JURIMATRIX SERVICES INDIA PRIVATE LIMITED,BENGALURU V. ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE 4(3)(1), BENGALURU

ITA 92/BANG/2025

AI Insights

Jurimatrix Services India Private Limited filed an appeal against the order of the PCIT dated 30.03.2023, which was passed under section 263 of the Income Tax Act, 1961, for the assessment year 2018-19. The appeal was filed with a significant delay of 596 days, for which the assessee submitted a condonation petition. The main contention was that the appeal filed before the CIT(A) against the consequential order passed by the AO under sections 144 r.w.s. 263 was not at the correct forum. The Tribunal, referencing a Supreme Court judgment, emphasized the importance of adhering to the statutory provisions of limitation and dismissed the appeal due to the absence of sufficient cause for the delay. Furthermore, the Tribunal observed that the grounds of appeal did not directly challenge the order under section 263, leading to the dismissal of the appeal on this ground as well.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 708512 (ITAT-BANGALORE)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-07-2025
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Assessment Year: 2018-2019
• Other Referred Cases: Pathapati Subba Reddy (Died) by L.Rs. & Ors. v. The Special Deputy Collector (LA)
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: NEHA SAHAY
• Assessee Lawyers: K.R. GIRISH
• Keywords: Condonation of delay; Reasonable cause; Period of limitation; Revision of order
• Section: 144; 263

Judgement Text

"ITA No.92/Bang/2025 Jurimatrix Services India Private Limited, Bangalore IN THE INCOME TAX APPELLATE TRIBUNAL “A’’BENCH: BANGALORE BEFORE SHRI WASEEM AHMED, ACCOUNTANT MEMBER AND SHRI KESHAV DUBEY, JUDICIAL MEMBER ITA No.92/Bang/2025 AssessmentYears:2018-19 Jurimatrix Services India Pvt. Ltd. G4, Aspen Building Manyata Embassy Business Park Hebbal Bangalore 560045 PAN NO : AABCJ6157D Vs. ACIT Circle 4(3)(1) Bangalore APPELLANT RESPONDENT Appellant by : Sri K.R. Girish, A.R. Respondent by : Ms. Neha Sahay, D.R. Date of Hearing : 21.04.2025 Date of Pronouncement : 15.07.2025 O R D E R PER KESHAV DUBEY, JUDICIAL MEMBER: This appeal at the instance of the assessee is directed against the order of the ld. PCIT dated 30.03.2023 vide DIN & Order No. ITBA/REV/F/REV5/2022-23/1051648832(1) passed u/s 263 of the Income Tax Act, 1961 (in short “the Act”) for the assessment year 2018-19. 2. The assessee has raised the following grounds of appeal: ITA No.92/Bang/2025 Jurimatrix Services India Private Limited, Bangalore Page 2 of 19 ITA No.92/Bang/2025 Jurimatrix Services India Private Limited, Bangalore Page 3 of 19 3. At the outset, there is a delay of 596 days in filing this appeal before this Tribunal. The assessee has filed an affidavit along with a condonation petition explaining the reasons for filing the appeal belatedly which are reproduced below for ease of reference and convenience: ITA No.92/Bang/2025 Jurimatrix Services India Private Limited, Bangalore Page 4 of 19 ITA No.92/Bang/2025 Jurimatrix Services India Private Limited, Bangalore Page 5 of 19 ITA No.92/Bang/2025 Jurimatrix Services India Private Limited, Bangalore Page 6 of 19 ITA No.92/Bang/2025 Jurimatrix Services India Private Limited, Bangalore Page 7 of 19 ITA No.92/Bang/2025 Jurimatrix Services India Private Limited, Bangalore Page 8 of 19 ITA No.92/Bang/2025 Jurimatrix Services India Private Limited, Bangalore Page 9 of 19 ITA No.92/Bang/2025 Jurimatrix Services India Private Limited, Bangalore Page 10 of 19 ITA No.92/Bang/2025 Jurimatrix Services India Private Limited, Bangalore Page 11 of 19 4. On going through the above, the main contention of the assessee is that after filing the appeal before the ld. CIT(A)/NFAC against the Order of the AO passed u/s 144 r.w.s. 263 of the Act, the assessee company basis an independent advice wishes to file the present appeal before ITAT against the order issued u/s 263 of the Act as the assessee was of the view that the appeal filed before ld. CIT (A) could be construed as not been filed at the correct forum. The assessee company was informed that since the genesis of the dispute in the case on hand emanates from the order passed by the ld. PCIT u/s 263 of the Act. Therefore, all the proceedings in consequence of the order of ld. PCIT u/s 263 of the Act including assessment order served u/s 144 r.w.s. 263 of the Act cannot be challenged until and unless the proceedings u/s 263 of the Act are agitated by the assessee before the ITAT and hence the AR of the assessee submitted that there is a Bonafide and reasonable cause for the assessee company in not filing the appeal before this Tribunal within time allowed under the Act, which is evident from the fact that the company was pursuing alternate remedy available under the Act and appeared before the AO for consequential ITA No.92/Bang/2025 Jurimatrix Services India Private Limited, Bangalore Page 12 of 19 assessment proceedings and hence it may not treated as a case of “negligence” of the assessee. 