2025 (9) TMI 433 - AT - Income Tax

Appeal dismissed for 539-day delay as reasons were general, unsupported, and failed to show sufficient cause

Sri Dinesh Daga, Hyderabad Versus The Income Tax Officer, Ward-5 (1), Hyderabad.

ITAT HYDERABAD - AT refused to condone a 539-day delay in filing the appeal, finding the appellant's reasons general, unsupported by dates or evidence, ... Delay of 539 days in filing the appeal before the Tribunal - HELD THAT:- The reasons adduced by the assessee are general in nature and did not inspire the confidence. The explanation lacks specific dates, supporting evidences or cogent material to demonstrate bonafides. It is well settled law by the decision of Hon’ble Supreme Court yet in another decision in the case of O/o. Chief Post Master General & Ors. vs. Living Media India Ltd. [2012 (4) TMI 341 - SUPREME COURT] that, Law of Limitation has to be applied with all its rigor and liberal approach cannot be extended to cases of gross negligence or inaction. In this view of the matter and considering the facts and circumstances of the case, we find that, the assessee has failed to explain delay and the circumstances beyond the control of the assessee in not filing the appeal before the Tribunal within the prescribed period with ‘sufficient and reasonable cause’. Therefore, by respectfully following the Judgments of Pathapati Subbareddy (died) [2024 (5) TMI 1319 - SUPREME COURT]; Balwant Singh (Dead) [2010 (7) TMI 556 - SUPREME COURT] and O/o. Chief Post Master General & Ors. vs., Living Media India Ltd., & Anr [2012 (4) TMI 341 - SUPREME COURT] we are disinclined to condone the delay of 539 days in filing the appeal before the Tribunal and accordingly, the appeal of the assessee is dismissed in limine as un-admitted. Appeal of the assessee is dismissed in limine. ISSUES PRESENTED AND CONSIDERED 1. Whether the Tribunal should condone a delay of 539 days in filing the appeal under section 5 of the Limitation Act (read with the discretionary power under the Income-tax law) on the grounds advanced by the appellant. 2. Whether the explanations offered (non-physical service of the appellate order uploaded on an electronic portal, personal attendance to an ailing relative, and reliance on a Chartered Accountant) constitute 'sufficient and reasonable cause' to excuse inaction and negate negligence. 3. The relevance of the appellant's conduct before lower authorities (failure to furnish evidence during assessment, non-appearance before the first appellate authority, and overall negligence) in assessing the bonafides of the delay-condonation plea. 4. The applicable legal standard and limits of the 'liberal' or 'justice-oriented' approach to condoning delay, including the principle that limitation rules embody public policy and cannot be lightly displaced. ISSUE-WISE DETAILED ANALYSIS Issue 1 - Legal framework for condonation of delay Legal framework: Section 5 of the Limitation Act (as applied) and the discretion conferred under the Income-tax Act to condone delay require satisfaction of 'sufficient cause' to excuse filing beyond the prescribed period. The law of limitation is grounded in public policy and the maxim interest reipublicae ut sit finis litium. Precedent treatment: The Tribunal relied on established higher court jurisprudence that courts/tribunals adopt a liberal approach but must nonetheless require adequate explanation showing the delay was beyond the appellant's control and not due to negligence or inaction. Interpretation and reasoning: The Tribunal reiterated that while a justice-oriented construction may avoid throwing out meritorious matters, the phrase 'sufficient cause' is a condition precedent to exercise discretion; liberalism in construction cannot be used to revive stale matters and disturb accrued substantive rights after limitation expires. Ratio vs. Obiter: Ratio - the exercise of discretion to condone delay demands a demonstrable 'sufficient cause' that prevented timely filing and was beyond the litigant's control. Obiter - general commentary on the object of limitation and policy considerations informing the rule. Conclusion: The Tribunal affirmed that condonation requires a convincing, specific, and non-negligent explanation; mere invocation of liberal principles does not suffice to override limitation. Issue 2 - Sufficiency of the specific reasons advanced for delay (portal upload, medical exigency, reliance on tax professional) Legal framework: The applicant must show reasons