Defense of Ignorance of Law cannot be taken after Hiring a Chartered Accountant: ITAT [Read Order]

The Chennai bench of the Income Tax Appellate Tribunal (ITAT) has held that the defense of ignorance of law cannot be reasonable cause to condone delay after the assessee hired a Chartered Accountant.

The assessee, M/s Balaji Autos filed their appeal with a huge delay of 1070 days. The assessee contended that the order of the Commissioner of Income Tax (Appeals)- 9, Chennai dated 24.05.2019 was not received by the assessee and only while filing appeal on 24.03.2022 before the Commissioner of Income Tax (Appeals) against the order passed under 143(3) r.w.s.147 for the assessment year 2014-15 in the e-filing portal, the assessee came to know that the order of the Commissioner of Income Tax (Appeals) on the appeal against the assessment order u/s. 143(3) was passed on 24.05.2019. Further, the learned AR submitted that from 24.03.2022 which is the date on which the passing of the order was first known to the assessee, the delay was only 35 days.

Relying on a catena of decisions, the Tribunal bench consisting of Shri Mahavir Singh, Vice-President and Shri G. Manjunatha, Accountant Member observed that “ignorance of law is also an excuse, but if you examine the facts of the present case, we are of the considered view that the assessee is not ignorant of law, because, the assessee was well aware of the Income Tax proceedings and further, hired professional Chartered Accountant, for representing its case. Thus, we are of the considered view that the case laws relied upon by the assessee, are not applicable to the facts of the present case.”

Rejecting the plea of the assessee, the Tribunal held that “Coming back to the legal position evolved by the decision of various High Courts, including the Hon’ble Supreme Court in number of cases, where it has been, time and again, held that when merits and technicalities pitted against each other, then merit alone deserves to be prevailed, because, if you throw out a meritorious case out of judicial scrutiny on the grounds of technicalities, then you may deprive the right of the petitioner in pursuing their case. At the same time, various Courts have held that rules of limitation are not meant to destroy the rights of parties, they are meant to see that parties do not resort to dilatory tactics, but seek their remedy promptly, within the time bound prescribed under the Act. Further, in a case, where, for the reasons beyond the control of the petitioner, the appeal could not be filed, then the Courts are well equipped with power to condone the delay, if the petitioner explains the delay in filing of the appeal with a reasonable cause. However, there is no law or mandate in the Act, to condone the delay in each and every case.”

To Read the full text of the Order CLICK HERE

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