2016 (5) TMI 413 - AT - Income Tax

Condonation of delay - Held that - the assessee has been vigilant and has been pursuing the legal remedy but under a wrong provision. We find that the efforts of the assessee have been bonafide and the assessee has not been insolent, negligent or lethargic in pursuing its legal remedies/appeal. The Cochin Tribunal in the case of Kadakkal Educational Trust (2014 (9) TMI 959 - ITAT COCHIN) has also taken note of the bonafide pursuit of the appeal before wrong Forum as a reasonable cause for condonation of the delay. Respectfully following the above judgments, we are inclined to condone the delay of 62 months 24 days and remit the issue to the file of the Ld. CIT(A) for reconsideration on merits.

Summary

Issues:
Delay in filing appeal before Ld. CIT(A) against order under section 143(3) for A.Y. 2006-07.

Analysis:
The assessee, engaged in real estate business, filed its return for A.Y. 2006-07 on 08.11.2006. The Assessing Officer (A.O) disallowed a sum under section 40(a)(ia) and assessed total income at a higher amount. The assessment order was served on 03.11.2008, and the assessee filed an appeal on 25.03.2014, causing a delay of 62 months and 24 days. The delay was due to pursuing rectification under section 154, which was allowed in part by the A.O. The Ld. CIT(A) upheld certain disallowances, leading to subsequent appeals. The delay was attributed to seeking legal advice and pursuing remedies in good faith. The Ld. CIT(A) dismissed the delay condonation, prompting the current appeal.

The assessee contended that it diligently pursued legal remedies under a genuine belief, citing Supreme Court's liberal approach in Land Acquisition Collector vs. SS Katiji case. The counsel referred to a Cochin Tribunal case where delay was condoned due to bonafide pursuit before a wrong forum. The Departmental Representative (D.R.) argued that each day's delay must be explained adequately, and since the assessee failed to do so, the appeal should be dismissed. However, the Tribunal found the assessee's efforts genuine, not negligent, and not willful, citing the Katiji case's principles. The Tribunal also considered the Cochin Tribunal's decision and decided to condone the delay of 62 months and 24 days, remitting the issue for reconsideration on merits to the Ld. CIT(A).

In conclusion, the Tribunal allowed the appeal, emphasizing the genuineness of the assessee's actions, the need for an equitable approach in delay condonation, and the importance of pursuing legal remedies diligently. The judgment highlighted the principle of doing justice on merits and the significance of bonafide pursuit of legal remedies, ultimately leading to the decision to condone the delay and remit the issue for further consideration on merits to the Ld. CIT(A).