2025 (7) TMI 119 - AT - Income Tax

Delay in filing the appeal before CIT(A) - sufficient cause for delay - eligible reasons for delay of 175 days - HELD THAT - Hon ble Supreme Court in Sambhaji and Ors V Gangabai and Ors 2008 (11) TMI 393 - SUPREME COURT has held that the object of prescribing procedure is to advance the cause of justice. In an adversial justice system no party should ordinarily be denied the opportunity of participating in the process of justice dispensation. Unless compelled by express and specific language of the statute the procedural enactment ought not to be construed in a manner which would leave the court helpless to meet extra ordinary situations in the ends of justice. Justice is the goal of jurisprudence. Procedural law is always subservient to and is in aid to justice. Any interpretation which eludes or frustrates the recipient of justice is not to be followed. Processual law is not to be tyrant but a servant not an obstruction but an aid to justice. A procedural prescription is the handmaid and not the mistress lubricant not a resistance in the administration of justice. In view of this and in the interest of justice we find sufficient cause to condone the delay caused in filing the first appeal before the ld. CIT(Appeals). In the result the appeal is allowed for statistical purposes. The impugned order dated 28.02.2023 is set aside. The delay in filing the first appeal before first appellate authority i.e CIT(A) stands condoned.

Summary

1. ISSUES PRESENTED and CONSIDERED

- Whether the delay in filing the appeal before the first appellate authority (CIT(A)) can be condoned despite being beyond the statutory limitation period under section 249(2) of the Income-tax Act, 1961?

- Whether the delay in filing the second appeal before the Appellate Tribunal (AT) can be condoned despite being significantly delayed beyond the prescribed period under section 250 of the Income-tax Act, 1961?

- Whether the first appellate authority erred in dismissing the first appeal solely on the ground of delay without considering the medical and other sufficient cause submitted by the assessee for the delay?

- Whether the matter should be remanded back to the first appellate authority for fresh adjudication on merits after condoning the delay?

2. ISSUE-WISE DETAILED ANALYSIS

Issue 1: Condonation of delay in filing the first appeal before CIT(A) under section 249(2) and (3)

Relevant legal framework and precedents: Section 249(2) of the Income-tax Act mandates that an appeal to the CIT(A) must be filed within 30 days from the date of receipt of the assessment order. Section 249(3) empowers the CIT(A) to condone delay if satisfied that the appellant had sufficient cause for not filing the appeal within the prescribed period. The Supreme Court in Sambhaji and Ors v Gangabai and Ors emphasized that procedural laws are subservient to justice and should not be interpreted rigidly to deny an opportunity to be heard, especially in extraordinary circumstances. The Court held that procedural requirements are aids to justice, not obstacles.

Court's interpretation and reasoning: The Tribunal noted that the assessee filed the first appeal on 16.09.2022 against the assessment order dated 23.02.2022, resulting in a delay of 175 days beyond the due date of 22.03.2022. The assessee submitted medical grounds, including critical illness and post-Covid complications, supported by affidavit and medical evidence, explaining the inability to file the appeal timely. Although the first appellate authority was not convinced to condone the delay, the Tribunal found the reasons sufficient cause in light of the Supreme Court's guidance that procedural rules should not thwart justice.

Key evidence and findings: The delay condonation application and affidavit detailed the assessee's critical health issues from 20.03.2022 to 11.09.2022 (noting a typographical error in the original document). Medical evidence was produced before the first appellate authority but was not accepted. The Tribunal found these facts uncontroverted and credible.

Application of law to facts: Applying the principles from the Supreme Court, the Tribunal held that the delay in filing the first appeal should be condoned as the assessee had sufficient cause, namely severe health issues and illiteracy, which prevented timely filing.

Treatment of competing arguments: The Department supported the dismissal of the appeal on grounds of delay. However, the Tribunal prioritized the interest of justice and the principle that procedural laws should not be a tyrant but a servant to justice, thereby overruling the first appellate authority's rejection.

Conclusions: The Tribunal condoned the delay in filing the first appeal before CIT(A) and set aside the impugned order dismissing the appeal on delay grounds.

Issue 2: Condonation of delay in filing the second appeal before the Appellate Tribunal under section 250

Relevant legal framework: Section 250 of the Income-tax Act prescribes the time limit for filing appeals before the Tribunal and empowers it to condone delay if sufficient cause is shown.

Court's interpretation and reasoning: The appeal before the Tribunal was filed on 28.03.2025 against the impugned order dated 28.02.2023, resulting in a delay of approximately 699 days. The assessee submitted that the impugned order was communicated on 29.04.2023 and reiterated the medical complications and illiteracy as grounds for delay. An affidavit in support was filed and remained uncontroverted.

Key evidence and findings: The affidavit and delay condonation application detailed the serious health issues and lack of familiarity with tax matters. The Tribunal found these facts credible and sufficient to condone the delay.

Application of law to facts: The Tribunal applied the same principle of substantial justice and held that the delay in filing the appeal before the Tribunal should be condoned in the interest of justice.

Treatment of competing arguments: The Department opposed condonation, but the Tribunal prioritized the assessee's health-related hardships and the overarching principle of justice.

Conclusions: The Tribunal condoned the delay in filing the second appeal before itself.

Issue 3: Whether the first appellate authority erred in dismissing the appeal solely on the ground of delay

Court's reasoning: The Tribunal observed that the first appellate authority failed to appreciate the medical evidence and the affidavit submitted by the assessee. The dismissal of the appeal solely on the ground of delay without considering the merits or the sufficient cause was held to be erroneous.

Application of law to facts: The Tribunal emphasized that the principles of natural justice require that an opportunity be given to the assessee to present submissions on merits once the delay is condoned.

Conclusions: The impugned order dismissing the appeal on delay grounds was set aside, and the matter was remanded for fresh adjudication on merits after condoning the delay.

Issue 4: Remand for fresh adjudication on merits

Court's reasoning: The Tribunal directed the first appellate authority to pass a fresh order on merits in accordance with law and ensure substantial compliance with the principles of natural justice.

Conclusions: The matter was restored to the first appellate authority for fresh consideration after condoning the delay.

3. SIGNIFICANT HOLDINGS

"The object of prescribing procedure is to advance the cause of justice. In an adversial justice system, no party should ordinarily be denied the opportunity of participating in the process of justice dispensation. Unless compelled by express and specific language of the statute, the procedural enactment ought not to be construed in a manner which would leave the court helpless to meet extraordinary situations in the ends of justice. Justice is the goal of jurisprudence. Procedural law is always subservient to and is in aid to justice. Any interpretation which eludes or frustrates the recipient of justice is not to be followed. Processual law is not to be tyrant but a servant, not an obstruction but an aid to justice. A procedural prescription is the handmaid and not the mistress, lubricant, not a resistance in the administration of justice."

Core principles established include the primacy of justice over procedural technicalities, the discretion of appellate authorities to condone delay upon sufficient cause, and the necessity to afford an opportunity to be heard on merits once delay is condoned.

Final determinations:

• The delay in filing the first appeal before CIT(A) was condoned.
• The delay in filing the second appeal before the Tribunal was condoned.
• The impugned order dismissing the first appeal on delay grounds was set aside.
• The matter was remanded to the first appellate authority for fresh adjudication on merits in accordance with law and principles of natural justice.