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Judgment
PER SANJAY AWASTHI, ACCOUNTANT MEMBER:
This appeal arises from order dated 01.09.2025, passed u/s 250 of the Income Tax Act, 1961 (hereafter as “the Act”), by Ld. CIT(A)-3, Noida. In this case, the ITAT registry has reported a delay of 51 days in the filing of the said appeal, for which the assessee has filed an affidavit indicating the reasons for delay as under: -
“1.That I have filed appeal against the order u/s 154 of the Income Tax Act, 1961 before the Worthy CIT(A)- Noida.
2.That I have filed details submission in my case before the Appellate Authority. The order u/s 250(6) has been passed by the Worthy CIT(Appeals) Noida on 01.09.2025 and the same has been received on my Income Tax portal account.
3.That I have given the above said order to my accountant for filing of appeal before the second appellate authority.
4.That due to the misshaping in the family of my accountant, my accountant has went to leave without my permission and he has neither sent the order of CIT(A) to the counsel for filing of appeal further before the Hon'ble Bench.
5.That I did not know the above said facts.
6.That I got a call from the 'Income tax department' regarding some arrears of notice in the second week of January 2026. Then I came to know that my counsel did not sent order to my counsel for filing of appeal.
7.That I immediately sent my appellate order to Sh. Sudhir Sehgal Advocate for filing of appeal before the Hon'ble ITAT Delhi Bench.
8.That the delay in filing the appeal is as under:-
i)Date of passing the order by the CIT(A) 01.09.2025
ii) Appeal has to file 30.11.2026
iii) Date of filing appeal before ITAT 20.01.2026 Delay 51 days
9.That the delay in filing the appeal only on account of the above said bona-fide reasons are highly regretted and, as such, the same may, please, be condoned.”
Considering the reasons given in the said petition, the delay is condoned and the appeal is admitted for adjudication.
In this case, the Ld. AO passed an order u/s 154 of the Act and enhanced the income of the assessee by Rs.24,04,397/-. It is claimed by the assessee that the said order was not “properly served” on the assessee and therefore he could not file first appeal within the statutory time limit. Through the impugned order the Ld. CIT(A) has mentioned in para 2 at pages 1 & 2 of his order that the assessee filed the appeal after a delay of around nine years. The Ld. CIT(A) has further mentioned that even during the rectification proceedings (impugned before him) no reply was filed before the Ld. AO. Considering these factors the first appeal was dismissed in limine as the delay was not condoned.
Aggrieved with this the assessee has filed the present appeal with three substantive grounds which challenge the action of Ld. CIT(A) in dismissing the appeal in limine.
Before us the Ld. AR mentioned that there was a certain sequence of events which deserves to be mentioned as under: -
05.03.2015 – Original assessment order passed u/s 143(3) of the Act;
22.09.2015 – Rectification order u/s 154 of the Act was passed enhancing the income by Rs.24,04,397/-;
18.03.2016 – An order u/s 143(3)/153C of the Act was passed on the assessee wherein the enhancement u/s 154 was incorporated in the computation of income;
30.01.2019 – An order u/s 250 of the Act was passed on the assessment order u/s 143(3)/153C of the Act.
27.02.2019 – Appeal was filed before the ITAT in which the enhancement u/s 154 of the Act was duly challenged;
13.12.2023 – The ITAT passed the order in which this ground was dismissed as it did not arise from the impugned order before that Bench.
The Ld. AR argued that at least till 13.12.2023 this issue was alive in one form or another. It was the submission that the assessee was pursuing the matter to the best of his ability. The Ld. AR also pointed out the detailed submissions made before the Ld. CIT(A) running from pages 36 to 73 in the Paper Book. The Ld. AR stated that the rectification through which the impugned enhancement was made was patently illegal.
The Ld. DR, on the other hand, pointed out that while the assessee had contested the impugned addition at various forums on merit, but he failed to supply good and sufficient reasons for the massive delay of nine years in the filing of first appeal. The Ld. DR pointed out that even in the submissions before the Ld. CIT(A) stress was laid on the merit of the case and there is not a whisper about the reasons for the almost 9 years delay and why the same should be condoned. The Ld. DR supported the impugned order.
We have carefully considered the rival submissions and have gone through the records before us. It is seen that while the assessee has been raising the issue of an alleged unjustified enhancement of income u/s 154 of the Act, but he has not requested for any condonation of delay before the Ld. CIT(A) through reasons which would satisfy the mandate available u/s 249(3) of the Act. The detailed submissions before the Ld. CIT(A), as placed before us in the paper book, do not reveal anything about the reasons placed before the Ld. CIT(A) for considering condoning of the delay. We find it difficult to be swayed by the contention that the impugned issue was being duly agitated in the proceedings u/s 153C, right up to the stage of the ITAT, but somehow the issue of delay could not be raised for condonation in any appropriate manner. The submissions of the assessee and the arguments of the Ld. AR tend to give an impression that just because the issue was kept alive right up to the stage of ITAT then this fact itself would be sufficient to automatically condone any delay at first appellate stage. This is a fallacious argument in our opinion.
