2024 (8) TMI 362 - AT - Income Tax

Delay of 1528 days in filing of the appeal - CIT(A) dismissed the quantum appeal as the reasons furnished by the assessee for the condonation of delay do not constitute sufficient cause and because the appeal was filed with such delay long after the sue motu extension of time limit due to Covid-19 as allowed by the Hon ble Supreme Court - as pleaded before the CIT(A) that immediately after receipt of the copy of the order in the quantum appeal, the assessee met his counsel and due to the professional preoccupations of the counsel the appeal could not be drafted and filed at once - HELD THAT - Ordinarily the delay of 1528 days require proper explanation in respect of the sufficient cause for the delay occurred. In this case according to the assessee the moment he received the copy of the order he approached his counsel, but due to the professional preoccupations of the counsel the appeal could not be filed at once but due to the intervening pandemic, believing the words of the counsel, the assessee rest assured and when he realised that the appeal was not filed as promised by his counsel, the delay occurred. Hon ble Supreme Court also extended the time for filing of the appeals from the date of lockdown till expiry of 3 months from 1/3/2022. Having regard to the ordinary human conduct, do not find anything suspicious in the submissions made by the assessee that believing the words of his counsel that the appeal would be filed in due course, the assessee rest assured and due to the long period of pandemic it escaped his mind causing the abnormal delay. The assessee does not stand to gain by not preferring the appeal in time and as a matter of fact, such a conduct is detrimental to his interest and therefore unless there are convincing reasons, an individual would not sleepover the matter. Thus, if the request of the learned AR is granted affording an opportunity to the assessee to prosecute the appeal before the CIT(A) by condoning the delay, the highest that would happen is that a cause could be decided on merits. When the technicalities are pitted against the delivery of substantial justice, the former must give way to the later. Thus, set aside the impugned order and restore the appeal to the file of the learned CIT(A) to pass an order in compliance with the provisions under section 250(6) of the Act, and direct the assessee to co-operate with the first appellate authority in getting the matters disposed of on merits without seeking any adjournments.

Summary

Issues Involved:
- Condonation of delay in filing the quantum appeal
- Justification for delay due to communication gap with auditor
- Consideration of pandemic-related delays
- Restoring the appeal to the file of the learned CIT(A)
- Disposal of penalty appeal along with the quantum appeal

Condonation of Delay in Filing the Quantum Appeal:
The assessee appealed against orders passed by the Commissioner of Income Tax (Appeals)- National Faceless Appeal Centre. The delay of 1528 days in filing the appeal was not condoned by the learned CIT(A), citing insufficient reasons. The assessee's argument focused on the communication gap with the auditor, leading to the delay. The learned AR emphasized that the delay was not intentional but due to the professional preoccupations of the auditor. The delay was attributed to the pandemic and the belief that the appeal would be filed in due course. The Tribunal noted that the delay was abnormal but found the reasons provided by the assessee plausible, considering the circumstances. The Tribunal granted an opportunity to the assessee to prosecute the appeal by condoning the delay, emphasizing the delivery of substantial justice over technicalities.

Justification for Delay Due to Communication Gap with Auditor:
The delay in filing the appeal was explained by the assessee as arising from a communication gap with the auditor. The assessee approached the auditor immediately upon receiving the order, but due to the auditor's preoccupations, the appeal could not be filed promptly. The Tribunal considered the reasons furnished by the assessee and the circumstances surrounding the delay, including the impact of the pandemic. The Tribunal accepted the explanation provided by the assessee, highlighting the importance of granting an opportunity to effectively prosecute the appeal.

Consideration of Pandemic-Related Delays:
The pandemic-induced delay in filing the appeal was a significant factor in the case. The Tribunal acknowledged that the pandemic had affected the timely filing of appeals and considered the impact of the lockdown on the assessee's ability to pursue the appeal promptly. Despite the delay of 1528 days, the Tribunal found the reasons presented by the assessee valid, particularly in light of the extraordinary circumstances caused by the pandemic. The Tribunal emphasized the need to balance technicalities with substantial justice, leading to the decision to condone the delay and restore the appeal.

Restoring the Appeal to the File of the Learned CIT(A):
The Tribunal set aside the impugned order and restored the appeal to the file of the learned CIT(A) for a decision on merits. The Tribunal directed the assessee to cooperate without seeking adjournments, emphasizing the importance of a fresh review by the learned CIT(A) to ensure a fair hearing. By restoring the appeal, the Tribunal aimed to facilitate a comprehensive consideration of the case in compliance with the provisions of the Income Tax Act.

Disposal of Penalty Appeal Along with the Quantum Appeal:
The Tribunal also addressed the appeal against the penalty levied under section 271(1)(c) of the Act. The order of the learned CIT(A) dismissing the penalty appeal for non-prosecution was set aside, as it did not comply with the Act's provisions. Given the restoration of the quantum appeal, the penalty appeal was also restored to the file of the learned CIT(A) to be disposed of along with the quantum appeal. Ultimately, the appeals of the assessee were treated as allowed for statistical purposes, ensuring a comprehensive review of both issues.