Amit Agarwal Vs ITO (ITAT Bangalore)
The Income Tax Appellate Tribunal (ITAT), Bangalore, considered the assessee’s appeal against the order of the Joint Commissioner of Income-tax (Appeals), who had dismissed the appeal solely on the ground of refusing to condone a delay of more than four years in filing the appeal against an order passed under Section 154 of the Income-tax Act, 1961. The Tribunal first condoned a separate 62-day delay in filing the appeal before it after accepting the explanation that the assessee had initially acted on professional advice to pursue departmental remedies, including an application under Section 119(2)(b), before approaching the Tribunal.
The assessee had originally filed a return declaring total income of ₹5,70,000. The return was processed under Section 143(1), and the Central Processing Centre determined the total income at ₹12,65,749, primarily due to duplication of casual income and an addition arising from mismatch with Form 26AS. The assessee filed a rectification application under Section 154, which was rejected. Thereafter, instead of immediately filing an appeal, the assessee continued making representations before the Revenue authorities seeking rectification. The appeal before the CIT(A) was eventually filed on 30 December 2023 against the Section 154 order dated 31 October 2019, resulting in a delay exceeding four years.
Before the CIT(A), the assessee sought condonation of delay on the ground that he had been pursuing rectification through representations before the Assessing Officer and expected the matter to be resolved administratively. The CIT(A) held that the explanation was vague and insufficient. According to the appellate authority, once the rectification order under Section 154 had been passed, the Assessing Officer became functus officio in relation to that order and the statutory remedy was to file an appeal within the prescribed limitation period. The CIT(A) observed that departmental representations could not extend the statutory limitation period and concluded that no sufficient cause had been shown to justify condonation of the prolonged delay. Consequently, the appeal was dismissed without examination on merits.
Before the Tribunal, the assessee submitted that after the intimation under Section 143(1), he had pursued rectification proceedings, filed the correct return forms together with supporting financial statements, and also pursued an application under Section 119(2)(b). An affidavit explained that between 2019 and 2023 he repeatedly approached the Income-tax Officer for correction of the demand but obtained no effective relief. It was further stated that he later discovered that the application filed along with the revised return had not been acted upon because of refund adjustment in later years. The assessee contended that these circumstances constituted sufficient cause for the delay.
The Departmental Representative opposed the appeal, contending that the assessee had consciously chosen not to file the appeal within the prescribed time and had therefore failed to establish sufficient cause for condonation.
After considering the rival submissions, the Tribunal held that the decisive consideration was not the length of the delay but whether sufficient cause existed. It found that the assessee had been pursuing an alternative remedy under Section 119(2)(b), which remained unattended, and that he genuinely believed the Revenue authorities would either grant relief or communicate an adverse decision. Since neither occurred, the assessee subsequently filed the appeal. The Tribunal held that these circumstances established a bona fide and sufficient cause for the delay.
Accordingly, the Tribunal reversed the order refusing condonation of delay, held that the appeal before the CIT(A) ought to have been admitted and decided on merits, restored the matter to the file of the CIT(A), and directed the appellate authority to adjudicate the appeal afresh after providing the assessee an opportunity of hearing and permitting him to produce the necessary evidence. The appeal before the Tribunal was allowed for statistical purposes.
Cases Discussed
- Office of the Chief Post Master General v. Living Media India Ltd., 348 ITR 7
- Ajay Dabra Vs Pyare Ram & Ors, arising out of SLP (C) No. 15793/2019 dated 31/01/2023
- Balwant Singh (Dead) vs Jagdish Singh & Ors, Civil Appeal No. 1166 of 2006 dated 08/07/2010
FULL TEXT OF THE ORDER OF ITAT BANGALORE
1. This appeal is filed by Mr. Amit Agarwal [the appellant] against the appellate order passed by the Joint Commissioner of Income-tax (Appeals)-1, Ahmedabad [the learned CIT(A)] for assessment year 2017-18, dated 3 October 2025, whereby the appeal filed by the assessee against the rectification order passed under section 154 of the Income-tax Act, 1961 [the Act], dated 31 October 2019 by the Income-tax Officer, Ward-4(3)(1), Bangalore [the learned AO], was dismissed on the ground that the learned CIT(A) did not condone the delay in filing the appeal.
