The ITAT, Ahmedabad bench, in a recent decision, ruled that the authorities should take a liberal approach while condoning delay in filing appeals. In the opinion of the single member,
While entertaining such petitions, the authorities must consider the sufficiency of reason, not the length of delay. The delay must be arose out of bonafide act on the part of the assessee.
The assessee filed a cross objection before the Tribunal with a delay of near three and half years. The assessee claimed that the delay was a bonafide one since they were under an impression that they have succeeded in the appeal filed before the first appellate authority. Referring to the Apex Court decision in Collector Land Acquisition Vs. Mst. Katiji & Others, the appellants pointed out that adjudicating authority should adopt a liberal approach in construing the explanation of the assessee inferred from the material.
Diving deeply into the facts of the case, the Tribunal observed that length of delay is immaterial and it is sufficiency of reasons that matters. Any amount of delay can be condoned if there is a plausible reason.
While dismissing the Cross Objection, the Tribunal observed that “In the present case also, I am not satisfied with bona fide of the assessee, because, the ld.CIT(A) has decided the appeal of the assessee on 4.7.2011. This order must have been served upon the assessee within reasonable time. From the stamp of date available on the order of the ld.CIT(A) it revealed that it was received by tax consultant of the assessee i.e. ITP. A perusal of this, the assessee would have come to know about issue which has been decided partly against him. When assessee received notice from the Tribunal on 20.10.2011 again he must have appraised himself about the issue involved in the appeal and how the ld.CIT(A) had adjudicated them. There must be conscious decision to accept the order of the ld. CIT(A) when it was passed. Similarly, the assessee was not in a mood to challenge this order, when summons were issued to the assessee for defending appellate proceedings before the Tribunal. If the Department has taken out one of the grounds erroneously that would not persuade the assessee to believe that the ld.CIT(A) has decided both the issues in favour of it. To my mind, the assessee has declared a loss of Rs.15,13,710/-. He was not going to be effected by a marginal disallowance of Rs.6,30,000/-, and therefore, consciously, he never thought to challenge the order of the ld.CIT(A). When the appeal before the Tribunal came up for hearing, then realizing the fact that the assessee should be visited with penalty also, this CO might have been filed. But, really the assessee was not fully aggrieved with the impugned order of the ld. CIT(A), because, there was no tax liability by virtue of such disallowance, and therefore, he never thought to challenge it in the higher appellate forum.”
Read the full text of the order below.