5. The ld. D.R. fervently objected for condoning the substantial delay in the absence of any sufficient cause demonstrated by the assessee and prayed to dismiss the appeal in limine. 6. We have heard the rival submissions and perused the materials available on record. 6.1. It is worthwhile here to mention that u/s. 253(5) of the Act, the Tribunal may admit the appeal filed beyond the period of limitation where it is established that there exist a sufficient cause on the part of the assessee for not presenting the appeals within the prescribed time. The explanation therefore becomes relevant to determine whether the same reflects sufficient cause on the part of the assessee in not filing the appeal within the prescribed time. 6.2 As can be seen from the above, the assessee has filed this appeal belatedly before this Tribunal as the assessee was of the view that the appeal filed before ld. CIT (A) against the consequential Order passed by the AO u/s 144 r.w.s. 263 of the Act could be construed as not been filed at the correct forum. The assessee company was informed that since the genesis of the dispute in the case on hand emanates from the order passed by the ld. PCIT u/s 263 of the Act. Therefore, all the proceedings in consequence of the order of ld. PCIT u/s 263 of the Act including assessment order served u/s 144 r.w.s. 263 of the Act cannot be challenged until and unless the proceedings u/s 263 of the Act are agitated by the assessee before the ITAT. 6.3 At this juncture, it is pertinent to mention the judgment of the Hon’ble Supreme Court in the case of Pathapati Subba Reddy (Died) by L.Rs. & Ors. v. The Special Deputy Collector (LA) in ITA No.92/Bang/2025 Jurimatrix Services India Private Limited, Bangalore Page 13 of 19 Special Leave Petition (Civil) No.31248 of 2018 dated 08.04.2024 wherein it is observed as under:- “6. The moot question before us is whether in the facts and circumstances of the case, the High Court was justified in refusing to condone the delay in filing the proposed appeal and to dismiss it as barred by limitation. 7. The law of limitation is founded on public policy. It is enshrined in the legal maxim “interest reipublicae ut sit finis litium” i.e. it is for the general welfare that a period of limitation be put to litigation. The object is to put an end to every legal remedy and to have a fixed period of life for every litigation as it is futile to keep any litigation or dispute pending indefinitely. Even public policy requires that there should be an end to the litigation otherwise it would be a dichotomy if the litigation is made immortal vis-a- vis the litigating parties i.e. human beings, who are mortals. 8. The courts have always treated the statutes of limitation and prescription as statutes of peace and repose. They envisage that a right not exercised or the remedy not availed for a long time ceases to exist. This is one way of putting to an end to a litigation by barring the remedy rather than the right with the passage of time. 9. Section 3 of the Limitation Act in no uncertain terms lays down that no suit, appeal or application instituted, preferred or made after the period prescribed shall be entertained rather dismissed even though limitation has not been set up as a defence subject to the exceptions contained in Sections 4 to 24 (inclusive) of the Limitation Act. 10. Section 3(1) of the Limitation Act, for the sake of convenience, is reproduced herein below: “3. Bar of limitation.- (1) Subject to the provisions contained in sections 4 to 24 (inclusive), every suit instituted, appeal preferred, and application made after the prescribed period shall be dismissed, although limitation has not been set up as a defence.” 11. Though Section 3 of the Act mentions about suit, appeal and application but since in this case we are concerned with appeal, we would hereinafter be mentioning about the appeal only in context with the limitation, it being barred by time, if at all, and if the delay in its filing is liable to be condoned. 