Sai Souhardha Credit Co-operative Society Ltd. Vs ITO (Karnataka High Court)
A Delayed Appeal Gets a Second Life: CA’s Family Cancer Crisis Is “Sufficient Cause” u/s 249(3), Karnataka HC Restores Merits
Summary: In Sri Sai Souhardha Credit Co-operative Society Ltd. v. Income Tax Officer, the Karnataka High Court considered an assessee’s appeal u/s 260A concerning AY 2020-21. The assessment order was passed on 12.09.2022. The assessee challenged it before the Commissioner (Appeals) only on 28.01.2025, accompanied by an application seeking condonation of delay u/s 249(3).
The Commissioner (Appeals), by order dated 18.08.2025, refused to condone the delay & dismissed the appeal in limine without examining the assessment on merits. The Bangalore ITAT, through its order dated 24.02.2026 in ITA No.2342/Bang/2025, upheld that decision, holding that sufficient cause had not been established.
The assessee approached the High Court, questioning the threshold dismissal, adequacy of its explanation & failure to consider the Chartered Accountant’s letter explaining why the entrusted appeal was not filed within time.
Issue Before the Court
The central issue was whether the personal circumstances of the assessee’s authorised representative, whose wife was undergoing prolonged cancer treatment, constituted “sufficient cause” u/s 249(3) for condoning the substantial delay.
The connected issue was whether the High Court could consider an affidavit, medical records & death certificate produced for the first time before it, although those supporting documents had not been placed before the Commissioner (Appeals) or Tribunal.
Assessee’s Contentions
The assessee submitted that all relevant papers had been handed over to its authorised representative, Chartered Accountant K.L. Ravindranath, within time for filing the first appeal. The delay was therefore not caused by abandonment of the remedy or deliberate inaction by the society.
The CA explained in his earlier letter that his wife had suffered from cancer since 2021. He was continuously occupied with arranging treatment at hospitals in Chitradurga, Davanagere & Bengaluru, due to which he could not attend properly to office responsibilities or file the entrusted appeal.
Before the High Court, the CA filed an affidavit dated 01.08.2026, supported by medical records. The documents showed treatment from 2021 until 2024. A death certificate confirmed that his wife, Vijayalakshmi, died on 26.06.2024. The assessee argued that these circumstances were genuine, compelling & wholly inconsistent with mala fide delay.
Revenue’s Position
Revenue appeared through counsel, but the judgment records no detailed rebuttal to the medical documents. The principal circumstance supporting the earlier orders was that this material had not been produced before either appellate authority.
Consequently, the Commissioner (Appeals) & Tribunal had decided the condonation request without the benefit of the affidavit, treatment records or death certificate & had concluded on the available record that sufficient cause was not shown.
Court’s Findings
The High Court examined the CA’s affidavit, medical records & death certificate. It found that his wife had genuinely undergone prolonged cancer treatment from 2021 to 2024 & ultimately died from the illness. The explanation therefore stood corroborated by objective evidence rather than resting upon a bare assertion.
The Court accepted that the assessee had entrusted the papers to its representative for filing the appeal. His inability to complete that task arose from an exceptional personal crisis. The cause was neither mala fide, intentional nor a device to gain an unfair advantage.
Although the Commissioner (Appeals) & Tribunal could not be faulted for not considering documents never placed before them, the High Court held that the fuller evidence now produced satisfactorily established sufficient cause. Continuing to deny the statutory appeal despite such evidence would allow procedural delay to defeat substantive adjudication.
The Court consequently set aside both appellate orders, condoned the delay & remitted the matter to the Commissioner (Appeals) for deciding the appeal on merits. The substantial questions of law formulated in the High Court appeal were expressly kept open.
Legal Reasoning
Section 249(3) empowers the Commissioner (Appeals) to admit a belated appeal when satisfied that the appellant had sufficient cause for not presenting it within the prescribed period. The expression is intended to advance justice where delay is adequately explained, rather than punish a litigant for every procedural lapse.
The Court reiterated the Supreme Court’s approach that a potentially meritorious matter should not be rejected solely on limitation. Condonation applications require a liberal, justice-oriented assessment, particularly where the explanation is supported by evidence & lacks deliberateness or bad faith.
At the same time, the judgment does not declare that every mistake of a professional automatically binds the Department or warrants condonation. Relief flowed from the specific combination of timely entrustment, grave illness, prolonged treatment, death & documentary corroboration.
Practical Implications
The order restores only the appellate opportunity; it does not disturb the assessment on merits or indicate that the assessee’s substantive tax case will succeed. The Commissioner (Appeals) must now independently adjudicate all grounds.
Taxpayers seeking condonation should file the professional’s affidavit, medical evidence, correspondence showing timely entrustment & a complete chronology at the earliest stage. Delay may be forgiven when the cause is human, genuine & proved-but the merits must still win their own battle.
FULL TEXT OF THE JUDGMENT/ORDER OF KARNATAKA HIGH COURT
The appellant – assessee is in appeal under Section 260A of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) questioning the order dated 24.02.2026 in ITA No.2342/Bang/2025 for the Assessment Year 2020-21 passed by the Income Tax Appellate Tribunal, Bengaluru (hereinafter referred to as ‘the Tribunal’) raising the following substantial questions of law:
“16. (i) Whether in facts & Circumstances of the Appellant’s case, whether Appellate Tribunal is right in upholding the order of the First Appellate Authority, who had dismissed the appeal in limine?
