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TMI Blog2023 (2) TMI 1066X X X X Extracts X X X X X X X X Extracts X X X X ..... s highly unreasonable and very harsh for the assessee as the total gross receipts of the assessee was assessed to tax being a total income of the assessee without allowing the deduction of various expenditures which were part of the return of income. Thus, there is an apparent mistake from the order of CPC passed under section 143(1) however, the illegality or a mistake in the order of tax authorities itself cannot be a ground to be considered as reasonable cause for delay of 1950 days in filing the appeal. Assessee has not brought on record anything or any material to show that the assessee has finally filed a rectification petition under section 154 or if such petition is filed, the details of filing of such petition and the outcome of the said petition. In the absence of any detail or facts regarding filing of the petition under section 154 of the Income Tax Act we are unable to accept this argument and explanation of the assessee. There is no quarrel on the point if the assessee has chosen a wrong remedy then the time consumed in pursuing the wrong or improper remedy has to be excluded for the purpose of limitation in seeking the proper remedy by way of filing the appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... zance have been taken by the Hon'ble Supreme Court who has suo motto allowed the extension of time for submitting the appeal, revision, reference all things. The Ld. National Faceless Appeal Centre, Delhi has erred and acted illegally in not taking into account this aspect of fact. 3. Because the Computation of Income made by the CPC Bangalore without taking into the account the expenditure to achieve the object is illegal and against the principle of Income Tax. The Ld. National Faceless Appeal Centre, Delhi has erred and acted illegally in not taking into account this aspect of Fact. 4. Because the Computation of Income is bad both in facts and in law and not maintainable. 3. Ground no. 1 and 2 are regarding declining of condonation of delay in filing the appeal before the CIT(A) and consequently the same was dismissed as barred by limitation in limine. The assessee is a trust running educational institutions namely Saraswati Devi Mahavidyala at Kushinagar and Saraswati Mahila Vidyalaya at Maharajganj. The assessee trust was granted provisional registration under section 12AA of the Act vide order dated 22.06.2022 from assessment year 2023-24 to 2025- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the assessee and is directly the result of deliberate inaction on the part of the assessee. 4. Before the Tribunal, the learned AR of the assessee has reiterated the explanation as explained before the CIT(A) for delay in filing the appeal. He has further submitted that since the CPC has assessed the entire gross receipt as income of the assessee without allowing the expenditure therefore, the impugned order under section 143(1) is illegal and highly arbitrary also suffering an apparent mistake from record for not assessing the correct income of the assessee. The learned AR has contended that initially the assessee was advised to file the rectification petition under section 154 of the Income Tax Act and time limit for filing the petition was upto March, 2020 however, in the meantime, there was a Covid-19 pandemic outbreak and a complete lockdown from 22nd March, 2020 which led to the delay in filing the application before CIT(A). He has referred to the decision of Hon ble Supreme Court whereby the limitation was extended from 15th march, 2020 to 28th February, 2022 and thereafter a further time was allowed for filing the petition, suit, appeals etc., upto 30th May, 2022. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... classes were also discontinued and only some virtual classes were conducted. Thus the assessee has explained that in these circumstances, the assessee could not take the steps for filing the appeal before the CIT(A) within the period of limitation. The CIT(A) after considering the plea for condonation of delay has given its finding in para 4 to 4.2.2 as under:- 4. Findings and Decision: 4.1 In the instant appeal, the date of order u/s 143(1) of the I.T. Act was 27.03.2017 and appeal has been filed on 27.07.2022. The appellant while filing Form No.35 has mentioned the grounds for condonation of delay. although there was delay in filing appeal of approximately 1950 days. However, during the course of appellate proceedings, the appellant has submitted a petition dated 27.07.2022 along with Form No.35 for condonation of delay in filing of this appeal. The relevant extract of the grounds for condonation of delay as submitted by the appellant is reproduced as under:- That later on the assessee has received an intimation u/s 143(1)(a) of the I.T. Act, 1961 dated 27.03.2017 wherein the gross receipts has been treated as taxable without allowing any kind of expenditure and t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n appeal against this order on or before 27.04.2017. The claim of the appellant that it was waiting for the rectification application is untenable and unacceptable. Rectification is only possible on a mistake apparent from record. The mistake apparent from record must be an obvious and patent mistake and not something which can be established by a long-drawn process of reasoning of points on which there may conceivably be two opinions. Thus the ground of the appellant that it did not file appeal as it was waiting for the outcome of its rectification application is misplaced and lacks merit. The appellant has also mentioned the reasons of COVID outbreak during the period because of which it could not file the appeal in time. However, it is pertinent to note that the COVID outbreak and the lock down started only in the month of March, 2020, whereas the appellant was supposed to file the appeal on or before 27.04.2017. Therefore, the reasons stated by the appellant for not filing the appeal within the prescribed time is found to be bereft of any merits. 