Tarangan Park Sahakari Gruharachana Sanstha Maryadit Vs ITO (ITAT Pune)
Ten Years Late, Yet Not Too Late for Justice
The Controversy
A delay of 3,726 days—more than ten years—in filing an appeal would ordinarily appear difficult to overcome. However, the Pune Tribunal condoned such a delay in the case of a small cooperative housing society, accepting the explanation concerning its elderly honorary office-bearers, their health conditions and the absence of competent guidance.
The Tribunal emphasised that the acceptability of the explanation, rather than the length of the delay alone, determines whether condonation is justified. It restored the matter to the first appellate authority for adjudication on merits.
The Society’s Explanation
The assessee was a small cooperative society deriving income from maintenance charges and interest on deposits received from its members. Its office-bearers worked in an honorary capacity.
The dispute arose from an intimation under section 143(1), dated 22 January 2015, for Assessment Year 2014-15. The society challenged the intimation before the first appellate authority, but the appeal was delayed by 3,726 days. The appellate authority declined to condone the delay and dismissed the appeal through an order dated 9 January 2026.
Before the Tribunal, the society explained that its managing committee members were unfamiliar with income-tax provisions. They were also of advanced age, faced health difficulties and lacked access to a competent person who could guide the society.
The society further submitted that it was eligible for deduction under section 80P and requested that the delay be condoned so that its claim could be examined on merits.
Revenue’s Objection
The Department strongly opposed condonation. Its argument was that the assessee had failed to satisfactorily explain an extraordinary delay extending beyond ten years.
The Revenue therefore sought confirmation of the first appellate authority’s order.
The Tribunal identified the central question as whether the explanation offered constituted sufficient cause for condoning the 3,726-day delay. It addressed that question before considering whether the substantive tax dispute required restoration.
Length of Delay Is Not the Only Test
The Tribunal observed that where reasonable circumstances prevent an assessee from filing an appeal within limitation, the explanation must be examined on its substance.
The purpose of limitation is to secure expeditious disposal of disputes. Nevertheless, where the delay is shown to be unintentional and attributable to reasonable circumstances, the interest of substantial justice may warrant condonation.
The Tribunal’s approach was that a long delay does not, by itself, make an application unacceptable. Equally, the reasoning does not mean that every delayed appeal must be admitted. The explanation remains the decisive consideration.
Supreme Court Decisions Relied Upon
The Tribunal referred to Ramnath Sao v. Gobardhan Sao, AIR 2002 SC 1201, which emphasises that sufficient cause must be assessed according to the facts of each case. There is no fixed formula for accepting or rejecting an explanation.
The judgment also recognises the need for balance. Courts should avoid rejecting explanations through an unduly technical approach, while remaining conscious that condonation should not be granted routinely where negligence, inaction or lack of bona fides is established.
The Tribunal further relied on N. Balakrishnan v. M. Krishnamurthy, (1998) 7 SCC 123. The principle drawn from that decision was that a short delay may remain uncondonable if the explanation is unacceptable, whereas a much longer delay may be condoned if satisfactorily explained.
Earlier Decisions on Substantial Delays
The Tribunal also referred to Midas Polymer Compounds Pvt. Ltd., decided by the Tribunal on 25 June 2018, where a delay of 2,819 days had been condoned.
That decision concerned an omission by the professional handling the matter and applied the principles of substantial justice discussed in Collector, Land Acquisition v. Mst. Katiji, 167 ITR 471 (SC). The extract reproduced in the present order stressed that limitation should be applied pragmatically rather than through a mechanical demand for an explanation of every day.
The Pune Tribunal additionally cited CIT v. K.S.P. Shanmugavel Nadai and Others, 153 ITR 596 (Mad.), referring to condonation of a delay of nearly 21 years. These authorities supported its conclusion that the duration of delay alone could not foreclose relief.
The Tribunal’s Decision
Accepting the society’s explanation, the Tribunal condoned the delay in filing the appeal before the first appellate authority.
Since the dispute had not been adjudicated on merits, it set aside the impugned order and restored the matter for fresh adjudication after providing a reasonable opportunity of hearing.
