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Judgment
PER VIKAS AWASTHY, JUDICIAL MEMBER:
This appeal by the Revenue is directed against the order of Commissioner of Income Tax (Appeals), Delhi-25 [in short 'the CIT(A)'] dated 19.12.2025, for Assessment Year 2011-12. The assessee has filed cross objections in appeal filed by the Revenue.
The appeal of Revenue is time barred by 649 days. The reasons given by the Revenue for delay in filing of appeal are reproduced herein below:
The reason given for inordinate delay in filing of appeal is a routine stereo type excuse by the Department. We are live to the law propounded by the Hon’ble Apex Court on condoning delay and emphasizing that acceptance of reason explaining delay should be the rule and refusal an exception. Further, the Hon’ble Court has also accentuated that a liberal approach should be adopted while interpreting the expression ‘sufficient cause’. The Hon’ble Apex Court has underlined liberal interpretation of expression ‘sufficient cause’ and not excuses.
In the case of CWT vs. Amateur Riders Club reported as 1994 SUPP(2) SCC 603, the Hon’ble Supreme Court of India after examining the reason given in affidavit for condonation of delay observed:
“3.This explanation is incapable of furnishing a judicially acceptable ground for condonation of delay. After the earlier observations of this Court made in several cases in the past, we hoped that the matters might improve. There seems to be no visible support for this optimism. There is a point beyond which even the courts cannot help a litigant even if the litigant is Government which is itself under the shackles of bureaucratic indifference. Having regard to the law of limitation which binds everybody, we cannot find any way of granting relief. It is true that Government should not be treated as any other private litigant as, indeed, in the case of the former the decisions to present and prosecute appeals are not individual but are institutional decisions necessarily bogged down by the proverbial red- tape. But there are limits to this also. Even with all this latitude, the explanation offered for the delay in this case merely serves to aggravate the attitude of indifference of the Revenue in protecting its common interests. The affidavit is again one of the stereotyped affidavits making it susceptible to the criticism that the Revenue does not seem to attach any importance to the need for promptitude even where it affects its own interest.
4.The application for condonation of delay is, accordingly, dismissed. The special leave petition is, therefore, dismissed as barred by time.”
[Emphasized by us]
The Hon’ble Supreme Court of India in the case of Chief Post Master General vs. Living Media India Ltd. reported as 20 taxmann.com 347 while considering application for condonation of 427 days delay in filing of appeal took note of following earlier decisions:
- Collector, Land Acquisition v. Mst. Katiji, [1987] 2 SCC 107, - G. Ramegowda, Major v. Special Land Acquisition Officer, [1988] 2 SCC 142, - State of Haryana v. Chandra Mani [1996] 3 SCC 132, - State of U.P. v. Harish Chandra, [1996] 9 SCC 309, - National Insurance Co. Ltd. v. Giga Ram, [2002] 10 SCC 176, - State of Nagaland v. Lipok AO, [2005] 3 SCC 752, - CWT v. Amateur Riders Club 1994 Supp (2) SCC 603 and - Pundlik Jalam Patil v. Executive Engineer, Jalgaon Medium Project [2008] 17 SC 448
After examining contents of Affidavit filed by the appellant explaining delay in filing of appeal, the Hon’ble Court rejected the reasons and dismissed the appeal on the ground of limitation holding as under:
“12.It is not in dispute that the person(s) concerned were well aware or conversant with the issues involved including the prescribed period of limitation for taking up the matter by way of filing a special leave petition in this Court. They cannot claim that they have a separate period of limitation when the Department was possessed with competent persons familiar with court proceedings. In the absence of plausible and acceptable explanation, we are posing a question why the delay is to be condoned mechanically merely because the Government or a wing of the Government is a party before us. Though we are conscious of the fact that in a matter of condonation of delay when there was no gross negligence or deliberate inaction or lack of bonafide, a liberal concession has to be adopted to advance substantial justice, we are of the view that in the facts and circumstances, the Department cannot take advantage of various earlier decisions. The claim on account of impersonal machinery and inherited bureaucratic methodology of making several notes cannot be accepted in view of the modern technologies being used and available. The law of limitation undoubtedly binds everybody including the Government.
13.In our view, it is the right time to inform all the government bodies, their agencies and instrumentalities that unless they have reasonable and acceptable explanation for the delay and there was bonafide effort, there is no need to accept the usual explanation that the file was kept pending for several months/years due to considerable degree of procedural red-tape in the process. The government departments are under a special obligation to ensure that they perform their duties with diligence and commitment. Condonation of delay is an exception and should not be used as an anticipated benefit for government departments. The law shelters everyone under the same light and should not be swirled for the benefit of a few. Considering the fact that there was no proper explanation offered by the Department for the delay except mentioning of various dates, according to us, the Department has miserably failed to give any acceptable and cogent reasons sufficient to condone such a huge delay. Accordingly, the appeals are liable to be dismissed on the ground of delay.”
The Hon’ble Supreme Court of India in a recent judgement in the case of State of Odisha vs. Managing Committee of Namatara Girls High School reported as 2026 SCC Online SC 191, where the appellant sought condonation of delay explaining reason for delay as, “That the delay in filing the appeal was on account of procedural delay in obtaining approval from the higher authority. The delay caused is not deliberate and intentional.” The Hon’ble Court while considering application for condonation of delay took note of the past decisions and how the law evolved over the period of time with regard to condonation of delay, held as under:
“11.We now proceed to assign our reasons.
12.No cause, much less sufficient cause, has been shown for exercise of discretion in favour of the State of Odisha. The nature of explanation in the application for condonation of delay is such that with much ado, the proceedings could be closed.
13.However, since there is a long line of decisions of this Court propounding the law that the expression ‘sufficient cause’ employed by the legislature in Section 5 of the Limitation Act, 1963 is adequately elastic to enable the courts to apply the law in a meaningful manner which subserves the ends of justice and in view of the submission of Ms. Sanjana, we have considered it appropriate to consider the matter in some depth.
14.Almost four decades back, in Collector, Land Acquisition, Anantnag v. Mst Katiji, (1987) 2 SCC 107, a coordinate Bench noting that the justifiably liberal approach which this Court has been adopting in matters instituted before it is not being followed by the courts lower in the hierarchy, mandated that a justice oriented approach is indeed called for when a ‘State’ seeks condonation of delay as distinguished from ‘a private party’.
15.Close on the heels of Katiji (supra), Hon’ble Justice M.N. Venkatachaliah speaking for the coordinate Bench in G. Ramegowda v. Land Acquisition Officer, (1988) 2 SCC 142 had referred to Katiji (supra) in paragraph 14 and quoted the following passage therefrom:
“When substantial justice and technical considerations are pitted against each other, cause of substantial justice deserves to be preferred for the other side cannot claim to have vested right in injustice being done because of a non-deliberate delay … It must be grasped that judiciary is respected not on account of its power to legalise injustice on technical grounds but because it is capable of removing injustice and is expected to do so.”
Immediately thereafter, in paragraphs 15 to 17, it was held as under:
“15.In litigations to which Government is a party there is yet another aspect which, perhaps, cannot be ignored. If appeals brought by Government are lost for such defaults, no person is individually affected; but what, in the ultimate analysis, suffers is public interest. The decisions of Government are collective and institutional decisions and do not share the characteristics of decisions of private individuals.
16.The law of limitation is, no doubt, the same for a private citizen as for governmental authorities. Government, like any other litigant must take responsibility for the acts or omissions of its officers. But a somewhat different complexion is imparted to the matter where Government makes out a case where public interest was shown to have suffered owing to acts of fraud or bad faith on the part of its officers or agents and where the officers were clearly at cross purposes with it.
