Delay of 1 and ½ years in filing appeal cannot be considered as inordinate delay – ITAT

Delay of 1 and ½ years cannot be considered as inordinate delay unless negligence or want of due diligence on the part of assessee is shown – ITAT 

In a recent judgment, ITAT Cuttack while condoning the delay in filing appeal observed that delay of 1 and ½ years cannot be considered as inordinate delay unless negligence or want of due diligence on the part of assessee is shown.

ABCAUS Case Law Citation:
4364 (2025) (01) abcaus.in ITAT

In the instant case, the assessee had challenged the order passed by the CIT(A) NFAC in dismissing the appeal in limine on account of non-condonation of delay. 

The assessee was a charitable Institution. There were delays of 1331 days and one year respectively in filing the appeal before the CIT(A) in respect of two financial years.

Before the Tribunal the appellant contended that the delay in filing appeals before the CIT(A) for both the assessment years was on account of illness and subsequent demise of the Accountant of the assessee. 

It was also the submission that when filing the appeal before the Tribunal for the one assessment year the delay was of only 24 days and for the another assessment year delay was of only 132 days.  It was the submission that this delay was on account of the illness/hospitalization of the Chairman of the assessee trust. 

It was also the submission that from the CIT(A), admittedly, no notice had been received by the assessee and consequently, the assessee was unable to give further explanation for the delay. 

It was prayed that the delay in filing in both the appeals may be condoned and issues restored to the file of the CIT(A) for adjudication on merits.

In reply, the CIT (DR) submitted that though the assessee had made various claims such as illness and subsequent demise of the Accountant, the details of the period of illness of the Accountant much less the name of the Accountant who was deceased not provided.  It was the further submission that in respect of delay in filing of appeal before the Tribunal though there is a claim that the Chairman of the Trust was hospitalized due to cardiac problem but no medical certificate and evidence had been produced.

It was the submission of the Revenue that in respect of issue of condonation of delay, the Hon’ble Supreme Court interpreted various earlier decisions of the Hon’ble Supreme Court on the aspect/principles of condonation of delay and has laid down various principles / conditions none of which was complied with by the assessee.

The Tribunal observed that the decision of the Hon’ble Supreme Court was in respect of Limitation Act which specifically does not apply to the Income Tax Act, 1961.  However, the principles laid down by the Hon’ble Supreme Court in respect of the issues of limitation being the Rule of Law can also be considered.  A perusal of the principles laid down by the Hon’ble Supreme Court shows that firstly, there should be an end to litigation by forfeiting the right to remedy rather than the right itself.  In the present case, clearly the fact that the assessee had filed its appeal and has disputed the demand created on it itself showed that it had not forfeited its right to the remedy. The second principle is that the right or the remedy that has not been exercised or availed of for a long time must come to an end or cease to exist after a fixed period of time.  In the present case, the Hon’ble Supreme Court itself in its suo moto order had extended the period of limitation on account of Covid.

The Tribunal further observed that the next principle was that in order to advance substantial justice, the law of limitation should not be defeated.  A perusal of present case showed that the assessee had challenged the intimation and the rectification application which had been rejected by the Revenue. A perusal of the intimation shows that under the guise of intimation for rectification of mistake, entire expenditures incurred by the assessee which are nothing but the application of income have been disallowed bringing to tax the entire receipts of an Organisation.  How and under which principles of mistake apparent from the record, the entire receipts get disallowed in intimation without verification.  Admittedly, the liberal approach is called for from the Court. 

Coming to the next principles laid down by the Hon’ble Supreme Court that Courts are empowered to exercise discretion to condone the delay if sufficient cause had been explained and the Courts have also the powers to refuse to apply the discretion even if sufficient cause is provided for such as, where there is inordinate delay, negligible and want of due diligence.  The Tribunal noted that in the present case, admittedly, if the Covid period was removed, the delay in respect of one assessment year would be nearly 1 and ½ years and for the other assessment year delay it would be nearly one year.  These cannot be considered as inordinate delay nor has shown any cause to raise the issue of negligence or want of due diligence on the assessee.  

The Tribunal opined that the issue of limitation cannot be very strictly applied unless it shows that there has been negligence or there has been failure of due diligence by the assessee when it has filed appeal before the Appellate Forum.  In these circumstances, looking into the facts of the case and considering the fact that the assessee had categorically mentioned the delay in filing appeal before the CIT(A) was on account of the illness of the Accountant and subsequent demise, we are of the view that the assessee has shown reasonable cause.  The affidavit filed by the assessee in respect of reasons for the delay before the Tribunal had also not found to be false. 

Accordingly, the delay in filing of appeal before the Tribunal was condoned and heard. The delay in filing appeal before the CIT(A) was also condoned and the issues on merits were restored to the file of the CIT(A) for adjudication after granting the assessee adequate opportunity of being heard. 

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