NARESH KUMAR AGRAWAL, RAIGARH,RAIGARH V. INCOME TAX OFFICER, WARD-3, RAIGARH, RAIGARH

ITA 461/RPR/2024

AI Insights

The case involves Shri Naresh Kumar Agrawal, who appealed against the order of the Income Tax Officer (ITO), Ward-3, Raigarh, which included an addition of Rs.9,71,599 to his income for the assessment year 2017-18. The addition was made following a limited scrutiny assessment, which initially focused on cash deposits during the demonetization period. However, the ITO expanded the scope to include discrepancies in reported turnover. The CIT(Appeals) dismissed Agrawal's appeal due to a significant delay in filing, which the Tribunal upheld, emphasizing the lack of sufficient cause for the delay and the importance of adhering to statutory time limits.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 35784 (ITAT-RAIPUR)
• Duration Of Justice: 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-11-2024
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Next Hearing Date: 18-11-2024
• Assessment Year: 2017-2018
• Appeal Filed On: 21-10-2024
• Other Referred Cases: Perumon Bhagvathy Devaswom, Perinadu Village v. Bhargavi Amma (Dead) by LRs, Balwant Singh (Dead) v. Jagdish Singh, Shiv Dass v. Union of India (UOI) and Ors, University of Delhi Va Union of India & Ors, Pathapati Subba Reddy (Died) By Lrs And Ors vs Special Deputy Collector (La), Maqbul Ahmad and Ors vs. Onkar Pratap Narain Singh and Ors, Brijesh Kumar and Ors. vs. State of Haryana and Ors, Lanka Venkateswarlu vs. State of Andhra Pradesh & Ors, Basawaraj and Anr. vs. Special Land Acquisition Officer
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: MOHAL AGRAWAL
• Assessee Lawyers: VEEKAAS S SHARMA
• Keywords: Condonation of delay; Business income; Opportunity of being heard; Reasonable cause; Period of limitation; Principle of natural justice; Time period of passing order
• Section: 143(3); 143(2); 201; 12A

Judgement Text

"आयकर अपीलȣय अͬधकरण Ûयायपीठ “एक-सदèय” मामला रायपुर मɅ IN THE INCOME TAX APPELLATE TRIBUNAL RAIPUR BENCH “SMC”, RAIPUR Įी रवीश सूद, ÛयाǓयक सदèय क े सम¢ BEFORE SHRI RAVISH SOOD, JUDICIAL MEMBER आयकर अपील सं. / ITA No. 461/RPR/2024 Ǔनधा[रण वष[ / Assessment Year : 2017-18 Shri Naresh Kumar Agrawal Shri Ram Rice Mill, Junadih, At post Rapagula, Sarangarh-496 445 Raigarh (C.G.) PAN : ACHPA7179B .......अपीलाथȸ / Appellant बनाम / V/s. The Income Tax Officer Ward-3, Raigarh (C.G.) ……Ĥ×यथȸ / Respondent Assessee by : Shri Veekaas S Sharma, CA Revenue by : Shri Mohal Agrawal, Sr. DR सुनवाई कȧ तारȣख / Date of Hearing : 18.11.2024 घोषणा कȧ तारȣख / Date of Pronouncement : 19.11.2024 2 Shri Naresh Kumar Agrawal Vs. ITO, Ward-3, Raigarh ITA No. 461/RPR/2024 आदेश / ORDER PER RAVISH SOOD, JM: The present appeal filed by the assessee is directed against the order passed by the ADDL/JCIT(A)-3, Bengaluru, dated 03.09.2024, which in turn arises from the order passed by the A.O under Sec.143(3) of the Income-tax Act, 1961 (in short ‘the Act’) dated 14.12.2019 for the assessment year 2017-18. The assessee has assailed the impugned order on the following grounds of appeal: “1. On the facts and in the circumstances of the case, the Learned AO has erred on facts and in law in making addition of Rs.9,71,599/- in the course of limited scrutiny assessment inasmuch as the Learned Assessing Officer has travelled outside the scope of limited scrutiny assessment without following the procedure for converting assessee's limited scrutiny case to complete scrutiny as mandated vide CBDT Instruction No.5/2016 dated 14.07.2016 and consequently the entire assessment is void-ab-initio, bad-in-law and liable to be quashed and the Learned ADDL/JCIT(A)-3, Bengaluru has erred in dismissing the appeal on the ground of limitation, as such, the addition is contrary to facts, law and legislative intent, hence, it is prayed that the addition of Rs.9,71,599/- made by the Learned A.0 without jurisdiction may kindly be deleted. 2. The Appellant craves leave to add, amend, alter vary and /or withdraw any or all the above grounds of Appeal.” 