Case Law Details
Sekhari Ganna Vikas Samiti Ltd Vs ITO (ITAT Delhi)
In the case of Sekhari Ganna Vikas Samiti Ltd vs. Income Tax Officer (ITO), the Income Tax Appellate Tribunal (ITAT) Delhi condoned a 236-day delay in filing an appeal. Sekhari Ganna Vikas Samiti, a cooperative society, had initially filed a return showing no taxable income for the assessment year 2020-21 after claiming a deduction under Section 80P of the Income Tax Act. However, the Assessing Officer (AO) disallowed a part of the Section 80P deduction, specifically ₹12,18,305 in interest income, and added ₹24,000 in rental income. Following this, the cooperative society appealed to the Commissioner of Income Tax (Appeals) [CIT(A)] but missed the deadline by 236 days. The CIT(A) rejected this appeal solely on grounds of the delay, leading Sekhari Ganna Vikas Samiti to escalate the case to the ITAT.
The ITAT, referencing several Supreme Court rulings, emphasized that courts should adopt a liberal stance when reviewing delays to avoid dismissing cases based on procedural grounds alone. Specifically, the Tribunal cited the case of Collector Land Acquisition vs. Mst. Katiji, where the Apex Court advocated for accepting delay explanations except in instances of negligence or lack of good faith. The Tribunal found that the cooperative society’s delay did not reflect any intentional fault or negligence and decided to condone the delay to ensure a fair hearing. Consequently, the ITAT set aside the CIT(A)’s decision, restoring the case to the CIT(A) for review on its merits, allowing the assessee a fresh opportunity to present their case in accordance with the law.
FULL TEXT OF THE ORDER OF ITAT DELHI
This appeal by the assessee is directed against the order of Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi (hereinafter referred to as ‘the CIT(A)’) dated 26.12.2023, for assessment year 2020-21.
2. The ld. Counsel for the assessee submits that assessee is a cooperative society of farmers registered under Cooperative Societies Act. The assesssee has filed its return of income for the impugned assessment year declaring total income as Nil, after claiming deduction of Rs.1,16,59,419/- u/s. 80P of the Income Tax Act, 1961(hereinafter referred to as ‘the Act’). During assessment proceedings the Assessing Officer (AO) disallowed assessee’s claim of deduction of interest income Rs. 12,18,305/- u/s. 80P of the Act and also made addition of rental income Rs.24,000/- . Aggrieved by the assessment order dated 06.09.2022 passed u/s. 143(3) r.w.s. 144B of the Act, the assessee filed appeal before the CIT(A). The appeal filed by the assessee before the CIT(A) was time barred by 236 days. The assessee filed application for condonation of delay giving reasons for delay in filing of appeal. The CIT(A) without appreciating the reasons dismissed appeal of assessee in limine on the ground of limitation. Hence, this appeal by the assessee.
3. Per contra, Shri Sanjay Kumar representing the department submitted that the CIT(A) has considered the assessee application for condonation of delay. The CIT(A) after examining the same came to the conclusion that the reasons given by the assessee does not reflect “sufficient cause” for delay in filing of appeal. He prayed for upholding the impugned order and dismissing appeal of the assessee.
4. Both sides heard, order of the authorities below examined. This appeal by the assessee is against the order of CIT(A) dismissing appeal of the assessee on the ground of limitation. The Hon’ble Apex Court in various decisions has held that acceptance of explanation furnished for delay should be the rule and refusal, an exception. The explanation causing condonation of delay should not be rejected taking a hyper technical and Pedantic approach.
5. The Hon’ble Apex Court in the case of Collector Land Acquisition vs. Mst. Katiji & Ors. 1987 com 1072 has held that liberal approach should be adopted while dealing with an application praying for condonation of delay. Refusing to condone delay can result in meritorious matter being thrown out at the very threshold and cause of justice being defeated. Pedantic and hyper technical approach should not be adopted while dealing with an application for condonation of delay.
6. The Hon’ble Apex Court in the case of Ram Nath Sao @ Ram Nath Sahu And Others vs Gobardhan Sao and Others has held that the expression “sufficient cause” within the meaning of Section 5 of the Limitation Act or Order 22 Rule 9 of CPC or any other similar provision should receive a liberal construction so as to advance substantial justice. The courts should not proceed with the tendency of finding fault with cause shown and reject the petition by a slipshod order in over jubilation of disposal derive. Acceptance of explanation furnished should be the rule and refusal, an exception, more so when no negligence or inaction or want of bonafides can be imputed to the defaulting party.
7 In view of the law expounded by the Hon’ble Apex Court in dealing with condonation application and considering the reasons given by the assessee causing delay in filing of appeal before the First Appellant Authority, the delay for 236 days in filing of appeal is condoned. The appeal is restored to CIT(A) for fresh adjudication on merits after affording reasonable opportunity of making submissions to the assessee in accordance with law.
8. In the result, impugned order is set aside and appeal of the assessee is allowed for statistical purpose.
Order pronounced in the open court on Tuesday the 01st day of October, 2024.
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