Supreme Court upholds ITAT order refusing to condone Delay in filing Appeal due to Gross Negligence of Assessee [Read Judgement]
There was gross negligence in the attitude of the assessee and the assessee was aware of the orders passed by CIT (A) even though assessee has not exercised any care to enquire about status of second appeal and tried to shift the responsibility towards his lawyer
Supreme Court upholds ITAT order
Supreme Court upholds ITAT order
The Supreme Court upheld the Income Tax Appellate Tribunal ( ITAT ) order which refused to condone the delay in filing appeal due to gross negligence of assessee. The Special Leave Petition (SLP) was filed by C.I. Builders Private Limited, the assessee, challenged the final judgment and order dated 02-05-2025 in ITA No. 75/2024 passed by the High Court of Madhya Pradesh Principal Seat at Jabalpur.
A two-judge bench of Justice J.B. Pardiwala and Justice Manmohan found no reason to interfere with the impugned order passed by the High Court and dismissed the SLP.
The Income Tax Appeal is preferred under Section 260 A of the IncomeTax Act, 1961 impugning the order dated 23.01.2024 passed by the Income Tax Appellate Tribunal, Indore Bench Indore, whereby the appeals preferred by the appellant assailing the assessment orders of assessment years 2010-2011 and 2012-2013 were dismissed being time barred.
The appellant Company had submitted its return of income for the assessment year 2010-2011 and 2012-2013 on 12.10.2010 and 30.09.2012, respectively, and the assessment orders were passed on 18.03.2013 and 25.03.2015. The appellants preferred two separate appeals before the Commissioner of Income Tax (Appeals-I), Bhopal, which were dismissed by the appellate authority by order dated 31.12.2015 and 21.03.2017 respectively. He further submitted that at the time of hearing of these appeals, no one appeared on behalf of the appellant and, therefore, these appeals were decided based on the record.
The appeal was delayed for seven years and 104 days in one appeal and six years and 83 days in second case.
The appeals were not preferred in time due to the mistake committed by Shri Rinva, Advocate and the appeals were filed when the appellant Company engaged new counsel Shri Rakesh K. Mangal. He further submits that the condonation of delay applications were filed before the ITAT on the ground that appellant promptly handed over the documents to the counsel and the professional expert grossly failed to take action for which the appellant Company should not be penalized. He further submitted that by the impugned order dated 23.01.2024, ITAT, Indore Bench, Indore refused to condone the delay and consequently dismissed the appeals as time barred. Hence, the present appeal has been preferred.
Shri Purohit, Senior Advocate vehemently argued that Shri Ashwini Rinva Advocate filed the income tax appeal before the Commissioner of Income Tax, Bhopal, but due to his non appearance, the appeals were decided ex parte and dismissed on 31.12.2015. The delay occurred due to negligence of the professional engaged by the appellant Company and therefore, ITAT has committed error in not condoning the delay. He further submits that during this period of delay of 6-7 years, there was Covid pandemic period.
The expression 'sufficient cause' as appearing in Section 5 of Limitation Act should receive liberal construction, when the delay is not on account of any dilatory tactics, want of bonafides, deliberate inaction or negligence on the part of the appellant, to advance substantial justice. The word 'sufficient cause' for not making the application within the period of limitation should be understood and applied in a reasonable, pragmatic, practical and liberal manner, depending upon the facts and circumstances of the case.
The ITAT has considered the reasons offered by appellant caused in filing appeals belatedly, but due to lack of bonafides impugnable to parties seeking condonation of delay, reasons were not found sufficient and consequently, delay was not condoned. Further held that there was gross negligence attitude of the assessee and assessee was aware of the orders passed by CIT (A) even though the assessee has not exercised any care to enquire about status of second appeal and tried to shift the responsibility towards his lawyer. The assessee was negligent and his act was lethargic.
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