2. Succinctly stated, the assessee had filed his return of income for A.Y.2017-18, declaring an income of Rs.7,76,060/-. Subsequently, the case of the assessee was selected for “limited scrutiny” as per CASS for examination of “cash deposits” made by the assessee during the year under consideration, Page 26-27 of APB. 3 Shri Naresh Kumar Agrawal Vs. ITO, Ward-3, Raigarh ITA No. 461/RPR/2024 3. During the course of the assessment proceedings, the A.O found the assessee’s claim that the cash deposits of Rs.7 lacs (supra) made by him during the demonetization period was sourced out of closing cash balance that was available with him as on 08.11.2016 in order and accepted the same. However, the assessee in the course of verification carried out by the A.O submitted that though he had disclosed his turnover in his return of income at Rs.93,46,866/- but the correct turnover amounted to Rs.2.18 crore. The A.O on verification of the bank statement found that the aforesaid claim of the assessee as regards his actual turnover was Rs.2.18 crore was found to be in order. At the same time, assessee’s claim that his business income be computed @ 6% of the gross receipts did not find favour with the A.O. Accordingly, the A.O computed the assessee’s business income @8% of his gross turnover of Rs.217.64 lacs, i.e. Rs.17,41,120/-. As the assessee had already offered income of Rs.7,69,521/- (on presumptive basis), therefore, the addition of balance amount of Rs.9,71,599/- was made by the A.O in the hands of the assessee. Accordingly, the A.O vide his order passed u/s.143(3) of the Act, 14.12.2019 after making the aforesaid addition determined the income of the assessee at Rs.17,47,659/-. 4. Aggrieved the assessee carried the matter in appeal before the CIT(Appeals). As the appeal filed by the assessee before the CIT(Appeals) involved a delay of two and half years, therefore, the latter holding a firm 4 Shri Naresh Kumar Agrawal Vs. ITO, Ward-3, Raigarh ITA No. 461/RPR/2024 conviction that the assessee had failed to come forth with any sufficient and reasonable cause which would justify the condonation of the inordinate delay involved in filing of the appeal before him, dismissed the same by observing as under: “5.1. Delay in filing of appeal: In the instant case, the appeal was filed by the Appellant on 23/06/2022 whereas the statutory time limit for filing of the appeal against the Assessment Order of the AO dated 14/12/2019 was 13/01/2020. The Appellant vide letter dated 20/06/2022 has submitted the reasons for delay in filing of the appeal filed after two and half years as under: 1. It is respectfully submitted that the limited Assessment proceedings u/s 143(3) of the Income Tax Act, 1961 for the year under consideration in case of the assessee was completed vide order dated 14.12.2019, the assessee being aggrieved with the addition of Rs. 9,71,599/- made by the Income Tax Officer Ward 3, Raigarh and therefore, preferring an appeal against the aforesaid addition. 2. It is respectfully submitted that the statutory time limit for filing of appeal within 30 days of service of assessment order in terms of provisions of Section 249(2)(b) expired on 13.01.2020, hence, vide this application u/s 249(3), the assessee most humbly prays before your honors to kindly condone the delay in filing of appeal as the assessee was prevented by reasonable cause in filing the appeal as detailed in the succeeding paragraphs. 3. It is respectfully submitted that the assessee on receipt of the assessment order u/s 143(3) of the Income Tax act, 1961 sought legal advice on the same from his previous counsel. 4. It is respectfully submitted that the assessee was w solely dependent upon the counsel for representing his case as the assessee was not familiar with the legal jargons and Income Tax laws. The previous counsel advised the assessee to accept the assessment 5 Shri Naresh Kumar Agrawal Vs. ITO, Ward-3, Raigarh ITA No. 461/RPR/2024 without preferring an appeal against the order passed u/s 143(3) dated 14.12.2019. The assessee on the basis of incorrect and inadvertent advise of the counsel accepted the assessment made by the Learned AO vide reply dated 10.12.2019 and 13.12.2019. The Learned AO thereafter initiated the penalty proceedings u/s 270A vide notice dated 26.03.2022 having reference number ITBA/PNL/S/270A/2019- 20/1022358234(1) and passed the final order vide order dated 26.03.2022 having reference number ITBA/PNL/F/270A/2021-22/1041581860(1) 5. However, upon receipt of penalty order vide letter dated 26.03.2022 having reference No. ITBA/PNL/F/270A/2021- 22/1041581860(1), the assessee consulted the undersigned for representing his case before your honors, the undersigned advised the assessee that the case of the assessee was selected for limited scrutiny to examine the cash deposit during the year and the addition was made to the total income on the issue other than the limited issue for which the notice w/s 143(2) of the Income Tax Act, 1961 was issued. The Learned Assessing officer has thus travelled outside the scope of limited scrutiny assessment without following the due process of law for converting assessee's limited scrutiny case to complete scrutiny without obtaining the permission from Principal Commissioner of income Tax. 6. The undersigned has been recently engaged as Authorised Representative for preparation and submission of Appeal (Form-35) online. 