Supreme Allied Services Private Limited Vs ACIT (ITAT Mumbai)
“Order Went to Spam” Is Insufficient Without Evidence of Diligence: ITAT Refuses to Condone 667-Day Delay
Background
The Mumbai Tribunal considered whether a delay of 667 days in filing an appeal could be condoned on the explanation that the email intimating the CIT(A)’s order had landed in the assessee’s spam folder.
The appeal arose from a CIT(A)/National Faceless Appeal Centre order dated 20 November 2023, concerning a rectification order passed under Section 154 on 23 June 2023 for Assessment Year 2018–19.
Before examining the grounds relating to rectification, the Tribunal considered the application for condonation of delay. The assessee supported its application with an affidavit from a director explaining why the appeal had not been filed within the prescribed period.
Assessee’s Explanation
The assessee stated that the appellate order had been uploaded on the Income Tax Portal and an intimation had been sent to its registered email address. However, the email allegedly went into the spam folder and consequently escaped its attention.
According to the assessee, it remained unaware that the CIT(A) had disposed of the appeal and therefore did not inform its tax consultant about the order.
On 18 September 2025, the assessee received a demand notice under Section 156. While preparing a response, the consultant discovered that the first appeal had already been decided. The consultant advised the assessee to challenge the order before the Tribunal, following which a professional was engaged to prepare the appeal.
The appeal was ultimately filed on 17 November 2025. The assessee submitted that the delay arose from unforeseen circumstances, was not deliberate or mala fide, and should not prevent adjudication on merits. It also stated that it had not committed similar defaults in other assessment years.
In support of a liberal approach, it relied on Collector, Land Acquisition v. Mst. Katiji, Improvement Trust v. Ujagar Singh and Vasu & Co. v. State of Kerala.
Tribunal’s Assessment of the Explanation
The Tribunal found the explanation flimsy and superficial and held that it did not establish sufficient cause.
It noted that service of the appellate order was not disputed. The assertion that the email might have entered the spam folder did not adequately explain the company’s prolonged failure to monitor its pending appeal.
The Tribunal emphasised that a corporate assessee was expected to follow up and keep track of ongoing income-tax proceedings. In its assessment, the delay reflected negligence and inaction rather than circumstances justifying condonation.
It further observed that the assessee had not furnished substantive evidence supporting its explanation for the late filing.
Liberal Interpretation Does Not Dispense with Sufficient Cause
The Tribunal referred to several decisions explaining the relationship between a liberal approach and the requirement of sufficient cause.
Relying on Basawaraj v. Special Land Acquisition Officer, it observed that an applicant must demonstrate an adequate reason preventing timely recourse to the appellate remedy. Negligence, lack of diligence and prolonged inactivity cannot ordinarily justify condonation.
In Perumon Bhagvathy Devaswom v. Bhargavi Amma, the Supreme Court had recognised that sufficient cause should receive a reasonable, practical and liberal interpretation. However, that approach applies where the delay is not attributable to dilatory tactics, lack of bona fides, deliberate inaction or negligence.
The Tribunal also referred to Balwant Singh v. Jagdish Singh, which stressed that liberal construction must remain consistent with reasonable conduct and fairness to both parties. The opposing party’s accrued rights cannot be displaced merely because condonation is requested.
The Bombay High Court’s decision in Ornate Traders Private Limited v. ITO was cited for the proposition that delay should not be condoned mechanically or routinely without justification.
Merits Cannot Automatically Override Limitation
The Tribunal stressed that the bona fides and adequacy of the explanation must be examined before proceeding to the merits of the underlying dispute.
Condonation is not an act of generosity, and sympathy cannot substitute for sufficient cause. Substantial justice must be considered alongside the purpose of limitation and fairness to the opposing party.
Applying these principles, the Tribunal held that the assessee had not demonstrated a sufficient reason for the abnormal delay of 667 days. It considered the company’s failure to assert its appellate rights within time to be attributable to its own lack of diligence.
Decision
The Tribunal rejected the application for condonation and dismissed the appeal in limine as inadmissible.
Consequently, the grounds challenging the Section 154 proceedings were not examined on merits. The order therefore concerns limitation and condonation; it does not affirm the underlying rectification on substantive grounds.
Author’s Comments
The decision is a practical reminder that electronic communication requires active monitoring. A pending appeal cannot safely be left unattended until a recovery notice arrives.
