ITAT condones Delay of 387 Days in filing Appeal since Assessee was fighting with Chartered Accountant who filed False Returns [Read Order]

The Jaipur bench of the Income Tax Appellate Tribunal (ITAT) has condoned a delay of 387 days in filing the appeal by the assessee by finding that there was a reasonable cause for such a delay as the assessee was fighting with his Chartered Accountant who filed false returns based on false accounts.

Before the Tribunal, the assessee claimed that the delay has occurred since the assessee was facing very turbulent time in the family as well as with his earlier Chartered Accountant, who had mischievously prepared the accounts of the assessee and also filed the return of income in his own signatures without bringing the fact in the notice of the assessee. It was claimed that a complaint had been lodged against the Chartered Accountant in the Court of Mahanagar Magistrate. It was also claimed that he was fighting for getting the relevant papers from the C.A. and in this process, the assessee could not take steps to file the appeal within the stipulated period of limitation.

While allowing the plea of the assessee, the ITAT observed that there is no denying that the assessee has been fighting with his Chartered Accountant regarding manipulation of the accounts and filing the false/wrong return of income without the knowledge and signature of the assessee. It was also noticed that the assessees’ father was suffering from cancer since 2012.

“Though these allegations are the subject matter of the proceedings pending before the court, however, the fact which is undisputed that the assessee has been prosecuting the matter of complaint against the C.A. before the various authorities including the Court of Additional Chief Metropolitan Magistrate, Jaipur,” the Tribunal said.

While condoning the delay, the Tribunal said that “the reasons explained by the assessee are found to be true and therefore, these are bonafide explanation and not malafide. It is settled proposition of law that the court should take lenient view on the matter of condonation of delay provided the explanation and reasons for delay is bonafide and not merely a device to cover an ulterior purpose or an attempt to save limitation in an underhand way. While construing the sufficient cause, a liberal view should be taken and court should lean in favour of the party as explained the reasons for delay as bonafide.”

“Thus, once the assessee explained the cause of delay which is found as bonafide and not a device to cover an ulterior purpose then the length of delay itself cannot be a reason for denying the condonation. Thus, when the assessee was passing through a bad phase for such a long time on business front as well as on family front and facing the problem even with the CA and fighting for getting his account set right. Then in the facts and circumstances of the case and in the interest of justice, we condone the delay of 387 days in filing the present appeal,” the Tribunal added.