By TIOL News Service

MUMBAI, OCT 06, 2017: THE issue before the Bench is - Whether when the delay of over eight years in filing appeal is attributable to wrong professional advice, it can be said that reasons were beyond the assessee's control and condonation is justified. YES is the verdict.

Facts of the case:

The Assessee, an individual, is a citizen of India, aged about 58 years and retired from service in January, 2003. During relevant period, he was employed with a German Bank as a Mumbai Representative and was rendering his services from India to a foreign employer. He, therefore, claimed a deduction u/s 80-O with respect to salary earned by him from the employer. The claim was however disallowed by both AO as well as CIT. Against this disallowance, the Assessee approached the Tribunal after consulting a Chartered Accountant. The assessee specifically stated that his previous CAs advised him not to file further appeals before the Tribunal to avoid multiplicity of litigation as the issue of Section 80O involved in A.Ys in question was identical to the one involved in the appeal before the Tribunal for A.Y 1993-94. He was also advised that after adjudication of the appeal for A.Y 1993-94, he could move a rectification application before AO to bring his assessment order in conformity with the decision of the Tribunal. After some time, the Assessee came to know that the Tribunal had restored the matter back to the file of AO for the A.Y 1993-94 to examine the issue of allowability of deduction u/s 80-O, and the AO passed an order allowing the claim in confirmity with the order of the Tribunal. That is how he first preferred a rectification application to the AO to rectify his order for A.Y 1994-95 and A.Y 1996-97. After continuous followup with the Department and also seeking information under the RTI, this rectification application was rejected. Thereafter, the assessee consulted another CA, who advised him to file appeals before the Tribunal against the initial orders of CIT together therewith an application for condonation of delay. It was in these circumstances that the assessee stated on oath that he acted bona fide under the advice from his CAs and there was no negligence on his part for seeking condonation of delay of 2984 days in filing the appeal. The Tribunal however refused to condone the delay.

High Court held that,

++ it is clear from the record that Assessee had filed an application supported by an affidavit. He stated that the order of CIT(A) was received for the A.Y 1994-95 on March 20, 2003. The last date for filing the appeal before the Tribunal was May 19, 2003. However, for the reasons beyond the control of the assessee, the appeal was filed on July 20, 2011 and there is a delay of 2984 days. We find that the Tribunal, out of sheer desperation and agitated by the fact that the Revenue is not opposing the request for condonation of delay, turned its attention towards the assessee's Chartered Accountant. It is very unfortunate that the Tribunal has, apart from seeking to advice professionals, blamed not only individual CAs but equally the Institute of Chartered Accountants of India. It is unfortunate that Courts of law or Tribunals, which are the last fact finding authorities in this case, adopted this course. A perusal of the whole order indicate that the Tribunal did not terms the conduct of Assessee to be sole factor responsible for the delay. The conduct is not termed as negligent, callous and lacking in bona fides either. We find that the Tribunal holds that the assessee failed to show that there was sufficient cause. However, the explanation which the assessee provided was an advise from his Chartered Accountant. That is why the Tribunal stated that the advice of CAs were not only absurd but the assessee is faulted for blindly accepting such an advice;++ it is noted that way back in the year 1979, in case of M/s. Concord of India Insurance Co. Ltd. Vs. Smt. Nirmala Devi and others, the Supreme Court has held that a legal advice tendered by a professional and the litigant acting upon it one way or the other could be a sufficient cause to seek condonation of delay. Eventually, an overall view in the larger interest of justice has to be taken. None should be deprived of an adjudication on merits unless the Court of law or the Tribunal/Appellate Authority finds that the litigant has deliberately and intentionally delayed filing of the appeal, that he is careless, negligent and his conduct is lacking in bona fides. It is seen that the Tribunal though aware of these principles, has been carried away by the fact that the delay of 2984 days is incapable of condonation. That is not how a matter of this nature should be approached. In the process the Tribunal went about blaming the assessee and the professionals and equally the Department. To our mind, therefore, the Tribunal's order does not meet the requirement set out in law. The Tribunal has completely misdirected itself and has taken into account factors, tests and considerations which have no bearing or nexus with the issue at hand;

++ the Tribunal, therefore, has erred in law and on facts in refusing to condone the delay. The explanation placed on affidavit was not contested nor we find that from such explanation can we arrive at the conclusion that the assessee was at fault, he intentionally and deliberately delayed the matter and has no bona fide or reasonable explanation for the delay in filing the proceedings. The position is quite otherwise. In the light of the above discussion, we condone the delay of 2984 days in filing the appeals but on the condition of payment of costs, quantified totally at Rs.50,000/-.

(See 2017-TIOL-2097-HC-MUM-IT)