However, the ruling should not be read as establishing that an email entering a spam folder can never constitute sufficient cause. The Tribunal rejected the explanation in the context of the length of the delay, absence of substantive supporting evidence and failure to demonstrate diligence.
A condonation application should therefore explain the complete chronology and support it with available records of communication, follow-up, discovery of the order and subsequent action. Merely stating that an email was missed may leave the central question unanswered: what prevented the assessee from checking the status of its pending proceedings for such a prolonged period?
Cases Discussed
- Collector, Land Acquisition v. Mst. Katiji, 157 ITR 471 (SC) — cited by the assessee in support of a liberal approach to condonation.
- Improvement Trust v. Ujagar Singh, Civil Appeal No. 2155 of 2008, dated 9 June 2010 (Supreme Court) — cited by the assessee in support of condonation.
- Vasu & Co. v. State of Kerala, (2001) 124 STC 124 (Kerala High Court) — cited by the assessee.
- Basawraj and another v. Special Land Acquisition Officer, Civil Appeal Nos. 6974–6975 of 2013 (Supreme Court) — applied on sufficient cause and negligence.
- Perumon Bhagvathy Devaswom, Perinadu village v. Bhargavi Amma, (2008) 8 SCC 321 (Supreme Court) — considered on pragmatic liberal construction.
- Balwant Singh v. Jagdish Singh, (2010) 8 SCC 685 (Supreme Court) — considered on reasonable conduct and accrued rights.
- Ornate Traders Private Limited v. ITO, Notice of Motion No. 2281 of 2008 (Bombay High Court) — cited against mechanical condonation.
- Shiv Dass v. Union of India, AIR 2007 SC 1330 (Supreme Court) — considered on delay and laches.
- Ramlal v. Rewa Coalfields Ltd., AIR 1962 SC 361 (Supreme Court) — considered on avoidable delay.
- University of Delhi v. Union of India, Civil Appeal No. 9408 of 2019, dated 17 December 2019 (Supreme Court) — considered on prolonged unexplained delay.
FULL TEXT OF THE ORDER OF ITAT MUMBAI
The instant appeal arising from the appellate order dated 20.11.2023 is preferred by the Assessee against the order passed by the Learned Commissioner of Income-tax (Appeals)/National Faceless Appeal Centre, Delhi [hereinafter referred to as “CIT(A)”] pertaining to the Rectification order passed u/s. 154 of the Income-tax Act, 1961 [hereinafter referred to as “Act”] dated 23.06.2023 for the Assessment Year [A.Y.] 2018-19.
2. The assessee has various grounds of appeal. However, at the very outset, it was noticed that the instant appeal is delayed by 667 days. In this regard, an application for condonation of the delay was submitted alongwith an affidavit of Sri Benny George, Director of the company. It is stated that the appellate order dated 20.11.2023 was passed by ld. CIT(A) under section 250 of the Act for the impugned Assessment Year 2018-19. However, the applicant was not aware of the impugned order being passed. As per the date of order, the last date for filing the appeal before this Hon’ble Appellate Tribunal was 20.01.2024.The same was filed on 17.11.2025.The impugned appellate order was uploaded on the Income Tax Portal and intimation thereof was sent to the registered email Id of the assessee. However, the email of the impugned order was delivered into spam folder and therefore, it failed to notice and communicate the existence of the impugned order to the tax consultant. On 18.09.2025, the assessee was in receipt of notice of demand under section 156 of the Act for the recovery from Department. During the course of preparation of reply to the said notice, the tax consultant came to know that the appeal filed by the applicant was already disposed. The tax consultant advised the applicant to immediately challenge the impugned order by way of appeal before ITAT and as per the advice, the assessee engaged the services of a professional to prepare and file the appeal challenging the order passed by ld. CIT(A). The advocate immediately prepared the appeal memo and the appeal was filed on 17.11.2025. However, by that time the appeal was barred by limitation by 667 days.
2.1 It is submitted that it was under the above peculiar facts and circumstances, which were unforeseen and beyond his control, the appeal could not be filed within the limitation period. The delay in filing the present appeal was not because of any malafide intention. Hence, it was requested to condone the delay in filing the present appeal and the appeal may be decided on merits of the case. The assessee company had never been guilty of such default in earlier or subsequent assessment years. The assessee relied on the decisions of Hon’ble Supreme Court in the case of Improvement Trust vs. Ujagar Singh, Civil Appeal No. 2155 of 2008 dated 9th June, 2010,Collector, Land Acquisition Vs. Katiji.157 ITR 471 (SC) and Vasu & Co. Vs. State of Kerala (2001) 124 STC 124 (Ker.).
