2024 (2) TMI 65 - AT - Income Tax

Condonation of delay filling appeal before ITAT - delay of 493 days - bonafide reasons of delay or not? - as submitted by AR that there were multi-facet reasons leading to the same, viz. (i) that as the earlier chartered accountant of the assessee society, who was looking after the matter before the CIT(Appeals) had unfortunately expired in the month of April, 2021, therefore, the case of the assessee society had thereafter remained unattended; (ii) that the staff of the assessee society which was working under the Government supervision and Jila Sahakari Bank in a rural areas was not computer literate; (iii) that books of the account of the assessee society was being manually maintained; and (iv) that there was no proper access of internet in the rural area where the assessee society was based. HELD THAT - Explanation of the assessee society does not inspire any confidence for the reason that it ought to have made necessary arrangements for both prosecuting the matter before the first appellate authority and thereafter filing the appeal against the latter s order well within the prescribed time period contemplated in law. As observed the callous and irresponsible conduct of the assessee society is not only discernible from the inordinate delay involved in filing of the present appeal but also, its conduct in the course of the proceedings before the CIT(Appeals), wherein it had adopted an evasive approach and had on no occasion despite having been put to notice about the hearing of the appeal had put up an appearance before the said appellate authority. Apropos, the claim of the assessee that as it is working in the rural areas with a skeletal staff who were not computer literate, unable to approve the said reason advanced by the assessee society in its attempt to explain the inordinate delay involved in filing of the present appeal. As all the assessees without any exception are expected to be vigilant and comply with the statutory obligations cast upon them within the prescribed time period, therefore, the mere fact that the assessee society suffered from a locational disadvantages or that its staff was not computer savvy, cannot be pressed into service for justifying the substantial delay of 493 days involved in filing of the present appeal. Also, the claim of the assessee society that there was no proper access to internet in the rural area where it was based would also not come to its rescue. Not only the lackadaisical approach adopted by the assessee society in substantially delaying the filing of the present appeal by an inordinate period but also its non-cooperative attitude and sheer carelessness in the course of the proceedings before the CIT(Appeals) wherein it had despite being well informed evaded participation in the course of the proceedings before him, therein, irrefutably evidence the fact that the substantial delay involved in filing of the appeal was not backed by any bona fide reasons, but a careless approach on its part, which it had tried to justify on the basis of its multifacet contentions that have not legs to stand upon. Where an application for condonation of delay has been moved bonafide, then, the Court would normally condone the delay, but where the delay has not been explained at all and in fact there is an unexplained and inordinate delay coupled with negligence or sheer carelessness, then, the discretion of the court in such cases would normally tilt against the applicant. See M/s. Phoenix Mills Ltd. Vs. Asstt. CIT. Reverting to the facts of the present case, as already examined the reasons that had led to the inordinate delay, which has not been explained by the assessee society to have occasioned due to bonafide reasons. As observed by me hereinabove, as there was no justifiable reason for the assessee society to file the present appeal after 493 days from the lapse of the prescribed period, therefore, there appears to be no reason to adopt a liberal view and condone the inordinate delay therein involved. Also, I may observe at this juncture that the law of limitation has to be construed strictly as it has an effect of vesting on one and taking away the right from the other party. The delay in filing of the appeals cannot be condoned in a mechanical or a routine manner since that would undoubtedly jeopardize the legislative intent behind Section 5 of the Limitation Act. As decided in case of State of West Bengal Vs. Administrator, Howrah 1971 (12) TMI 106 - SUPREME COURT the expression sufficient cause should receive a liberal construction so as to advance substantial justice, particularly when there is no motive behind the delay. The expression sufficient cause will always have relevancy to reasonableness. The action which can be condoned by the court should fall within the realm of normal human conduct or normal conduct of a litigant. However, as observed assessee appellant in the present case had acted in defiance of law, therefore, there can be no reason to allow its application and condone the substantial delay of 493 days involved in preferring of the captioned appeal. Delay of 493 days cannot be simply condoned on the basis of the hollow claim of the assessee that the same had occasioned for the multi facet reasons given. Also, as observed by the Hon ble Supreme Court in the case of Ramlal, Motilal and Chotelal Vs. Rewa Coalfields Ltd. 1961 (5) TMI 54 - SUPREME COURT that seeker of justice must come with clean hands, therefore, now when in the present appeal before us the assessee appellant had failed to come forth with any good and sufficient reason that would justify condonation of the inordinate delay of 493 days involved in preferring of the same, therefore, decline to condone the same and, thus, without adverting to the merits of the case dismiss the captioned appeal of the assessee society as barred by limitation. Decided against assessee.

Summary

Issues Involved:
1. Disallowance of Deduction u/s 80P(2).
2. Condonation of Delay in Filing Appeals.
3. Non-Compliance by the Assessee before CIT(A).

Summary:

1. Disallowance of Deduction u/s 80P(2):
The assessee societies challenged the disallowance of deductions u/s 80P(2) made by the Assessing Officer (AO). The AO had allowed only a general deduction of Rs. 50,000/- u/s 80P(2)(GJ)(11) and disallowed other income including dividend income and membership fees, totaling Rs. 7,15,729/-. The CIT(A) upheld the AO's decision due to the assessee's failure to provide corroborative evidence or explanation during the appellate proceedings.

2. Condonation of Delay in Filing Appeals:
The appeals involved significant delays, ranging up to 542 days. The assessee societies attributed the delay to the unfortunate demise of their chartered accountant, lack of computer literacy among staff, manual maintenance of books, and poor internet access in rural areas. The Tribunal, however, found these reasons insufficient to justify the inordinate delay. It emphasized that the assessee had adopted a "lackadaisical approach" and failed to make necessary arrangements to prosecute the appeal timely. The Tribunal highlighted that the delay was not due to bona fide reasons but sheer negligence and carelessness on the part of the assessee societies.

3. Non-Compliance by the Assessee before CIT(A):
The assessee societies did not comply with multiple notices issued by the CIT(A) and failed to appear for hearings. The CIT(A) proceeded ex-parte and dismissed the appeals based on available records, citing the assessee's non-cooperative behavior. The Tribunal supported this decision, referencing multiple judicial pronouncements that uphold the dismissal of appeals for non-prosecution when the assessee fails to appear despite being duly notified.

Conclusion:
The Tribunal dismissed all the appeals filed by the assessee societies due to the inordinate delay in filing and lack of sufficient cause for the delay. It also upheld the CIT(A)'s decision to dismiss the appeals for non-compliance and non-prosecution. The Tribunal emphasized the importance of adhering to statutory obligations and maintaining a cooperative approach during appellate proceedings.