The Term ‘Sufficient Cause’ shall Interpret Liberally: ITAT [Read Order]

Sufficient Cause - Interpret Liberally - ITAT - Taxscan

The Bangalore bench of the ITAT, in a significant ruling favoring the assessee, has held that the term “sufficient cause” shall interpret liberally.

There was a delay of more than 500 days in filing the appeal before the first appellate authority for the relevant assessment year. The assessee, an individual, contended that he went for an advice of a tax consultant and he asked for earlier years’ records by that time, assessee came to know about the lapse on the part of the earlier counsel and advised to the present counsel that assessee filed the appeals against penalty orders before the CIT(A). Thus, there caused a delay of 591 days in the case of appeal against the order passed under section 271(1)(c) and 775 days in the case of order passed under section 271F of the Act.

Before the Tribunal, the assessee contended that these facts were duly explained by the assessee before the CIT(A) in both the cases. However, he rejected the condonation petition holding that there was no reasonable cause for filing these appeals belatedly before him.

The bench of Shri Chandra Poojari, AM & Shri George George K, JM observed that “Under the scheme of Constitution, the Government cannot retain even a single pie of the individual citizen as tax, when it is not authorised by an authority of law. Therefore, if we refuse to condone the delay, that would amount to legalise an illegal and unconstitutional order passed by the lower authority. Therefore, in our opinion, by preferring the substantial justice, the delay has to be condoned.”

Condoning the delay in filing the appeal, the Tribunal held that “the principles that emanate from the above said decisions are that, in the matter of condonation of delay in filing appeals beyond the limitation period, the courts are empowered to condone the delay, provided the litigant is able to demonstrate that there was “sufficient cause” in preferring appeal beyond the limitation period. The Courts have also held that the expression “sufficient cause” should receive liberal construction so as to advance substantial justice. Hence, the question of condonation of delay is a factual matter and the result would depend upon the facts of the case and the cause shown by the assessee for the delay. It has also been opined that generally delays in preferring appeals are required to be condoned in the interest of justice, where no gross negligence or deliberate inaction or lack of bona fides is imputable to the party seeking condonation of the delay. In view of the foregoing, we are of the view that the assessees have shown sufficient cause for the delay in filing the appeals before the Tribunal.”

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Sri Suhas Suresh Shet vs Income Tax Officer

Counsel for Appellant:   Shri Ravi Shankar, Adv.

Counsel for Respondent:   Smt. Priyadarshini Basaganni, Addl.CIT


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