The society was directed to provide updated email and contact details, remain vigilant and avoid seeking adjournments without reasonable cause.
The appeal was allowed for statistical purposes. Importantly, the Tribunal did not allow the section 80P deduction; that claim remained open for examination.
Author’s Comments
The decision recognises the practical difficulties faced by small societies administered by elderly volunteers. Their capacity to manage tax litigation may differ considerably from that of professionally managed organisations.
However, honorary management and ignorance of tax provisions should not be treated as automatic grounds for condonation. A credible explanation connecting the circumstances to the delay remains essential.
The relief here was an opportunity to obtain a decision on merits, not exemption from tax. The calendar counted ten years; the Tribunal examined the cause. Its accompanying directions on vigilance also make clear that the restored opportunity must now be used responsibly.
Cases Discussed
- Ramnath Sao Vs Gobardhan Sao and Others, AIR 2002 SC 1201 (Supreme Court) — relied upon for the principle that whether an explanation constitutes “sufficient cause” depends upon the facts of each case; there is no straitjacket formula, and courts must balance substantial justice against negligence, inaction and the rights accrued to the opposite party.
- N. Balakrishnan Vs M. Krishnamurthy, (1998) 7 SCC 123 (Supreme Court) — relied upon for the principle that length of delay is not by itself decisive; acceptability of the explanation is the material criterion, so even a long delay may be condoned where satisfactorily explained.
- M/s. Midas Polymer Compounds Pvt. Ltd. Vs ACIT, ITA No. 288/Coch/2017, order dated 25.06.2018 (ITAT) — relied upon as a case where a 2,819-day delay caused by failure to take appropriate professional action was condoned in furtherance of substantial justice.
- Collector, Land Acquisition Vs Mst. Katiji and Others, 167 ITR 471 (Supreme Court) — reproduced through the Midas Polymer decision for the principles that substantial justice should prevail over technical considerations and that the requirement to explain delay should be applied rationally, pragmatically and without a pedantic approach.
- CIT Vs K.S.P. Shanmugavel Nadai and Others, 153 ITR 596 (Madras High Court) — relied upon for the relevance of sufficient and reasonable cause rather than merely the duration of delay; the Tribunal noted that nearly 21 years’ delay had been condoned.
- Sreenivas Charitable Trust Vs Dy. CIT, 280 ITR 357 (Madras High Court) — cited in the reproduced Midas Polymer decision for the proposition that the expression “sufficient cause” should be interpreted so as to advance substantial justice.
FULL TEXT OF THE ORDER OF ITAT PUNE
The captioned appeal at the instance of assessee pertaining to A.Y. 2014-15 is directed against the order dated 09.01.2026 of ldAddl/JCIT(A)-2, Hyderabad emanating out of Intimation dated 22.01.2015 passed u/s.143(1) of the Income Tax Act, 1961 (in short ‘the Act’).
2. At the outset, ld. Counsel for the submitted that the assessee is a small cooperative society and deriving income from the maintenance charges and interest on deposits received from its Members. Officer bearers of the society works on Honorary. There was delay of 3726 days in preferring the appeal before ld.CIT(A) which came to be dismissed without condoning the delay. Demonstrating the facts relating to delay, ld. Counsel for the assessee submitted that since the Managing Committee members are completely ignorant of the provisions of Income Tax and the Committee Members are in the advanced age, their health conditions and non-availability of competent person to guide the society, delay had occurred. Otherwise on merits, the assessee society is fully eligible for deduction u/s.80P of the Act. A prayer is made to condone the delay and set aside the issue to the file of ld.CIT(A) for adjudication on merits of the case in accordance with law.
3. On the other hand, ld. DR heavily opposed the arguments advanced by the assessee as the assessee has unable to explain the inordinate delay of more than ten years. Therefore, the order of ld.CIT(A) deserves to be upheld.
4. I have heard the rival submissions and perused the record placed before. The moot question to be decided whether such an inordinate delay of 3726 days can be condoned. I proceed to adjudicate the delay issue first.
