IMAGE TOWNSHIP AND DEVELOPERS PVT. LTD.,DELHI V. INCOME TAX OFFICER, DELHI

ITA 5032/DEL/2024

AI Insights

The case involves Image Township and Developers Pvt. Ltd., the appellant, contesting an order from the National Faceless Appeal Centre (NFAC), which dismissed their appeal as time-barred without considering the merits. The original dispute arose from an assessment order under the Income-tax Act, 1961, for the assessment year 2012-13. The appellant argued that the delay in filing the appeal was justified and that the CIT(A) erred in considering the delay from the date of the order rather than from the receipt of the certified copy of the assessment order. The NFAC upheld the dismissal due to the alleged delay, leading to the current appeal before the Income Tax Appellate Tribunal.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 22853 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-02-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2012-2013
• Other Referred Cases: R.B. Ramlingam Petitioner vs R.B. Bhavaneshwari, CIT vs. Ram Mohan Kabra, Surinder Kumar Boveja vs. CWT, Tulsidas V. Patel (P.) Ltd. Vs. Deputy Commissioner of Income Tax, Tractors & Farm Equipment Ltd., T. Kishnan
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANAND BHASKAR
• Keywords: Condonation of delay; Opportunity of being heard; Reasonable cause; Onus to prove; Period of limitation; Ignorance of law; Principle of natural justice; Validity of assessment
• Section: 148