7. That it is due to incorrect and inadvertent advise of the previous counsel the assessee could not file appeal within the statutory time limit against the order u/s 143(3) of the Income Tax Act, 1961. 8. It is respectfully submitted that the assessee was prevented by reasonable cause from filing the appeal within the statutory limit and therefore, the assessee most humbly prays before your honors to kindly condone the delay in view of principles of natural justice. Kindly admit the appeal and which the assessee shall always remain obliged. 6 Shri Naresh Kumar Agrawal Vs. ITO, Ward-3, Raigarh ITA No. 461/RPR/2024 Submitted for your honor’s kind consideration. However, if your honors do not agree with the aforesaid submissions and if any adversity is sought to be held against the appellant in the above matter, then an opportunity of being heard may kindly be given to the appellant to submit his further defense. This request being in consonance with the principles of natural justice may kindly be acceded. 5.2. Another notice dated 30/08/2024 was issued to the Appellant seeking the following: It is observed that the assessment order in your case was passed on 14.12.2019 for the year under consideration making an addition of Rs.9,71,595 As per section 249 of the Act, you should have filed appeal before the First Appellate Authority on or before 13.01.2020. Even considering the fact that there was considerable uncertainty due to the Covid-19 Pandemic because of which the Govt. Of India had declared a country wide lockdown from the end of March 2020, in order to provide relief to the taxpayers to comply with the statutory matter under the Income Tax Act, the compliance date was extended on several occasions upto 31.05.2022 by the Hon'ble Supreme Court of India and therefore, the appeal in the instant case should have been filed on or before 31.05.2022. It is however seen that you chose to file an appeal only after the receipt of the penalty order u/s 270A. Thus, it prima facie appears that you did not have any reasonable cause for not filing the appeal within the stipulated time period or even the extended time limit owning to Covid-19 Pandemic. In view of the same you are hereby asked to explain why your application for condonation for delay in filing of the appeal should not be rejected. 5.3. In response to this the Appellant has uploaded the same submission dated 20/06/2022, which is reproduced herein under: Respected Sir/Madam, Under instructions from our aforesaid client, we respectfully submit before your honor as under:- 7 Shri Naresh Kumar Agrawal Vs. ITO, Ward-3, Raigarh ITA No. 461/RPR/2024 1. It is respectfully submitted that the limited Assessment proceedings u/s 143(3) of the Income Tax Act, 1961 for the year under consideration in case of the assessee was completed vide order dated 14.12.2019, the assessee being aggrieved with the addition of Rs.9,71,599/- made by the Income Tax Officer Ward 3, Raigarh and therefore, preferring an appeal against the aforesaid addition. 2. It is respectfully submitted that the statutory time limit for filing of appeal within 30 days of service of assessment order in terms of provisions of Section 249(2)(b) expired on 13.01.2020, hence, vide this application u/s 249(3), the assessee most humbly prays before your honors to kindly condone the delay in filing of appeal as the assessee was prevented by reasonable cause in filing the appeal as detailed in the succeeding paragraphs. 3. It is respectfully submitted that the assessee on receipt of the assessment order u/s.143(3) of the Income Tax act, 1961 sought legal advice on the same from his previous counsel. 4. It is respectfully submitted that the assessee was solely dependent upon the counsel for representing his case as the assessee not familiar with the legal jargons and Income Tax laws. The previous counsel advised the assessee to accept the assessment without preferring an appeal against the order passed a/s 143(3) dated 14.12.2019. The assessee on the basis of incorrect and inadvertent advise of the counsel accepted the assessment made by the Learned AO vide reply dated 10.12.2019 and 13.12.2019. The Learned AD thereafter initiated the penalty proceedings u/s 270A vide notice dated 26.03.2022 having reference number ITBA/PNL/S/270A/2019- 20/1022358234(1) and passed the final order vide order dated 26.03.2022 having reference number ITRA/PNL/F/2701/2021- 22/1041581860(1) 5. However, upon receipt of penalty order vide letter dated 26.03.2022 having reference No. ITHA/PNL/Y/270A/2021- 22/1041581860(1), the assessee consulted the undersigned for representing his case before your honors, the undersigned advised the assessee that the case of the assessee was selected for limited scrutiny to examine the cash deposit during the year and the addition was made to the total income on the issue other than the limited 8 Shri Naresh Kumar Agrawal Vs. ITO, Ward-3, Raigarh ITA No. 461/RPR/2024 issue for which the notice u/s 143(2) of the Income Tax Act, 1961 was issued. The Learned Assessing officer has thus travelled outside the scope of limited scrutiny assessment without following the due process of law for converting assessee's limited scrutiny case to complete scrutiny without obtaining the permission from Principal Commissioner of Income Tax. 6. The undersigned has been recently engaged as Authorised Representative for preparation and submission of Appeal (Form-35) online. 