Chopda Merchant Co-operative Credit Society Ltd. Vs NFAC/DCIT (ITAT Pune)
“Our Counsel Failed Us” Was Not Enough: ITAT Refuses to Condonе a Three-Year Delay
The issue: sufficient cause or a history of indifference?
The Pune ITAT dismissed two appeals filed by a co-operative credit society after refusing to condone an inordinate delay of approximately 1,127 days. The society attributed the delay to its dependence on professional advice, its managing committee elections and lack of knowledge about the time limit for approaching the Tribunal.
However, the Tribunal found that the affidavit contained vague explanations without supporting particulars. Viewed alongside repeated non-compliance before the Assessing Officer, the first appellate authority and the Tribunal, the explanation failed to establish sufficient cause.
The decision reinforces that a liberal approach to condonation does not dispense with a credible explanation supported by facts.
The background: cash deposits triggered reopening
The society had not filed returns of income for AYs 2011-12 and 2013-14. The Assessing Officer issued notices under section 148 after noticing cash deposits of ₹2,71,90,500 and ₹2,64,57,000, respectively.
Further notices followed. The Assessing Officer also issued a summons under section 131 to the society’s Chairman, but there was no compliance. Ultimately, ex parte assessments were completed under section 144 on 24 December 2018.
The society approached the Commissioner (Appeals), but the pattern continued. The appellate authority issued seven notices, none of which was complied with. The appeals were dismissed, and the assessments were confirmed through orders dated 29 September 2022.
The society eventually filed its Tribunal appeals in December 2025, accompanied by applications seeking condonation of the substantial delay.
The explanation: counsel, elections and committee approval
An affidavit filed on behalf of the society stated that neither the society nor its Manager knew the limitation period for filing an appeal before the ITAT. The society claimed that it was entirely dependent on its counsel for taxation and appellate matters.
It also referred to managing committee elections and related procedural compliances continuing up to 2023.
According to the affidavit, the society became aware of the dismissal of its appeals only when recovery proceedings commenced and the Manager contacted the earlier counsel. That counsel allegedly advised engagement of another professional and admitted unfamiliarity with the procedure and time limit for filing Tribunal appeals.
The newly engaged professional advised immediate remedial action. A managing committee meeting was then convened, and a unanimous decision was taken to file the appeals. The affidavit explained that the Manager could not act individually and had to await a meeting with the required quorum.
The society maintained that the delay arose from incorrect advice, lack of advice and professional negligence, rather than deliberate inaction.
The Tribunal’s objection: where were the particulars?
The Tribunal found these explanations inadequate.
The affidavit did not specify the dates of the society’s elections. Although considerable responsibility was placed on the earlier counsel, it did not identify that counsel by name. Nor were documents produced establishing the specific responsibilities entrusted to the professional.
These omissions mattered because the application sought forgiveness of a delay exceeding three years. A general reference to elections and professional dependence did not explain the prolonged failure to act.
The Tribunal consequently characterised the affidavit as vague and insufficient to demonstrate sufficient cause.
Esha Bhattacharjee: liberal treatment has limits
The Tribunal applied the Supreme Court’s principles in Esha Bhattacharjee v. Managing Committee of Raghunathpur Nafar Academy, decided on 13 September 2013.
Those principles require a liberal, pragmatic and justice-oriented approach, recognising that substantial justice should not be defeated by excessive technicality. However, they also require consideration of gross negligence, bona fides and the litigant’s conduct.
A significant distinction exists between a short delay and an inordinate one. The latter warrants closer scrutiny. Judicial discretion must rest on objective reasoning and the entire factual background.
Thus, the expression “sufficient cause” is flexible, but it is not unlimited. A plea for substantial justice cannot substitute for an explanation demonstrating why timely action was prevented.
Repeated non-compliance weighed against the society
The Tribunal considered the society’s earlier conduct particularly relevant. It had not filed returns, had not complied with the Assessing Officer’s notices and had remained non-compliant before the Commissioner (Appeals).
Even before the Tribunal, nobody appeared on its behalf despite seven scheduled hearings between February and September 2026. The appeals were therefore heard ex parte after considering the Revenue’s submissions and the records.
The Tribunal described the overall conduct as reflecting a casual or defiant attitude. Combined with the vague condonation petition, this prevented acceptance of the explanation.
Both appeals were dismissed without adjudication of the underlying assessment issues.
Author’s comments
Blaming the counsel is an explanation to be proved, not a formula for automatic condonation. A persuasive application should identify the professional, establish the engagement and provide a clear chronology of communication, discovery and subsequent action.
Committee procedures may explain some delay, but their actual dates and effect must be demonstrated. Here, the combination of missing particulars and persistent non-compliance proved decisive. The Tribunal’s dismissal was on limitation; it did not decide the merits of the cash deposits or any substantive exemption claim.
