Lack Of Diligence Disqualifies Applicant From Condonation Of Delay Under Sec 249(2): Pune ITAT

Lack Of Diligence Disqualifies Applicant From Condonation Of Delay Under Sec 249(2): Pune ITAT

The Pune Income Tax Appellate Tribunal (ITAT) has dismissed an appeal filed by an assessee, a partnership firm, due to an inordinate delay of 2086 days in filing the appeal against the assessment order. The Division Bench of Vinay Bhamore (Judicial Member) and G. D. Padmahshali (Accountant Member) held that the assessee's lack of action and diligence over a period of more than five years disentitled it from the benefit of Section 249(2) of the Income Tax Act, which allows for condonation of delay in certain circumstances.

The assessee had filed its income tax return, which was subjected to limited scrutiny. During this scrutiny, it was found that the assessee had failed to deduct tax at source on interest payments amounting to ₹20,35,033, which were debited to the Profit & Loss Account and credited to eight identified persons. Consequently, these payments were disallowed under Section 40(a)(ia) of the Income Tax Act, and the assessment was framed under Section 143(3) on March 22, 2016. The assessment order was communicated to the assessee on March 30, 2016.

According to the provisions of Section 249(2) of the Income Tax Act, an appeal against an assessment or penalty order must be filed within thirty days from the date of receiving the order. In this case, the assessee filed the appeal before the Commissioner of Income Tax (Appeals) [CIT(A)] with a significant delay of 2086 days beyond the statutory period.

The ITAT noted that the appeal was clearly barred by limitation, and the assessee failed to provide any valid documentation or explanation for the substantial delay. The tribunal referred to the Supreme Court's decision in Esha Bhattacharjee v. Managing Committee of Raghunathpur Academy & Ors, where it was held that even with the exclusion of the COVID-19 relaxation period, the remaining delay in filing the appeal was still excessive and unjustified.

Furthermore, the ITAT cited the Supreme Court's ruling in Basawaraj & Anr v. Special Land Acquisition Officer, which stated that if a party is found to be negligent or lacking in bona fide efforts, or if the party remained inactive, there is no justified ground to condone the delay.

Given that the assessee did not demonstrate sufficient cause for the delay in filing the appeal, the ITAT dismissed the appeal. The tribunal emphasized that condoning such an inordinate delay without any valid justification would be in violation of statutory provisions and show disregard for the legislative intent.