2024 (6) TMI 357 - AT - Income Tax

Condonation of Delay in Filing Appeals before ld. CIT(A) - reasons for delay - delay of 93 days - assessee has pleaded before the ld. CIT(A) that the appeals were filed belatedly on the reason that assessee has been pursuing the alternative remedy by filing the writ appeal before Hon ble High Court - HELD THAT - There is a reasonable cause in filing the appeal belatedly before CIT(A) as delay was neither willful nor wanton but due to the circumstances beyond the control of the assessee. In this connection, we have gathered from the records that the assessee was advised by the advocates. If it appears to be guilty of latches or negligence and does not take appropriate steps to pursue its remedy till about the close of the period prescribed for filing of appeal, it must be prepared to have its remedy barred without expecting condonation. Still, it is for the party concerned to explain the reasons for delay and it is not the function of concerned authorities often to find cause for delay. The Court/authority has to examine whether the sufficient cause has been shown by the party for condoning the delay and whether such cause is reasonable or not. In the present case in hand, the assessee explained the delay in filing the appeals before the ld. CIT(A) was on the reason that the assessee pursued the remedies before the High Court by filing the writ and on dismissal of writ, assessee filed writ appeals before the Hon ble High Court. Later, it has filed review petitions. Thus, the assessee before us was able to demonstrate that assessee prosecuted for alternative remedy under bonafide belief and the assessee has been failed to get relief as sought by in its writ. This being the position, it constitutes a sufficient cause for filing the appeals belatedly. This view of ours is supported by judgement of KSP Shamugavel Nadar 1984 (4) TMI 24 - MADRAS HIGH COURT wherein the assessee has filed writ petition for condoning the delay of 21 years on the ground that he had been prosecuting other remedies and hence, the time taken bonafide for prosecuting other remedies should be taken into consideration for condoning the delay. The Hon ble High Court held that there exists a reasonable for filing the appeals belatedly. Whether delay was excessive or inordinate ? - There is no question of any excessive or inordinate when the reason stated by the assessee was a reasonable cause for not filing the appeal. We have to see the cause for the delay. When there was a reasonable cause, the period of delay may not be relevant factor. As decided in K.S.P. Shanmugavel Nadai and Ors 1984 (4) TMI 24 - MADRAS HIGH COURT held that there was sufficient and reasonable cause on the part of the assessee for not filing the appeal within the period of limitation and condoned nearly 21 years of delay in filing the appeal. When compared to 21 years, 93 days cannot be considered to be inordinate or excessive. We are condoning the delay in filing the appeals before ld. CIT(A) belatedly and the appeals are admitted for adjudication by exercising the power u/s 253(5) of the Act. Assessment Orders Passed Ex-Parte - On merit, the similar issue raised before us has been considered by the jurisdictional High Court in assessee s own case 2021 (11) TMI 1196 - KARNATAKA HIGH COURT for the assessment year 2011-12, wherein observed the ld. AO has not properly or correctly considered or appreciated the objections or replies or documents submitted by the assessee and has proceeded to pass the impugned orders, which is a unreasoned and non-speaking order without considering or appreciating the several contentions urged by the assessee or documents produced by the assessee or hearing the assessee and consequently the impugned order being violative of principles of natural justice, the same deserves to be quashed and the matter remitted back to the ld. AO for reconsideration afresh in accordance with law within the stipulated time frame - we remit the entire issue in dispute in all these appeals to the file of ld. AO to decide afresh in accordance with law after giving a fair opportunity of hearing to the assessee and decide accordingly.

Summary

Issues Involved:
1. Ex-parte assessment orders u/s 144 and u/s 143(3) r.w.s. 147.
2. Additions u/s 68 for unexplained credits.
3. Delay in filing appeals before CIT(A).
4. Condonation of delay and principles of natural justice.

Summary:

1. Ex-parte Assessment Orders u/s 144 and u/s 143(3) r.w.s. 147:
In the assessment years 2012-13, 2013-14, and 2014-15, the assessment orders were passed ex-parte u/s 144 of the Income Tax Act, 1961. For AY 2012-13, an additional assessment was made u/s 143(3) r.w.s. 147, adding Rs. 3.05 crores due to credits through shell companies. For AY 2015-16, the assessment was passed u/s 143(3) with various additions u/s 68 for unexplained credits.

2. Additions u/s 68 for Unexplained Credits:
The Assessing Officer (AO) made several additions u/s 68 in the books of accounts as the assessee failed to explain the source of credits. This was a common issue across the assessment years in question.

3. Delay in Filing Appeals Before CIT(A):
The appeals were filed belatedly before the CIT(A) with delays ranging from 1138 to 2504 days. The assessee claimed the delay was due to pursuing alternative remedies by filing writ petitions before the Hon'ble High Court, which were not filed timely by their advocate.

4. Condonation of Delay and Principles of Natural Justice:
The CIT(A) dismissed the appeals for non-prosecution and did not condone the delay. The assessee argued that the delay was due to pursuing alternative remedies and the high-pitched assessments were passed ex-parte, violating principles of natural justice. The tribunal noted that the assessee was pursuing alternative remedies under a bonafide belief and cited precedents where delays were condoned due to counsel's mistakes or pursuing alternative legal remedies.

Tribunal's Decision:
The tribunal condoned the delay in filing appeals before the CIT(A), emphasizing substantial justice over technicalities. The tribunal referenced several judgments, including those of the Supreme Court and High Courts, supporting the condonation of delay when caused by reasonable and sufficient cause. The tribunal remitted the cases back to the AO for fresh consideration in accordance with law, ensuring a fair opportunity of hearing to the assessee.

Conclusion:
The appeals were partly allowed for statistical purposes, and the matters were remitted back to the AO for reconsideration, ensuring adherence to principles of natural justice.