Cases Discussed
- Esha Bhattacharjee v. Managing Committee of Raghunathpur Nafar Academy & Others, Civil Appeal Nos. 8183-8184 of 2013, Supreme Court, order dated 13.09.2013 — relied upon for the governing principles on condonation of delay, including liberal and justice-oriented consideration of “sufficient cause” while taking account of gross negligence, bona fides, conduct, the distinction between short and inordinate delay, and the requirement of objective judicial reasoning.
FULL TEXT OF THE ORDER OF ITAT PUNE
These two appeals are filed by the assessee against the order of the Learned Commissioner of Income Tax (Appeals), NFAC, Delhi [Ld.CIT(A)], passed u/s. 250 of the Income Tax Act, 1961 (‘the Act’) for AYs 2011-12 and 2013-14 on 29.09.2022, emanating from the ex-parte assessment order dated 24.12.2018.
2. Since, issue involved is same, for the sake of conveniencethese two appeals were heard together and are disposed of by this common order.
3. Basic Facts :
> In this case, hearing was scheduled on 12.02.2026, none appeared on behalf of the assessee, hence, case was adjourned to 02.04.2026.
> On 02.04.2026, none appeared on behalf of the assessee, hence, case was adjourned to 22.04.2026.
> On 22.04.2026, none appeared on behalf of the assessee, hence, case was adjourned to 18.05.2026.
> On 18.05.2026, none appeared on behalf of the assessee, hence, case was adjourned to 15.07.2026.
> On 15.07.2026, none appeared on behalf of the assessee, hence, case was adjourned to 12.08.2026.
> On 12.08.2026, none appeared on behalf of the assessee, hence, case was adjourned to 29.09.2026.
> On 29.09.2026, none appeared on behalf of the assessee.
3.1 In these backgrounds, we heard the case on 29.09.2026 ex-parte qua the assessee. We heard Ld. DR and perused the records.
Findings and Analysis:
4. In this case, the assessee is a Co-operative Society and not filed return of income for AYs 2011-12 and 2013-14. The Assessing Officer (AO) issued notice u/s 148 of the Act as there were cash deposits of Rs.2,71,90,500/- in AY 2011-12 and Rs.2,64,57,000/- in AY 2013-14. Then, the AO issued various other notices. The AO also issued summons u/s 131 of the Act to the Chairman of the society. There was no compliance to the summons. Finally, the AO passed ex-parte order u/s 144 of the Act. Aggrieved by the same, the assessee filed an appeal before the Ld. CIT(A). The Ld. CIT(A) issued seven notices. None of the notices were complied by the assessee. The Ld. CIT(A) dismissed the appeal of the assessee and confirmed the assessment order. Aggrieved by the order of the Ld. CIT(A), the assessee filed an appeal before this Tribunal with a delay of 1127 days.
5. Mr. Sanjay K. Patil filed affidavit on behalf of the assessee explaining the delay. The relevant paragraphs of the affidavit are reproduced here as under :
“2. That the position of delay in filing the present appeal for AY.2011-12, is as under:
| Section of order | Date of order | Date of Service | Due date of filing of appeal | Actual dt. Of filing of appeal | Delay in days. |
|---|---|---|---|---|---|
| 250 of the Act. | 29.09.2022 | 30.09.2022 | 30.11.2022 | 31.12.2025 | 1128 days |
3. That the appellant assessee is a Co. Op. Credit Society and it is engaged in the business of providing credit facilities to its members. Neither the appellant Society nor the Manager of the Society were aware about the limitation period during which an appeal must be filed before the Hon’ble ITAT. The appellant Society was totally depended upon its Counsel and its taxation/appeal matter. Further, there was election of the managing committee of the appellant Society. Such work was continued upto 2023 in complying with procedural work of election and thereafter compliances to the Election officer and Department of Co. Op. Societies.
4. That the appellant assessee came to know about the dismissal of the appeal of the Society only when the recovery proceedings were initiated and when the Manager had contacted the Counsel. The Counsel had advised the appellant Society to engage the professional services of the other expert who shall deal the matter of filing of an appeal before the Hon’ble Tribunal. It was admitted by the earlier Counsel that he is not aware of the procedure and time limit during which the appeal is required to be filed, before the Hon’ble ITAT.
5. That the present Counsel had advised the correct legal remedial action and also suggested for immediate filing of appeal. In view of this, the meeting of the Managing Committee of the Society was urgently conducted and it was unanimously decided to file an appeal before the appropriate authority against the order u/s. 250 of the Act., by which the ld. CIT(A), NFAC, has dismissed the appeal. It was also decided to engage the professional services of the present Advocate for such purpose. It is significant to mention here that unless the matter was decided in the meeting and decision thereon taken unanimously, no one can take decision individually. The Manager/Officer in charge, cannot take the decision individually and was waiting for the meeting with full Corum.