The Hon'ble Apex Court in a catena of decisions has held that the law of limitation being substantive, the power of discretion to condone the delay is to be exercised judiciously and cannot be exercised in a routine manner. The parties are expected to approach the Court in adherence to this general principle. Thus, filing an appeal is the rule and condoning the delay is the exception, wherein the Courts have to exercise their discretionary power judiciously and by recording reasons. Excessive delay, as in this case, cannot be simply wished away by casually mentioning that the issue on merit was being diligently pursued. Such casually explained delay is to be construed as a delay which cannot be condoned. Once there is a delay, the person who is filing the condonation petition is expected to furnish the reasons which must be acceptable to the concerned Appellate Authority.
The Hon'ble Supreme Court in the case of Collector, Land Acquisition v. Mst. Katiji 1987 taxmann.com 1072/28 ELT 185, has observed that it is for the assessee to explain each and every day of delay in filing of appeal. Before the Ld. CIT(A), in the present case, no such petition prayer/application for condonation of delay appears to have been filed much less a sufficient and satisfactory explanation to prove that there is a reasonable cause for the said delay.
At this juncture, it is necessary to delve into the genesis of limitation and how a judicial forum needs to deal with matters pertaining to condonation of delay. Almost all the tax laws, whether they relate to direct taxes or Indirect taxes, contain provisions for condonation of delay in filing appeals, if the appellant (whether it is the taxpayer or the revenue) proves to the satisfaction of the appellate authority that he had sufficient cause for not filing the appeal within time. The genesis for such provisions can be traced to section 5 of the Limitation Act, 1963, which reads as follows:
"Extension of prescribed period in certain cases Any appeal or any application, ether than an application under any of the provisions of Order XXI of the Code of Civil Procedure, 1908 (5 of 1908), may be admitted after the prescribed period if the appellant or the applicant satisfies the Court that he has sufficient cause for not preferring the appeal or making the application within such period.
Explanation: The fact that the appellant or the applicant was misled by any ender, practice or judgment of the High Court in ascertaining or computing the prescribed period may be sufficient cause within the meaning of this section.”
The two essential ingredients for condoning delays are: (1) the existence of sufficient cause, and (ii) the satisfaction of the competent authority that such sufficient cause was proved as existing. Thus, the first issue about the existence of sufficient cause covers the factual matrix in respect of which the onus to prove is squarely on the litigant, while the second issue about ‘satisfaction’ covers the discretionary area in which the competent authority is expected to act. It is by now well settled that the expression ‘sufficient cause’ has to be understood to mean a cause beyond the control of the appellant or one which the appellant, even with the exercise of due care and attention, could not avoid. The expression is required to be interpreted liberally so as to advance substantial justice when no negligence or inaction nor want of bona fides is imputable to the appellant-assessee. Further, it is a general principle of law that whenever a Court is vested with a discretionary power, such discretion must be exercised not in an arbitrary, vague or fanciful manner but on judicial principles. The fundamental principle, which has been universally recognized as the true rule of guidance for the exercise of discretion to condone delays is to see whether the party claiming indulgence has been reasonably diligent in prosecuting his appeal. In the case of State of Gujarat v. Sayed Mohd. Baquir El Edross AIR 1981 SC 1921, the Hon’ble Supreme Court laid down the following principles that should govern the exercise of powers of condonation under section 5:
The party seeking relief has to satisfy the Court that he had sufficient cause for not preferring the appeal, etc., within the prescribed time.
The explanation has to cover the entire period of delay.
A litigant should not be permitted to take away a right which has accrued to his adversary by lapse of time.
The proof of sufficient cause is a condition precedent for the exercise of the discretionary jurisdiction vested in the Court under section 5. After sufficient cause is shown, the Court is to inquire whether in its discretion it should condone the delay.
The discretion conferred on the Court is a judicial discretion and must be exercised to advance substantial justice.
No liberal view should be taken merely because the defaulting party is a Government.
Even if there was a strong case for acceptance of the appeal on merits that could not be a ground for condonation of delay
When there is remiss on the part of the advocate, the question that comes up for consideration is whether the mistake was bona file or was merely a device to cover the ulterior purpose such as latches on the part of the litigant or an attempt to save limitation in an underhand way.
It was also held in an earlier decision in the case of Ramlal Motilal v. Rewa Coalfields AIR 1962 SC 361, that “every day's” delay must be explained. Another important requirement is that the ‘cause’ for the delay must have arisen before the expiry of the limitation period, and, as held by the Supreme Court in the case of Ajit Singh Thakur Singh v State of Gujarat AIR 1981 SC 733, "no event or circumstance arising after the expiry of limitation period can constitute ‘sufficient cause’”.
Considering the detailed discussion above, it is our considered opinion that the appellant has not been able to demonstrate any reasonable cause to allow condonation of delay in the matter and thus we decline to intervene in the decision rendered by the Ld. CIT(A). Accordingly, this appeal is dismissed on the point of limitation before Ld. CIT(A). It is held that the Ld. CIT(A) was justified in dismissing this appeal u/s 249(3) of the Act.
In the result, the appeal filed by the assessee is dismissed.