preventing timely filing; explanations must be specific, supported by evidence where available, and not merely general or vague. Precedent treatment: The Tribunal followed the settled approach that unexplained or inordinate delays accompanied by general reasons are insufficient; precedents disallow condonation where reasons do not convincingly demonstrate prevention from filing. Interpretation and reasoning: The Tribunal scrutinised the affidavit and submissions and found the reasons-unawareness of a portal-uploaded order, necessary travel to assist an ailing relative, and dependence on the Chartered Accountant-were vague, lacked corroborative detail (dates, documentary proof of continuous unavailability, attempts to access the portal, or evidence of unavoidable obstruction), and failed to show prevention rather than mere inaction. Ratio vs. Obiter: Ratio - portal non-service and personal medical attendance, without corroboration and in the context of other conduct omissions, do not constitute 'sufficient cause.' Obiter - observations on what kinds of supporting material or specificity might render such reasons persuasive. Conclusion: The reasons offered did not meet the statutory threshold of 'sufficient and reasonable cause' and were therefore insufficient to justify condonation of the 539-day delay. Issue 3 - Impact of appellant's conduct and negligence before lower authorities on the condonation plea Legal framework: Courts must consider the conduct of the parties, bona fides, and whether the delay could have been avoided by reasonable diligence when assessing condonation applications. Precedent treatment: The Tribunal applied well-established principles that gross negligence, failure to furnish material during assessment, non-appearance at appellate hearings, and a pattern of inaction weigh against granting relief under section 5. Interpretation and reasoning: The Tribunal found a consistent pattern of negligent conduct: failure to produce documentary evidence in assessment; non-appearance at five scheduled hearings before the first appellate authority; and delay in procuring the appellate order after learning of a penalty order. These factors collectively undermined the claim that circumstances beyond control prevented timely filing; instead they indicated an inaction-driven delay. Ratio vs. Obiter: Ratio - conduct evidencing negligence or lack of diligence is a valid and decisive factor against the grant of condonation. Obiter - extension that a single bona fide oversight may be viewed differently from persistent negligence. Conclusion: The appellant's conduct negated the bonafides of the delay explanation and materially supported refusal to condone the delay. Issue 4 - Application of the stringent standard where delay is inordinate and explanation lacks specificity Legal framework: Inordinate delay, absence of corroborative particulars, and lack of specific dates or supporting documents attract rigorous application of limitation rules; liberal construction cannot be used to excuse gross negligence. Precedent treatment: The Tribunal adhered to precedents that refuse condonation in cases of inordinate delay where explanations are general and unsubstantiated, emphasizing that limitation rules must be enforced to preserve finality. Interpretation and reasoning: The Tribunal characterized the 539-day delay as 'highly inordinate,' noted the lack of supporting evidence, and observed that the explanation did not inspire confidence. The Tribunal invoked the principle dura lex sed lex to underscore that legal strictness is appropriate where negligence, rather than unforeseeable prevention, causes delay. Ratio vs. Obiter: Ratio - inordinate unexplained delay coupled with lack of evidence justifies refusal to condone; liberalism has limits where gross negligence exists. Obiter - broader policy remarks about the public interest in finality of litigation. Conclusion: Given the duration of delay, absence of cogent supporting material, and the appellant's conduct, the Tribunal declined to exercise discretion to condone the 539-day delay. Final Disposition (as to the issues collectively) After applying the statutory test for 'sufficient cause,' weighing conduct and bonafides, and following the controlling principles limiting the reach of a liberal approach to condonation, the Tribunal concluded that the appellant failed to demonstrate sufficient and reasonable cause; the delay of 539 days is not condonable and the appeal is dismissed in limine.