12. In view of the above provision, the appeal which is preferred after the expiry of the limitation is liable to be dismissed. The use of the word ‘shall’ in the aforesaid provision connotes that the dismissal is mandatory subject to the exceptions. Section 3 of the Act is peremptory and had to be given effect to even though no objection regarding limitation is ITA No.92/Bang/2025 Jurimatrix Services India Private Limited, Bangalore Page 14 of 19 taken by the other side or referred to in the pleadings. In other words, it casts an obligation upon the court to dismiss an appeal which is presented beyond limitation. This is the general law of limitation. The exceptions are carved out under Sections 4 to 24 (inclusive) of the Limitation Act but we are concerned only with the exception contained in Section 5 which empowers the courts to admit an appeal even if it is preferred after the prescribed period provided the proposed appellant gives ‘sufficient cause’ for not preferring the appeal within the period prescribed. In other words, the courts are conferred with discretionary powers to admit an appeal even after the expiry of the prescribed period provided the proposed appellant is able to establish ‘sufficient cause’ for not filing it within time. The said power to condone the delay or to admit the appeal preferred after the expiry of time is discretionary in nature and may not be exercised even if sufficient cause is shown based upon host of other factors such as negligence, failure to exercise due diligence etc. 13. It is very elementary and well understood that courts should not adopt an injustice- oriented approach in dealing with the applications for condonation of the delay in filing appeals and rather follow a pragmatic line to advance substantial justice. 14. It may also be important to point out that though on one hand, Section 5 of the Limitation Act is to be construed liberally, but on the other hand, Section 3 of the Limitation Act, being a substantive law of mandatory nature has to be interpreted in a strict sense. In Bhag Mal alias Ram Bux and Ors. vs. Munshi (Dead) by LRs. and Ors. 1, it has been observed that different provisions of Limitation Act may require different construction, as for example, the court exercises its power in a given case liberally in condoning the delay in filing the appeal under Section 5 of the Limitation Act, however, the same may not be true while construing Section 3 of the Limitation Act. It, therefore, follows that though liberal interpretation has to be given in construing Section 5 of the Limitation Act but not in applying Section 3 of the Limitation Act, which has to be construed strictly. 15. It is in the light of the public policy upon which law of limitation is based, the object behind the law of limitation and the mandatory and the directory nature of Section 3 and Section 5 of the Limitation Act that we have to examine and strike a balance between Section 3 and Section 5 of the Limitation Act in the matters of condoning the delay. 16. Generally, the courts have adopted a very liberal approach in construing the phrase ‘sufficient cause’ used in Section 5 of the Limitation Act in order to condone the delay to enable the courts to do substantial justice and to apply law in a meaningful manner which subserves the ends of justice. In Collector, Land Acquisition, Anantnag and Ors. vs. Katiji and Ors., this Court in advocating the liberal approach in condoning the delay for ITA No.92/Bang/2025 Jurimatrix Services India Private Limited, Bangalore Page 15 of 19 ‘sufficient cause’ held that ordinarily a litigant does not stand to benefit by lodging an appeal late; it is not necessary to explain every day’s delay in filing the appeal; and since sometimes refusal to condone delay may result in throwing out a meritorious matter, it is necessary in the interest of justice that cause of substantial justice should be allowed to prevail upon technical considerations and if the delay is not deliberate, it ought to be condoned. Notwithstanding the above, howsoever, liberal approach is adopted in condoning the delay, existence of ‘sufficient cause’ for not filing the appeal in time, is a condition precedent for exercising the discretionary power to condone the delay. The phrases ‘liberal approach’, ‘justice oriented approach’ and cause for the advancement of ‘substantial justice’ cannot be employed to defeat the law of limitation so as to allow stale matters or as a matter of fact dead matters to be revived and re-opened by taking aid of Section 5 of the Limitation Act. 17. It must always be borne in mind that while construing ‘sufficient cause’ in deciding application under Section 5 of the Act, that on the expiry of the period of limitation prescribed for filing an appeal, substantive right in favour of a decree-holder accrues and this right ought not to be lightly disturbed. The decree-holder treats the decree to be binding with the lapse of time and may proceed on such assumption creating new rights. 