A taxpayer may have a strong case on merits, but that does not necessarily mean the Income Tax Appellate Tribunal (ITAT) will hear it if the appeal is filed after an extraordinary delay.
The Chandigarh bench of the ITAT has made this clear in a recent case involving the sale of agricultural land jointly owned by two brothers. While one brother eventually succeeded in his tax dispute over the same land, the other brother’s legal heir could not get the appeal admitted because it was filed 2,544 days late.
The Tribunal said the delay was not satisfactorily explained and dismissed the appeal without going into the merits of the underlying tax dispute.
The order was pronounced on August 12, 2026, in the case of Late Shri Surjit Singh, represented by his legal heir, against the Income Tax Officer, Mohali.
What was the case?
Surjit Singh and his brother Piara Singh were co-owners of agricultural land, with each holding an undivided 50% share. The land was sold during assessment year 2013-14.
The Income Tax Department treated the land as a capital asset and made an addition of ₹1.86 crore towards long-term capital gains. The resultant tax demand was around ₹40.44 lakh.
The assessment was completed on December 27, 2017, under sections 144 read with 147 of the Income-tax Act. Surjit Singh challenged the assessment before the Commissioner of Income Tax (Appeals), but the CIT(A) dismissed his appeal on December 20, 2018, and sustained the addition.
That order should have been challenged further within the prescribed time. Instead, the matter remained pending for years.
Why did the legal heir approach the ITAT in 2026?
The legal heir said Surjit Singh was suffering from serious and prolonged illness after the 2018 order and was unable to effectively pursue the matter. He died on January 3, 2021.
The legal heirs subsequently said they were not familiar with income-tax litigation and were unaware of the remedies available under the law.
They eventually approached the ITAT in 2026, but by then the appeal was delayed by 2,544 days.
The legal heir therefore had to first seek condonation of delay — essentially asking the Tribunal to accept the appeal despite it being filed far beyond the prescribed time.
Brother’s case provided a fresh reason to approach the Tribunal
There was an important twist in the case.
Piara Singh, the assessee’s brother and co-owner of the same agricultural land, had pursued his own tax litigation.
After remand proceedings in his case, the Assessing Officer accepted that the land was agricultural land and was located approximately 1,100 metres from National Highway-21.
The CIT(A), NFAC subsequently allowed Piara Singh’s appeal on January 5, 2026, holding the land to be rural agricultural land outside the definition of a capital asset under section 2(14) of the Income-tax Act.
This became important for Surjit Singh’s legal heir.
The legal heir argued that both brothers were co-owners of the same land, the transaction was the same and the brother had received relief. After becoming aware of that order and obtaining professional advice, the legal heir said the appeal was filed promptly.
But the ITAT drew a distinction between having a strong case and filing the case within time.
ITAT: Strong merits cannot by themselves explain delay
The Tribunal said it was aware that the law permits a liberal and justice-oriented approach while considering an application for condonation of delay.
But that does not mean every long delay can be condoned.
The taxpayer has to provide a “reasonable, cogent and satisfactory explanation covering the period of delay”, the Tribunal said.
In Surjit Singh’s case, the ITAT found that the explanation did not cover the entire 2,544-day period.
The Tribunal noted that no specific material had been placed before it to establish exactly how long the taxpayer remained incapacitated because of illness or that his medical condition prevented him from taking legal action throughout the relevant period.
Ashish Mehta, Partner at Khaitan & Co, said this is one of the key lessons from the ruling.
“This is a significant ruling. Despite a co-owner winning an appeal on identical facts, the Tribunal refused to condone a delay of over seven years,” Mehta said.
According to him, each period of delay needs to be specifically explained. Medical records, the date of death and evidence showing when the legal heirs became aware of the litigation and took action can become important.
“A general pleading of sufficient cause or that of hardship being caused is not enough,” he said.
Death of taxpayer did not automatically stop the clock
The legal heir also relied on Surjit Singh’s death in January 2021.
The Tribunal acknowledged that the death of the taxpayer was a significant circumstance. However, it found that this still did not explain the entire period after his death.
The legal heirs had not explained when they first became aware of the 2018 order, when professional advice was obtained or what prevented them from filing the appeal during the intervening period.
This is an important point for families dealing with pending tax disputes.
Mehta said legal heirs should act quickly after a taxpayer involved in litigation dies.
“They should make every effort to locate all tax records, diarise the appeal deadline immediately, take professional advice early and keep dated proof of it, and bring the heir on record properly,” he said.
“Death does not automatically pause the limitation clock,” Mehta added.
Why did the brother’s victory not help?
This was perhaps the most important question before the Tribunal.
The legal heir had a seemingly strong argument: the same land had been sold, both brothers owned it and the Revenue had accepted in the brother’s case that the land was rural agricultural land.
The ITAT itself accepted that the brother’s favourable order could be highly relevant to the merits of Surjit Singh’s case.
But it said the merits could be considered only if the delay was first condoned.
The Tribunal held that the brother’s litigation was an independent proceeding and its outcome could not automatically extend the limitation period in Surjit Singh’s case.
Mehta explained the distinction between the two issues.
“It is a settled proposition that merits of the case and limitation are separate questions,” he said.
According to him, a taxpayer filing a delayed appeal must first satisfy the authority that the delay was genuine and not intentional. Only then does the matter move to the merits.
“The co-owner’s win explained why the heirs wanted to appeal in 2026, but not why they failed to appeal in time,” he said.
A favourable co-owner ruling can strengthen the case — but cannot open the limitation gate
The legal heir could rely on the brother’s favourable order as a precedent, but the Tribunal said that could not by itself cure the delay.
The ITAT observed that accepting such an argument would make statutory limitation periods uncertain. A party could potentially wait for years and then seek to revive an expired appeal after a favourable decision emerged in a related case.
Mehta put it another way: “A co-owner’s win is a strong engine, not a key to the door.”
A favourable decision in an identical co-owner’s case can help establish the taxpayer’s position on merits once the appeal is admitted. But it cannot independently overcome the limitation hurdle.
What about the heirs’ lack of legal knowledge?
The legal heir had also argued that the family members were laypersons and were not aware of the technicalities of income-tax litigation.
The Tribunal did not accept this as sufficient explanation for such an extraordinary delay.
It said ignorance of law or unfamiliarity with appellate procedures may be one circumstance in an appropriate case, but it cannot automatically justify an unexplained delay running into several years.
The Tribunal stressed that the taxpayer still has to demonstrate reasonable diligence and explain why the statutory remedy was not exercised.
What did the ITAT finally decide?
After considering the circumstances, the Tribunal concluded that there was no continuous chain of circumstances that satisfactorily explained the entire 2,544-day delay.
The explanation moved from Surjit Singh’s illness to his death, then to the alleged lack of awareness of the legal heirs and finally to the favourable order in the brother’s case. But even taken together, these circumstances did not explain the full period of delay, the Tribunal said.
The ITAT therefore refused to condone the delay.
As a result, the appeal itself was dismissed.
Importantly, the Tribunal did not decide the underlying question of whether Surjit Singh’s land was taxable as a capital asset. The appeal failed at the limitation stage.
For taxpayers, the message is straightforward: even if another co-owner wins on the same issue, that does not automatically revive a time-barred appeal. A taxpayer or legal heir must separately explain the delay with sufficient evidence before the court or Tribunal can consider the merit of the case.
Disclaimer: This story is based on the ITAT order dated August 12, 2026, and expert views shared for this article. Tax laws and their interpretation can vary depending on the facts and circumstances of each case. Readers should consult a qualified tax professional before taking any action based on the information provided.