Unauthenticated Power of Attorney and gross negligence preclude

Unauthenticated Power of Attorney and gross negligence preclude condonation of an extraordinary 2376-day appeal delay.

Issue

Whether an inordinate delay of 2376 days in filing an appeal can be condoned under Section 254 when supported only by an unnotarized, inadmissible Power of Attorney executed abroad and where the assessee demonstrated gross negligence.

Facts

For Assessment Year 2011-12, the assessee initially filed a return of income declaring an income of approximately Rs. 2.43 lakhs, which was assessed under Section 143(3) at Rs. 2.48 lakhs.
The Principal Commissioner of Income Tax (PCIT) invoked Section 263 regarding capital gains and a claim under Section 54B, setting aside the assessment for fresh examination.
In the consequential assessment passed under Section 143(3) read with Section 263, the Assessing Officer (AO) determined the total income at approximately Rs. 2.89 crores, which was subsequently upheld by the CIT(A).
The assessee filed the present appeal before the ITAT with an extraordinary delay of 2376 days.
A condonation of delay application was filed by a Power of Attorney (POA) holder based on a General Power of Attorney (GPA) executed by the assessee in the USA.
The GPA brought on record was neither executed before a Notary Public in the USA nor before the Indian Embassy/Consulate Office in the USA.

Decision

The Tribunal held that a GPA executed abroad without proper authentication by a Notary Public or Indian Consulate is inadmissible in evidence, making any affidavit filed on its basis equally inadmissible.
The Tribunal observed that the assessee was not diligent, failed to exercise care before lower authorities, and demonstrated gross negligence by attempting to shift complete responsibility onto the POA holder.
Since the assessee failed to establish sufficient cause for the inordinate delay, the application for condonation of delay was rejected, and the appeal was dismissed in favor of the Revenue.

Key Takeaways

Strict Adherence to Authentication of Foreign GPAs: Power of Attorney documents executed outside India must be duly authenticated by a Notary Public or the Indian Embassy/Consulate to hold evidentiary value in judicial proceedings.
Gross Negligence Defeats Condonation: Unexplained, extraordinary delays (e.g., 2376 days) coupled with a lack of diligence cannot be condoned merely by shifting blame onto an attorney holder.
Inadmissibility of Defective Supporting Affidavits: Affidavits executed on the strength of legally invalid or defective GPAs carry no legal weight in support of condonation applications.

IN THE ITAT AHMEDABAD BENCH ‘A’

Shailesh Narshibhai Patel

Income-tax Officer

Ms SUCHITRA KAMBLE, Judicial Member
and Narendra Prasad Sinha, Accountant Member

IT Appeal No. 2382 (AHD) of 2025
[Assessment year 2011-12]

JULY 14, 2026

Vivek Chavda, CA for the Appellant. Rajeev Garg, Sr. DR for the Respondent.

ORDER

Narendra Prasad Sinha, Accountant Member.- This appeal has been filed by the assessee against the order of Commissioner of Income Tax -12, Ahmedabad [hereinafter referred to as “CIT(A)”] dated 29.03.2019 for the Assessment Year (A.Y.) 2011-12 in the proceeding u/s 143(3) r.w.s. 263 of the Income Tax Act [hereinafter referred as “the Act”].

2. There was a delay of 2376 days in filing of this appeal. A condonation application has been filed by one Shri Jaykumar Bharatbhai Patel, Power of Attorney Holder (hereinafter referred as the “POA holder”) of the assessee. The present appeal was also filed by Shri Jaykumar Bharatbhai Patel in the capacity of POA holder of the assessee. Though the appeal was filed by the assessee on 01.12.2025, the condonation application has been filed vide affidavit of Shri Jaykumar Bharatbhai Patel dated 08.04.2026. A copy of General Power of Attorney (in short GPA) issued by the assessee in favour of Shri Jaykumar Bharatbhai Patel has also been brought on record. It is found that the GPA was executed by the assessee on 24^th June, 2024 at Chase Branch Findlay, Ohio, USA, but the same was notarized by a Government Notary on 30.08.2024 in India. An Indian Notary appointed under the Notaries Act 1952, can notarize only:

Documents executed before him in India,

ii.