2. The assessee has raised several grounds of appeal; however, the principal grievance is that the learned CIT(A) failed to appreciate that the delay in filing the appeal before him was supported by sufficient cause.
3. In this case, the order of the learned CIT(A) was passed on 3 October 2025. The assessee filed the appeal before the Tribunal on 3 March 2026. Accordingly, the Registry issued a defect notice on the same date, stating that the appeal was time-barred by 62 days. In support of the application for condonation of delay, the assessee explained that the appellant had acted on the advice of a consultant, who suggested pursuing departmental representation instead of litigation. It was further submitted that the application filed under section 119(2)(b) of the Income-tax Act remains pending.
4. The learned authorised representative submitted that the delay arose from the assessee’s bona fide belief that the application pending under section 119(2)(b) of the Income-tax Act before the competent authorities would be considered. The assessee therefore initially avoided litigation. However, when no response was received from the Revenue authorities, he filed the appeal before the Tribunal on legal advice. It was submitted that this constituted sufficient and reasonable cause for the delay, which was neither intentional nor motivated by any mala fide purpose.
5. The learned Departmental Representative strongly opposed the assessee’s application for condonation of delay. He submitted that the delay resulted from a conscious and deliberate decision not to file the appeal before the Tribunal and therefore could not be regarded as having been caused by sufficient reason. According to him, the delay was a strategic choice for the assessee.
6. We have carefully considered the rival submissions and the reasons stated in the assessee’s application for condonation of delay. The delay arose because the assessee was pursuing an application before the Revenue authorities under section 119(2)(b) of the Income-tax Act. Since that alternative remedy did not yield any result, the assessee could not file the appeal within time. Once advised by the chartered accountant to prefer an appeal, the assessee filed it before the Tribunal. We therefore find that the delay was supported by sufficient cause, was bona fide and unintentional, and deserves to be condoned. Accordingly, the appeal is admitted.
7. Briefly stated, the assessee is an individual who filed his return of income declaring total income of ₹5,70,000. The return included interest and salary income from a partnership firm and income from other sources, comprising business income and casual income of ₹1,44,978. The return was processed by the Central Processing Centre, which assessed the total income at ₹12,65,749. The increase was mainly due to duplication of casual income of ₹1,44,978 and an addition arising from mismatch with Form 26AS. The assessee filed a rectification application, which was rejected by the Central Processing Centre. He then filed an appeal before the learned CIT(A). The learned CIT(A) noted that the appeal was against the rectification order passed under section 154 of the Act on 31 October 2019, which was received by the assessee on the same date. Therefore, the appeal ought to have been filed on or before 30 November 2019. However, it was filed only on 30 December 2023, resulting in a delay of more than four years.The assessee explained that he had been pursuing rectification by making representations to the Assessing Officer and therefore did not immediately file an appeal. He submitted that the delay occurred because he first sought resolution through rectification proceedings and later filed the appeal on advice, which constituted sufficient cause.
8. The learned CIT(A) decided the issue against the assessee, holding that no sufficient cause had been shown for the delay of more than four years in filing the appeal:
“4. Condonation of delay:
4.1. This appeal was filed by the appellant against the rectification order passed under section 154 of the Income-tax Act, 1961 on 31.10.2019, which was received by him on the same date. As per section 249(2) read with section 246A of the Act, the appeal was required to be filed within 30 days from the date of service of the order, i.e., on or before 30.11.2019.
However, the present appeal has been filed only on 30.12.2023, resulting in an inordinate delay of more than four years. Along with the appeal, the appellant has filed an application for condonation of delay. The appellant has explained the delay in the following terms: “I kindly request the Appellate Authority to condone the delay in filing this appeal. I genuinely awaited the resolution of the issue by making representations to the AO’s office, and during the course it is delayed to file the appeal.”
