“Acceptance of Explanation for Delay should be the Rule and Refusal, An Exception”: ITAT Condones 236-Day Delay in Appeal Filing [Read Order]

Recently, the Income Tax Appellate Tribunal ( ITAT ) in Delhi has allowed an appeal by an assessee condoning a delay of 236 days in filing the appeal in light of Supreme Court's precedents, stressing that accepting delays in cases where a valid reason is provided should be the standard practice, while rejecting such explanations should only be an exception.

The case started from a dispute regarding the deduction of interest and rental income claimed by the assessee/appellant, Sekhari Ganna Vikas Samiti Ltd., a cooperative society of farmers, for the 2020-21 assessment year. The Income Tax Officer initially disallowed the assessee-society’s deduction claims on an interest income of INR 12,18,305 and an additional rental income of INR 24,000. When the assessee appealed this decision to the Commissioner of Income Tax (Appeals) (CIT(A)), the appeal was filed 236 days past the deadline, and the CIT(A) dismissed it on these procedural grounds, without assessing the merit of the case.

The assessee argued that the delay was due to unavoidable circumstances and filed a request for condonation of the delay. The CIT(A), however, deemed the reasons insufficient and maintained the dismissal enforcing strict adherence to the filing timelines. In response, the assessee escalated the matter to the ITAT.

Get a Copy of Direct Taxes Law and Practices Including Tax Planning with Free E-Book Access, Click Here

During the ITAT proceedings, the representative for the income tax department contended that the CIT(A) had already reviewed the reasons for delay and found them lacking in sufficient cause. Conversely, the Tribunal, presided over by Judicial Member Shri Vikas Awasthy, observed the importance of a fair, liberal approach toward condonation requests. Citing Supreme Court rulings, including the landmark decision in Collector Land Acquisition vs. Mst. Katiji & Ors. and Ram Nath Sao vs. Gobardhan Sao, the Tribunal stressed that judicial bodies should not adopt a rigid or overly technical stance when evaluating delay condonation requests. Rather, the default position should lean towards permitting appeals when genuine efforts to comply with deadlines are evident, as the alternative could unjustly obstruct substantive justice.

The Tribunal, aligning with this judicial philosophy, acknowledged the cooperative society’s explanations and opted to condone the 236-day delay. Consequently, it restored the case to the CIT(A) for a fresh assessment on its merits, granting the appellant the opportunity to present its case comprehensively.

To Read the full text of the Order CLICK HERE

Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates