2017 (5) TMI 976 - AT - Income Tax

Condonation of delay - reason to delay - Held that - Right of filing an appeal is a statutory right and hence it is the duty of an Assessee to file an appeal within the time stipulated and any time taken beyond that has to be properly explained. In these cases, there was no reason given by the parties. The courts have time and again brought out a distinction between a short delay of one week or two weeks and abnormal delay of more than one year by cautioning that strict approach is warranted when the delay is substantial. In these cases, there was a delay of more than one month even from the date on which Assessees have taken a decision to prefer appeals and in such cases, the explanation has to be strictly construed, whereas in all these cases no explanation was forthcoming under these circumstances, we are of the firm view that the delay in filing the appeals is not supported by sufficient cause and therefore they deserve to be dismissed as unadmitted as they are barred by limitation.

Summary

Issues:
Delay of 580 days in filing appeals related to computation of book profits u/s 115JB of the IT Act based on a judgment of ITAT, Mumbai Bench. Whether the delay in filing the appeals should be condoned or not.

Analysis:
The appeals were filed belatedly due to a delay of 580 days after the Assessees noticed a judgment of ITAT, Mumbai Bench. The Assessees cited the reason for delay as being unaware of the need to file appeals until their Chartered Accountant brought the relevant judgment to their attention. The Assessees contended that a meritorious appeal should not be rejected without hearing the parties on merits, supported by the ITAT decision. The Assessees argued that they were prevented by sufficient and reasonable cause in filing the appeals belatedly. However, the delay was not explained for a period of more than one month after the decision to file appeals was taken, indicating gross negligence on the part of the Assessees.

The Counsel for the Assessees highlighted the decision of the Hon'ble Supreme Court emphasizing substantial justice over technical considerations in cases of delay. On the other hand, the Departmental Representative argued that inordinate delay warrants a strict approach, invoking the doctrine of prejudice and emphasizing the need for a valid explanation for the delay. The DR relied on previous judgments to support the stance that delay should not be condoned if there is gross negligence or lack of valid reasons for the delay.

The Tribunal observed that the Assessees took more than 30 days to file the appeals after deciding to do so, without providing any explanation for the additional delay. The Tribunal noted that the right to file an appeal is a statutory right, and any delay beyond the stipulated time must be properly explained. In this case, the Assessees failed to provide a valid reason for the delay, leading the Tribunal to conclude that the delay was not supported by sufficient cause. Consequently, the appeals were dismissed as unadmitted due to being barred by limitation.

In conclusion, the Tribunal dismissed the appeals as unadmitted, emphasizing the importance of filing appeals within the stipulated time and providing a valid explanation for any delay. The decision highlighted the need to balance substantial justice with procedural requirements, cautioning against substantial delays without adequate justification.