The Supreme Court in the case of C.I. Builders (P.) Ltd. v. Principal Commissioner of Income-tax [2025] 178 taxmann.com 257 (SC) has once again clarified the law on condonation of delay in filing income tax appeals.
In this case, the assessee filed its appeal before the Tribunal after an extraordinary delay of six to seven years pleading that the delay was caused due to negligence of its counsel. The assessee contended that it had handed over all papers to the counsel but he failed to take necessary steps and therefore the company should not be penalized for the counsel’s fault.
However, the Tribunal observed that that the assessee was having awareness of the ex-parte orders passed by the Commissioner (Appeals). Despite this facts, it failed to make any enquiry about the progress of the appeal for several years and opportunely tried to shift the entire responsibility onto its counsel. Accordingly, the Tribunal refused to condone the delay and dismissed the appeals as time barred.
Further, the High Court upheld this order holding that there is no universal rule that a mistake of counsel is always a sufficient ground for condonation. Each case must be examined on its own facts and in this case, the assessee’s conduct showed lack of diligence.
The Supreme Court upheld the decision of High Court and its reasoning and accordingly dismissed the Special Leave Petition filed by the assessee. The Court underlined that while courts do exercise discretion in condonation of delays where sufficient cause is shown, negligence of counsel by itself cannot be a blanket excuse. If, a litigant is aware of proceedings but fails to act responsibly, delay cannot be condoned.
This judgment is a strong reminder for taxpayers and professionals as well as timely attentiveness is essential in the matter of tax litigation. Further, responsibility cannot be shifted indefinitely on counsel and parties must themselves remain attentive about the progress of their appeals.
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