3. We have carefully considered the above facts and find that the reasons adduced for the delay are too flimsy and superficial and do not fall in the category of sufficient cause. Rather, negligence of the assessee company is very much palpable. It is not disputed that the appellate order was duly served on it though as stated it might have gone to spam folder. The assessee is a company and in such a situation, it is all the more expected of it to follow up and keep track of the ongoing income tax proceedings.
3.1 In the case of Basawraj and another vs. Special L and Acquisition Officer, Civil Appeal Nos. 6974 and 6975 of 2013. the hon’ble Apex Court has observed that, where a case has been presented in the court beyond limitation, the applicant has to explain the court as to what was the “sufficient cause” which means an adequate and enough reason which prevented him to approach the court within limitation. In case a party is found to be negligent, or for want of bona fide on his part in the facts and circumstances of the case, or found to have not acted diligently or remained inactive, there cannot be a justified ground to condone the delay. No court could be justified in condoning such an inordinate delay by imposing any condition whatsoever. The application is to be decided only with the parameters laid down by this court in regard to the condonation of delay.
3.2 We find that in the instant case, the law laid down by the Apex Court is squarely applicable. The present assessee is not only negligent and lacking bona fides but, has put forth a plea which deserves to be rejected. The Supreme Court remarked, “It is a well-settled law that while considering the plea for condonation of delay, the first and foremost duty of the court is to first ascertain the bona fides of the explanation offered by the party seeking condonation rather than starting with the merits of the main matter. Only when sufficient cause or reasons given for the delay by the litigant and the opposition of the other side is equally balanced or stand on equal footing, the court may consider the merits of the main matter for the purpose of condoning the delay.”
3.3 The hon’ble Apex court has repeatedly emphasised in several cases that delay should not be condoned merely as an act of generosity. The pursuit of substantial justice must not come at the cost of causing prejudice to the opposing party. In the present case, the assessee has failed to demonstrate reasonable grounds of delay in pursuing the matter and this crucial requirement for condoning the delay remains unmet and its request for condonation could not be entertained for want of any sufficient cause.
3.4 In the case of Perumon Bhagvathy Devaswom, Perinadu village v. Bhargavi Amma (Dead) by LRs, (2008) 8 SCC 321, it was observed by the Hon’ble Court that
“13…the words “sufficient cause for not making the application within the period of limitation* should be understood and applied in a reasonable, pragmatic, practical and liberal manner, depending uponthe facts and circumstances of the case, and the type of case. The words “sufficient cause” in Section 5 of the Limitation Act should receive a liberal construction so as to advance substantial justice, when the delay is not on account of any dilatory tactics, want of bona fides, deliberate inaction or negligence on the part of the appellant.”
3.5 The aforesaid view was reiterated in the case of Balwant Singh (Dead) v. Jagdish Singh, (2010) 8 SCC 685, where in the Court held that:
“25. We may state that even if the term “sufficient cause” has to receive liberal construction, it must squarely fall within the concept of reasonable time and proper conduct of the party concerned. The purpose of introducing liberal construction normally is to introduce the concept of “reasonableness as it is understood in its general connotation. The law of limitation is a substantive law and has definite consequences on the right and obligation of a party to arise. These principles should be adhered to and applied appropriately depending on the facts and circumstances of a given case. Once a valuable right has accrued in favor of one party as a result of the failure of the other party to explain the delay by showing sufficient cause and its own conduct, it will be unreasonable to take away that right on the mere asking of the applicant, particularly when the delay is directly a result of negligence, default or inaction of that party. Justice must be done to both parties equally. Then alone the ends of justice can be achieved. If a party has been thoroughly negligent in implementing its rights and remedies, it will be equally unfair to deprive the other party of a valuable right that has accrued to it in law as a result of his acting vigilantly.”
3.6 The Courts in the abovementioned cases, highlighted the importance of introducing the concept of “reasonableness” while giving the clause “sufficient cause” a liberal interpretation. In furtherance of the same, the Courts has cautioned regarding the necessity of distinguishing cases where delay is of few days, as against the cases where the delay is inordinate as it might accrue to the prejudice of the rights of the other party. In such cases, where there exists inordinate delay and the same is attributable to the party’s inaction and negligence, the Courts have to take a strict approach so as to protect the substantial rights of the parties.
