2019 (11) TMI 508 - AT - Income Tax

Condonation of delay in filing an appeal - mistake on the part of the counsel - HELD THAT - When an assessee authorizes a counsel to appear on his behalf, such authorization is given by placing faith on the legal expertise of the Counsel and also with the hope that the counsel shall take care of the interest of the assessee. Hence, when there is a lapse on the part of the legal counsel, in my view, the assessee should not be found fault with, unless it is shown that the blame put on the counsel with malafide intentions in order to cover up the mistake/lapse on the part of the assessee. In the instant case, it is the contention of the Ld D.R that the explanation of the assessee is not supported by any evidence. Submission of the Ld A.R that the assessee could not collect a letter from the Counsel in view of the strained relationship, is a reasonable explanation when we take into account human conduct and probabilities, since a professional counsel cannot be expected to admit his lapses, lest it should affect his reputation. In any case, no material was brought on record by the revenue to show that the assessee was continuing to avail the services of very same counsel even after noticing his lapse. Hence, reason given by the affidavit cannot be considered to be a malafide one. It is well settled proposition that the mistake on the part of the counsel constitutes sufficient cause in the matter relating to condonation of delay.

Summary

Issues Involved:
1. Condonation of delay in filing the appeal.
2. Whether sufficient cause was shown for the delay.
3. Whether the assessee's conduct was bona fide.
4. Impact of decision on merits on the limitation issue.

Issue-wise Detailed Analysis:

1. Condonation of Delay in Filing the Appeal:
The primary issue in this case was whether the delay of 571 days in filing the appeal by the assessee before the Tribunal should be condoned. The assessee claimed that the delay was due to not receiving the order from the CIT(A) on time. The order was allegedly received by the counsel, who failed to inform the assessee. The Tribunal had to decide if this explanation constituted a sufficient cause for the delay.

2. Whether Sufficient Cause was Shown for the Delay:
The assessee provided an affidavit explaining the reasons for the delay, including the non-receipt of the order and the subsequent delay in obtaining a copy from the CIT(A). The Accountant Member opined that the assessee failed to show sufficient cause, whereas the Judicial Member believed the explanations demonstrated bona fide and sufficient cause. The Third Member considered the principles laid out by the Supreme Court, emphasizing a liberal approach to condoning delays to advance substantial justice. It was noted that the delay was not due to gross negligence or deliberate inaction by the assessee but due to the counsel's failure to communicate the order.

3. Whether the Assessee's Conduct was Bona Fide:
The discussion included whether the assessee's conduct in handling the appeal was bona fide. The Tribunal noted that the assessee had relied on the counsel for legal matters, and the failure of the counsel to inform the assessee about the order should not be held against the assessee. The strained relationship with the counsel was considered a reasonable explanation for not obtaining a confirmation letter from the counsel. The Tribunal concluded that the assessee's explanation was credible and that the delay was beyond the assessee's control.

4. Impact of Decision on Merits on the Limitation Issue:
The Tribunal also addressed the fact that the appeal had been adjudicated on merits despite the delay. Citing a precedent from the Madras High Court, it was noted that if the appeal is considered on merits, then refusing to condone the delay is an error. The Tribunal emphasized that substantial justice should prevail over technicalities, and the appeal should be admitted if it has been decided on merits.

Conclusion:
The Third Member concurred with the Judicial Member's view that the delay should be condoned, given the sufficient cause shown by the assessee. The Tribunal directed that the matter be listed before the Division Bench for passing orders in accordance with the majority view. The judgment underscores the importance of a liberal approach in condoning delays to ensure justice is served, especially when delays are not due to the litigant's fault.