Facts of the Case

The assessee, Kanodia Investments Private Limited, filed its return of income which was processed under Section 143(1) of the Income-tax Act. Subsequently, the assessee sought to challenge the intimation by filing an appeal before the Commissioner of Income Tax (Appeals). However, the appeal was filed after an extraordinary delay of approximately 1473 days (more than four years) beyond the statutory time limit.

The assessee pleaded illness of the Managing Director as the reason for the delay. The CIT(A) declined to condone the delay due to absence of sufficient documentary evidence and dismissed the appeal. The assessee then approached the Income Tax Appellate Tribunal, Allahabad Bench.

Issues Involved

  1. Whether the delay of about 1473 days in filing the appeal before CIT(A) should be condoned.
  2. Whether the assessee had demonstrated “sufficient cause” under Section 249(3).
  3. Whether illness of a key managerial person without supporting evidence justified such prolonged delay.
  4. Whether the CIT(A) exercised discretion properly in refusing condonation.

Petitioner’s (Assessee’s) Arguments

  • The delay occurred due to illness of the Managing Director, who was responsible for handling tax matters.
  • The assessee contended that the delay was neither intentional nor deliberate.
  • It was argued that the appeal should be admitted in the interest of justice and decided on merits.

Respondent’s (Revenue’s) Arguments

  • The assessee had admittedly received the intimation under Section 143(1) in time.
  • Despite having professional assistance and corporate structure, no action was taken for several years.
  • No credible documentary evidence was produced to substantiate the alleged illness or incapacity.
  • Therefore, the CIT(A) rightly refused to condone the delay.

Court Order / Findings (ITAT)

  • The right to appeal is a statutory right subject to prescribed conditions and limitation.
  • Condonation of delay requires proof of “sufficient cause,” which must be supported by credible evidence.
  • Mere assertions without substantiation cannot justify extraordinary delay.
  • A corporate entity with multiple officers and professional advisors cannot rely solely on illness of one individual without proof of incapacity.
  • The CIT(A) exercised discretion judiciously and reasonably.

Important Clarification by the Tribunal

  • Limitation provisions are not mere technicalities but integral to statutory procedure.
  • Discretion to condone delay must be exercised on sound judicial principles.
  • Failure to act diligently cannot be excused merely on sympathetic grounds.

Link to download the order   https://itat.gov.in/public/files/upload/1658396395-Kanodia.pdf

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