7. That it is due to incorrect and inadvertent advise of the previous counsel the assessee could not file appeal within the statutory time limit against the order u/s 143(3) of the Income Tax Act, 1961. 8. It is respectfully submitted that the assessee was prevented by reasonable cause from filing the appeal within the statutory limit and therefore, the assessee most humbly prays before your honors to kindly condone the delay in view of principles of natural justice. Kindly admit the appeal and grant opportunity of hearing at the earliest for which the assessee shall always remain obliged. 5.4. From perusal of the submissions made by the Appellant it is evident that the Appellant had accepted the addition made by the AD. However, it was only after the penalty u/s 270A of the Income Tax Act, 1961 levied by the AO that the Appellant filed an appeal against the substantial addition made in the Assessment Order in the instant case. It is clearly a case of after-thought on the part of the Appellant to institute an appeal on technical ground alleging that the AO transcended his jurisdiction by making an addition on turnover of the business when the Appellant's case was selected for Limited Scrutiny to examine cash deposits made during demonetization period. 5.5 This is a case where an appeal is sought to be initiated after the prescribed time limit as per sub section (2) of section 249 of the Income Tax Act, 1961, which reads as under: \"(2) The appeal shall be presented within thirty days of the following date, that is to say,- 9 Shri Naresh Kumar Agrawal Vs. ITO, Ward-3, Raigarh ITA No. 461/RPR/2024 (a) where the appeal is under section 248, the data of payment of the tax, or (b) where the appeal relates to any assessment or penalty, the date of service of the notice of demand relating to the assessment or penalty: Provided that, where an application has been made under section 146 for reopening an assessment, the period from the date on which the application is made to the date on which the order passed on the application is served on the assessee shall be excluded: Provided further that where an application has been made under subsection (1) of section 270AA, the period beginning from the date on which the application is made, to the date on which the order rejecting the application is served on the assessee, shall be excluded, or (c) in any other case, the date on which intimation of the order sought to be appealed against is served. (2A) Notwithstanding anything contained in sub-section (2), where an order has been made under section 201 on or after the 1st day of October, 1998 but before the 1st day of June, 2000 and the assessee in default has not presented any appeal within the time specified in that sub-section, he may present such appeal before the 1st day of July, 2000. (3) The Commissioner (Appeals) may admit an appeal after the expiration of the said period if he is satisfied that the appellant had sufficient cause for not presenting it within that period.\" 5.6 It is pertinent to note that any delay in filing of appeal may be condoned and the appeal may be admitted u/s. 249(3) only if the Appellant successfully demonstrates that it had sufficient cause for not presenting the appeal within the statutory time limit of 30 days. There should be compelling reason for the Appellant for not filing appeal within the stipulated time under the Act. Merely an after- thought on part of the Appellant cannot be considered as a sufficient ground for condoning the delay especially when the same is solely 10 Shri Naresh Kumar Agrawal Vs. ITO, Ward-3, Raigarh ITA No. 461/RPR/2024 motivated with the aim to escape the rigours of penalty proceedings under the Income Tax Act, 1961. 