4.1.1. Thus, the appellant’s justification is that he was pursuing the matter through representations before the Assessing Officer, and therefore could not approach the appellate forum within the prescribed limitation.
4.1.2. I have considered the explanation tendered by the appellant along with the application for condonation of delay. The rectification order u/s 154 was passed on 31.10.2019 and received by the appellant on the same date. As per Section 249(2), the appeal should have been filed on or before 30.11.2019. However, the present appeal was instituted only on 30.12.2023, entailing a delay of more than four years.
4.1.3. The appellant has stated that he did not file the appeal within time because he was awaiting resolution of the matter by making repeated representations before the Assessing Officer. However, the appellant has not specified what kind of “resolution” he was expecting from the AO, particularly when an order u/s 154 had already been passed on 31.10.2019. Once such rectification order is passed, the AO becomes functus officio in respect of that order, and the only lawful remedy available to the appellant is to file an appeal before the appellate authority within the prescribed limitation.
4.1.4. It is a settled position of law that pendency of departmental representations or correspondence cannot extend or suspend the statutory period of limitation. The Hon’ble Supreme Court in Office of the Chief Post Master General v. Living Media India Ltd. (348 ITR 7) has categorically observed that limitation provisions must be strictly applied, and delay condonation can only be granted upon demonstration of genuine and sufficient cause.
4.1.5. In the present case, the explanation furnished is vague and unsatisfactory. The appellant has not demonstrated any unavoidable or compelling reason for not approaching the appellate forum in time. Merely stating that he was “awaiting resolution” without clarifying the precise nature of such resolution, especially when the rectification order had already been passed, cannot be accepted as sufficient cause for condonation. In most of the cases it is mentioned that decision for condonation of delay should be taken after verifying the reasonable cause for which delay has occurred. If proper reasonable cause is present explaining the delay then only delay can be condoned and doors for entry of appeal for decision on merits are open for the appellant. The substantial justice and merit of the case comes later only after receipt of gate pass for entry to the appellant. Now it is clear that delay in filing of appeal can be condoned only when reasonable cause is present. In this case it is seen that appellant is failed to explain the delay and there is no reasonable cause for delay.
4.1.6. Again, the delay is considerable and it cannot be disputed that the onus to show that sufficient cause exists for condonation of delay lies upon the appellant. It is obligatory upon the appellant to show sufficient cause due to which appellant was prevented from filing the appeal in time. The decision of the Hon’ble Supreme Court in the case of Balwant Singh (Dead) vs Jagdish Singh &Ors, dated 08/07/2010 (Civil appeal No. 1166 of 2006) is relied up on, where it has held in para 6 that “Law of limitation may harshly affect a particular party but it has to be applied with all its rigor when the statute so prescribed and the courts have no power to extend the period of limitation on equitable grounds”.
4.1.7. The order supra also refers to various judgments where it has been held that “here is no question of construing the expression `sufficient cause’ liberally either because the party in default is the Government or because the question arises in connection with the impleading of the legal representatives of the deceased respondent. The provisions of the Code are with a view to advance the cause of justice have also applied the principle of `reasonable time’. This, however, does not mean that the Court should readily accept whatever the appellant alleges to explain away his default.
4.1.8. The decision supra also holds that Section 5 of the Limitation Act is to apply parametria. Section 3 of the Limitation Act requires that suits or proceedings instituted after the prescribed period of limitation shall be dismissed. However, in terms of Section 5, the discretion is vested in the Court/Appellate Authority to admit an appeal or an application, after the expiry of the prescribed period of limitation, if the appellant shows `sufficient cause’ for not preferring the application within the prescribed time. In this case the applicant has failed to explain the reasons for inordinate delay of more than 4 years.
