Facts of the Case

The assessee, Shalimar Powerloom Textiles, filed an appeal before the Income Tax Appellate Tribunal against the order of the Commissioner of Income Tax (Appeals), Allahabad, dated 01.10.2019 for Assessment Year 2012-13.

There was a delay of 1462 days in filing the appeal before the Tribunal. The assessee submitted an application seeking condonation of delay, stating that the delay occurred due to the COVID period and shifting of its business premises.

The Tribunal examined whether the reasons provided constituted “sufficient cause” under law to condone the delay.

Issues Involved

  1. Whether the delay of 1462 days in filing the appeal could be condoned.
  2. Whether the reasons cited—COVID-19 period and business shifting—constituted sufficient cause.
  3. Whether lack of due diligence on the part of the assessee barred condonation of delay.
  4. Whether the appeal could be admitted despite being time-barred.

Petitioner’s Arguments (Assessee)

  • The delay was attributable to the COVID-19 pandemic period.
  • The business had shifted, causing disruption in operations.
  • The delay was not intentional and should be condoned in the interest of justice.

Respondent’s Arguments (Revenue)

  • The delay was extraordinarily long.
  • The reasons provided lacked documentary support.
  • The assessee failed to demonstrate unavoidable circumstances or due diligence.

Court Order / Findings (ITAT Allahabad)

The Tribunal analyzed the law relating to condonation of delay, including principles laid down by the Supreme Court regarding Sections 3 and 5 of the Limitation Act, 1963. The Tribunal noted that:

  • Law of limitation is based on public policy to ensure finality of litigation.
  • Courts may condone delay only where “sufficient cause” is established.
  • Liberal interpretation cannot override mandatory limitation provisions.
  • Negligence, lack of bona fide, or absence of diligence disentitles a party to condonation.

Applying these principles, the Tribunal found that:

  • The assessee failed to establish sufficient cause for the inordinate delay.
  • The reasons cited were unsupported by documentary evidence.
  • There was a complete lack of due diligence.

Accordingly, the application for condonation of delay was rejected.

 Important Clarification

  • Condonation of delay is discretionary and not automatic.
  • Mere reference to COVID-19 or administrative difficulties is insufficient without proof.
  • Courts cannot revive stale or dead claims in the absence of convincing justification.
  • Merits of the case are irrelevant when deciding limitation issues.

Link to download the order - https://www.mytaxexpert.co.in/uploads/1771064443_SHALIMARPOWERLOOOMTEXTILESAZAMPURMAUIMAVS.INCOMETAXOFFICER15ALLAHABAD.pdf

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