Condonation of delay based on sympathy/ benevolence not grantable

Girraj Prasad Shambhu Dayal Vs Principal Commissioner of Income (ITAT Jaipur)

ITAT Jaipur held that condonation of delay cannot be granted merely on the basis of sympathy or benevolence. Further, condonation of delay rejected alleging lack of diligence and inaction on the part of the assessee.

Facts-

The issue is that there is delay of 669 days for filing an appeal. Accordingly, an assessee submitted the condonation of petition supported by an affidavit signed by the partner of the firm. In this case the order under challenged is passed on 18.03.2019 by the ld. PCIT u/s. 263 of the Act. The then counsel died on 15.08.2020. The partner of the firm dealing the tax affairs of the firm died on 07.09.2020. Therefore, the other partner was not aware about the legal right available with the assessee firm. The ld. AR of the assessee submitted plethora of judgment and argued vehemently that the bench considering the various judgement relied upon in his submission may consider the petition for condonation of delay in bringing this appeal.

Conclusion-

Held that the delay cannot be condoned merely because the assessee’s case calls for sympathy or merely out of benevolence. For the exercise of discretion in condoning the delay, it must be established beyond the shadow of doubt that the assessee was diligent and was not guilty of negligence on its part. It is not a matter of delay of few days rather the delay has happened for 669 days. Therefore, it is incumbent on part of the assessee to come forward and explain the circumstances which prevented him from filing the appeal in time at all the three points of time.

Therefore, in the facts and circumstances of the case, we are of the considered view that there is clearly a failure on part of the assessee in attending to the present proceedings and lack of diligence and inaction on his part which could have been avoided by the assessee if it had exercised due care and attention. Thus, we do not find any merits in the argument of ld. AR and therefore, we do not admit these appeals and dismissed at the stage as the assessee has not explained the delay in bringing in these appeals and therefore, the same is dismissed without commenting on the merits of the case.

FULL TEXT OF THE ORDER OF ITAT JAIPUR

This appeal is filed by the assessee aggrieved from the order of the Pr. Commissioner of Income Tax, Alwar [ Here in after referred as Ld. PCIT ] for the assessment year 2014-15 dated 18.03.2019 as per provision of section 263 of the Act, which in turn arises from the order passed by the ITO, Ward-1(2), Alwar passed under Section 143(3) of the Income tax Act, 1961 (in short ‘the Act’) dated 29.11.2016.

2. The assessee marched this appeal on the following grounds of appeal:-

“1. That the action under section 263 of the I.T. Act, 1961 has not been taken by the Pr. CIT, Alwar suo-moto but based on the proposal of the AO which is invalid in law and liable to be quashed.

2. That the order passed by the Pr. CIT, Alwar u/s 263 of the I.T. Act, 1961 setting aside the assessment order dated 29.11.2016 passed by the ITO, Ward-1(2), Alwar u/s 143(3) of the Act is without jurisdiction, against law and facts of the case and therefore illegal and is liable to be quashed.

3. That on the facts and in the circumstances of the case the ld. Pr. CIT, Alwar has grossly erred in passing the order u/s 263 dated 18.03.2019 setting aside the assessment order passed u/s 143(3) by the AO on 29.11.2016, blindly following the observation of Revenue Audit Party and the proposal sent by the AO for revision of assessment order u/s 263, completely ignoring the reply of the appellant reproduced by the Pr. CIT at page-2 of the order u/s 263, dated 18.03.2019. Therefore, the order passed u/s 263 by the Pr. CIT, Alwar, without any independent application of mind deserves to be quashed, being bad in law.”

3. At the outset, it is noted that there is delay of 669 days for filling this appeal, for which the then ld. AR has submitted the condonation of petition supported by an affidavit signed by the partner of the firm. In this case the order under challenged is passed on 18.03.2019 by the ld. PCIT u/s. 263 of the Act. The then counsel died on 15.08.2020. The partner of the firm dealing the tax affairs of the firm died on 07.09.2020. Therefore, the other partner was not aware about the legal right available with the assessee firm. The ld. AR of the assessee submitted plethora of judgment and argued vehemently that the bench considering the various judgement relied upon in his submission may consider the petition for condonation of delay in bringing this appeal.

4. On the other hand, the ld. DR objected to the delayed appeal filed by the assessee firm. He has submitted that the appeal under challenged filed on 19.03.2021. In the meantime, the order pursuant to the order passed by the PCIT u/s. 263 is passed on 28.12.2019 and the assessee has already filed an appeal before the first appellate authority against that order. The argument of the ld. AR has no force as to the fact that the counsel and the partner handling the tax matter both left heavenly abode after a considerable time of the order under disputed in this appeal is passed. The order pursuant to the order of the ld. AO after the direction under section 263 of the Act was also passed and at that time the both the decision maker was alive. Thus, there is no force in the argument advanced by the ld. AR of the assessee. The ld. DR further submitted that when the assessee firm filed an appeal against the order of the ld. AO pursuant to order passed u/s. 263 then how can they plea that against the order of the PCIT passed u/s. 263 they have not exercised their right of appeal when the then consultant and the partner dealing with the tax affairs was active and alive. This period of delay is not properly explained by the assessee firm, is not supported by any cogent evidences to substantiate the plea placed before the bench and therefore, there are letches, the inordinate delay based on these set of facts may not be considered. To drive home to these contentions the ld. DR has relied upon the following decisions