Judgement Text

" 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘C’, NEW DELHI BEFORE SH.SHAMIM YAHYA, ACCOUNTANT MEMBER AND SH. SUDHIR KUMAR, JUDICIAL MEMBER ITA No.5032/Del/2024 Assessment Year: 2012-13 Image Township and Developers Pvt. Ltd. RZ-230, Portion East Saiyad, Nagloi PAN No.AABC15990F Vs. ITO Delhi (APPELLANT) (RESPONDENT) Appellant by None Respondent by Sh. Anand Bhaskar, Sr. DR Date of hearing: 20/02/2025 Date of Pronouncement 20/02/2025 ORDER PER SUDHIR KUMAR, JM: This appeal by the assessee is directed against the order of the National Faceless Appeal Centre (in short “NFAC”), Delhi vide order dated 30.08.2024 pertaining to A.Y. 2012-13 pertaining to arises out of the assessment order dated 2 05.12.2019 of the Income – tax Act, 1961 [hereinafter referred as ‘the Act’]. 2. The assessee has raised the following grounds in appeal : 1. 1(1) That on facts and circumstances of the case, the Ld. CIT(A) was not justified in dismissing the appeal on the ground of limitation without appreciating that there is no case of any delay in filing of appeal. (ii) That the appeal having been filed within the period of 30 days counted from the date of receipt of certified copy of the assessment order, the CIT(A) has erred in considering the delay from the date of order. (iii) That the impugned order dismissing the appeal in limine is illegal and in contravention of principles of natural justice. 2(i) That on facts and circumstances of the case, the CIT(A) has erred in upholding the assessment order without adjudicating the ground regarding validity of assessment order u/s 147/144 even though the notice u/s 148 was arbitrary and without recording valid reasons. (ii) That in absence of proper approval u/s 151, the notice u/s 148 is illegal and not sustainable under law. 3(i) That on facts and circumstances of the case, the CIT(A) was not justified in the upholding the assessment order without adjudicating the ground regarding correctness of addition of 3 Rs. 19,90,000/- made on the alleged ground of commission income in respect of entries appearing the bank account even though the same is purely based on conjectures and surmises. (ii) That the assessee company being engaged in genuine business activities, the allegation of accommodation entry provider in the assessment order is whimsical and not based on any adverse evidence or material. (iii) That entries in the bank account being wholly for the for the purpose of business and duly accounted for in the books of account, the adverse inference is highly mechanical and arbitrary basis. 4. That the orders passed by lower authorities are sustainable on facts and bad in law. 3. Aggrieved by the order of the AO, the assessee has filedthe appeal before the NFAC. The NFAC has dismissed the appeal of the assessee by observing as under : 2.1 Decision on condonation of delay 2.1 DECISION ON CONDONATION OF DELAY: I have gone through the factsof the case. As per the provisions of section 249(3) of the Act, there should be sufficient cause for the appellant for not presenting the appeal within the time allowed. The relevant provisions read as under: - \"The CIT(A) may admit an appeal after the expiration of the said period if he is satisfied that 4 the appellant had sufficient cause for not presenting it within that period\". Under section reason for the delay being shown, admit an appeal after the expiry of the period of 249(3) of the Act, the appellate authority may, on-good and sufficient reason for the delay being shown, admit an appeal after expiry of the period of limitation. 2.2 In condoning the delay the appellate authority must be satisfied that there has been due diligence on the part of the appellant and it was not guilty of negligence. The sufficient cause within the contemplation of these provisions must be a cause which is beyond the control of the party invoking the aid of the provisions. 2.3 The Hon'ble Supreme Court in the case of R.B. Ramlingam Petitioner vs R.B. Bhavaneshwari vide order dated 13.1.2009 (2009) (SC2) GJX 106 (SC), on this matter has held as under: \"Section 5 of the Limitation Act, 1963 does not lay down any standard or objective test. The test of \"sufficient cause\" is purely an individualistic test. It is not an objective test. Therefore, no two cases can be treated alike. The statute of Limitation has left the concept of \"sufficient cause\" delightfully undefined, thereby leaving to the Court a well- intentioned discretion to decide the individual cases 5 whether circumstances exist establishing sufficient cause. There are no categories of sufficient cause. The categories of sufficient cause are never exhausted. Each case spells out a unique experience to be dealt with by the Court as such” 2.4 While deciding the prayer for condonation of delay, the court cannot ignore of give a go-by to the basic principle that de burden to prove the existence of sufficient cause is always on the appellant, and there is no presumption that the delay occasioned in the filing of the appeal is always bona fide and the condonation of delay is not the matter of right. The law of limitation is prescribed by the Income Tax Act under the provisions of section 249(3) of the Act which envisages that there should have been a sufficient cause for not presenting the appeal within that period as prescribed. The applicant has failed to show sufficient cause for condonation of delay. Even though a liberal approach has to be adopted, but that does not mean that any plea without any plausible or acceptable basis and not even bearing semblance or rationality has to be accepted, and delay has to be condoned. That shall be against the very spirit of law. Prescription of time limit for filling appeals u/s 249(3) of the I.T. Act would become meaningless in such event. At the same time, the appellant must show that he was diligent all along 6 in taking appropriate steps and the delay was caused notwithstanding his due diligence and if he appears to be guilty of laches or negligence and does not take appropriate steps for pursuing his remedy then he must be prepared to have his remedy barred without expecting condonation. Still, it is the party concerned to explain the reasons for delay and it is not the function of the appellate authority to find the cause of the delay. The sufficient cause envisaged in section 249(3) has to be shown by the appellant before a quasi-judicial authority objectively used its discretion. The Punjab & Haryana High Court in the case of CIT vs. Ram Mohan Kabra (2002) 257 ITR 773 (R & H) held as under: \"The provisions relating to prescription of limitation in every statute must not be construed so liberally that it would have the effect of taking away the benefit accruing to the other party in a mechanical manner. Where the legislature spells out a period of limitation, and provides for power to condone the delay as well, there such delay can be condoned only for sufficient and good. reasons supported by cogent and proper evidence. Now, it is a settled principle of law that the provisions relating to specified period of limitation must be applied with their rigour and effective consequences.