(ii) Whether in facts & circumstances of the Appellant’s case, whether Appellate Tribunal is right in holding that the appellant failed to offer any sufficient cause explaining the delay in filing the appeal before the First Appellate Authority?
(iii) Whether in facts & circumstances of the Appellant’s case, whether Appellate Tribunal is right in not considering the letter of the Chartered Accountant, who explained the reasons for not filing the appeal, when it was entrusted to him, though a copy of the said letter was filed before the Appellate Authorities?”
2. Heard learned counsel Sri.R Chandrashekar and learned counsel Sri.Kashinath Kalmath along with Sri.Rama Murthy R for the appellant and learned counsel Sri.E I Sanmathi along with Sri.Nirmal Mathew for the respondent-revenue.
3. Learned counsel for the appellant would submit that in respect of appellant – assessee order of assessment was passed on 12.09.2022 for the Assessment Year 2020-21. Against the said order of assessment, the appellant filed appeal before the Commissioner (Appeals) on 28.01.2025 with an application for condonation of delay under Section 249 (3) of the Act. The Commissioner (Appeals) dismissed the appeal without condoning the delay. Against the order of the Commissioner (Appeals) dated 18.08.2025, the appellant – assessee filed appeal before the Tribunal in ITA No.2342/Bang/2025. The said appeal also came to be dismissed holding that the
4. Learned counsel for the appellant would submit that the appeal was filed by the authorized representative of the appellant and the relevant papers for filing the appeal was handed over to the authorized representative of the appellant in time. However, it is submitted that the authorized representative of the appellant could not file the appeal in time for the reason that the wife of the authorized representative of the appellant was suffering from Cancer since the year 2021.
5. Learned counsel for the appellant – assessee would invite our attention to the letter of authorized representative (Annexure – C), wherein he has stated that due to his personal problems he could not attend the office work properly and, as his wife was suffering from cancer, he was running around to get treatment to his wife. Learned counsel for the appellant also files affidavit dated 01.08.2026 of the said authorized representative Sri.K L Ravindranath, Chartered Accountant before this Court today. Wherein the Chartered Accountant has sworn that his wife late Mrs.R.Vijayalakshmi was diagnosed with cancer in the year 2021 and she underwent prolonged treatment in various hospitals in Chitradurga, Davanagere and Bengaluru. Further, the said affidavit is enclosed with death certificate of his wife, which indicates that she died on 26.06.2024. The affidavit is also enclosed with the medical documents of treatment of the wife of the legal representative of the appellant herein. The medical records would indicate that the wife of the authorized representative of the appellant was being treated for cancer since year 2021 till 2024. However, these documents were not filed before the Commissioner (Appeals) or before the Tribunal. The Tribunal or the Commissioner (Appeals) had no advantage of going through the documents filed before this Court. As such, the Commissioner (Appeals) and Tribunal have come to the conclusion that the appellant has not made out sufficient cause to condone the delay.
6. Hon’ble Apex Court has made it clear that delay shall not defeat the justice and only on the question of delay, a merited case should not be thrown out. Further, it is also made clear that the Courts or Tribunal should be liberal in considering the application for condonation of delay and, if cause is shown, which is not mala fide or deliberate, the delay shall be condoned and matter shall be examined on merit. In the instant case, the categorical case of the appellant is that, the papers were handed over to their representative Sri.K L Ravindranath, Chartered Accountant, for filing the appeal and the said representative could not file appeal within time as his wife was suffering from cancer. To establish that the representative of appellant – Chartered Accountant Sri.K L Ravindranath’s wife was suffering from cancer, the affidavit and medical records are placed on record. On going through the affidavit of the appellant’s representative Chartered Accountant Sri.K L Ravindranath as well as the medical records of his wife, who died by cancer, we are satisfied that the reason or the cause shown by the appellant would constitute sufficient cause to condone the delay. Section 249(3) of the Act empowers the Commissioner (Appeals) to admit an appeal after the expiration of period of limitation, if he is satisfied that the appellant had sufficient cause for not presenting the appeal within the time prescribed. In the instant case, though the appellant had not placed on record sufficient material to establish sufficient cause before the Tribunal or Commissioner (Appeals), however, before this Court, the appellant has made available the material which constitutes sufficient cause. In that view of the matter, the appeal needs to be allowed by condoning the delay in filing the appeal before the Commissioner (Appeals). The substantial question of law raised by the appellant are kept open. In the light of the above, the following order:
ORDER
i) The order dated 18.08.2025 (Annexure – D) in Appeal No.NFAC/2019-20/10428186 and order dated 24.02.2026 in ITA No.2342/Bang/2025 for the Assessment Year 2020-21 passed by the Tribunal are set aside.
ii) The delay in filing the appeal before the Commissioner (Appeals) against Assessment Order dated 12.09.2022 is condoned and the matter is remitted back to the Commissioner (Appeals) for consideration of appeal on its merit.
