2025 (6) TMI 1921 - AT - Income Tax

Delay of 100 days in filing of present appeal by the revenue before the ITAT - sufficient cause of delay - HELD THAT - The reasons given by the AO would not constitute the sufficient cause the averments made by the AO are general in nature. This reminds us to the judgement of Living Media India Ltd. wherein 2012 (4) TMI 341 - SUPREME COURT held Condonation of delay is an exception and should not be used as an anticipated benefit for government departments. The law shelters everyone under the same light and should not be swirled for the benefit of a few. Considering the fact that there was no proper explanation offered by the Department for the delay except mentioning of various dates according to us the Department has miserably failed to give any acceptable and cogent reasons sufficient to condone such a huge delay. Recently the apex court in the case of Mool Chandra Vs. UOI 2024 (8) TMI 1528 - SUPREME COURT has held that it is not the length of the delay rather the cause behind the delay which is to be seen while condoning the delay. In view of these observations of the apex court we are constrained to dismiss the present appeal of the revenue as barred by limitation. Since we have already dismissed the appeal of the revenue.

Summary

The core legal questions considered by the Tribunal in this appeal pertain primarily to the issue of delay in filing the appeal by the revenue before the Appellate Tribunal and whether the reasons advanced for such delay constitute "sufficient cause" warranting condonation of the delay under the applicable legal provisions. A consequential issue arises regarding the maintainability of the appeal itself, given the delay. The cross objection filed by the assessee also becomes relevant only if the appeal is admitted.

The principal issue can be summarized as follows:

• Whether the delay of 100 days in filing the appeal by the revenue before the Tribunal can be condoned on the ground of "sufficient cause" as per the legal standards governing limitation and condonation of delay?

Regarding this issue, the Tribunal undertook a detailed analysis grounded in the relevant legal framework, judicial precedents, and the facts presented by the parties.

Relevant Legal Framework and Precedents:

The Tribunal referred to the statutory provisions and judicial principles governing limitation and condonation of delay. It relied heavily on recent authoritative pronouncements by the Supreme Court, which have clarified the approach to be adopted in condoning delay. Notably, the Tribunal cited the Supreme Court's observations in a recent case dated 8.1.2025, which emphasized that rules of limitation are designed to prevent dilatory tactics and ensure promptness in seeking remedies, rather than to destroy substantive rights. The Court underscored that while a liberal, justice-oriented approach is desirable, it cannot be used to frustrate the law of limitation.

Further reliance was placed on the Supreme Court's judgment in the Office of the Chief Post Master Vs. Living Media India Ltd. (348 ITR 7), where the apex court held that government departments cannot claim a separate or extended period of limitation merely because of bureaucratic procedures or workload. The Court emphasized that government agencies bear a special obligation to perform their duties diligently and that condonation of delay is an exception, not a rule. The Court rejected generalized or vague explanations such as heavy workload or procedural red tape as sufficient cause for condoning delay.

Additionally, the Tribunal noted the Supreme Court's ruling in Mool Chandra Vs. UOI (2024), which clarified that the cause of delay, rather than the length of delay, is the critical factor in deciding condonation applications.

Court's Interpretation and Reasoning:

The Tribunal carefully examined the reasons advanced by the Assessing Officer (AO) for the delay, which included the heavy workload due to time-barred assessments, penalty work, scrutiny reports, grievance redressal, and the merging of multiple wards. The AO contended these factors were beyond his control and led to unintentional delay.

However, the Tribunal found these reasons to be generalized and insufficient to constitute "sufficient cause." The Tribunal underscored that mere workload or procedural delays do not justify condonation, especially when modern technology and administrative systems are in place. The Tribunal highlighted that the AO's explanation lacked any plausible or acceptable justification demonstrating bona fide efforts to file the appeal within time.

The Tribunal also analyzed the legal principle that government departments are under a heightened duty to adhere to limitation timelines and cannot rely on bureaucratic inertia as an excuse. It observed that the Supreme Court has repeatedly cautioned against using "liberal approach" to condone delays without credible reasons.

Key Evidence and Findings:

The primary evidence consisted of the AO's application for condonation of delay and the reasons therein. The Tribunal noted the absence of any detailed or specific explanation beyond citing workload and procedural complexities. The Tribunal also considered the submissions of both parties, including the assessee's strong opposition to condonation.

Application of Law to Facts:

Applying the stringent standards laid down by the Supreme Court, the Tribunal concluded that the reasons offered were inadequate to meet the threshold of "sufficient cause." The Tribunal emphasized that the delay was neither caused by any exceptional circumstance nor supported by bona fide efforts to comply with limitation.

Treatment of Competing Arguments:

The revenue's argument for condonation rested on the AO's workload and procedural delays, supported by prior High Court decisions. The assessee countered that these reasons are routine and do not amount to sufficient cause. The Tribunal sided with the assessee's position, reinforced by the Supreme Court's recent rulings, and rejected the revenue's plea for condonation.

Conclusions:

The Tribunal concluded that the appeal filed by the revenue was barred by limitation and that the delay could not be condoned. Consequently, the appeal was dismissed on grounds of delay. As a result, the cross objection filed by the assessee was rendered infructuous and also dismissed.

Significant Holdings:

The Tribunal's decision affirms the principle that:

• "Rule of limitation are not meant to destroy the rights of parties, they are meant to see that the parties do not resort to dilatory tactics but seek their remedy promptly."
• "The concept such as 'liberal approach, justice-oriented approach, substantial justice' should not be employed to frustrate or jettison the substantial law of limitation."
• "Government departments are under a special obligation to ensure that they perform their duties with diligence and commitment. Condonation of delay is an exception and should not be used as an anticipated benefit for government departments."
• "Unless there is a reasonable and acceptable explanation for the delay and bona fide effort, the usual explanation of procedural red tape or workload cannot be accepted."

In the words of the Tribunal, quoting the apex court:

"It is the right time to inform all the government bodies, their agencies and instrumentalities that unless they have reasonable and acceptable explanation for the delay and there was bonafide effort, there is no need to accept the usual explanation that the file was kept pending for several months/years due to considerable degree of procedural red tape in the process."

The final determination was to dismiss the revenue's appeal as barred by limitation and to dismiss the assessee's cross objection accordingly.