\" 7 2.5 The Delhi High Court in the case of Surinder Kumar Boveja vs. CWT (2006) 287 ITR 52 (Del) held as under: \"In order to get condonation of delay in filing of an appeal, a party has to show sufficient cause. Sufficient cause means a cause beyond the control of the party e.g., a mistake made in good faith in respect of exercise of due care and attention. But where there is want of due care and attention or want of due diligence or sufficient cause the delay cannot be condoned. The appellant was satisfied with the relief granted by CWT(A). After being satisfied with the relief granted by CWT(A), he did not prefer an appeal against the order. However the IT Department preferred the appeal against the order of CWT(A) before the Tribunal. Even during the arguments, appellant supported the order of CWT(A) and stated that the order be not reversed. Appellant chose to prefer an appeal against the order of CWT(A) only after the order of the Tribunal making some observation in his favour came. A party who had been content with the order and due to that reason has not preferred an appeal, cannot later on, on seeing some observation in a judgment or a finding about the law cannot plead that the delay be condoned of the entire period for which the 8 party had felt contented and not preferred an appeal. The appellant did not prefer an appeal against the order of CWT(A) for about five years in one case and for about one and half year in another case. Ignorance of law, appellant's neglect or failure to seek legal advice is not sufficient ground for condonation of delay. Ignorance of law is no excuse and Court cannot consider ignorance of law or mistake of law as sufficient cause for condonation of delay. If candonation is allowed on such ground, then there would be no end to the litigation and a party can prefer an appeal against an order at any point di/time after find some observation in a judgment subsequently delivered by a higher forum. Therefore, the Tribunal was right in dismissing the appeal on the ground of limitation 2.6 Further, the language used in section 249(3) is \"sufficient cause\" and not \"reasonable cause 'Sufficient cause is much more stringent that the term 'reasonable cause and even if a cause is reasonable, it has to be ascertained whether it was a sufficient cause or not. It has already been discussed above that for qualifying u/s 249(3) for condonation of delay, the appellant must show that he was diligent all along with taking appropriate steps, and the delay was caused notwithstanding his due diligence; and if he appears to be guilty of 9 lapses or negligence, then he must be prepared to have his remedy barred without expecting condonation. 2.7 Reference is also drawn to the Hon'ble Bombay High Court order in Tulsidas V. Patel (P.) Ltd. Vs. Deputy Commissioner of Income Tax [reported in 93 taxmann.com 210 (Bombay)] wherein it has been held that: No doubt one should be liberal in dealing with the application for condonation of delay. However, one must at the same time keep in mind that condoning of the delay should not result in accrued rights of the other party being defeated by setting the clock back. The Applicant has been negligent in prosecuting their Appeal. We are not satisfied with the reasons indicated in the Affidavit in Support seeking condonation of delay. Thus, we see no reason to condone such gross delay of over thirteen years. 2.8 Judicial Authorities have time and again held that in condoning delay in filing appeal, it must be proved beyond shadow of doubt that assessee was diligent and was not guilty of negligence whatsoever. Reference is drawn to Tractors & Farm Equipment Ltd. [2007] 104 ITD 149 (Chennai) TM and ITAT Hyderabad in the case of T. Kishnan [2012] 23 taxmann.com 383 (Hyderabad). 2.9 In light of above legal position and judicial pronouncements, it is a settled position that in case 10 of delay the assessee has to make out a case of having sufficient cause, and producing evidences towards the same strengthness the plea of the assessee. However, in this case, the assessee has failed to produce any evidence, far from it has not even cared to file the condonation petition alongwith the documentary evidences in a proper format/ affidavit. 3. On the basis of the circumstances of the case as narrated above, it is held that the appellant has not made a case for having “sufficient cause” for delay in filing appeal. The appeal is held to be invalid and non-maintainable being out of time. Since the appeal is being dismissed on the threshold, there is no comments made on the merits. Accordingly, in the result the appeal is dismissed in limine. For statistical purposes, the appeal is dismissed.” 4. Aggrieved by the order of the NFAC, the assessee is in appeal before us. 5.No body attended the proceedings on behalf of the assessee. ld. DR supported the orders of the authorities below. 6. We have heard the arguments of Ld. DR and gone through the material available on record. In this case Ld. CIT(A) has 11 observed that no application has been movedby assessee for condonation of delay and dismissed the appealas treatedtime barred. In the interest of justice and fair play, the assessee be given one more opportunity of being heard. Ifthe assessee moved, any application for condonation of delay or orally argue the matter than Ld. CIT(A) will dispose the application in accordance with law after giving appropriate opportunity of being heard to the assessee. 7. In the result, the appeal of the assessee is allowed for statistical purposes. The order pronounced in the open court on 20.02.2025. Sd/- Sd/- (SHAMIM YAHYA) (SUDHIR KUMAR) ACCOUNTANT MEMBER JUDICIAL MEMBER *NEHA, Sr. PS* Date:- 20.02.2025 Copy forwarded to: 1.Appellant 2.Respondent 3.CIT 4.CIT(Appeals) ` 5.DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI "