Refusing to condone delay can result in a meritorious matter thrown out at threshold

Refusing to condone delay can result in a meritorious matter thrown out at very threshold against case being decided on merits after hearing the parties 

In a recent judgment, ITAT Mumbai has condoned the delay in filing appeal observing that Hon’ble Supreme Court had held that refusing to condone delay can result in a meritorious matter being thrown out at the very threshold. As against this, when delay is condoned, the highest that can happen is that a cause would be decided on merits after hearing the parties

ABCAUS Case Law Citation:
4973 (2026) (01) abcaus.in ITAT

Important Case Laws relied upon by Parties:
Collector, Land Acquisition v. Mst. Katiji
Vedabai alias Vaijayantabai Baburao Patil v. Shantaram Baburao Patil
Improvement Trust v. Ujagar Singh
Phoenix Mills Ltd. v. ACIT
Kamyab Television Pvt. Ltd. v. PCIT
SRK Construction Projects
Lava International Ltd. v. CBDT

In the instant case, the assessee had challenged the order passed by the CIT(A), National Faceless Appeal Centre (NFAC) in dismissing the appeal preferred by the assessee as being barred by limitation without considering the application seeking condonation of delay and the reasons stated therein.

Before the Tribunal, the assessee submitted that the CIT(A) erred in law and on facts by dismissing the appeal as time-barred under Section 249(2) of the Act.

It was contended that despite the appellant having filed a condonation petition explaining sufficient cause for the delay of 162 days in filing the appeal, the CIT(A) incorrectly observed that condonation petition had not been filed nor any reason had been given for delay in filing of appeal,

It was submitted that the letter for Condonation of Delay was submitted along with Form 35. The oversight by CIT(A) rendered the order perverse and liable to be set aside.

It was submitted that the delay was attributable to bona fide reasons beyond the appellant’s control as the assessee was an individual not well-versed in tax laws and entirely dependent on professional advice, remained unaware of the appeal deadline until engaging a new tax consultant.

It was further submitted that the initial appeal filed was rejected by NFAC due to inadvertent procedural lapses (e.g., failure to upload condonation letter correctly), leading to a procedural delay of 16 days for rectification and fresh filing.  That the appellant had entrusted all income tax matters to a consultant who failed to inform about the assessment order and notice of demand, despite being responsible for monitoring communications via the e-filing portal.

Thus, it was submitted that delay was unintentional and attributable to negligence of the previous consultant, coupled with the appellant’s lack of expertise, constituting sufficient cause under Section 249(3).

It was also submitted that CIT(A)’s reliance on Delhi High Court judgment was misplaced, as that case involved no extraordinary circumstances, whereas in the instant case, the appellant’s procedural errors, consultant’s negligence, and timely rectification constitute sufficient cause.

The Tribunal observed that CIT(A) rejected the application seeking condonation of delay holding that explanation offered by the Assessee was vague and unsupported by verifiable facts. The CIT(A) observed that ignorance of law was no excuse and therefore, the assessee had failed to meet the threshold the sufficient cause required for condoning delay.

The Tribunal further noted that on perusal of application seeking condonation of delay filed by the Assessee before the CIT(A) the assessee had explained that the appeal was dismissed on account of fact that the tax consultant engaged by assessee and entrusted that taking care of income tax matters had failed to take necessary steps. The assessee claimed that he was not familiar with the tax laws procedures and was dependent upon the tax consultant who had failed to inform regarding the passing of the assessment order and the limitation of filing the appeal.

The Tribunal further observed that while the CIT(A) had rejected the aforesaid explanation as being vague and unsupported by verifiable facts, there was nothing on record to doubt the explanation offered by the assessee. It had not been disputed by the Revenue that the assessee was dependent upon the previous tax consultancy for taking care of tax matters. The CIT(A) had not doubted the bonafides of the assessee and has rejected the explanation observing that ignorance of law is no excuse.

The Tribunal noted that Hon’ble Supreme Court has held that the while dealing with the issue of condonation of delay, emphasized that substantial justice should prevail over technical considerations. Every day’s delay must be explained does not mean that a pedantic approach should be taken and that the aforesaid doctrine must be applied in a rational common sense and pragmatic manner, more so in circumstances where a litigant does not stand to benefit by lodging the appeal late (as is the present case).

The Tribunal noted that the Hon’ble Supreme Court has observed that refusing to condone delay can result in a meritorious matter being thrown out at the very threshold. As against this, when delay is condoned, the highest that can happen is that a cause would be decided on merits after hearing the parties.

The Tribunal accepting the explanation given by the Assessee to be reasonable, held that in assessee was prevented by the sufficient cause from filing the present appeal before the CIT(A) within the prescribed time.

Accordingly, the Tribunal condoned the delay of 162 days in filing appeal before the CIT(A). The impugned order was set aside with the directions to CIT(A) to adjudicate the grounds raised by the assessee in appeal on merits after granting the Assessee a reasonable opportunity of being heard.

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