2024 (6) TMI 1504 - AT - Income Tax

371-day delay denied; appeal dismissed as time-barred after condonation application rejected under binding higher authority guidance

Vineet Singh Construction Company Private Limited Versus Joint Commissioner of Income Tax, Chhattisgarh

ITAT RAIPUR - AT refused to condone an inordinate 371-day delay in filing an appeal, finding no sufficient cause shown by the appellant. Following binding ... Condonation of the exorbitant delay of 371 days in filling appeal - 'sufficient cause' of delay - HELD THAT:- As in light of the decision by the tribunal in the case of Satish Kumar Agrawal [2024 (4) TMI 984 - ITAT RAIPUR] which was under binding guidance of the judgment of Hon’ble Jurisdictional High Court in the case of Vidya Shankar Jaiswal [2024 (4) TMI 986 - CHHATTISGARH HIGH COURT] and M/s BPS Infrastructure [2024 (4) TMI 1006 - CHHATTISGARH HIGH COURT] respectfully following the mandate of law accorded by the Hon’ble Jurisdictional High Court, in absence of any justifiable reason or sufficient cause for delay in filing of the appeal in the present case, we reject the condonation request of the assessee, wherein the assessee appellant had failed to come forth with any substantial clarification to support the application for condonation elaborating in the backdrop of sufficient reason that would justify condonation of the exorbitant delay of 371 days involved in preferring of the captioned appeal, therefore, we decline to condone the same and, thus, without adverting to the merits of the case, dismiss appeal of the assessee as barred by limitation. ISSUES PRESENTED AND CONSIDERED 1. Whether the appeal to the Tribunal is maintainable in view of a delay of 371 days and whether the delay should be condoned under the Tribunal's discretionary jurisdiction. 2. Whether the appellants' explanation for delay - non-receipt/late knowledge of the CIT(A)'s order because of faceless scheme/on-line uploading and employee oversight - amounts to 'sufficient cause' beyond appellant's control to warrant condonation. 3. Whether the appellant's prior election to receive communications by the specified e-mail address and the absence of evidence of non-service affect the adequacy of the explanation for delay. 4. Whether established judicial authorities on condonation of delay (including principles favouring substantial justice and liberal construction of 'sufficient cause') apply to and support condonation in the present factual matrix. ISSUE-WISE DETAILED ANALYSIS Issue 1 - Tribunal's power and framework for condonation of delay Legal framework: The Tribunal has discretionary power to admit appeals beyond prescribed limitation if 'sufficient cause' is shown; the expression is to be liberally construed to advance substantial justice, subject to reasonableness and absence of mala fides. Precedent treatment: The Tribunal considered a range of authorities emphasising liberal construction (Collector, Land Acquisition v. Katiji; N. Balakrishnan v. M. Krishnamurthy; cases condoning long delays where bonafide absence of knowledge was shown). These precedents were acknowledged as establishing the general doctrine that substantial justice may prevail over technicality. Interpretation and reasoning: The Tribunal applied the legal framework by examining whether the factual explanation in the present case meets the threshold of 'sufficient cause.' The Tribunal emphasised that the doctrine of liberal construction does not operate in vacuo and must be anchored to bona fide, plausible reasons. Where conduct or omissions amount to a lackadaisical or evasive approach to proceedings, liberal construction is inapplicable. Ratio vs. Obiter: Ratio - the Tribunal's statement that its condonation power is discretionary and guided by sufficiency of cause and bona fides; Obiter - broader citations of multiple condonation cases used to illustrate principles rather than to mandate condonation. Conclusion: The Tribunal reaffirmed its discretionary power but held that such power cannot be exercised where the appellant fails to establish a bona fide, plausible cause for delay and where conduct before lower authorities shows inaction or evasion. Issue 2 - Sufficiency of appellant's explanation for the 371-day delay Legal framework: Explanation for delay must be credible, supported by evidence where appropriate, and demonstrate that delay was beyond appellant's control; mere assertions or conjectural technical difficulties do not suffice. Precedent treatment: The Tribunal distinguished authorities where the appellant's lack of knowledge was uncontroverted or supported by evidence (cases condoning delays) from cases where the appellant's conduct was evasive or unsubstantiated (cases refusing condonation). It relied on binding jurisdictional High Court guidance and prior Tribunal decisions that refused condonation in similar factual patterns. Interpretation and reasoning: The Tribunal analysed appellants' facts: appellant had elected to receive communications at a specified e-mail in Form 35, yet claimed ignorance of the CIT(A) order until an employee accessed the portal later. The Tribunal found this explanation 'incomprehensible' and unsupported by plausible evidentiary detail. The Tribunal further weighed the appellant's prior non-participation before AO and CIT(A) and ex-parte orders against a claim of bonafide oversight, concluding the record showed habitual non-prosecution rather than excusable neglect. Ratio vs. Obiter: Ratio - where an appellant has elected electronic communication and provides no convincing evidence of non-service or other uncontrollable cause, the Tribunal will not treat portal non-access as 'sufficient cause'; Obiter - references to systemic difficulties of faceless schemes and general sympathy for transitional issues (not relied on in the result). Conclusion: The explanation offered did not constitute 'sufficient cause'; the delay was attributable to lackadaisical conduct and not to circumstances beyond control; condonation was rejected. Issue 3 - Effect of prior election to receive communications by e-mail and service implications Legal framework: An appellant's affirmative choice to receive notices/communications electronically is a factor weighing against acceptance of a subsequent claim of non-receipt; the onus lies on the appellant to show non-service or other hindrance. Precedent treatment: The Tribunal referenced cases where non-service despite electronic schemes had been accepted where the department failed to prove service, but distinguished those facts because here the appellant expressly opted for e-mail and provided no evidence that the e-mail was not delivered. Interpretation and reasoning: The Tribunal treated the election of e-mail receipt as significant: absence of any evidence showing malfunction, mis-addressing, or denial of service undermined the appellant's claim. The Tribunal held that the appellant could not plausibly claim ignorance when the record showed affirmative election for electronic communication. Ratio vs. Obiter: Ratio - an appellant's election to receive electronic communications, coupled with lack of evidence of delivery failure, weakens claim of non-receipt as a sufficient cause; Obiter - policy observations on faceless schemes' need for flexibility (not determinative). Conclusion: Election to receive electronic communication and absence of proof of non-service negated the appellant's contention of non-receipt; this contributed to refusal of condonation. Issue 4 - Applicability of principles favouring substantial justice and their limits in present facts Legal framework: While courts/tribunals should prefer adjudication on merits and adopt a pragmatic approach to condonation, such approach is not automatic and must be balanced against fairness, conduct of parties, and precedent. Precedent treatment: The Tribunal reviewed numerous authorities supporting a liberal approach but underscored that those authorities presuppose bona fide explanations; it followed binding decisions of the jurisdictional High Court and its own SMC Bench that declined condonation where the appellant's conduct was evasive or unexplained. Interpretation and reasoning: The Tribunal reconciled the competing principles by stating that advancement of substantial justice does not licence condoning delay where the appellant's explanation lacks credibility or where condonation would reward habitual non-participation. The Tribunal cautioned against creating a precedent that would encourage procedural complacency. Ratio vs. Obiter: Ratio - substantial justice is a guiding principle but cannot displace the requirement of credible, sufficient cause; Obiter - extensive survey of pro-condonation cases used illustratively rather than as controlling authority. Conclusion: Principles favouring substantial justice were considered but inapplicable given the appellant's unsupported explanation and prior conduct; therefore condonation was refused. Final Disposition The Tribunal, applying the above analysis, rejected the condonation application for the 371-day delay, held the appeal to be time-barred and not maintainable, and dismissed the appeal without adjudicating the merits of the penalty and assessment issues.