Refusal of late relief on non-filing of relief petition is untenable: ITAT Chennai

Medavakkam Vattara Nadargalikkiya Sangam Vs ITO (ITAT Chennai)

ITAT Chennai held that the delay condonation should not be denied on the ground that the late appeal was not accompanied by the condonation petition. Thus order was set aside and matter was left behind.

Facts- In the present appeal, the appellant principally contested that the Addl/JCIT erred in not condoning the delay and also in dismissing the appeal for non-prosecution. The assessee’s main grievance is that the CIT(A) not only dismissed the objection in a limited and unsustainable manner but also dismissed the objection on the ground of non-prosecution.

Solution- It held that the delay bill should not be rejected outright because the late objection was not accompanied by a petition for certification. The remission provisions under the Income Tax Act are monetary in nature as per Rule 3A and Order 41 of the Code of Civil Procedure, 1908, which categorically states that there is no rule prescribed for dismissing the memorandum of appeal in a case where the appeal is not accompanied by the following. An application to condone delay. In this type of appeal, if the memorandum of appeal is made without adding an application for condonation to the appeal, the result cannot be fatal. The court cannot consider such an objection as a valid appeal. Conversely, if the appellant later files an application to condone the delay, which is rejected, the same needs to be considered along with the memorandum of appeal already filed, only then can the courts treat it as if it was lawfully filed. There is nothing wrong if the court returns the petition with a defect and if this defect can be remedied by the party concerned and the appeal can be filed without further delay.

Concluding that the dismissal by the CIT(A) for default was bad in law, we set aside the decision of the CIT(A).

FULL TEXT OF ITAT CHENNAI ORDER

These objections raised by the assessee arise from different orders of the Commissioner of Income Tax, Appellate, Addl/JCIT(A)-4, Delhi, ITBA/APL/S/250/2024-25/1065898299 (1). , 1065898037(1), 1065896834(1), 1065897322(1) and 1065897668(1) dated 21.06.2024. Income returns have been processed by the Central Processing Centre, Bengaluru under Section 143(1) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) for assessment years 201617, 2018-19 to 2021-22. Orders on different dates: 01.03.2019 / 30.12.2020 / 11.05.2020 / 30.11.2021 / 23.08.2022.

2. The only common issue in these five appeals of the assessee relates to the different orders of Addl./JCIT, Delhi not to condone delay and also to dismiss the appeal on the ground of non-prosecution simplicity. The facts and circumstances and grounds alleged in these five appeals are exactly the same and, therefore, the facts and grounds for the assessment year 2016-17 are submitted in ITA No. We will take it from 2186/CHNY/2024 and decide the matter. The relevant grounds given by the assessee are as follows:-

2nd Ld. ADDL/JCIT(A) is not justified in disregarding the appellant’s delay in lodging an appeal even though the appellant was reasonably and sufficiently prevented from delaying the appeal.

3rd Ld. ADDL/JCIT(A) consequently erred in rejecting the appellant’s objection.

4th Lt. ADDL/JCIT(A) is not justified in approving the declaration passed by the CPC under Section 143(1) of the Bangalore Act dated 01.03.2019 fixing the total income of the appellant at Rs.3,51,970/- and a claim of Rs.1,55,970/- increased

3. We have heard the rival allegations and considered the facts and circumstances of the case. We have noted that the delay before the CIT(A) in this appeal was 1694 days (similar to the delays in the assessee’s other assessment years, but there are some differences between the days) and he has ignored this delay as stated by the CIT(A). Delay due to the failure of the assessee to explain the reasonable and sufficient reason causing the delay in filing this appeal. JCIT observed the following in paragraphs 6.2 and 6.3:-

6.2. In the present case the appellant has failed to provide any plausible explanation. and sufficient cause for delay in filing the appeal. The language used in Section 249(3) is “sufficient cause” and not “reasonable cause”. ‘Sufficient reason’ is much stricter than the term ‘reasonable reason’ and even if the reason is reasonable, it must be determined whether there is sufficient reason. The reasoning given by the appellant is too general and cannot be verified. If this type of justification is accepted, then anyone can accept this defense. It has already been discussed above that in order to be entitled to us/s 249(3) to condone delay, the appellant must show that he was diligent all along in taking appropriate steps and if he appears to be at fault or negligent, then he must do so. Be prepared to be prevented from seeking forgiveness.