Copies of signatures personally verified by him.

In the present case, the signature of the assessee Shri Saileshbhai Narsinbhai Patel appended on the GPA on 24.06.2024 in USA, could not have been verified by the Govt. Notary in India. The Notary had only verified the signature of Shri Jaykumar Bharatbhai Patel and not the signature of Grantor of POA, Shri Saileshbhai Narsinbhai Patel. Since the GPA was executed by the Grantor in USA for use in India, it should have been executed

Before a Notary Public in the USA or

ii.

Executed before a Consulate Office of an Indian Embassy / Consulate in the USA.

In this case, the GPA filed by the assessee is neither found executed before a Notary Public in USA nor before the Consulate Office of the Indian Embassy/Consulate in the USA. Since the document was merely signed by the Grantor in USA without Notarization or Consulate Authentication, this defect in the GPA couldn’t have been cured by its Notarization in India. Thus, the GPA as filed by the assessee is not found to be an admissible evidence. The affidavit of the POA holder on the basis of such defective GPA, is also an inadmissible evidence.

3. Notwithstanding the above facts regarding inadmissibility of the GPA and the affidavit of the POA holder on the basis of inadmissible evidence; we deem it relevant to examine the reason given by the assessee for the delay in filing of the present appeal. The reason for delay has been explained in the affidavit of Shri Jaykumar Bharatbhai Patel as under:

That I am the duly authorised Power of Attorney Holder of the Appellant, Shri Shailesh Narsinhbhai Patel, S/o Narsinhbhai Patel, as per the General Power of Attorney executed on 24th June, 2024, notarised before the Notary Public, Ohio, USA and subsequently registered before the Sub Registrar, Ahmedabad 4 (Paldi), by virtue of which I am fully competent and authorised to swear this Affidavit on his behalf and to prosecute the present appeal before this Hon’ble Tribunal. I have personal knowledge of the facts stated herein.

That the Appellant, Shri Shailesh Narsinhbhai Patel, is an Individual assessee ordinarily resident in the United States of America (USA) since the year 2017 and is not able to appear personally to manage and administer legal proceedings in India.

That the impugned order under Section 250 of the Income Tax 1961 for Assessment Year 2011-12, upholding the addition 8f Rs.2.86.79.970/-, was passed by the Ld. CIT(A)-12, Ahmedabad 29.03.2019. The Appellant is challenging the said order before this Hon’ble Tribunal by way of the present appeal. The appeal is filed belatedly, and this Affidavit is filed in support of the application for condonation of the delay so occasioned.

That prior to the execution of the present Power of Attorney in my favour, the Appellant had appointed his close relative, Shri Bhogilal Kodarbhai Patel, S/o Kodarbhai Patel, resident of Patel Vas, Balochpur Kampa, Nava, Taluka Himatnagar, Dist. Sabarkantha, as his Power of Attorney Holder vide General Power of Attorney executed on 19th February, 2022, duly notarised before the Notary, Govt. of India, Ahmedabad and registered before the Sub-Registrar. Paldi Ahmedabad, for the purpose of managing and administering all legal and related matters pertaining to the Appellant’s properties and proceedings.

That the Appellant had entrusted all legal matters, including the income tax proceedings, to Shri Bhogilal Kodarbhai Patel as his Power of Attorney Holder, with full and bonafide belief that the said Power of Attorney Holder would take all necessary steps to protect the Appellant’s interests, including filing the appropriate appeal against the order of the Ld. CIT(A) within the prescribed time.

That the Appellant was residing in the USA and was not in a position to monitor the status of legal proceedings in India directly. The Appellant was under a bonafide and genuine belief that Shri Bhogilal Kodarbhai Patel, his trusted Power of Attorney Holder, was looking into the matter and had taken, or would timely take, the necessary steps to file the appeal before this Hon’ble Tribunal against the order of the Ld. CIT(A).

That it is most respectfully submitted that Shri Bhogilal Kodarbhai Patel, unfortunately, failed to take any action in the matter and did not file the appeal against the order of the Ld. CIT(A) within the period of limitation or at all. Thereafter, Shri Bhogilal Kodarbhai Patelexpired on 13th June, 2024, as evidenced by the Death Certificate issued by the Department of Health and Family Welfare, Government of Gujarat bearing Certificate No. D202410241971, Registration No. 4. dated 14.06.2024 (issued on 18.06.2024), a copy whereof is enclosed herewith.

That subsequent to the demise of Shri Bhogilal Kodarbhai Patel, and upon becoming aware of the pendency of the matter, the Appellant appointed the Deponent, Shri Jay Bharatkumar Patel, as his new Power of Attorney Holder vide General Power of Attorney executed on 24th June, 2024, for the purpose of managing and administeri legal proceedings and matters related to the Appellant’s properties and income tax affairs.

That it was only when the Deponent received in SONY regarding the recovery of outstanding demand arising out of the impugned order that the Deponent became aware of the fact that no appeal had been filed before this Hon’ble Tribunal. On receiving such information, the Deponent immediately approached an accountant friend for guidance, who advised the Deponent to engage a tax professional for the purpose of filing the appeal and taking proper recourse in the matter.

10.

That thereafter, the Deponent engaged the services of a tax professional, who upon reviewing the facts and documents of the case, prepared and filed the present appeal before this Hon’ble Tribunal. along with the present application for condonation of delay.

11.

That the delay in filing the present appeal is neither intentional nor wilful. The delay has been occasioned solely on account of the following genuine, sufficient and bona fide reasons:

(a)

The Appellant is a Non-Resident Indian residing in the USA and was physically unable to monitor or attend to legal proceedings in India.

(b)

The Appellant had reposed full and bonafide trust and dence in his Power of Attorney Holder. Shri Bhogilal Kodarbhai Bel to take all necessary steps in relation to the impugned proceedings.

(c)

Shri Bhogilal Kodarbhai Patel failed to take any steps to file the appeal and, unfortunately, expired on 13.06.2024 before any action could be taken.

(d)

The Deponent came to know of the default only upon receiving information about the recovery of outstanding demand, after which immediate steps were taken to engage a tax professional and file the present appeal.

12.

That if the delay is not condoned, the Appellant will suffer irreparable loss and injury, as a substantial and unjust demand of Rs 2,86,79,970/ will be sought to be recovered from him despite there being strong legal grounds warranting deletion of the impugned additions On the other hand, if the delay is condoned, the Respondent will not suffer any prejudice or inconvenience whatsoever.

13.

That on the merits of the case, the Appellant has a strong prima facie case and there are reasonable chances of success, inasmuch as the impugned additions relate to rural agricultural lands which are exempt from capital gains tax under Section 2(14)(m) of the Income Tax Act, 1961, read with Notification No. 9447 dated 06.01.1994, and. deduction under Section 54B has been wrongly denied without ahy inquiry into the fulfilment of the relevant conditions.

14.

That the following documents are enclosed herewith in support of this Affidavit

(i)

Copy of Death Certificate of Shri Bhogilal Kodarbhai Patel (Certificate No. D202410241971, dated 18.06.2024);

(ii)

Copy of General Power of Attorney executed by the Appellant in favour of Shri Bhogilal Kodarbhai Patel dated 19.02.2022

(iii)

Copy of General Power of Attorney executed by the Appellant in favour of the Deponent, Shri Jay Bharatkumar Patel, dated 24.06.2024.

15.

That the delay in filing the present appeal has been caused due to genuine, sufficient and bona fide reasons beyond the control of the Appellant. It is, therefore, most humbly and respectfully prayed that this Hon’ble Tribunal may be pleased to condone the delay in filing the present appeal in the interest of justice and equity.