18. This Court as far back in 1962 in the case of Ramlal, Motilal And Chhotelal vs. Rewa Coalfields Ltd has emphasized that even after sufficient cause has been shown by a party for not filing an appeal within time, the said party is not entitled to the condonation of delay as excusing the delay is the discretionary jurisdiction vested with the court. The court, despite establishment of a ‘sufficient cause’ for various reasons, may refuse to condone the delay depending upon the bona fides of the party. 19. In Maqbul Ahmad and Ors. vs. Onkar Pratap Narain Singh and Ors.4, it had been held that the court cannot grant an exemption from limitation on equitable consideration or on the ground of hardship. The court has time and again repeated that when mandatory provision is not complied with and delay is not properly, satisfactorily and convincingly explained, it ought not to condone the delay on sympathetic grounds alone. 20. In this connection, a reference may be made to Brijesh Kumar and Ors. vs. State of Haryana and Ors.5 wherein while observing, as above, this Court further laid down that if some person has obtained a relief approaching the court just or immediately when the cause of action had arisen, other persons cannot take the benefit of the same by approaching the court at a belated stage simply on the ground of parity, equity, sympathy and compassion. 21. In Lanka Venkateswarlu vs. State of Andhra Pradesh & Ors.6, where the High Court, despite unsatisfactory explanation for the delay of 3703 days, had allowed the ITA No.92/Bang/2025 Jurimatrix Services India Private Limited, Bangalore Page 16 of 19 applications for condonation of delay, this Court held that the High Court failed to exercise its discretion in a reasonable and objective manner. High Court should have exercised the discretion in a systematic and an informed manner. The liberal approach in considering sufficiency of cause for delay should not be allowed to override substantial law of limitation. The Court observed that the concepts such as ‘liberal approach’, ‘justice-oriented approach’ and ‘substantial justice’ cannot be employed to jettison the substantial law of limitation. 22. It has also been settled vide State of Jharkhand & Ors. vs. Ashok Kumar Chokhani & Ors. , that the merits of the case cannot be considered while dealing with the application for condonation of delay in filing the appeal. 23. In Basawaraj and Anr. vs. Special Land Acquisition Officer, this Court held that the discretion to condone the delay has to be exercised judiciously based upon the facts and circumstances of each case. The expression ‘sufficient cause’ as occurring in Section 5 of the Limitation Act cannot be liberally interpreted if negligence, inaction or lack of bona fide is writ large. It was also observed that even though limitation may harshly affect rights of the parties but it has to be applied with all its rigour as prescribed under the statute as the courts have no choice but to apply the law as it stands and they have no power to condone the delay on equitable grounds. 24. It would be beneficial to quote paragraph 12 of the aforesaid decision which clinches the issue of the manner in which equilibrium has to be maintained between adopting liberal approach and in implementing the statute as it stands. Paragraph 12 reads as under: “12. It is a settled legal proposition that law of limitation may harshly affect a particular party but it has to be applied with all its rigour when the statute so prescribes. The Court has no power to extend the period of limitation on equitable grounds. “A result flowing from a statutory provision is never an evil. A Court has no power to ignore that provision to relieve what it considers a distress resulting from its operation.\" The statutory provision may cause hardship or inconvenience to a particular party but the court has no choice but to enforce it giving full effect to the same. The legal maxim dura lex sed lex which means \"the law is hard but it is the law\", stands attracted in such a situation. It has consistently been held that, “inconvenience is not” a decisive factor to be considered while interpreting a statute.” 