Absence Of Diligence On Part Of Applicant Would Disentitle It To Benefit Of Condonation Of Delay As Per Sec 249(2): Pune ITAT

As per Section 249(4) of Income tax Act, in a case where no return of income has been filed by the assessee, then his appeal shall be maintainable before the CIT(A) only if he had paid an amount equal to the amount of advance tax which was payable by him.

However, the statutory requirement contemplated in clause (b) of sub-section (4) of section 249 would stand triggered only where any obligation was cast upon the assessee to pay 'advance tax'.

At the same time, Section 40(a)(ia) of the Income Tax Act, disallows payments made to resident contractor, commission agent, broker, or professionals, on which the TDS has not been deducted, or after deduction has not been paid within the specified timeframe.

The Division Bench of Vinay Bhamore (Judicial Member) and G. D. Padmahshali (Accountant Member) observed that “the burden is on the party claiming condonation of delay to place before the appellate authority, in clear and explicit terms, all facts on which the party relies, so that the appellate authority/court can conclude that it is not a case of want of diligence or inaction on the part of the applicant”.

Facts of the case:

The assessee, a partnership firm, filed its return, which was subjected to limited scrutiny. In the event of assessee's failure to deduct tax at source from the expenditure of interest Rs.20,35,033/- debited to Profit & Loss Account and credited, eight identified persons were disallowed u/s 40(a)(ia) and the assessment was accordingly framed u/s 143(3).

Observations of the Tribunal:

The Bench found that the assessment order u/s 143(3) was passed on Mar 22, 2016 & communicated to the appellant on Mar 30, 2016.

In terms of provisions of section 249(2), the appeal against order of assessment or penalty order is required to be filed within thirty days from the date the order sought to appealed was received by assessee, added the Bench.

The Bench noted that the appeal against assessment order was admittedly filed before the CIT(A) with a delay of 2086 days from the expiry of statutory period prescribed u/s 249(2).

Hence, the Bench stated that the said appeal was barred by limitation and hence dismissed in-limine in the absence of document/explanation establishing sufficient reasons behind occurrence of such inordinate delay.

The Bench referred to the decision of Apex Court in 'Esha Bhattacharjee Vs Managing committee of Raghunathpur Academy and Ors' [12 SCC 649], where it was held that even if the period of two years i.e. COVID-19 relaxation/exclusion is excluded for computation of total delay, the balance delay in instituting appeal before CIT(A) still continues to be inordinate, substantial & excessive.

The Bench reiterated the decision passed by Apex Court in Basawaraj & Anr Vs Special Land Acquisition Officer [L4 SSC 8U(SC)] where it was held that in case a party is found to be negligent, or for want of bona fide on his part in the facts and circumstances of the case, or found to have not acted diligently or remained inactive, there cannot be a justified ground to condone the delay.

The Bench further reiterated that in case there was no sufficient cause to prevent a litigant to approach the court on time condoning the delay without any justification, putting any condition whatsoever, amounts to passing an order in violation of the statutory provisions and it tantamount to showing utter disregard to the legislature.

Hence, finding that the appellant failed to make out a case of sufficient cause for delay in filing appeal before CIT(A), the ITAT dismissed Assessee's appeal.

Counsel for Appellant/ Assessee: None

Counsel for Respondent/ Revenue: Umesh Phade

Case Title: M/s Bhujbal Construction Company Verses Income Tax Officer

Case Number: ITA No. 0756/PUN/2024

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