2025 (4) TMI 1045 - HC - Income Tax

Delay of 161 days in filing the appeal before the ITAT - appellant has assigned the reason that the CIT (Appeals) had dismissed the appeal vide its order dated 21.03.2022 and uploaded the order on ITBA portal about which the appellant was not aware and he came to know about this development while filing Tax Audit Report for assessment year 2022-23 and therefore he could not prefer an appeal right in time HELD THAT - The Supreme Court vide its Order in the matter of Vidya Shankar Jaiswal 2025 (1) TMI 1526 - SC ORDER while setting aside the order of this Court rejecting the appeal on the ground of delay has held that the High Court ought to have adopted justice oriented and liberal approach by condoning the delay. In view of above and also for the reason shown by the assessee/appellant herein coupled with the fact that though the application of the appellant was supported by the affidavit but the Revenue did not file any counter-affidavit controverting the reason assigned by the assessee and as such the delay of 161 days occurred in filing the appeal remained uncontroverted and also for the reason that the assessee was not aware of order passed by the CIT(Appeals) as it was only uploaded on ITBA portal therefore the sufficient cause has been show by the assessee/appellant for the delay of 161 days occurred in filing the appeal. Accordingly the delay of 161 days occurred in filing the appeal deserves to be and is hereby condoned. The matter is remitted back to the ITAT for deciding the appeal on merits.

1. ISSUES PRESENTED and CONSIDERED

The core legal question considered by the Court was whether the Income Tax Appellate Tribunal (ITAT) was justified in dismissing the appellant's appeal on the ground that no sufficient cause was shown for the delay of 161 days in filing the appeal, particularly when the ITAT's finding was alleged to be perverse to the record. This raised the broader issue of the criteria and approach to be adopted by appellate authorities in condoning delay in filing appeals under the Income Tax Act, 1961.

2. ISSUE-WISE DETAILED ANALYSIS

Issue: Whether sufficient cause was shown for condonation of delay of 161 days in filing appeal before ITAT?

Relevant legal framework and precedents: The matter falls under the procedural provisions of the Income Tax Act, 1961, specifically concerning appeals under Section 260A and the power of appellate authorities to condone delay in filing appeals. The Court referred to the Supreme Court's decision in Vidya Shankar Jaiswal v. The Income-Tax Officer, which emphasized a justice-oriented and liberal approach in condoning delays, especially where the delay is explained and uncontroverted.

Court's interpretation and reasoning: The Court examined the appellant's explanation that the delay occurred because the appellant was unaware of the CIT (Appeals) order dated 21.03.2022, which was uploaded on the ITBA portal but not brought to the appellant's notice. The appellant only became aware of the order while filing the Tax Audit Report for the assessment year 2022-23, after which the appeal was promptly filed.

Key evidence and findings: The appellant supported the application for condonation of delay with an affidavit explaining the cause of delay. The Revenue did not file any counter-affidavit to dispute this explanation, leaving the appellant's reasons uncontroverted. The Court noted the absence of any contrary evidence challenging the appellant's claim of ignorance of the order.

Application of law to facts: Applying the principle from the Supreme Court judgment, the Court held that the delay was sufficiently explained and the appellant's ignorance of the order due to its mere uploading on the portal constituted a sufficient cause. The Court underscored the need for a liberal and justice-oriented approach rather than a rigid and technical one in condoning delay.

Treatment of competing arguments: While the Revenue supported the impugned order dismissing the appeal for delay, the Court found the ITAT's dismissal to be perverse in light of the uncontroverted explanation and the absence of any counter-evidence. The Court preferred the appellant's explanation and the principle of substantial justice over procedural technicalities.

Conclusions: The Court concluded that the appellant had shown sufficient cause for the delay of 161 days and that the ITAT's order dismissing the appeal on this ground was not justified. Consequently, the delay was condoned.

3. SIGNIFICANT HOLDINGS

The Court held that "the High Court ought to have adopted justice oriented and liberal approach by condoning the delay," quoting the Supreme Court's direction in Vidya Shankar Jaiswal. It emphasized that where the delay is explained by the appellant and remains uncontroverted by the Revenue, the delay should be condoned to advance substantial justice.

The Court stated, "the sufficient cause has been show[n] by the assessee/appellant for the delay of 161 days occurred in filing the appeal," particularly considering that the appellant was unaware of the CIT (Appeals) order as it was only uploaded on the ITBA portal.

Accordingly, the Court set aside the ITAT's order dismissing the appeal for delay and remitted the matter back to the ITAT for adjudication on merits, directing that the appeal be decided at the earliest. The appeal was allowed to the extent of condoning the delay, with parties bearing their own costs.

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