Tribunal's condonation of 763-day delay in benami appeal upheld if discretion not arbitrary, despite lack of sufficient cause.

JUDGMENT :

SUSHRUT ARVIND DHARMADHIKARI, CJ.

Calling into question the legality and veracity of the order dated 16.12.2025 passed by the Appellate Tribunal under SAFEMA, condoning the delay of 763 days in filing the appeal after the expiry of period of limitation, the present appeal is filed.

2. Short facts relevant for disposal of this appeal are as under:

2.1. It is averred that the appellant is one of the co-owners of Spectrum Mall, which was a joint venture between Ganga Foundations Pvt. Ltd and the other owners. During the month of November, 2017, a search was conducted by the Income Tax Department in the premises of the appellant, consequent to a search in the case of second respondent.

2.2. It is stated that, during the course of search, the appellant was questioned about the sale of his share in the Spectrum Mall to the second respondent. Since the appellant had no idea about the entire transaction, the appellant has merely refused to comment on the same.

2.3. The appellant thereafter received notices under Section 153C of theIncome Tax Act, 1961for the Assessment Years 2012- 13 to 2017-18. In the show cause notice for the assessment year 2017-18, the Assessing Officer, relying on the material seized from the office of Ganga Foundations Pvt. Ltd and the sworn statements recorded thereunder, has proceeded to construe as if the appellant has received a sum of Rs.18 Crores towards the sale of his share in the Spectrum Mall to the second respondent and the Assessing Officer proposed to tax the said amount as advance forfeited underSection 56(2)(ix) of the Income Tax Act.

2.4. On the basis of the aforesaid material, it is stated that a show cause notice dated 01.11.2019 underSection 24(1) of theProhibition of Benami Property Transactions Act, 1988was issued by the first respondent alleging that the appellant is a “benamidar” for the identified beneficial owner viz., the second respondent, with respect to his share in Spectrum Mall. An order of provisional attachment was also made under (3) of the Prohibition of Benami Property Transaction Act, 1988. 2.5. It is averred that though the appellant has furnished a detailed reply, without considering the reply and without following the principles of natural justice, the first respondent passed the order continuing attachment underSection 24(4) of the Prohibition of Benami Property Transaction Act, 1988 and made a reference to the Adjudicating Authority to conduct the adjudication proceedings underSection 26(3) of the Prohibition of Benami Property Transaction Act, 1988.

2.6. It is stated that pursuant to the orders passed by this Court in the earlier round of litigation, the Adjudicating Authority considered the reply of the appellant, passed the order under Section 26 (3) of the Prohibition of Benami Property Transaction Act, 1988 and refused to confirm the order of attachment made under Section 24 (3) holding that there is no “benami transaction”.

2.7. It is stated that thereafter the first respondent preferred the statutory appeal before the Appellate Tribunal with a delay of 763 days in filing the appeal. Though the appellant submitted a detailed reply, the Appellate Tribunal has condoned the delay and has posted the matter for further hearing along with a batch of cases. Hence, the present appeal.

3.1. Shri Vijay Narayan, learned Senior Counsel appearing on behalf of the appellant, submitted that though the first respondent did not provide sufficient case for the towering delay of 763 days, the Tribunal condoned the delay exceeding two years. He further submitted that administrative excuses like field work, searches, transfer and retirement of successive Initiating Officers do not constitute “sufficient cause”.

3.2. It is further submitted that, as per the provisions of the Prohibition of Benami Property Transaction Act, 1988, 45 days is the time limit for filing the appeal, whereas, in the case on hand,