Society's 53-day delay in filing appeal condoned due to counsel's wrong advice under Section 253(5)

Chhattisgarh HC allowed appeal challenging ITAT's rejection of condonation application for 53-day delay in filing appeal. Appellant society explained delay occurred due to counsel's wrong advice to reapply for registration under Section 12A of IT Act instead of filing appeal. Court held "sufficient cause" under Section 253(5) requires liberal construction to advance substantial justice. Since delay was bona fide, based on erroneous legal advice without mala fide intent or deliberate inaction, and rejection would deny tax exemption benefits under Sections 11-12, delay was condoned. ITAT order set aside.

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Issues Involved:

1. Whether the Income Tax Appellate Tribunal (ITAT) was justified in holding that the appellant failed to show sufficient cause for a delay of 55 days in filing the appeal.

Issue-wise Detailed Analysis:

1. Justification of ITAT's Decision on Delay:

The primary issue in this case was whether the ITAT was justified in rejecting the appellant's application for condonation of delay in filing an appeal. The appellant's appeal was delayed by 55 days, and the ITAT held that sufficient cause for the delay was not shown, leading to the dismissal of the appeal.

The appellant argued that the delay was caused by the wrong advice from their counsel, who suggested reapplying for registration under Section 12A of the Income Tax Act instead of filing an appeal against the rejection of their initial application for permanent registration. The appellant later realized the mistake and filed the appeal, which resulted in the delay. The Revenue did not file a reply to the application for condonation of delay, nor did it controvert the reasons provided by the appellant.

The court emphasized that the expression "sufficient cause" should be interpreted liberally to advance substantial justice. It noted that generally, delays in preferring appeals should be condoned in the interest of justice unless there is gross negligence, deliberate inaction, or lack of bona fides. The court referred to several Supreme Court judgments, which highlighted that the judiciary should focus on substantial justice rather than technicalities, and delays should be condoned if they are not deliberate or mala fide.

The court observed that the appellant's explanation for the delay was bona fide and not opposed by any counter-affidavit from the Revenue. It concluded that the appellant had shown sufficient cause for the delay, which was not deliberate or mala fide but was based on wrong legal advice. The rejection of the application for condonation of delay would have severe civil consequences for the appellant, as it would prevent the Society from claiming tax exemption under relevant sections of the Income Tax Act.

Conclusion:

The court set aside the ITAT's order rejecting the application for condonation of delay. It condoned the 55-day delay and restored the appeal to its original status, directing the ITAT to decide the appeal afresh on merits within three months. The court made it clear that it had not expressed any opinion on the merits of the case itself. The tax appeal was allowed with no order as to costs.

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