6. Thus, due to above reasons and late communication of appellate order of the CIT(A), by the earlier Counsel and improper legal advice tendered by the professional person on which the appellant assessee had acted, there is a delay in submission of present appeal. Further, the documents/information/submission were not produced before the lower authorities due to insufficiency or inadvertence of the professional person to whom the taxation matter of the Society was assigned, resulted into dismissal of appeal. Hon’ble Sir, the delay is not due to deliberate or culpable negligence on the part of the appellant Society and the same cannot be said to be gross negligence or lack of bonafide or unreasonable.
7. That it is therefore most humbly prayed that non filing of an appeal within time was not because of lethargy, malafide or callous attitude on the part of the Manager/Society but because of Counsel’s misadvise/non advise and negligence and involvement in 5 years Society’s election.”
5.1 On perusal of the affidavit filed by the Manager of the assessee society, it is observed that the assessee has not established any sufficient cause for substantial delay of 1127 days. No dates of the elections of the Society have been mentioned. In the affidavit, it is claimed that the society was totally dependent on Counsel, however, no name of the Counsel is mentioned and no documents have been filed to establish the specific responsibilities given to the Counsel. Thus, the affidavit is vague without specifying sufficient cause.
6. The Hon’ble Supreme Court in the case of Esha Bhattacharjee vs Managing Committee of Raghunathpur Nafar Academy and others Civil Appeal Nos.8183-8184 of 2013 vide order dated 13/09/2013 has laid down following principles for deciding Condonation Application:
Quote, “15. From the aforesaid authorities the principles that can broadly be culled out are:
i) There should be a liberal, pragmatic, justice-oriented pedantic approach while dealing with an application for condonation of delay, for the courts are not supposed to legalise injustice but are obliged to remove injustice.
ii) The terms “sufficient cause” should be understood in their proper spirit, philosophy and purpose regard being had to the fact that these terms are basically elastic and are to be applied in proper perspective to the obtaining fact- situation.
iii) Substantial justice being paramount and pivotal the technical considerations should not be given undue and uncalled for emphasis.
iv) No presumption can be attached to deliberate causation of delay but, gross negligence on the part of the counsel or litigant is to be taken note of.
v) Lack of bona fides imputable to a party seeking condonation of delay is a significant and relevant fact.
vi) It is to be kept in mind that adherence to strict proof should not affect public justice and cause public mischief because the courts are required to be vigilant so that in the ultimate eventuate there is no real failure of justice.
vii) The concept of liberal approach has to encapsule the conception of reasonableness and it cannot be allowed a totally unfettered free play.
viii) There is a distinction between inordinate delay and a delay of short duration or few days, for to the former doctrine of prejudice is attracted whereas to the latter it may not be attracted. That apart, the first one warrants strict approach whereas the second calls for a liberal delineation.
ix) The conduct, behaviour and attitude of a party relating to its inaction or negligence are relevant factors to be taken into consideration. It is so as the fundamental principle is that the courts are required to weigh the scale of balance of justice in respect of both parties and the said principle cannot be given a total go by in the name of liberal approach.
x) If the explanation offered is concocted or the grounds urged in the application are fanciful, the courts should be vigilant not to expose the other side unnecessarily to face such a litigation.
xi) It is to be borne in mind that no one gets away with fraud, misrepresentation or interpolation by taking recourse to the technicalities of law of limitation.
xii) The entire gamut of facts are to be carefully scrutinized and the approach should be based on the paradigm of judicial discretion which is founded on objective reasoning and not on individual perception.
xiii) The State or a public body or an entity representing a collective cause should be given some acceptable latitude. “Unquote.
(emphasis supplied).
6.1 Thus, Hon’ble Supreme Court has explained that the Inordinate Delay warrants Strict Approach, and earlier conduct of the petitioner should be analyzed.
6.2 In this case when we apply the above mentioned Principles, the Delay in this case is Inordinate hence warrants Stricter approach. The assessee had not filed return of income, had not complied any notices issued by the Assessing Officer. The Assessee was non-compliant even before the Commissioner of Income Tax. This shows casual or defiant attitude of the assessee. The reasons mentioned in the condonation petition are vague. Assessee has failed to demonstrate that there was any sufficient cause for delay.
6.3 For all the reasons discussed above, the Delay is not condoned, and appeal in ITA No. 3353/PUN/2025 for AY 2011-12 filed by the assessee is dismissed.
7. Identical affidavit has been filed for AY 2013-14, accordingly, the facts discussed above applies to AY 2013-14 also. Taking into consideration totality of the facts, we are of the considered opinion that there was no sufficient cause for such inordinate delay. Hence, ITA No. 3352/PUN/2025 for AY 2013-14 is dismissed.
8. In the result, both the appeals of the assessee are dismissed.
Order pronounced in the open Court on 30TH September, 2026