4.1.9. Further, recently, in case of the Hon’ble Supreme Court in the case of Ajay Dabra Vs Pyare Ram &Ors arising out of SLP (C) No. 15793/2019 dated 31/01/2023 dismissed the delay condonation applications filed under Section 5 of the Limitation Act, 1963, declining to condone a delay of 254 days, because the reasons assigned for the condonation were not sufficient reasons for condonation of the delay.
4.1.10. The concept of mutuality, divergent/wrong opinions of professionals, status of the appellant, difficulties faced by the appellant and merits of addition for substantial justice are also related factors which require to be considered while deciding condonation of delay. Even after thinking over all these relevant factors, it is seen that the degree of delay is enormous in this case. The law of limitation is to bring certainty and finality to litigation. This inordinate delay is not condonable in absence of sufficient cause and in presence of unreasonable, inordinate and enormous delay in filing of appeal. Respectfully following the ratio in the decisions of the Hon’ble Supreme Court relied upon and discussion made in foregoing para’s delay in filing of appeal is not condoned. Hence, without going into the merits of the case, the appeal filed by the appellant is dismissed.”
9. The learned authorised representative, Shri Srinivas K.T., Advocate, filed a 101-page paper book. He submitted that, after the intimation under section 143(1) of the Act was issued on 26 March 2019, the assessee filed a rectification application under section 154, which was disposed of on 31 October 2019. The assessee also filed correct ITR-V and ITR-3 forms, along with the balance sheet and profit and loss account. The affidavit at pages 95 to 97 of the paper book, filed before the learned CIT(A), explained the sufficient cause for the delay. He further submitted that the assessee had pursued an application under section 119(2)(b) of the Act before the Assessing Officer for rectification of the demand. Since no effective relief was granted by the Revenue authorities, the assessee ultimately filed the appeal before the learned CIT(A). It was therefore submitted that the delay was supported by sufficient cause.
10. The learned Departmental Representative, Shri Ganesh R. Ghale, Advocate, opposed the assessee’s submissions. He contended that the delay of more than four years was rightly not condoned by the learned CIT(A), as the assessee had failed to show sufficient cause for filing the appeal late. He therefore submitted that the order of the learned CIT(A) called for no interference.
11. We have considered the rival contentions and perused the orders of the lower authorities. The issue is whether the learned CIT(A) was justified in refusing to condone the delay of more than four years in filing the appeal.The length of delay is not decisive; what matters is whether sufficient cause existed. For assessment year 2017-18, the assessee was required to file the original return by 5 August 2017 but filed it on 1 February 2018. The Central Processing Centre issued an intimation under section 143(1) of the Act on 26 March 2019, determining the total income at ₹12,65,749 against the returned income of ₹5,17,000. On 19 March 2021, the assessee attempted to revise the return, stating that the Central Processing Centre had erred in computing the income. Before the learned CIT(A), the assessee submitted that he had been pursuing an application under section 119(2)(b) of the Act filed on 19 March 2021.In his affidavit, he stated that between 2019 and 2023 he made several visits and representations to the office of the Income-tax Officer for correction of the incorrect demand, but no relief was granted. He later learnt that the application filed with the revised return on 19 March 2021 had not been acted upon because of refund adjustment in subsequent years. These circumstances led to the delay in filing the appeal before the learned CIT(A). We find that the assessee was pursuing an alternative remedy which remained unattended, and he was under a bona fide belief that the Revenue authorities would either grant relief or issue an adverse response. Neither happened, he filed the appeal before the learned CIT(A), resulting in delay. In our view, the delay was supported by sufficient causeand ought to have been condoned. The learned CIT(A) should have decided the appeal on merits. We therefore reverse the order refusing condonation of delay. Since the appeal has not been adjudicated on merits, we restore the matter to the file of the learned CIT(A). The assessee shall substantiate his case on merits by producing the necessary evidence, and the learned CIT(A), after giving him an opportunity of hearing, shall decide the issue afresh.
12. In the result, the appeal filed by the assessee is allowed for statistical purposes.
Order pronounced in the open court on 20th July, 2026.
