Case Law Details

Case Name : M/s K.G.N.M.M.W. Educational research & Analysis Society Vs ITO (ITAT Jaipur)
Appeal Number : ITA Nos. 402 & 403/JP/2012
Date of Judgement/Order : 13/02/2015
Related Assessment Year :
Courts : All ITAT (5782) ITAT Jaipur (129)

Affidavit and cavalier conduct of CA in respect of delayed Filing of Clients Appeal – ITAT raises serious questions on professional competence and work ethics of CA  

The learned counsel for the assessee contends that the concerned Chartered Accountant has admitted that the impugned orders of CIT(A) were handed over to him by the assessee in the first week of April, 2011 for filing the appeals before ITAT. Thereafter, he proceeded to Nagaur for SBBJ bank’s audit and on return, filing of assessee’s appeals skipped from his mind. This fact revived in his memory when the assessee brought TRO notice dated 2nd March, 2011 and thereafter the appeals are filed before the ITAT on 24/7/2012. It is pleaded that the assessee should not suffer for the mistakes committed by his C.A. As the assessee was prevented by a sufficient cause in filing the appeals in time, therefore, the delay of 347 days may be condoned.

Reliance is placed on the decision of Hon’ble Supreme Court in the case of Collector, Land Acquisition V. Mst. Katiji (1987) 167 ITR 471 (SC) for the proposition that when technical considerations and cause of substantial justice are pitted against each other, the cause of substantial justice should prevail. While condoning the delay in filing appeal a pedantic view may not be taken.

The learned D.R., on the other hand, vehemently opposed the assessee’s petitions for condonation of delay. It is pleaded that:

(i) Neither the assessee nor the C.A. has given any specific and genuine reason to demonstrate that there exists a reasonable and sufficient cause to condone the delay.

(ii) It is trite law that it is the burden of the assessee to explain the delay of every day in a reasonable manner.

(iii) The assessments resulted in huge additions and for two years heavy demand of tax and interest was raised. This was a serious matter, which in normal circumstances would require frequent meetings and consultations between assessee and the counsel to analyze the issues. Such matters cannot be left to get and forgot the papers attitude of the CA. The theory, vague and too naïve to be believed.

(iv) The affidavit fails to reflect in credibility inasmuch as neither any particular dates nor events are mentioned to objectively corroborate the depositions. The visit of Mr. Malik Parvej, President of the Society is referred to some time in first week of April, which is a vague deposition. Similarly the dates when CA proceeded for SBBJ audit and returned there from have not been specified so the deposition remains vague and unverifiable.

(v) The C.A. has goneto Nagau for assignment of SBBJ bank audit of, the time schedule must be pre-decided, no pertinent details have been mentioned in the affidavit.

(vi) It is surprising and does not appeal to logic that neither any office assistant from the team of C.A. or assessee reminded him during one year about non filing of such important and high demand appeals.

(vii) No affidavit of Shri Malik Parvej is filed to corroborate the deposition of the C.A..

(viii) The notice of TRO dated 2nd March, 2012 is mentioned as an eye opener for the CA and assessee to file the appeals whereas in income tax proceeding, assessee is reminded to pay the outstanding demand of tax and interest not only on telephone but by other notice from the Assessing Officer before sending default cases to TRO.

(ix) No averment is made in the affidavit that except TRO notice, no other communication was made by department either by way of telephone or in writing.

(x) Shri Malik Parvej has not filed any affidavit to corroborate the version that in fact that anybody from assessee’s side never visited or reminded the CA about such a huge outstanding demand and pending appeals, more so when the issues about returns of subsequent years are process of registration may have been discussed between them.

(xi) It is vehemently contended by ld. DR that the affidavit is totally vague, general and does not explain the delay on day to day basis and reasonable and convincing averments are totally missing. The delay is not of few days but of about a year i.e. 347 days. If such deliberate delay is condoned on vague pleadings, it will not be conducive of the judicially settled principles of natural justice like delay defeats equity and law helps diligent and not the indolent.

