The Bangalore Bench of Income Tax Appellate Tribunal(ITAT) dismissed an appeal by the assessee due to a delay of 879 days, finding insufficient cause for the delay.
MFAR Holdings Pvt. Ltd., appellant-assessee,engaged in real estate development and building maintenance services, filed its return of income on December 8, 2006, declaring a loss of ₹2.09 crore. The case was selected for scrutiny, and an assessment under section 143(3) was completed on March 31, 2006, disallowing ₹1.08 crore in financial expenses, ₹3.71 lakh in building maintenance charges, and ₹37,913 in property tax. The loss was recomputed at ₹96.17 lakh.
A search conducted on February 2, 2009, in the case of Shri Lakshman & Others led to the discovery of certain documents related to the assessee. Based on this, the case was reopened under section 153C, and a notice was issued on July 13, 2010. The assessee requested that its original return be treated as the response. The Assessing Officer(AO) repeated the earlier disallowances in the reassessment.
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The assessee appealed against the original assessment before Commissioner of Income Tax (Appeals)[CIT(A)] on January 30, 2009, but the appeal was dismissed on March 28, 2013, citing that a subsequent appeal had been filed against the 153C order dated December 30, 2010. No further appeal was filed before the ITAT until November 4, 2024. A separate appeal was filed against the reassessment order under section 153C on February 3, 2011. CIT(A) ruled that the previous dismissal was incorrect but still rejected the appeal without examining the merits.
Aggrieved by CIT(A)’s order dated February 2, 2022, the assessee filed an appeal before the tribunal on August 30, 2024, with a delay of 879 days.
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The tribunal rejected the condonation of a 879-day delay, classifying it as inordinate. Citing Ornate Traders (312 ITR 193), it noted that delays over 365 days required strict scrutiny. The assessee failed to provide sufficient cause, and its application lacked supporting evidence.
The appellate tribunal dismissed claims that counsel’s illness caused the delay, as no medical records were submitted. It also rejected the argument that the CIT(A)’s order was not uploaded, as the revenue confirmed timely uploading. The claim that the assessee discovered the order during due diligence was found unconvincing, given its ongoing litigation before the ITAT in another case.
Read More: No Sufficient Cause Shown: ITAT dismisses Income Tax Appeal due to Inordinate Delay in Filing
The tribunal examined the application for condonation of a 879-day delay in light of Ornate Traders (312 ITR 193) and found no bona fide reasons for the delay. It noted that in cases of inordinate delay, each day’s delay must be explained with supporting material, which was lacking. While courts have condoned long delays in justified cases, the assessee failed to provide convincing reasons.
Referring to Liberal Association for Movement of People v. CIT(E) (164 taxman.com 83), the bench reiterated that condonation of delay is an exception, not a rule, and must be supported by sufficient cause. It cited the Supreme Court’s view that excessive delays cannot be excused without valid justification. The company did not submit a petition or explanation detailing the delay.
The two member bench comprising Prashant Maharishi (Vice President) and Prakash Chand Yadav (Judicial Member) also rejected the argument that the assessee’s counsel was unwell, as no medical records were provided. Given the absence of diligence and supporting evidence, it refused to condone the delay and dismissed the appeal on limitation grounds.
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