding right accrues in favour of the Revenue?] Shri C. Jegaveerapandian Vs ITO 2904 to 2910 /Mad/2014 ITAT 'A' Bench Chennai order dated 18.03.2015. The assessee has to establish that there was no negligence or inaction and the right granted under law to challenge the order was not abandoned. It cannot be overlooked that on expiry of the period of limitation prescribed for seeking remedy, a corresponding right accrues in favour of the other party and the same should not be lightly interfered with. The assessee has to explain the period of delay by bringing the material on record to support the sufficient cause. The assessee has to show that the assessee is vigilant during this period and the delay was beyond his control. Condoning of inordinate delay should not frustrate the legitimate expectation of the other party as the Revenue would have come to the conclusion that the order of the Assessing Officer has been accepted by the assessee and reached finality.
In the case of Prabhudas Kishoredas Tobacco Products P. Ltd. v. Deputy Commissioner of Income-tax, [(1994] 48 ITD 543 (AHD.), it has been held that it is a settled law that in order to get the delay condoned or excused in pursuing the remedies available to the assessee under the direct tax laws, the assessee has to explain the delay to the satisfaction of the Tribunal. In deciding what is sufficient cause for delay in filing the appeal, the true guide is whether the appellant has acted with reasonable diligence in prosecution of his appeal (see Asi Bai v. Gomathi AIR 1979 Mad. 115 at page 116). As laid down by the Supreme Court in the case of Ramlal v. Rewa Coalfields Ltd. AIR 1962 SC 361, 364, in the case of Sitaram Ramchandra v. M.N. Nagrashana AIR 1960 SC 260, 265, 266 and in the case of Mrs. Sandhya Rani Sarkar v. Smt. Sudha Rani Debi AIR 1978 SC 537, the appellant has to show sufficient cause for not filing the appeal on the last Date of the limitation and must explain the delay made thereafter day by day till the actual date of the filing of the appeal. In other words, the whole of the delay must be explained. The Madras High Court in the case of Andal Sweet Stall & Tippo Dining Hall v. State of Tamil Nadu [1981] 48 STC 551 have laid down that a judgment or pronouncement by a court long after the period of limitation cannot be taken advantage for filing of appeal with a petition to excuse the delay in filing the appeal. It is true that the parties are entitled to wait until the last date of the limitation for filing of the appeal, but when it allow the imitator to expire and come forward with an explanation enumerating reasonable causes for not filing the appeal within the time prescribed under the statute, then the causes so shown must establish that because of some event or circumstances arising before limitation expired, he/it was not able to file the appeal within the stipulated time mandated in law. Any event, cause or circumstance arising after the expiry of the limitation period cannot constitute a sufficient cause. There may be events or circumstances subsequent to the expiry of the limitation period which may further delay in filing of the appeal, but the limitation has been allowed to expire when the appeal being filed must be traced to a cause arising within the period of limitation. 12 In the present case, appellant had failed to prove beyond doubt that it had acted diligently and was not guilty of negligence and the Ld. CIT [A] was correct in rejecting the condonation of delay of 490 days. Hence, there is no scope for any interference in the decision of the Ld. CIT [A] and assessee's appeal is liable to be rejected by this Hon'ble Bench.”
We have heard Ld. Authorized Representatives of the parties and perused the material available on record. We find that Ld.CIT(A) had dismissed the appeal of the assessee without adverting the submissions made by the assessee. Therefore, in our considered view, it would sub-serve the principle of natural justice, if the appeal of the assessee is restored to the file of Ld.CIT(A) to decide the issue afresh. Considering the judgement of Hon’ble Supreme Court in the case of Suo Motu Writ Petition (C) No.3 of 2020 dated 10.01.2022 in respect of cognizance for extension of limitation, Ld.CIT(A) would consider the issue afresh and needless to say that Ld.CIT(A) would grant adequate opportunity of being heard to the assessee. Ground raised by the assessee are thus, allowed for statistical purposes.
In the result, the appeal of the assessee is allowed for statistical purposes.
Order pronounced in the open Court on 07th August, 2023.