(xii) The assessee has not filed evidence to support the contents of the affidavit, the conduct of the assessee and averments suffer from innumerable latches and inconsistencies and do not constitute sufficient reasons as proper basis for condonation of such prolonged delay.

We have heard the rival contentions of both the parties and perused the material available on the record. We find merit in the contentions of learned DR.

  • The assessee has only filed a vague and general affidavit from the CA which utterly lacks any specific contentions and fails to explain day to day delay in reasonable manner.
  • The assessee has neither filed any evidence nor the affidavit of Shri Malik Parvej to corroborate the vague affidavit by the C.A.. It does not conform to general human conduct in such circumstances, preponderance of probabilities and surrounding circumstances which form sine qua non in the matters of condonation of delay.
  • It is unbelievable that an assessee, whose taxable income is claimed to be NIL is taxed for two years assessed at such a high income resulting in a huge tax and interest demand will not visit the C.A. office almost for a period of about one year to know about the filing of the appeals.
  • There is no deposition in the affidavit that prior to TRO notice dated 02/3/2012, no other notice by way of telephone or writing was received either by assessee or the C.A. Thus, the depositions in affidavit remain vague, unsubstantiated and do not amount to explaining the sufficient cause.

The affidavit and cavalier conduct of Shri Kaushal Agarwal, C.A. raises serious questions on his professional competence and work ethics in giving such an affidavit which hides more than It explains. The burden is on the assessee to reasonably explain day to day delay and establish that there existed reasonable and sufficient cause in delaying the filing of appeals for about 1 year. If the proper dates or occasions are not mentioned with proper facts then the delay cannot be condoned.

In this behalf, we rely on the decision of the Hon’ble Madras High Court in the case of Madhu Dadha Vs. ACIT (2009) 317 ITR 458 (Mad). In this judgment, the Hon’ble Supreme Court citation i.e. Collector, Land Acquisition Vs. Mst. Katiji (supra) has also been considered. We find merit in the contentions of ld. DR that law helps diligent and not the indolent as well as the axiomatic delay defeats equity. In our considered view that the condonation petitions filed by the assessee and material available on the record, fail to invoke any confidence, fail to explain reasonable and sufficient cause for condonation of long delay of 347 days in filing these appeals . The assessee has to come clean with all the relevant facts, which happened in the period of one year. The assessee has to explain all the events and be specific in the dates. The depositions made in the C.A. affidavit remain uncorroborated and there is no affidavit from the said Shri Malik Parvej in support of the affidavit of C.A. Thus, the vague affidavit given by the C.A. remains uncorroborated and unreliable. In the entirety of facts and circumstances of the case, we decline to condone the delay of 347 days in filing these appeals.

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  1. Puttaraju S says:

    Department should first take care of its corrupt officers and workers & then point out at others. The departments are a shame, always waiting for an opportunity to find a scapegoat.

  2. Vivek says:

    I request Tax guru editorial team to give the hedading properly as Heading of Artical i.e “ITAT raises serious questions on professional competence and work ethics of CA” is not correct as in the Hon’ble ITAT order mention specific about Shri Kausal not about all CAs professional.

    Quoting the lines from above article only “The affidavit and cavalier conduct of Shri Kaushal Agarwal, C.A. raises serious questions on his professional competence and work ethics in giving such an affidavit…..”.

  3. S Subramanian, FCA says:

    While appreciating the observations of the ITAT, ist is to be noted that the dalay on the part of the Department even of some years in filing appeals citing work pressure gets condoned.The ITAT should not follow one standard for the appellants and another for the Department. Our sympathies are with the assessee in this case.

  4. dr.g.balakrishnan phd ML, says:

    how can any one accept the professional competence of CA?

    advocates tell their clients do not unnecessarily delay, without sufficient causes, else you dear client would lose the matter, simply do not over rely on condonation of delays, true clients might get angry but advocate has no way but has to say facts…after all law is a man made proposition that means no God came on earth and said this shall be the law, but men alone make the laws and that law one needs to closely follow, after all law is a kind of contractual liability imposed on any one…so advocates never say ‘in the name of truth’ but only use just grounds of facts…so no pleading says ‘truth’ but just facts of a case!

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