4.4. This is a case where an appeal is sought to be initiated after an inordinate delay of 1950 days beyond the prescribed time ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the judicial pronouncements by the Highest Courts of Law. 4.7. In the case of Perumon Bhagvathy Devaswom, Perinadu Village v. Bhargavi Amma (Dead) by LRS, (2008)8 SCC 321, the Hon'ble SC had enunciated certain principles in which are applicable while considering applications for condonation of delay under Section 5 which may be summarized as follows: The words sufficient cause , as appearing in Section 5 of Limitation Act, should receive a liberal construction when the delay is not on account of any dilatory tactics, want of bona fides, deliberate inaction or negligence on the part of the applicant/appellant, in order to advance substantial justice. The words sufficient cause for not making the application within the period of limitation should be understood and applied in a reasonable, pragmatic, practical and liberal manner. depending upon the facts and circumstances of the case. The decisive factor in condonation of delay is not the length of delay but sufficiency of a satisfactory explanation. The degree of leniency to be shown by a court depends on the nature of application and facts and circumstances of the case. For example, courts view delays in makin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e applicant, particularly when the delay is directly a result of negligence, default or inaction of that party. Justice must be done to both parties equally. Then alone the ends of justice can be achieved. If a party has been thoroughly negligent in implementing its rights and remedies, it will be equally unfair to deprive the other party of a valuable right that has accrued to it in law as a result of his acting vigilantly. 4.10 The Courts in the abovementioned cases, highlighted upon the importance introducing the concept of reasonableness while giving the clause sufficient cause a liberal interpretation. In furtherance of the same, the Courts has cautioned regarding the necessity of distinguishing cases where delay is of few days, as against the cases where the delay is inordinate as it might accrue to the prejudice of the rights of the other party. In such cases, where there exists inordinate delay and the same is attributable to the party's Inaction and negligence, the Courts have to take a strict approach so as to protect the substantial rights of the parties. 4.11 The Division bench of the Hon'ble Bombay HC in Ornate Traders Private Limited v. The Inco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... made between a case where the delay is inordinate and a case where the delay is of a few days. Whereas in the former consideration of prejudice to the other side will be a relevant factor and calls for a more cautious approach, in the later case no such consideration may arise and such a case deserves a liberal approach. No hard and fast rule can be laid down In this regard. The court has to exercise its discretion on the facts of each case keeping in mind that in construing the expression sufficient cause the principle of advancing substantial justice is of prime importance. The expression sufficient cause should receive a liberal construction. 4.15 From the above decisions it becomes clear that in the case of condonation of delay where the appeal was filed beyond the limitation of period, the courts are empowered to condone the delay, provided that the Appellant can prove his claim of inability to file appeal within the prescribed period. Litigant must be able to demonstrate that there was sufficient cause which obstructed his action to file Appeal beyond the prescribed time limit.. 4.16. The law of limitation is found upon the maxims Interest Reipublicae Ut Si ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... een shown u/s.249(3) of the Income Tax Act, 1961 for the appellant's failure to file the appeal within the prescribed period of limitation u/s.249(2) of the Income Tax Act, 1961 r.w.s. 5 of Limitation Act and hence the appeal sought to be instituted belatedly is hereby rejected. 4.22 In the result, as delay in filing of appeal is not condoned, the appeal is not admitted and is rejected accordingly. 7. There is no dispute that the order under section 143(1) passed by CPC is highly unreasonable and very harsh for the assessee as the total gross receipts of the assessee was assessed to tax being a total income of the assessee without allowing the deduction of various expenditures which were part of the return of income. Thus, there is an apparent mistake from the order of CPC passed under section 143(1) however, the illegality or a mistake in the order of tax authorities itself cannot be a ground to be considered as reasonable cause for delay of 1950 days in filing the appeal. The CPC issued intimation under section 143(1) on 27.3.2017 which was also communicated to the assessee on the same date and therefore, the limitation reckons from the said date to file the appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... available only when the assessee has explained the cause of delay upto 15th March, 2020. In the absence of any explanation by the assessee for non-filing of the appeal before the CIT(A) or any petition under section 154 of the Income Tax Act the assessee was not able to explain the reasonable cause for inordinate delay in filing the appeal before the CIT(A). The CIT(A) has passed a speaking order and came to the conclusion that the assessee has failed to explain the reasonable cause for the delay of 1950 days in filing the appeal. The fact remains same before us as the assessee is not able to explain a reasonable cause for delay at least from April, 2017 to March, 2020 for not taking any steps for filing the appeal before the CIT(A). Accordingly, in the facts and circumstances of the case, we do not find any reason to interfere with impugned order of the CIT(A) and the same is upheld. Since the CIT(A) has dismissed the appeal of the assessee in limine on the maintainability of the appeal being barred by limitation and not decided the merits of the assessment therefore, in view of our finding upholding the order of the CIT(A) on condonation of delay, the other grounds raised by the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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