17.Therefore, in assessing what, in a particular case, constitutes “sufficient cause” for purposes of Section 5, it might, perhaps, be somewhat unrealistic to exclude from the considerations that go into the judicial verdict, these factors which are peculiar to and characteristic of the functioning of the government. Governmental decisions are proverbially slow encumbered, as they are, by a considerable degree of procedural red tape in the process of their making. A certain amount of latitude is, therefore, not impermissible. It is rightly said that those who bear responsibility of Government must have “a little play at the joints”. Due recognition of these limitations on governmental functioning — of course, within reasonable limits — is necessary if the judicial approach is not to be rendered unrealistic. It would, perhaps, be unfair and unrealistic to put government and private parties on the same footing in all respects in such matters. Implicit in the very nature of governmental functioning is procedural delay incidental to the decision-making process. In the opinion of the High Court, the conduct of the law officers of the Government placed the Government in a predicament and that it was one of those cases where the mala fides of the officers should not be imputed to Government. It relied upon and trusted its law officers. …
16.Katiji (supra) and Ramegowda (supra) were consistently followed by this Court until adoption of a different and seemingly strict approach while dealing with applications for condonation of delay during the last decade and a half became discernible starting with the decision in Postmaster General v. Living Media India Limited, (2012) 3 SCC 563 where a delay of 427 days in filing the relevant special leave petition was not condoned. University of Delhi v. Union of India, (2020) 13 SCC 745 is another decision (of a three-Judge Bench of this Court) where delay of 916 days was not condoned.While upholding the decision of the relevant high court under challenge refusing to condone the delay of 5659 days in presentation of an appeal under Section 54 of the Land Acquisition Act, 1894 by the heirs of a deceased landowner, a coordinate Bench in Pathapati Subba Reddy v.Collector(LA), (2024) 12 SCC 336 very recently reiterated that the law of limitation is founded on public policy, the object is that a legal remedy is put to an end so that no litigation remains pending for an indefinite period. It was also held, departing from the earlier view, that the merits of the case cannot be considered at the stage of considering the application for condonation of delay.
17.Indeed, one of us [Dipankar Datta] in Sheo Raj Singh v. Union of India authoring the judgment for a coordinate Bench adopted the view taken in Katiji (supra), Ramegowda (supra) and a host of other decisions following the same while not interfering with an order of condonation of delay passed by the relevant high court. However, it was observed that a distinction ought to be drawn between an ‘explanation’ and an ‘excuse’ that is proffered as cause for condonation of delay. It was also emphasized that a different approach has to be adopted while this Court is considering an application for condonation of delay in presentation of an appeal/application and when it sits in appeal over a discretionary order of the high court granting the prayer for condonation of delay. In the case of the former, whether to condone or not would be the only question whereas in the latter, whether there has been proper exercise of discretion in favour of grant of the prayer for condonation has to be examined.
18.However, what perhaps remained unnoticed in any of the decisions post Katiji (supra) and Ramegowda (supra) adopting a liberal approach is the exasperation and consequent lament expressed by none other than Hon’ble M.N. Venkatachaliah, CJI. in course of authoring a brief order in Commissioner of Wealth Tax, Bombay v. Amateur Riders Club, Bombay and admonishing officers of the “revenue” in not acting with promptitude. This order was made within six years of the decision in amegowda (supra). We can do no better than quoting the same in its entirety hereunder:
1.We have heard Shri S.C. Manchanda, learned senior counsel for the Revenue. 2. This special leave petition filed on November 16, 1993 is delayed 264 days. For quite some time in the past, this Court has been making observations as to the grave prejudice caused to public interest by appeals brought on behalf of the Government being lost on the point of limitation. Such observations have been made for over a few years in the past. But there seems to be no conspicuous improvement as is apparent in the present petition which is filed in November 1993. The explanation for the delay, had better be set out in petitioner’s own words:
“(g)The Advocate-on-Record got the special leave petition drafted from the drafting Advocate and sent the same for approval to the Board on June 24, 1993 along with the case file.
(h)The Board returned the case file to the Advocate-on-Record on July 9, 1993 who re-sent the same to the Board on September 20, 1993 requesting that draft SLP was not approved by the Board. The Board after approving the draft SLP sent this file to CAS on October 1, 1993.”
