2024 (7) TMI 950 - AT - Income Tax

Delay filling appeal before CIT - delay of 1999 days in filing the appeal for A.Y. 2013-14 and a delay of 536 days in filing appeal for A.Y. 2015-16 before the CIT(A) - sufficient cause for condonation of delay - ongoing litigation between the assessee and the Union Bank of India, the delay occurred in filing the appeals before the CIT(A) HELD THAT - 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 CIT(A) was on the reason that the assessee presumed the appeals were filed by the representative who was handling the case at that point of time, and it was only on receipt of the recovery notice that the lapse was realized. This being the position, it constitutes a sufficient cause for filing the appeals belatedly. Further, on perusal of the affidavit filed by the then representative, we are of the opinion that due to the circumstances that existed, the lapse that occurred on behalf of the representative cannot be attributed to the assessee for which assessee could be punished. 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 able to file the appeals within the period of limitation. The cause for the delay therefore deserves to be considered, when there exist a reasonable cause, and therefore the period of delay may not be relevant factor. K.S.P. Shanmugavel Nadai and Ors. 1984 (4) TMI 24 - MADRAS HIGH COURT considered the condonation of delay and held that there was sufficient and reasonable cause on the part of the assessee for not filing the appeal within the period of limitation. Hon ble Madras High Court thus condoned nearly 21 years of delay in filing the appeal. As compared to 21 years, delay of about 1000 to 2000 days cannot be considered to be inordinate or excessive. As decided in Mrs. Sandhya Rani Sarkar vs. Smt. Sudha Rani Debi 1978 (2) TMI 210 - SUPREME COURT clarified the distinction between an 'explanation' and an 'excuse', emphasizing that, mere excuses wouldn't suffice; a satisfactory and acceptable explanation was required. The Court added, there is no formula that caters to all situations and, therefore, each case for condonation of delay based on existence or absence of sufficient cause has to be decided on its own facts. We therefore feel that we feel that the reasons assigned by the assessee and the then representative for condonation of delay on account of the assessee and inability to present the appeals within time, deserves consideration. We are therefore of the view that, there is a reasonable cause in filing the appeals belatedly before CIT(A), as delay was neither willful nor wanton but was due to the circumstances beyond the control of the assessee. It is noted that there is no malafide intention on behalf of assessee in not filing the appeals before Ld.CIT(A) within time. In our opinion there is a sufficient cause for condoning the delay as observed in case of Collector Land Acquisition Vs. Mst. Katiji Ors, 1987 (2) TMI 61 - SUPREME COURT in support of his contentions. We condone the delay in filing the appeals before CIT(A) belatedly and the appeals are admitted for adjudication by exercising the power u/s 253(5) of the Act.

Summary

Issues:
Delay in filing appeals before Ld.CIT(A) for A.Y. 2013-14 and 2015-16.

Analysis:
The appeals in question arose due to delays of 1999 days for A.Y. 2013-14 and 536 days for A.Y. 2015-16 in filing before the Ld.CIT(A). The delay was attributed to the assessee being declared a non-performing asset by the Union Bank of India, leading to the seizure of assets and hindering the ability to represent the case adequately. The Ld.AR sought condonation of the delay, citing the ongoing litigation with the bank and the inability to produce necessary documents. The Ld.DR opposed the condonation, arguing that the assessee's non-performing status rendered any appeal futile.

The Tribunal examined the submissions of both parties and emphasized the need to prioritize substantial justice over technicalities. The Ld.AR detailed the efforts made by the assessee to comply with the Union Bank's requirements for asset release, including substantial upfront payments and arrangements for further payments. The Ld.DR, while objecting, failed to counter the reasons provided by the Ld.AR for the delays.

In assessing the sufficiency of the reasons for delay, the Tribunal referred to legal precedents emphasizing the need for a diligent approach by the assessee and the reasonableness of the cause for delay. The Tribunal found the explanations provided by the assessee regarding presumptions made by their representative to be reasonable, thus constituting sufficient cause for the belated appeals.

Further legal references were made to cases condoning significant delays in filing appeals, highlighting the importance of advancing substantial justice and adopting a pragmatic approach in condoning delays. The Tribunal concluded that the reasons presented by the assessee and their representative, coupled with the lack of malafide intent, warranted the condonation of the delays in filing the appeals.

Consequently, the Tribunal ruled to condone the delays, admitting the appeals for adjudication and remitting the issues back to the Ld.CIT(A) for a fresh decision on merits. The orders dismissing the appeals without due consideration were deemed in violation of natural justice principles, necessitating a fair opportunity for the assessee to present their case.

In summary, the delays in filing the appeals before Ld.CIT(A) for A.Y. 2013-14 and 2015-16 were condoned, and the appeals were partially allowed for statistical purposes, with a directive to reconsider the issues on merits after affording the assessee a fair hearing.