Supreme Court declines to entertain inordinate delay of seven/six years in filing appeal by shifting responsibility of delay on counsel- SLP dismissed
In a recent judgment, Hon’ble Supreme Court dismissed the SLP against the judgment of the High Court upholding the ITAT order that shifting responsibility of delay of seven/six years in filing appeal on counsel was not right and it was otherwise the duty of the assessee to watch its affairs.
ABCAUS Case Law Citation:
4737 (2025) (09) abcaus.in SC
In the instant case, the petitioner assessee had challenged the order passed by the Hon’ble High Court in upholding the order of the Income Tax Appellate Tribunal whereby the appeals preferred by the assessee were dismissed being time barred.
Against the assessment orders for two Assessment Years, the first appeal of the assessee was dismissed by the CIT(A) by an ex parte decision.
Against the dismissal of both appeals by CIT(A), the second appeals before the Tribunal was filed after whopping delay of seven and six years respectively.
Before the Tribunal, the assessee filed an affidavit of the previous counsel advocate stating that he was dealing assessee’s income-tax affairs and the impugned order was handed over to him for filing appeal before ITAT; that he gave order to office staff for preparation and submission of appeal but due to ignorance on the part of his staff the appeal could not be filed in time; that the concerned staff is no longer associated with him and left service without updating the pendency.
Further, it was submitted that the assessee had taken all steps to file said two appeals in time through his counsel but due to lapse on the part of counsel, the appeals could not have been filed. It was submitted that the delay was solely attributable to counsel and not to assessee who was associated with the assessee till three years before filing appeal to the Tribunal.
It was also submitted that it was only when the assessee received orders of CIT(A) in connected penalty matters u/s 271(1)(c) and consulted with a different counsel for filing of appeals in penalty matters that the assessee came to know that the counsel had not filed appeals against impugned orders. Immediately thereafter, the assessee arranged to file appeals before the Tribunal alongwith appeals in penalty matters.
Thus, it was contended that the previous counsel’s lapse constituted a “sufficient cause” and there was no lethargy or negligence on the part of assessee in making delay in filing present appeals. Relying upon decisions of Hon’ble Supreme Court, Bombay HC and ITAT, Delhi the assessee prayed to condone the delay.
The Tribunal observed that the Hon’ble Supreme Court in the landmark judgment held in favour of condonation of delay in appropriate situations.
The Tribunal opined that it is equally true that the condonation request has to be dealt with great caution and care and it should not result in giving concession to an erring assessee.
The Tribunal observed that though the assessee was claiming that the delay in filing has occurred solely due to lapse of counsel but the fact is that the assessee had also contributed to a large extent in the process of delay.
The Tribunal noted that as pointed out by the Revenue, the assessee had filed appeals of other following two years and even at that stage, had not taken care to enquire and see the status of those appeals. This clearly showed lethargic attitude of assessee.
The Tribunal observed that Hon’ble Supreme Court had dealt an identical situation where the main excuse of delay in filing of appeal was in reference to the Late Managing Partner of the firm who was said to be suffering from many ailments. However, there was nothing on record to show that he was suffering from ailments and was such an ailment which did not permit him to take initiative for filing of appeal. Under these circumstances, the Hon’ble Supreme Court held that it was otherwise duty of the assessee to watch the affairs of its firm.
The Tribunal noted that grossly negligent attitude of assessee is further discernible from the fact that the assessee received impugned orders seven/six years back and wasn’t it a duty of assessee to enquire from his counsel about filing status of appeal against former order received way back?
The Tribunal opined that had the assessee exercised any care at that stage itself, he would have not only rushed to file appeal against impugned order with a smaller delay but also could ensure timely filing of appeal against order. However, the assessee did not exercise any such care even at stage and only continued with its negligent or lethargic attitude. Therefore, the assessee was also a contributor in causing delay in filing.
The Tribunal further observed that in a recent judgement the Madras High Court where the Court held that discretion to condone the delay has to be exercised judiciously based on facts and circumstances of each case and that, the expression ‘sufficient cause’ cannot be liberally interpreted, if negligence, inaction or lack of bona fides is attributed to the party. In the present case, the petitioner/appellant has not given ‘sufficient cause’ for condoning the huge delay of 1072 days in filing the appeals. The High Court declined to condone the delay of more than 1000 days and held that the assessee can not suddenly woke up from slumber like Rip Wan Winkle and prayed to condone the delay in filing the appeals.
As a result, the Tribunal dismissed the appeals.
Not satisfied, the assessee filed further appeal to the Hon’ble High Court and contended that ITAT had committed error in not condoning the delay. It was submitted that the condonation of delay applications were filed before the ITAT on the ground that appellant promptly handed over the documents to the counsel and the professional expert grossly failed to take action for which the appellant Company should not be penalized.
The Hon’ble High Court observed that assessee relied upon several judgments wherein it was held by the Apex Court and High Courts that well settled legal principle is that expression ‘sufficient cause’ should receive liberal consideration so as to advance the cause of justice. The expression ‘sufficient cause’ as appearing in Section 5 of Limitation Act should receive liberal construction, when the delay is not on account of any dilatory tactics, want of bonafides, deliberate inaction or negligence on the part of the appellant, in order to advance substantial justice. The word ‘sufficient cause’ for not making the application within the period of limitation should be understood and applied in a reasonable, pragmatic, practical and liberal manner, depending upon the facts and circumstances of the case.
The Hon’ble High Court noted that in the instant case, ITAT had considered the reasons offered by appellant caused in filing appeals belatedly, but due to lack of bonafides impugnable to parties seeking condonation of delay, reasons were not found sufficient and consequently, delay was not condoned. ITAT had relied upon the judgment delivered by the Supreme Court wherein the Court held that it was otherwise the duty of the assessee to watch the affairs of its firm and delay of few days or months can be considered, but delay of years is required to be examined minutely.
The Hon’ble High Court further noted that ITAT had held that there was gross negligence attitude of the assessee and assessee was aware of the orders passed by CIT (A) even though assessee has not excercised any care to enquire about status of second appeal and tried to shift the responsibility towards his lawyer. The assessee was negligent and his act was lethargic. The findings recorded by ITAT appeared to be just and proper.
The Hon’ble High Court thus held that there was no infirmity in the finding recorded by ITAT in the impugned order.
Accordingly, the appeals were also dismissed by the Hon’ble High Court.
Not satisfied, the assessee filed a Special Leave Petition (SLP) before the Hon’ble Supreme Court challenging the order of the High Court.
However, the Hon’ble Supreme Court dismissed the SLP with following observations,
“Having heard the learned counsel appearing for the petitioner and having gone through the materials on record, we see no reason to interfere with the impugned order passed by the High Court. The Special Leave Petition is, accordingly, dismissed.”
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