Merger-Related Account Migration Fails to Justify 275-Day Tax Appeal Delay, Tribunal Rejects Explanation

ITAT Cochin dismissed assessee's tax appeal as time-barred, finding 275-day delay unexcused. Despite claiming merger-related account migration issues, the Tribunal rejected the explanation, citing SC precedents that institutional assessees must demonstrate reasonable cause. The court emphasized vigilance in tax matters and held that merger proceedings do not automatically constitute valid grounds for delay condonation.

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The ITAT Cochin, per Judicial Member Prakash Chand Yadav, dismissed the assessee's appeal for AY 2018-2019 as barred by limitation due to a 275-day delay in filing. The assessee, a State Cooperative Bank, attributed the delay to merger-related account migration issues with Kerala Bank, acknowledging receipt of the CIT(A) order on 6.10.2023. The Tribunal held that merger proceedings do not constitute a "reasonable cause" for delay and emphasized the requirement for vigilance in tax matters by institutional assessees. Citing recent Supreme Court precedents-H. Guruswamy v. A. Krishna (Civil Appeal No. 317 of 2025) and Mool Chandra v. Union of India (2024 SCC OnLine SC 1878)-the Tribunal reiterated that condonation of delay hinges on the cause, not merely the length of delay, and that negligence negates condonation. The Tribunal rejected the assessee's explanation as insufficient, affirming that "power to condone delay should be exercised having regard to the facts of the case" but not to "frustrate the substantial law of limitation." Consequently, the appeal was dismissed.

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