2025 (6) TMI 134 - AT - Income Tax

Delay of 893 days in filing the appeal before the Tribunal - HELD THAT -Inordinate delay of 893 days appears to be completely due to negligence and want of due diligence on the part of the assessee. We find that even after the dismissal of its appeal by the CIT(A) on the grounds of delay and receipt of the impugned order dated 22/05/2022 on the same date the assessee appears to have not taken any serious steps for avoiding any delay in filing the further appeal before the Tribunal. Its appeal before the learned CIT(A) was delayed by only 66 days however the present appeal is delayed by as much as 893 days. We are of the considered view that the mere fact that the assessee does not have any full-time accountant does not in any manner absolve the assessee being an appellant from taking the necessary steps for filing the appeal within the prescribed limitation period before the Tribunal. Therefore in light of the decision of the Hon ble Supreme Court Pathapati Subba Reddy (Died) by L.Rs. Ors. v/s The Special Deputy Collector (LA) 2024 (5) TMI 1319 - SUPREME COURT we do not find any merit in the submissions of the assessee in seeking condonation of the delay of 893 days in filing the present appeal.Accordingly the same is dismissed as being barred by limitation.

Summary

1. ISSUES PRESENTED and CONSIDERED

The core legal questions considered by the Tribunal in this appeal are:

(a) Whether the delay of 893 days in filing the appeal before the Tribunal is liable to be condoned under the provisions of the Limitation Act, 1963;

(b) Whether the assessee has demonstrated "sufficient cause" for the delay in filing the appeal beyond the prescribed limitation period;

(c) The applicability and interpretation of the principles laid down by the Hon'ble Supreme Court regarding condonation of delay and limitation in appeals;

(d) Whether the appeal should be admitted despite the inordinate delay, or dismissed as barred by limitation;

(e) The treatment of the assessee's reasons for delay, including the absence of a full-time accountant and reliance on precedents;

(f) Whether the merits of the appeal are relevant for deciding the condonation of delay application.

2. ISSUE-WISE DETAILED ANALYSIS

(a) Delay of 893 Days and Condonation under the Limitation Act

The Tribunal examined the delay of 893 days in filing the appeal before it, which was filed well beyond the prescribed limitation period of 60 days from the date of receipt of the impugned order. The assessee sought condonation of delay relying primarily on the affidavit of the Chairman of the society, stating that the delay was due to the absence of a full-time accountant and was unintentional.

The Tribunal referred to the authoritative pronouncement of the Hon'ble Supreme Court in Pathapati Subba Reddy (Died) by L.Rs. & Ors. v/s The Special Deputy Collector (LA), which elucidates the law relating to limitation and condonation of delay. The Court emphasized that Section 3 of the Limitation Act mandates dismissal of appeals presented beyond limitation, while Section 5 confers discretionary power to condone delay if "sufficient cause" is shown.

The Supreme Court's interpretation was highlighted, particularly para-26, which sets out eight principles guiding the exercise of discretion, including that the law of limitation is based on public policy to bring litigation to an end, that Section 3 must be construed strictly whereas Section 5 liberally, but discretion to condone delay is not to be exercised mechanically or merely because some others obtained relief.

(b) Sufficiency of Cause for Delay

The Tribunal scrutinized the reasons advanced by the assessee for the delay. The affidavit cited only the absence of a full-time accountant and the assertion that the delay was beyond control. No other substantial reasons or mitigating circumstances were presented. There was no explanation for why the appeal was not filed within the limitation period despite receiving the impugned order on 22/04/2022 and the dismissal of the appeal by the learned CIT(A) on grounds of delay.

The Tribunal noted that the delay in filing the appeal before the CIT(A) was only 66 days, whereas the delay before the Tribunal was 893 days, indicating a lack of due diligence. The Tribunal observed that mere absence of a full-time accountant does not absolve the appellant from taking necessary steps to file the appeal timely. The Tribunal found the delay attributable to negligence and lack of due diligence rather than any unavoidable circumstance.

(c) Application of Supreme Court Precedents

The Tribunal applied the principles from the Supreme Court judgment, particularly emphasizing that:

• "Courts are empowered to exercise discretion to condone the delay if sufficient cause had been explained, but that exercise of power is discretionary in nature and may not be exercised even if sufficient cause is established for various factors such as, where there is inordinate delay, negligence and want of due diligence."
• "Merits of the case are not required to be considered in condoning the delay."
• "Merely some persons obtained relief in similar matter, it does not mean that others are also entitled to the same benefit if the court is not satisfied with the cause shown for the delay."

The Tribunal found that the assessee failed to meet the threshold of "sufficient cause" and that the delay was inordinate and unjustified.

(d) Treatment of Competing Arguments

The assessee's argument that the delay was unintentional and due to the absence of a full-time accountant was considered insufficient. The Tribunal rejected the reliance on precedents where delay was condoned in other cases, noting that each case must be decided on its own facts and the cause shown. The Tribunal also noted that the learned CIT(A) had earlier dismissed the appeal on grounds of delay and was not satisfied with the reasons, reinforcing the Tribunal's view.

(e) Final Determination on Delay and Appeal

Considering the above, the Tribunal concluded that the delay of 893 days was not satisfactorily explained, and the appeal was barred by limitation. Accordingly, the appeal was dismissed on the ground of delay. However, the Tribunal kept open the issues raised in the grounds of appeal for adjudication in any future proceedings, if they arise.

3. SIGNIFICANT HOLDINGS

The Tribunal, relying heavily on the Supreme Court's authoritative exposition, held as follows:

"Section 3 of the Limitation Act, 1963 casts an obligation upon the court to dismiss an appeal which is presented beyond limitation. The courts are conferred with discretionary powers under Section 5 of the Limitation Act to admit an appeal even after the expiry of the prescribed period, provided the proposed appellant is able to establish 'sufficient cause' for not filing it within time."

"The said power to condone the delay or to admit the appeal preferred after the expiry of time is discretionary in nature and may not be exercised even if sufficient cause is shown based upon various factors such as negligence, failure to exercise due diligence, etc."

"Merits of the case are not required to be considered in condoning the delay."

"The mere fact that the assessee does not have any full-time accountant does not in any manner absolve the assessee, being an appellant, from taking the necessary steps for filing the appeal within the prescribed limitation period before the Tribunal."

"The inordinate delay of 893 days appears to be completely due to negligence and want of due diligence on the part of the assessee."

Accordingly, the Tribunal dismissed the appeal as barred by limitation, emphasizing the importance of strict adherence to limitation periods and the discretionary nature of condonation of delay. The Tribunal's decision underscores the principle that procedural compliance and promptness in filing appeals are fundamental to the administration of justice and that leniency will not be extended in absence of sufficient cause.