3.7 The Division bench of the Hon’ble Bombay HC in Ornate Traders Private Limited v. The Income Tax Officer, Mumbai in Notice of Motion N0. 2281 of 2008 emphasized the need for reasonableness and hence, the actions which can be condoned by the court should fall within the scope of normal human conduct or normal conduct of a litigant. The Hon’ble Bombay HC further observed that while Section 5 of the Limitation Act is being interpreted liberally, it cannot be so liberally that it is without any justification, since condonation of delay in a mechanical or routine manner will jeopardize the legislative intent behind Section 5.
3.8 The Hon’ble Supreme Court in the case of Shiv Dass v. Union of India (UOl) and Ors., AIR 2007 SC 1330 held that the High Courts, while exercising their discretionary powers under Article 226, should consider delay or laches and, refuse to invoke its extraordinary powers if it is found that the applicant had neglected/omitted to assert its rights in a timely manner; however, this discretion has to be exercised judicially and reasonably. The Hon’ble Supreme Court in the case of Ramlal vs. Rewa Coalfields Ltd. AIR 1962 SC 361 has held that the cause for the delay in filing the appeal which by due care and attention could have been avoided cannot be a sufficient cause within the meaning of the limitation provision. Where no negligence, nor inaction, or want of bona fides can be imputed to the appellant a liberal construction of the provisions has to be made in order to advance substantial justice. Seekers of justice must come with clean hands.
3.9 In another judgment in the case of University of Delhi Vs Union of India & Ors. In Civil Appeal No. 9408 of 2019 vide order dated 17/12/2019, the Hon’ble Supreme Court refused to condone delay by holding that, “The entire explanation as noted above, depicts the casual approach unmindful of the law of limitation despite being aware of the position of law. That apart when there is such a long delay and there is no proper explanation, laches would also come into play while noticing as to the manner in which a party has proceeded before filing an appeal. In the matter of condonation of delay and laches, the well accepted position is also that the accrued right of the opposite party cannot be lightly dealt with.”
4. From the above decisions, it becomes clear that in the case of condonation of delay where the appeal was filed beyond the limitation of period, the courts/authorities are empowered to condone the delay, provided that the assessee can prove its claim of inability to file appeal within the prescribed period. Litigant must be able to demonstrate that there was “sufficient cause” which obstructed its action to file appeal beyond the prescribed time limit. The law of limitation is found upon the maxims “Interest Reipublicae Ut Sit Finis Litium “ that litigation must come to an end in the interest of society as a whole and “vigilantibus non dormientibus Jura subveniunt” that the law assists those that are vigilant with their rights, and not those that sleep thereupon. The law of limitation identifies the need for limiting litigation by striking a balance between the interests of the state and the litigant. The delay should not be condoned simply because the assessee’s case is hard and calls for sympathy or merely out of benevolence to the party seeking relief. In granting the indulgence and condoning the delay it must be proved beyond the shadow of doubt that the appellant was diligent and was not guilty of negligence whatsoever. The sufficient cause within the contemplation of the limitation provision must be a cause which is beyond the control of the party invoking the aid of the provisions.
4.1 Thus, in the instant case, there exists no sufficient and good reason for an abnormal delay of 667 days. Such a delay cannot be condoned as condonation in the present case would not be in accordance with the exposition emanating out of the Hon’ble apex Court and Hon’ble High Court decisions. It will rather be grave prejudice to the Department. As already expressed by the hon’ble Apex Court in the case cited supra that the State is also a litigant and need not be given a step-motherly treatment. It is a settled principle of law that the provisions relating to specified period of limitation must be applied with their rigour and effective. Since the assessee has failed to show any “sufficient cause” for the failure to file the appeal within the prescribed period of limitation under the Act r.w.s. 5 of Limitation Act, such abnormal delay cannot be condoned. The assessee had not given any substantive evidence for the late filing of appeal and has not been able to demonstrate that sufficient cause existed for non-filing the appeal within due time. The assessee has neglected/omitted to assert its rights of appeal in a timely manner. It is seen that there was no priority in the mind of the assessee to file the appeal. Thus, the appeal filed by the assessee is dismissed as not maintainable and the appeal is rendered inadmissible.
5. In the result, the appeal of the Assessee is dismissed in limine.
Order pronounced in the open court on 07/10/2026.