5.7 It has been held by various judicial authorities that the exercise of discretion in condonation of delay in matters of limitation, such as in the present case u/s 249(3) of the Income Tax Act, 1961 is to be considered within the meaning of \"Sufficient Cause\" as envisaged in Section 5 of the Limitation Act. Hence, the general rule of law of limitation is that an extension shall not be granted under Section 5 if there is no sufficient cause or cogent ground for the condonation of delay, the onus of proving which lies on the appellant/applicant as clearly laid down in the judicial pronouncements by the Highest Courts of Law of the land. 5.8 In the case of Perumon Bhagvathy Devaswom, Perinadu Village v. Bhargavi Amma (Dead) by LRs, (2008)8 SCC 321, the Hon'ble Supreme Court had enunciated certain principles in which are applicable while considering applications for condonation of delay under Section 5 which may be summarized as follows: -  The words sufficient cause\", as appearing in Section 5 of Limitation Act, should receive a liberal construction when the delay is not on account of any dilatory tactics, want of bona fides, deliberate Inaction or negligence on the part of the applicant/appellant, in order to advance substantial justice.  The words \"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 decisive factor in condonation of delay is not the length of delay but sufficiency of a satisfactory explanation.  The degree of leniency to be shown by a court depends on the nature of application and facts and circumstances of the case. For example, Courts view delay in making application in a pending appeal more leniently than delays in the institution of an appeal. The Courts view application relating to lawyer's lapses more leniently than application relating to litigant's lapses.  Want of 'diligence' or 'inaction' can be attributed to an applicant/appellant only when something, required to be done by 11 Shri Naresh Kumar Agrawal Vs. ITO, Ward-3, Raigarh ITA No. 461/RPR/2024 him, is not done. When nothing is required to be done, courts do not expect the applicant/appellant to be diligent. Where an appeal is admitted by the High Court and is not expected to be listed for final hearing for a few years, an appellant is not expected to visit the coun regularly to ascertain the current position but await information from his counsel about the listing of the appeal. 5.9 To quote their lordships' decision verbatim in the case cited supra- \"13... The words \"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, and the type of case. The words \"sufficient cause\" in Section 5 of the Limitation Act should receive a liberal construction so as to advance substantial justice, when the delay is not on account of any dilatory tactics, want of bona fides, deliberate inaction or negligence on the part of the appellant.\" (emphasis supplied)\". 5.6 The aforesaid view was reiterated in the case of Balwant Singh (Dead) v. Jagdish Singh, (2010) 8 SCC 685, where in the Court held that: \"25. We may state that even if the term \"sufficient cause\" has to receive liberal construction, it must squarely fall within the concept of reasonable time and proper conduct of the party concerned. The purpose of introducing liberal construction normally is to introduce the concept of “reasonableness” as it is understood in its general connotation. 26. The law of limitation is a substantive law and has definite consequences on the right and obligation of a party to arise. These principles should be adhered to and applied appropriately depending on the facts and circumstances of a given case. Once a valuable right has accrued in favour of one party as a result of the failure of the other party to explain the delay by showing sufficient cause and its own conduct, it wipe unreasonable to take away that right on the 12 Shri Naresh Kumar Agrawal Vs. ITO, Ward-3, Raigarh ITA No. 461/RPR/2024 mere asking of the applicant, particularly when the delay is directly a result of negligence, default or inaction of that party. Justice must be done to both parties equally. Then alone the ends of justice can be achieved. If a party has been thoroughly negligent in implementing its rights and remedies, it will be equally unfair to deprive the other party of a valuable right that has accrued to it in law as a result of his acting vigilantly.\" 5.10 The Courte in several cases have highlighted upon the importance of the concept of “reasonableness\" while giving the clause \"sufficient cause” a liberal interpretation. In furtherance of the same, the Courts have regularly cautioned regarding the necessity of distinguishing cases where delay is of few days, as against cases where the delay is inordinate as it might accrue to the prejudice of the rights of the other party. In such cases, where there exists inordinate delay and the same is attributable to the party's inaction and negligence, the Courts have to take a strict approach so as to protect the substantial rights of the parties. 