5. There is no question of any excessive or inordinate when the ‘reasonable cause’ prevented the assessee from filing the appeal within the period of limitation. The cause for the delay therefore deserves to be considered, when there exist a reasonable cause, and therefore the period of delay may not be relevant factor. It is also not in dispute that u/s. 253(5) of the Act, the Tribunal may admit an appeal filed beyond the period of limitation where it is satisfied that there exists a sufficient cause on the part of the assessee for not presenting the appeal within the prescribed time. The explanation of the assessee therefore becomes relevant to determine whether the same reflects sufficient and reasonable cause on its part in not presenting the present appeal within the prescribed time. The purpose of the limitation period is to ensure expeditious disposal of appeal; however, where the delay is shown to be unintentional and caused by reasonable circumstances, it ought to be condoned in the interest of substantial justice.
6. I take note the judgment of Hon’ble Apex Court in the case of Ramnath Sao vs. Gobardhan Sao and Others reported as 2002 AIR 1201 wherein the Hon’ble Court while dealing with the application seeking condonation of delay held as under:
“In a particular case whether explanation furnished would constitute “sufficient cause” or not will be dependant upon facts of each case. There cannot be a straitjacket formula for accepting or rejecting explanation furnished for the delay caused in taking steps. But one thing is clear that the courts should not proceed with the tendency of finding fault with the cause shown and reject the petition by a slipshod order in over jubilation of disposal drive. Acceptance of explanation furnished should be the rule and refusal an exception more so when no negligence or inaction or want of bona fide can be imputed to the defaulting party. On the other hand, while considering the matter the courts should not lose sight of the fact that by not taking steps within the time prescribed a valuable right has accrued to the other party which should not be lightly defeated by condoning delay in a routine like manner. However, by taking a pedantic and hyper technical view of the matter the explanation furnished should not be rejected when stakes are high and/or arguable points of facts and law are involved in the case, causing enormous loss and irreparable injury to the party against whom the lis terminates either by default or inaction and defeating valuable right of such a party to have the decision on merit. Which considering the matter, courts have to strike a balance between resultant effect of the order it is going to pass upon the parties either way.”
[Emphasised by us]
7. In yet another case, Hon’ble Apex Court in the case of N. Balakrishnan vs. M. Krishnamurthy reported as (1998) 7 SC Cases 123 has held as under:
“9. It is axiomatic that condonation of delay is a matter of discretion of the court. Section 5 of the Limitation Act does not say that such discretion can be exercised only if the delay is within a certain limit. Length of delay is no matter, acceptability of the explanation is the only criterion. Sometimes delay of the shortest range may be uncondonable due to a want of acceptable explanation whereas in certain other cases, delay of a very long range can be condoned as the explanation thereof is satisfactory.”
8. I also take note of the decision Coordinate Bench, Chennai in the case of Midas Polymer Compounds Pvt. Ltd. dated 25.6.2018, wherein the delay of 2819 days has been condoned by observing as follows:
“6. We have heard the rival submissions and perused the record. There was a delay of 2819 days in filing the appeal before the Tribunal. The assessee has stated the reasons in the condonation petition accompanied by an affidavit which has been cited in the earlier para. The assessee filed an affidavit explaining the reasons and prayed for condonation of delay. The reason stated by the assessee is due to inadvertent omission on the part of Shri Unnikrishnan Nair N, CA in taking appropriate action to file the appeal. He had a mistaken belief that the appeal for this year was filed by the assessee as there was separate Counsel to take steps to file this appeal before the ITAT. Therefore, we have to consider whether the Counsel’s failure is sufficient cause for condoning the delay. The Madras High Court considered an identical issue in the case of Sreenivas Charitable Trust v. Dy. CIT (280 ITR 357) and held that mixing up of papers with other papers are sufficient cause for not filing the appeal in time. The Madras High Court further observed that the expression “sufficient cause” should be interpreted to advance substantial justice. Therefore, advancement of substantial justice is the prime factor while considering the reasons for condoning the delay.