The ld. DR out of the above judgment draw our attention to the relevant findings of the decision relied upon and the same is reiterated here in below :

(i) Esha Bhattacharjee Vs. Mgt. Committee of Raghunathpur Nafar, Civil Appeal No. 8183-8184 of 2013 (SC)

“The law of limitation fixes a lifespan for such legal remedy for the redress of the legal injury so suffered. Time is precious and wasted time would never revisit. During the efflux of time, newer causes would sprout up necessitating newer persons to seek legal remedy by approaching the courts. So a lifespan must be fixed for each remedy. Unending period for launching the remedy may lead to unending uncertainty and consequential anarchy. The law of limitation is thus founded on public policy. It is enshrined in the maxim interest reipublicae up sit finis litium (it is for the general welfare that a period be put to litigation). Rules of limitation are not meant to destroy the rights of the parties. They are meant to see that parties do not resort to dilatory tactics but seek their remedy promptly. The idea is that every legal remedy must be kept alive for a legislatively fixed period of time. We have painfully re-stated the same.

(ii) P. K. Ramchandran Vs. State of Kerla & Anr on 19 September, 1997 (SC)

“Law of limitation may harshly effect a particular party but it has to be applied with all its rigour when the statute so prescribe and the Courts have no power to extend the period of limitation on equitable grounds. The discretion exercised by the High Court was, thus, neither proper nor judicious. The order condoning the delay cannot be sustained. This appeal, therefore, succeeds and the impugned order is set aside. Consequently, the application for condonation of delay filed in the High Court would stand rejected and the Miscellaneous First Appeal shall stand dismissed as barred by time. No costs.

(iii) Raja Gopal Rao Vs. Dolgobinda Sahu & Anr. AIR 1959 Ori. 31(Orissa High Court)

The position has been made clear on review of several cases on the point in my judgment in a Bench decision reported in Tirumala Bhaskara Rao v. Panasa Narayanamma, 22 Cut LT 309: ((S) AIR 1956 Orissa 124) (E), that it cannot be the rule of law that any mistaken advice given by a counsel is a sufficient ground under Section 5 of the Limitation Act. A party is not completely absolved of his responsibility and automatically becomes entitled to the protection under Section 5 of the Limitation Act merely by entrusting his work to a senior advocate.

5. We have heard the rival contentions and perused the material placed on record. We do not convince from the argument of ld. AR of the assessee that there is exist reasonable cause for not bringing the appeal in time. The reasoning or the explanation given for the inordinate delay that the ld. AR and the partner who is looking after the tax affairs both died but at the same time, the ld. AR did not controvert the argument of ld. DR that they have already filed an appeal against the order passed u/s 143(3) read with section 263 of the Act and in that case why the appeal against the order u/s 263 of the Act have not been filed. Thus, there is no support of the contention raised by the ld. AR in the petition filed for condonation of delay. Both the parties have placed on record the plethora of the judgment which are delivered on the merits of each case. But in this case what the bench has observed that there is no reasonable cause expressly submitted by the ld. AR of the assessee that why the appeal was not filed in time when both counsel and the partner who are familiar with the affair was alive. Therefore, that period is not satisfactorily explained not only that even at the time of filling the first appeal against the order passed consequent of the order of the proceeding challenged before us is filed then at that time also why the appeal under challenge was not filed simultaneously. There is no support of the advice received that the assessee has received later received the advice to file the appeal with an inordinate delay so the ld. AR of the assessee did not support his case on;

1) Why the appeal is not filed when the order under dispute is passed and in that period the counsel and the partner dealing was well aware and alive.

2) Why the appeal is not filed when the order consequent the order u/s. 263 is passed and in that case the appeal is filed well in time.

3) What is the proof of the advice that the assessee has received to file the appeal with delay of 669 days.

However, there is nothing on record in support of the prayer so taken by the assessee, thus the contentions raised before us remain unsubstantiated, we are unable to accede to the request of the assessee for condoning the delay. The delay cannot be condoned merely because the assessee’s case calls for sympathy or merely out of benevolence. For the exercise of discretion in condoning the delay, it must be established beyond the shadow of doubt that the assessee was diligent and was not guilty of negligence on its part. It is not a matter of delay of few days rather the delay has happened for 669 days. Therefore, it is incumbent on part of the assessee to come forward and explain the circumstances which prevented him from filing the appeal in time at all the three points of time. Therefore, in the facts and circumstances of the case, we are of the considered view that there is clearly a failure on part of the assessee in attending to the present proceedings and lack of diligence and inaction on his part which could have been avoided by the assessee if it had exercised due care and attention. Thus, we do not find any merits in the argument of ld. AR and therefore, we do not admit these appeals and dismissed at the stage as the assessee has not explained the delay in bringing in these appeals and therefore, the same is dismissed without commenting on the merits of the case.

6. In the result, the appeal filed by the assessee is dismissed as barred by limitation.

Order pronounced in the open court on 31/10/2022