5.11 The Hon'ble Supreme Court in the case of Shiv Dass v. Union of India (UOI) and Ors, AIR 2007 SC 1330 held that the High Courts, while exercising their discretionary powers under Article 226, should consider delay or laches and, refuse to invoke its extraordinary powers if it is found that the applicant had neglected/omitted to assert ita rights in a timely manner; however, this discretion has to be exercised judicially and reasonably. 5.12 In a recent judgment in the case of University of Delhi Va Union of India & Ors. In Civil Appeal No. 9488 of 2019 vide Order dated 17/12/2019, the Hon'ble Supreme Court has refused to condone delay by holding that, \"the entire explanation as noted above, depicts the casual approach unmindful of the law of limitation despite being aware of the position of law. That apart when there is such a long delay and there is no proper explanation, laches would also come into play while noticing as to the manner in which a party has proceeded before filing an appeal 28 in the matter of condonation of delay and laches, the well accepted position is also that the accrued right of the opposite party cannot be lightly dealt with” 13 Shri Naresh Kumar Agrawal Vs. ITO, Ward-3, Raigarh ITA No. 461/RPR/2024 5.13 From the above decisions it is evident that condonation of delay where the appeal is filed beyond the limitation of period, is to be considered leniently provided the Appellant is able to demonstrate that the delay was attributable to \"reasonable and sufficient cause\". 5.14 The law of limitation is based on the maxims \"Interest Reipublicae Ut Sit FinisLitium” that litigation must come to an end in the interest of society as a whole, and \"vigilantibus non dormientibus Jura subveniunt” that the law assists those that are vigilant with their rights, and not those that sleep thereupon. The law of limitation in India identifies the need for limiting litigation by striking a balance between the interests of the state and the litigant. 5.15 The Single Judge bench of the Hon'ble Madras High Court, while exercising writ jurisdiction in Kathiravan Pipes Pvt. Ltd., v. CESTAT, 2007 [5] STR 9 (Mad.) has observed that the period of limitation prescribed is not for destruction of statutory right but only to give finality without protracting the matter endlessly. 5.16 In the present case, the appellant has not adduced any reasonable cause that prevented him from fling the appeal within the 30 days time limit which ended on 13/01/2020. The only reason for filing the appeal in this case subsequently is to evade the rigours of penalty proceedings under the Act. The Appellant had duly accepted the addition made by the AD in the Assessment Order. Had not been so, the Appellant would have instituted appeal after the Assessment Order was received by him within the time limit stipulated in the Act. However, this is not the case. It may be pertinent to note that from April 2020 the Government had announced nationwide lockdown due to Covid-19 Pandemic and the limitation period for various statutory compliances including filing of income tax appeals was extended upto 31.05.2022 vide the decision of the Hon'ble Supreme Court as under: Miscellaneous Application No. 21 of 2022, 666 of 221 & In SMW(C) No. 3 of 2020 Cognizance for Extension of Limitation has held as under: 14 Shri Naresh Kumar Agrawal Vs. ITO, Ward-3, Raigarh ITA No. 461/RPR/2024 Therefore, we deem it appropriate to dispose of the M.A. No. 21 of 2022 with the following directions: 1. The order dated 23.03.2020 is restored and in continuation of the subsequent orders dated 08/03/2021, 27/04/2021 and 23/09/2021, is directed that the period from 15.03.2020 28.02.2022 shall stand excluded for the purposes of imitation as may be prescribed under any general or special laws in respect of all judicial or quasi- judicial proceeding. 1. Consequently, the balance period of limitation remaining as on 03.10 2021, if any shall become available with effect as on 03/10/2021, any shall become available with effect from 01/03/2022. 2. In cases where the limitation would have expired during the period between 15/03/2020 28/02/2022, notwithstanding the actual balance period of limitation remaining, all persons shall have a limitation period of 90 days from 01/03/2022. In the event the actual balance period of limitation remaining, with effect from 01/03/2022 is greater than 90 days, with effect from 01/03/2022. 3. It is further clarified that the period from 15/03/2020 till 28/02/2022 shall also stand excluded in computing the periods prescribed under Sections 23 (4) and 29A of the Arbitration and Conciliation Act, 1996, Section 12A of the Commercial Courts Act, 2015 and provisos (b) and (c) of Section 138 of the Negotiable Instruments Act, 1881 and any other laws, which prescribe period(s) of limitation for instituting proceedings, outer limits (within which the court or tribunal can condone delay) and termination of proceedings. 