6.3. Based on the circumstances of the case. it is kept like that The appellant had “sufficient cause” for delay. It was decided that the objection made by the plaintiff was invalid and unsustainable because it was out of time.

The main grievance of the assessee is that the CIT(A) not only dismissed the appeal in a limited and unsustainable manner but also dismissed the appeal on the ground of non-prosecution by observing in para 6.4 as follows:-

6.4. In view of the above details of non-compliance and disregard of appeal, reference is made to the following judicial order of the Hon’ble Apex Court. CIT vs. In the case of BN Bhattacharya(1977) 118 ITR 461 (SC), the Hon’ble Supreme Court, while dealing with the issue of pursuit of appeal, held that “opting for appeal means more than formally filing an application, but effectively pursuing it.” As reported in Hon’ble ITAT, Delhi, 38 ITD320 (Delhi), CIT vs. Multiplan India Pvt Ltd. In his case, when faced with a similar situation of not filing an appeal, he rejected the Revenue Administration’s objection. The law helps those who are awake, not those who sleep on their rights. This principle is embodied in the following maxim: “Vigilantibus non Dorientibus jura subveniunt” In view of the above, it is clear that the appellant is not interested in pursuing this appeal.

4. We note that the CIT(A) has stated that the assessee has not filed any petition as any reasonable and sufficient reason seeking condonation of the delay in these appeals. We find that the delay grant should not be denied immediately because the delayed objection was not accompanied by a petition for certification. The remission provisions under the Income Tax Act are monetary in nature as per Rule 3A and Order 41 of the Code of Civil Procedure, 1908, which categorically state that there is no rule prescribed for dismissing a memorandum of appeal in a case not accompanied by an appeal. An application to condone delay. In this type of appeal, if the memorandum of appeal is made without adding an application for condonation to the appeal, the result cannot be fatal. The court cannot consider such an objection as a valid appeal. Conversely, if the appellant subsequently files an application to condone the delay, which is rejected, it means that the same has to be considered along with the memorandum of appeal already filed and only then can the courts consider it to have been lawfully filed. There is nothing wrong if the court returns the petition with a defect and if this defect can be remedied by the party concerned and the appeal can be filed without further delay. Rule 3A(1) of Order 41 of the CPC staff The word ‘shall’ means that the rule cannot be construed too harshly and non-compliance cannot be made punitive on the part of the appellant. Due to some error or statute of limitations, the appellant may neglect to submit the application explaining the delay along with the appeal. In the present case, the CIT(A) noted intact Maxim. “Vigilantibus non dorientibus jura subveniunt” In other words, the law helps those who are awake, not those who sleep on their rights. But even a careful litigant is prone to making mistakes. This issue was considered by the Supreme Court in the case of State of Madhya Pradesh v. Pradeep Kumar reported in (2000) 7 SCC 372; Here “‘‘To err is human’ is a practical concept of human behavior rather than an abstract philosophy; The judicial system is permanently closed to him. The court’s endeavor should not be to find ways to close the shutters of its jurisdiction on a party seeking justice because of any mistake it has made. but to see whether it is possible to take into account his complaint, if it is genuine.”

4.1 We submit that in the present case before us, the CIT(A)-NFAC simply rejected the default plea and did not decide or decide the merits of the case. After going through the provisions of the Act, especially the provision of Section 250 of the Act, we are of the view that the CIT(A) is a quasi-judicial authority and as per the rules of the Income Tax Act, the CIT(A) cannot reject the appeal. clearly or unavoidably due to default, but the appellate authority must decide the appeal on the merits. The appellate authority does not have the authority to reject the appeal for default, but is obliged to decide the appeal on merits even in the absence of the assessor. Furthermore, this opinion is not supported by Southern Steel Industries vs. We have also noted that it was adopted by the Madras High Court in the case of AAC (CT), (1996) 101 STC 273 (Mad). Therefore, dismissal for default by CIT(A) is bad in law and we therefore set aside the order of CIT(A). In view of the above, the decision of the CIT(A) is set aside and the matter is remanded to the file for further decision. It goes without saying that the CIT(A), after giving a reasonable opportunity of hearing to the assessee, will first decide the issue of delay and, if delay is condoned, decide the merits of the appeal. We order accordingly.

5. In conclusion, the objections raised by the assessee in ITA No.2186 to 2190/CHNY/2024 are allowed for statistical purposes.

The verdict was announced in open court during the hearing on 21^st October 2024 in Chennai.