2002 (10) TMI 265 - AT - Income Tax

Summary

Issues:
- Delay in filing appeals before the CIT(A)
- Sufficiency of cause for condonation of delay
- Interpretation of "sufficient cause" under s. 249(3) of the IT Act

Delay in filing appeals before the CIT(A):
The appeals were filed by the assessee against the order of the CIT(A) pertaining to assessment years 1997-98 and 1998-99. The first appellate authority found that the appeal for the assessment year 1998-99 was time-barred by 30 days, while the appeals for the other years were time-barred by 345 days. The assessee attributed the delay to the demise of their tax consultant, stating that they were not actively involved in their tax matters and relied on the consultant for filing appeals within the time limit. The first appellate authority dismissed the appeal on the ground of limitation, finding the explanation provided by the assessee insufficient.

Sufficiency of cause for condonation of delay:
The assessee, in their submissions, reiterated their contentions made before the first appellate authority. The Departmental Representative supported the CIT(A)'s order, arguing that a delay caused by a bona fide mistake or negligence on the part of the appellant's counsel is not sufficient cause for condonation. The ITAT considered the rival contentions and emphasized that courts have the power to condone delay if sufficient reasons are provided to justify availing the remedy after the limitation period.

Interpretation of "sufficient cause" under s. 249(3) of the IT Act:
The ITAT referred to various legal precedents, including the Supreme Court judgments in State of West Bengal vs. The Administrator, Howrah Municipality and N. Balakrishnan vs. M. Krishnamirthy, to highlight the importance of a liberal construction of the term "sufficient cause" for condonation of delay. The Court noted that the length of delay is not as crucial as the acceptability of the explanation provided. The ITAT observed that the delay in this case was due to negligence or inaction on the part of the tax consultant, without any mala fide intent on the part of the assessee. Therefore, the ITAT decided to allow the appeals, condone the delay, and remand the matter back to the first appellate authority for a decision on the merits, subject to the payment of costs.

In conclusion, the ITAT allowed all the appeals, emphasizing the need for a justice-oriented approach in interpreting "sufficient cause" for condonation of delay under the IT Act. The ITAT highlighted the importance of advancing substantial justice and considered the overall facts and circumstances of the case to decide in favor of the assessee, while imposing costs for the delay.