ITAT rejects Assessee’s Claim of Lawyer’s Negligence, refuses to Condone 3-Year Delay in filing Income Tax Appeal [Read Order]

The Bangalore bench of Income Tax Appellate Tribunal (ITAT) rejected the assessee's claim of lawyers' negligence and refused to condone a delay of 1265 days in filing the income tax appeal.

Tribunal stressed the assessee’s duty to monitor proceedings, citing Supreme Court principles that the law favours the vigilant and not those who sleep over their rights.

The assessee, Gonemmanvara Narappa, was a Commercial Tax Officer posted at Bellary, and he could not access the Income Tax e-portal due to transfer and work pressure. The assessment order was passed on 12.12.2019. An appeal was filed before the CIT(A) with a delay of 172 days, which was dismissed on 29.07.2021 as time-barred. The assessee claimed that he had instructed Advocate V.S. Arunachala Setty to file a further appeal before the ITAT and believed it was filed online. However, Advocate Setty passed away on 03.05.2023.

Later, on inquiries by the assessee’s son, it was discovered that no appeal had actually been filed before the Tribunal. Thereafter, the assessee arranged to file the present appeal, but with a delay of 1265 days. The assessee filed affidavits (including from the advocate’s son) claiming that the delay was due to reliance on counsel, heavy official duties, and a belief that the appeal had already been filed.

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The assessee contended that the delay in filing the appeal was unintentional and for the

reasons beyond the control of the assessee and on account of a bona fide belief that his counsel might have filed the appeal. The Revenue objected to condoning such an inordinate delay in filing the appeal & submitted that the assessee was very callous in his approach in filing the appeal, not only before the CIT(A) but also before this Tribunal.

The Tribunal opined that under Section 253(5) of the Income Tax Act, the Tribunal may admit the delay filed beyond the period of limitation where it is established that there exists a “sufficient cause” on the part of the assessee for not presenting the appeal within the prescribed time. The explanation, therefore, becomes relevant to determine whether the same reflects sufficient and reasonable cause on the part of the assessee in not filing the appeal within the prescribed time.

The Tribunal, after going through the explanations, observed that the sole ground advanced for the delay is that the assessee handed over the brief to the Lawyer/CA concerned, but the Lawyer did not file the appeal on time.

The Tribunal further observed that the Advocate expired only on 03/05/2023, i.e. almost two years after the passing order by the CIT(A). And the assessee, by way of an affidavit, stated that on account of official work pressure and an honest and bona fide belief that an appeal has been filed online, he did not contact Mr V.S. Arunachala Setty. The Tribunal further opined that the assessee himself, being a Commercial Tax officer, who is well-versed with the provisions of law, is now trying to shift the entire blame to his counsel who expired on 03/05/2023.

The Tribunal quoted the Apex court in the case of Rajneesh Kumar & Anr. Vs. Ved

Prakash in SLP held as follows:

“10. It appears that the entire blame has been thrown on the head of the advocate who was appearing for the petitioners in the trial court. We have noticed over a period of time a tendency on the part of the litigants to blame their lawyers of negligence and carelessness in attending the proceedings before the court. Even if we assume for a moment that the concerned lawyer was careless or negligent, this, by itself, cannot be a ground to condone long and inordinate delay as the litigant owes a duty to be vigilant of his own rights and is expected to be equally vigilant about the judicial proceedings pending in the court initiated at his instance. The litigant, therefore, should not be permitted to throw the entire blame on the head of the advocate and thereby disown him at any time and seek relief…”

Also, the Tribunal relied on a recent decision of the Hon’ble Delhi High Court in the case of Rahul Mavi, which has deprecated the practice of shifting to the shoulder of the counsel, the negligence in approaching the court. The relevant observation

made by the Hon’ble High Court is as under:

“4. We also disapprove the unwholesome practice of seeking to explain away inordinate delay and laches on approaching the Court on the mere ground that the Counsel who had been dealing with, or entrusted, the matter, was tardy, negligent, or indolent. At times, this assertion is sought to be supported by an assertion that the litigant has approached the Bar Council concerned against the counsel.

5. We emphatically disapprove of this practice of shifting, to the shoulders of the Counsel, the negligence in approaching the Court. It is easy, in such circumstances, to file a complaint before the Bar Council and seek to explain away the delay. We deprecate this. A litigant does not abandon all responsibility to keep track of a matter, once it is entrusted to Counsel.

6. That said, if, in fact, the Counsel has been negligent, the litigant would have to place, on record, material to indicate that she, or he, has been in touch with the Counsel during the entire period of delay, and that the Counsel has been misleading her, or him. This material must be acceptable,

and convincing. The Court has to be satisfied that, in fact, the Counsel has been misleading the client, and that this explains the entire period of delay in approaching the Court. Of course, if the Court is so satisfied, and an innocent litigant has been led up the garden path by an unscrupulous Counsel, the court would not allow injustice to be done, and would, in an appropriate case, condone the delay.”

In view of the principle enunciated by the Hon’ble Supreme Court, the two-member bench of Waseem Ahmed (Accountant Member) and Keshav Dubey (Judicial Member) held that it is not a fit case to condone the inordinate delay of 1265 days as the assessee failed to offer any “sufficient cause” explaining the delay.

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