5.17 if the intention of the Appellant was to contest the Assessment Order, he could have done so by filing an appeal by either within the statutory time limit given in section 249 of the Income Tax Act 1961, or latest by 31/05/2022 as per the extension granted by the Hon'ble Supreme Court in the wake of Covid 19 Pandemic. The fact that the appeal was filed only on 23.06.2022 which is after having received the penalty order u/s 270A of the Act, clearly shows that the institution of the instant appeal was not due to the reason that 15 Shri Naresh Kumar Agrawal Vs. ITO, Ward-3, Raigarh ITA No. 461/RPR/2024 the Appellant was prevented by any reasonable cause to file appeal in time but the same is motivated with the sole aim to evade the rigours of penalty proceedings. 5.18. The Hon'ble Supreme Court in the case of Pathapati Subba Reddy (Died) By Lrs And Ors vs Special Deputy Collector (La) on 8 April, 2024 Special Leave Petition (Civil) No. 31248 OF 2018 has rejected the application for condonation of delay after making the following observations: 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 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 paint out that though on one hand, Section 5 of the Limitation Act is to be construed liberally, but on 16 Shri Naresh Kumar Agrawal Vs. ITO, Ward-3, Raigarh ITA No. 461/RPR/2024 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 is 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 Limitation 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 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 (2007) 11 SCC 285 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 'sufficient cause’ held that ordinarily a litigant does not stand 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 17 Shri Naresh Kumar Agrawal Vs. ITO, Ward-3, Raigarh ITA No. 461/RPR/2024 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, 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 property, 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 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 applications for condonation of delay, this Court held that the High Court failed to exercise its 18 Shri Naresh Kumar Agrawal Vs. ITO, Ward-3, Raigarh ITA No. 461/RPR/2024 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. 5.19 Similarly, in the case of Basawaraj and Anr. vs. Special Land Acquisition Officer, the Apex court has 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 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.\" 19 Shri Naresh Kumar Agrawal Vs. ITO, Ward-3, Raigarh ITA No. 461/RPR/2024 25. This Court in the same breath in the same very decision vide paragraph 15 went on to observe as under: “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 20 Shri Naresh Kumar Agrawal Vs. ITO, Ward-3, Raigarh ITA No. 461/RPR/2024 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 (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. 5.20 Though the decision of the Hon'ble Apex Court in the above- mentioned cases do not pertain to Income Tax Appeal matter, nonetheless, the ratio decidendi of the above-mentioned case is squarely applicable in the Appellant's case. In the instant case there is lack of bonafide on part of the Appellant for filing this appeal. In case the appeal is allowed to be admitted it shall not only contravene the provisions of section 249 of the Income Tax Act. 1961 but shall also lie in contravention to the ethos of the Limitation Act and give an undue advantage to the Appellant to rake up settled issue merely on technical grounds. Such an act is fraught with danger as would act as a precedence for other assesses/taxpayers to use this method to rem Initiate/institute appeals through the backdoor in cases which have long been accepted and settled in an attempt to evade the rigours of provisions relating to penalty/ prosecution in the Income tax Act. As has been held by the Hon'ble Supreme Court in the case of Basawaraj and Anr. (Supra) \"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. 21 Shri Naresh Kumar Agrawal Vs. ITO, Ward-3, Raigarh ITA No. 461/RPR/2024 5.21 In view of the discussion held above, since no \"sufficient/reasonable cause\" could be established by the Appellant to explain the delay in filing of this appeal beyond the due date as required u/s. 249 of the Income Tax Act, 1961 r.w.s. 5 of Limitation Act hence, the condonation is hereby rejected and the appeal sought to be instituted belatedly is not admitted.” 