25. This Court in the same breath in the same very decision vide paragraph 15 went on to observe as under: ITA No.92/Bang/2025 Jurimatrix Services India Private Limited, Bangalore Page 17 of 19 “15. The law on the issue can be summarised to the effect that where a case has been presented in the court beyond limitation, the applicant has to explain the court as to what was the “sufficient cause” which means an adequate and enough reason which prevented him to approach the court within limitation. In case a party is found to be negligent, or for want of bona fide on his part in the facts and circumstances of the case, or found to have not acted diligently or remained inactive, there cannot be a justified ground to condone the delay. No court could be justified in condoning such an inordinate delay by imposing any condition whatsoever. The application is to be decided only within the parameters laid down by this Court in regard to the condonation of delay. In case there was no sufficient cause to prevent a litigant to approach the court on time condoning the delay without any justification, putting any condition whatsoever, amounts to passing an order in violation of the statutory provisions and it tantamounts to showing utter disregard to the legislature.” (emphasis supplied) 26. On a harmonious consideration of the provisions of the law, as aforesaid, and the law laid down by this Court, it is evident that: (i) Law of limitation is based upon public policy that there should be an end to litigation by forfeiting the right to remedy rather than the right itself; (ii) A 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; (iii) The provisions of the Limitation Act have to be construed differently, such as Section 3 has to be construed in a strict sense whereas Section 5 has to be construed liberally; (iv) In order to advance substantial justice, though liberal approach, justice-oriented approach or cause of substantial justice may be kept in mind but the same cannot be used to defeat the substantial law of limitation contained in Section 3 of the Limitation Act; (v) Courts are empowered to exercise discretion to condone the delay if sufficient cause had been explained, but that exercise of power is discretionary in nature and may not be exercised even if sufficient cause is established for various factors such as, where there is inordinate delay, negligence and want of due diligence; (vi) Merely some persons obtained relief in similar matter, it does not mean that others are also entitled to the same benefit if the court is not satisfied with the cause shown for the delay in filing the appeal; (vii) Merits of the case are not required to be considered in condoning the delay; and ITA No.92/Bang/2025 Jurimatrix Services India Private Limited, Bangalore Page 18 of 19 (viii) Delay condonation application has to be decided on the parameters laid down for condoning the delay and condoning the delay for the reason that the conditions have been imposed, tantamounts to disregarding the statutory provision.” 6.4 We, therefore taking the support & guidance from the above observations of the Hon’ble Supreme Court in the case of Pathapati Subba Reddy (Died) by L.Rs. & Ors. v. The Special Deputy Collector (LA) (Supra), are of the unequivocal view that there was absence of “sufficient cause”, within the meaning of Section 253(5) of I.T. Act, for not presenting the appeal within period referred to in Section 253(3) of I.T. Act, leading us unhesitatingly to reject assessee’s request for condonation of delay in filing of this appeal within time prescribed U/s 253(3) of I.T. Act. In our Opinion, sufficient cause and grounds have not been made out to condone the delay and hence the application for condonation of delay is dismissed. 7. Further, on going through the grounds of appeal, we take a note of the fact that the all the grounds raised by the assessee in the present appeal are against the consequential order passed by the AO u/s 144 r.w.s. 263 of the Act dated 23/03/2024 & not against the Order passed by the ld. PCIT dated 30/03/2023 u/s 263 of the Act. Therefore, we are of the considered opinion that the assessee company has no grievance against the order dated 30/03/2023 passed by the ld. PCIT u/s 263 of the Act. Our opinion also gets support from the averments made by the assessee that the grounds of appeal raised before us are same as raised in the appeal filed before the ld. CIT(A)/NFAC against the Order of assessment passed u/s 144 r.w.s. 263 of the Act. Further, on going through the application for the condonation of delay, the assessee also submitted that the assessee company did not raise any grounds relating to adjustments proposed by ld. PCIT in the appeal filed before us. Therefore, on this ground alone also the appeal is liable ITA No.92/Bang/2025 Jurimatrix Services India Private Limited, Bangalore Page 19 of 19 to be dismissed as the assessee company is not aggrieved by the Order of ld. PCIT passed u/s 263 of the Act. 8. In the result, appeal of the assessee is dismissed. Order pronounced in the open court on 15th July, 2025 Sd/- (Waseem Ahmed) Accountant Member Sd/- (Keshav Dubey) Judicial Member Bangalore, Dated 15th July,2025. VG/SPS Copy to: 1. The Applicant 2. The Respondent 3. The CIT 4. The DR, ITAT, Bangalore. 5 Guard file By order Asst. Registrar, ITAT, Bangalore. "