3.This explanation is incapable of furnishing a judicially acceptable ground for condonation of delay. After the earlier observations of this Court made in several cases in the past, we hoped that the matters might improve. There seems to be no visible support for this optimism. There is a point beyond which even the courts cannot help a litigant even if the litigant is Government which is itself under the hackles of bureaucratic indifference. Having regard to the law of limitation which binds everybody, we cannot find any way of granting relief. It is true that Government should not be treated as any other private litigant as, indeed, in the case of the former the decisions to 15 1994 Supp (2) SCC 603present and prosecute appeals are not individual but are institutional decisions necessarily bogged down by the proverbial red-tape. But there are limits to this also. Even with all this latitude, the explanation offered for the delay in this case merely serves to aggravate the attitude of indifference of the Revenue in protecting its common interests. The affidavit is again one of the stereotyped affidavits making it susceptible to the criticism that the Revenue does not seem to attach any importance to the need for promptitude even where it affects its own interest.
4.The application for condonation of delay is, accordingly, dismissed. The special leave petition is, therefore, dismissed as barred by time.
(emphasis ours)
19.Reading Ramegowda (supra) and Amateur Riders (supra), one after the other, leaves none in doubt that it did not take much time for this Court to lose hope. It is absolutely clear that the law was laid down in Ramegowda (supra), following Katiji (supra), with much optimism that matters would improve. Their Lordships, however, found no visible support for such optimism and the Court’s patience having been tested to the extreme limit, held that there is a point beyond which even the courts cannot help a litigant even if the litigant labouring under the shackles of bureaucratic indifference is the Government.
20.We have found the State of Odisha to be utterly lethargic, tardy and indolent not only before the High Court but also before this Court. Notwithstanding that its appeal was dismissed as time-barred by the High Court, this Court has been approached by the State of Odisha four months after expiry of the period of limitation.
21.Condonation of delay cannot be claimed as a matter of right. It is entirely the discretion of the Court whether or not to condone delay. Despite all the latitude that is shown to a “State”, we are of the clear opinion that the cause sought to be shown here by the State of Odisha is not an explanation but a lame excuse. No case for exercise of discretion has been set up.”
Similar view has been expressed by the Hon’ble Apex Court in deprecating sluggish bureaucratic approach in not timely acting diligently, in the case of State of Madhya Pradesh and others vs. Bherulal (2020) 10 SCC 654 and in the case of Government of Maharashtra (Water Resources Department) vs. Borse Brothers Engineers and Contractors Pvt. Ltd. (2021) 6 SCC 460.
The reason given by the Revenue for condoning delay if considered in light of above judgements rendered by the Hon’ble Apex Court, we see no merit in the reason given for condonation of delay. The Revenue has not been able to show ‘sufficient cause’ resulting in delay in filing of appeal. Hence, appeal of the Revenue is dismissed on the ground of limitation.
CO 144/Del/206
The assessee in cross objections has supported findings of the CIT(A) in annulling the notice issued u/s 153C of the Act and assessment made in consequent thereof for AY 2011-12.
The ld. Counsel for the assessee submits that a search action was carried out on third party i.e Alankit Group, Shri Alok K Agarwal, Ankit Agarwal & others on 18.10.2019. Consequent to said search notice u/s.153C of the Act was issued to the assessee on 30.12.2022, satisfaction was recorded by the AO of the assessee on 21.12.2022. Thus, the deemed year of search in the case of assessee would be assessment year 2023-24. Ten years have to be determined from the deemed year of search, accordingly, tenth year would be AY 2014-15. The impugned assessment year i.e. AY 2011-12 is beyond the block of ten years. Hence, no assessment could have been made by the AO for AY 2011-12 u/s.153C of the Act. The ld. Counsel submits that the CIT(A) following the decision rendered in the case of PCIT v. Ojjus Medicare P. Ltd. & Ors., 465 ITR 101 (Delhi) has granted relief to the assessee on this legal ground. The ld. Counsel supported findings of the CIT(A).
We have heard the submissions made by rival sides and have examined the orders of lower authorities. Since, we have dismissed appeal of the Revenue on the ground of limitation, the cross objections filed by the assessee supporting findings of the CIT(A) have become infructuous.
In the result, appeal of the Revenue is dismissed and cross objections of the assessee are dismissed as infructuous.