6.1 On merit the issue is in favour of the assessee. But there is a technical defect in the appeal since the appeal was not filed within the period of limitation. The assessee filed an affidavit saying that the appeal was not filed because of the Counsel’s inability to file the appeal. The Revenue has not filed any counter affidavit to deny the allegation made by the assessee. While considering a similar issue the Apex Court in the case of Collector, Land Acquisition v. Mst. Katiji and Ors. (167 ITR 471) laid down six principles. For the purpose of convenience, the principles laid down by the Apex Court are reproduced hereunder:
(1) Ordinarily, a litigant does not stand to benefit by lodging an appeal late
(2) Refusing to condone delay can result in a meritorious matter being thrown at the very threshold and cause of justice being defeated. As against this, when delay is condoned, the highest that can happen is that a cause would be decided on merits after hearing the parties.
(3)’Every day’s delay must be explained’ does not mean that a pedantic approach should be made. Why not every hour’s delay, every second’s delay? The doctrine must be applied in a rational, commonsense and pragmatic manner.
(4)When substantial justice and technical consideration are pitted against each other, the cause of substantial justice deserves to be preferred, for the other side cannot claim to have vested right in injustice being done because of a nondeliberate delay.
(5) There is no presumption that delay is occasioned deliberately, or on account of culpable negligence, or on account of mala fides. A litigant does not stand to benefit by resorting to delay. In fact, he runs a serious risk.
(6)It must be grasped that the judiciary is respected not on account of its power to legalise injustice on technical grounds but because it is capable of removing injustice and is expected to do so.
6.2 When substantial justice and technical consideration are pitted against each other, the cause of substantial justice deserves to be preferred, for the other side cannot claim to have vested right for injustice being done because of nondeliberate delay. In the case on our hand, the issue on merit regarding allowability of deduction u/s. 80IB of the Act was covered in favour of the assessee by the binding Judgment of the jurisdictional High Court. Moreover, no counter-affidavit was filed by the Revenue denying the allegation made by the assessee. It is not the case of the Revenue that the appeal was not filed deliberately. Therefore, we have to prefer substantial justice rather than technicality in deciding the issue. As observed by Apex Court, if the application of the assessee for condoning the delay is rejected, it would amount to legalise injustice on technical ground when the Tribunal is capable of removing injustice and to do justice. Therefore, this Tribunal is bound to remove the injustice by condoning the delay on technicalities. If the delay is not condoned, it would amount to legalising an illegal order which would result in unjust enrichment on the part of the State by retaining the tax relatable thereto. Under the scheme of Constitution, the Government cannot retain even a single pie of the individual citizen as tax, when it is not authorised by an authority of law. Therefore, if we refuse to condone the delay, that would amount to legalise an illegal and unconstitutional order passed by the lower authority. Therefore, in our opinion, by preferring the substantial justice, the delay of 2819 days has to be condoned.”
9. I further note that the Hon’ble Madras High Court in the case of CIT vs. K.S.P. Shanmugavel Nadai and Ors. Reported in 153 ITR 596 considered the condonation of delay and held that there was sufficient and reasonable cause on the part of the assessee for not filing the appeal within the period of limitation. Hon’ble Madras High Court thus condoned nearly 21 years of delay in filing the appeal. As compared to 21 years, delay of about 3726 days cannot be considered to be inordinate or excessive. Further, considering the reasons furnished by the assessee, I find that ‘reasonable cause’ prevented the assessee to file the appeal before ld.CIT(A) within the stipulated time and therefore adopting a pedantic and justice oriented approach I condone the delay in filing of appeal before ld.CIT(A).
10. Since there is no adjudication on merits of the case, I therefore without dwelling upon the merits of the case deem it proper to restore the issue to the file of ld.CIT(A) for adjudication on merits in accordance with law after providing reasonable opportunity of hearing to the assessee. Assessee is directed to provide updated email id and contact detail to the department for receiving the notices from ITBA portal. Assessee is also directed to remain vigilant and not to take adjournment unless otherwise required for reasonable cause. Impugned order is set aside and the effective grounds of appeal raised by the assessee are allowed for statistical purposes.
11. In the result, the appeal of the assessee is allowed for statistical purposes.
Order pronounced on this 30th day of September, 2026.