5. Apropos the assessee’s contention that the A.O while framing the assessment had traversed beyond his jurisdiction that was vested with him for scrutinizing the case that was selected for “limited scrutiny”, the CIT(Appeals) refrained from dealing with the same for the reason that as the appeal had been dismissed in limine for want of justifiable reasons explaining the inordinate delay involved in filing of the same, therefore, the said contention qua the validity of the jurisdiction of the A.O was not required to be adjudicated. For the sake of clarity, the observation of the CIT(Appeals) is culled out as under: “6. Ground No. 1 The only ground taken by the Appellant in the instant appeal is that the AO has transcended his jurisdiction by making an addition on the turnover whereas the case was selected for Limited Scrutiny to verify the cash deposits during demonetization period. Since the condonation in delay in filing of the appeal has been rejected based on the detailed discussion held in the preceding paras, the ground raised by the Appellant is not adjudicated. 7. In the result, the appeal is Dismissed.” 22 Shri Naresh Kumar Agrawal Vs. ITO, Ward-3, Raigarh ITA No. 461/RPR/2024 6. The assessee being aggrieved with the order of the CIT(Appeals) has carried the matter in appeal before the tribunal. 7. I have heard the Ld. Authorized Representatives of both the parties, perused the orders of the lower authorities and the material available on record as well as considered the judicial pronouncements that have been pressed into service by the Ld. AR to drive home his contentions. 8. Shri Veekaas S. Sharma, Ld. Authorized Representative (for short ‘AR’) for the assessee at the threshold submitted that the solitary grievance involved in the present appeal was that the A.O had grossly erred in law and facts of the case in traversing beyond the scope of his limited jurisdiction and making addition qua an issue which was not a subject matter for which the case of the assessee was selected for limited scrutiny. The Ld. AR in support of his aforesaid contention had relied on the CBDT Circular No.05/2016, dated 14.07.2016. At this stage, I may herein observe that neither any ground of appeal as regards declining on the part of the CIT(Appeals) to condone the delay involved in filing of the appeal before him has been raised before me nor the said material aspect was brought to my notice by the Ld. AR. Rather, the Ld. AR had confined his contentions to the limited aspect of the validity of the jurisdiction that was assumed by the A.O for framing the assessment and making addition qua 23 Shri Naresh Kumar Agrawal Vs. ITO, Ward-3, Raigarh ITA No. 461/RPR/2024 an issue which did not form part of the reason for which the case was selected for limited scrutiny. 9. Per contra, the Ld. Departmental Representative (for short ‘DR’) relied on the orders of the lower authorities. 10. I have thoughtfully considered the contentions advanced by the Ld. Authorized Representatives of both the parties in the backdrop of the orders of the lower authorities. As the assessee had neither raised any ground of appeal qua the declining by the CIT(Appeals) to condone the inordinate delay of two and half years (approx.) that was involved in the appeal filed before him nor any such contention had been advanced in the course of proceedings before me, therefore, I approve the order of the CIT(Appeals) on the said count itself. Apart from that, I am of the view that as observed by the CIT(Appeals), and rightly so, as the assessee had failed to come forth with any plausible explanation as regards the inordinate delay of two and half years (approx.) that was involved in filing of the appeal before the first appellate authority, therefore, the latter had after drawing support from a host of judicial pronouncements rightly dismissed the same. 11. I, thus, in terms of my aforesaid observations, finding no infirmity in the view taken by the CIT(Appeals) uphold the same. Thus, the grounds of 24 Shri Naresh Kumar Agrawal Vs. ITO, Ward-3, Raigarh ITA No. 461/RPR/2024 appeal raised by the assessee are dismissed in terms of the aforesaid observations. 12. In the result, appeal filed by the assessee is dismissed in terms of the aforesaid observations. Order pronounced in open court on 19th day of November, 2024. Sd/- (रवीश सूद /RAVISH SOOD) ÛयाǓयक सदèय/JUDICIAL MEMBER रायपुर/ RAIPUR ; Ǒदनांक / Dated : 19th November, 2024. SB, Sr. PS आदेश कȧ ĤǓतͧलͪप अĒेͪषत / Copy of the Order forwarded to : 1. अपीलाथȸ / The Appellant. 2. Ĥ×यथȸ / The Respondent. 3. The CIT(Appeals)-1, Raipur (C.G) 4. The Pr. CIT-1, Raipur (C.G) 5. ͪवभागीय ĤǓतǓनͬध, आयकर अपीलȣय अͬधकरण,रायपुर बɅच, रायपुर / DR, ITAT, Raipur Bench, Raipur. 6. गाड[ फ़ाइल / Guard File. आदेशानुसार / BY ORDER, // True Copy // Senior Private Secretary आयकर अपीलȣय अͬधकरण, रायपुर / ITAT, Raipur. "