2021 (11) TMI 563 - AT - Income Tax

Condonation of delay - 353 days in filing the appeal before the Tribunal - proof of eligible reasons for delay - Revision u/s 263 by CIT on Treatment to income derived from the sale of timbers - HELD THAT - Assessee did not explain the reason for delay in filing the appeal before this Tribunal on account of medical reason as there is no supporting document to say that the assessee fell sick. Secondly, the assessee submitted that it failed to bring to the notice of the Auditor who had been attending the tax matters of assessee also did not inform the assessee of the need to file appeal before the Tribunal. Even here, the assessee has not mentioned the name of the auditor who attended before the Pr. CIT during the course of proceedings u/s. 263 of the Act. Also as stated there was a marriage in the family during the time when it received the impugned order of Pr. CIT. Even here, the assessee has not mentioned which family member's marriage was held during this period. Each and every information is not disclosed by the assessee - In our opinion, the assessee has not explained the reason for delay in filing the appeal before this Tribunal sufficiently and there was inordinate delay in filing the appeal. Law assists those who are vigilant, not those who sleep over their rights. The delay cannot be condoned simply because the assessee's case is hard and calls for sympathy or merely out of benevolence to the party seeking relief. In granting the indulgence and condoning the delay it must be proved beyond the shadow of doubt that the appellant was diligent and was not guilty of negligence whatsoever. The sufficient cause within the contemplation of the limitation provision must be a cause which is beyond the control of the party invoking the aid of the provisions. The cause for the delay in filing the appeal which by due care and attention could have been avoided cannot be a sufficient cause within the meaning of the limitation provision.. In the present case, the reasons for delay in filing the appeal is not sufficiently explained by the assessee and it shows that the delay was due to negligence and inaction on the part of assessee which cannot be condoned. - Decided against assessee.

Summary

Issues:
1. Validity of order passed under sec. 263
2. Treatment of timber receipts as agricultural income
3. Delay in filing appeal before the Tribunal

Analysis:

Issue 1: Validity of order passed under sec. 263
The appeal challenged the order of the Principal Commissioner of Income-tax, Madurai, passed under section 263 of the Income-tax Act. The appellant contended that the order was contrary to law, erroneous, and unsustainable. The appellant argued that the assessing officer had already examined and concluded the agricultural activities under section 143(3) of the Act, and the order under section 263 was unwarranted. The Principal Commissioner directed the officer to re-do the assessment to verify the cultivation of silver oak trees, which the appellant claimed had been considered by the officer. The appellant further contended that the order under section 263 lacked jurisdiction as there was no lack of inquiry, and the conditions for action under section 263 were not satisfied. The Tribunal dismissed the appeal, upholding the validity of the order passed under section 263.

Issue 2: Treatment of timber receipts as agricultural income
The Principal Commissioner observed that the assessee had admitted timber receipts in the income and expenditure account, but no expenses were incurred for growing silver oak trees. The Principal Commissioner held that the income from timber sales should not be treated as agricultural income under section 2(1A) of the Income-tax Act. The Principal Commissioner remitted the issues back to the assessing officer for re-examination, directing necessary inquiries and opportunities for the assessee. The Tribunal noted the Principal Commissioner's findings and upheld the decision regarding the treatment of timber receipts, leading to the dismissal of the appeal.

Issue 3: Delay in filing appeal before the Tribunal
The appellant filed a petition for condonation of delay of 353 days in filing the appeal before the Tribunal. The reasons cited for the delay included sickness, lack of communication from the auditor, and a family event. However, the Tribunal found the explanations contradictory and lacking in supporting evidence. The Tribunal emphasized the importance of diligence in filing appeals within the stipulated timeline. Due to the insufficiently explained delay, the Tribunal dismissed the petition for condonation of delay, resulting in the dismissal of the appeal due to the delay in filing.

In conclusion, the Tribunal upheld the order passed under section 263, affirmed the treatment of timber receipts, and dismissed the appeal due to the delay in filing before the Tribunal. The decision highlighted the significance of timely compliance with legal procedures and the need for clear and substantiated explanations for delays in legal actions.