4. Before we examine the reason for the delay in filing of the appeal, it will be relevant to briefly recapitulate the facts of the case. In the present case, the assessee had filed his return of income for A.Y 2011-12 on 01.08.2011 declaring total income of Rs.2,42,540/-. The original assessment was completed u/s. 143(3) on 27.02.2015 at total income of Rs. 2,48,387/-. Thereafter, proceeding u/s. 263 of the Act was initiated on the issue of capital gain disclosed on sale of land and the PCIT Central-Ahmedabad vide order u/s. 263 of the Act dated 11.03.2016 had set aside the matter to the file of the AO to examine the issue of capital gain and the exemption claimed u/s. 54B of the Act. The AO had passed consequent order u/s. 143(3) r.w.s. 263 of the Act on 13.12.2016 determining total income of Rs. 2,89,28,357/-. Before the AO, no compliance was made on merits, though the counsel of the assessee had attended the hearing on one occasion. The AO had noticed that the assessee had derived short term capital gain of Rs.1,58,49,970/- in respect of sale of three pieces of land which were not used for agricultural purpose by the assessee. In fact, the assessee had also agreed that the lands sold were capital assets u/s. 2(14) of the act. The assessee had, however, claimed deduction u/s. 54B of the act for investing the capital gain derived on sale of land in purchase of new pieces of land. However, the evidence for purchase of new land, in the form of sale deed, was not brought on record. Therefore, the AO had disallowed the claim for deduction u/s. 54B of the act. Further, the cash payments made for purchase of new land was also held as unexplained investment of the assessee. Aggrieved with the order of the AO, the assessee had filed an appeal before the Ld. CIT(A) well within the due date. However, there was no compliance before the Ld. CIT(A) in spite of six opportunities provided by him. Therefore, the Ld. CIT(A) had upheld the order of the Assessing Officer. It is thus found that the assessee neither attended the proceeding before the AO nor before the Ld. CIT(A). The assessee had himself filed the appeal before the Ld. CIT(A), yet no compliance was made on any occasion in spite of numerous opportunities. Thereafter, the present appeal has been filed with a delay of 2376 days.

5. It is settled position of law that delay occurred in filing the appeal should be considered liberally. At the same time, it is also settled law that every case is required to be considered on the basis of facts and circumstances of the case. The Hon’ble Supreme Court in the case of Esha Bhattacharjee v. Managing Committee of Raghunathpur [2013] 5 CTC 547, while dealing with the issue on the delay of seven years in filing an appeal, had held as under:

15.

From the aforesaid authorities the principles that can broadly be culled out are:

(i)

There should be a liberal, pragmatic, justice-oriented, non- pedantic approach while dealing with an application for condonation of delay, for the courts are not supposed to legalise injustice but are obliged to remove injustice.

(ii)

The terms “sufficient cause” should be understood in their proper spirit, philosophy and purpose regard being had to the fact that these terms are basically elastic and are to be applied in proper perspective to the obtaining fact- situation.

(iii)

Substantial justice being paramount and pivotal the technical considerations should not be given undue and uncalled for emphasis.

(iv)

No presumption can be attached to deliberate causation of delay but, gross negligence on the part of the counsel or litigant is to be taken note of.

(v)

Lack of bona fides imputable to a party seeking condonation of delay is a significant and relevant fact.

(vi)

It is to be kept in mind that adherence to strict proof should not affect public justice and cause public mischief because the courts are required to be vigilant so that in the ultimate eventuate there is no real failure of justice.

(vii)

The concept of liberal approach has to encapsule the conception of reasonableness and it cannot be allowed a totally unfettered free play.

(viii)

There is a distinction between inordinate delay and a delay of short duration or few days, for to the former doctrine of prejudice is attracted whereas to the latter it may not be attracted. That apart, the first one warrants strict approach whereas the second calls for a liberal delineation.

(ix)

The conduct, behaviour and attitude of a party relating to its inaction or negligence are relevant factors to be taken into consideration. It is so as the fundamental principle is that the courts are required to weigh the scale of balance of justice in respect of both parties and the said principle cannot be given a total go by in the name of liberal approach.

(x)

If the explanation offered is concocted or the grounds urged in the application are fanciful, the courts should be vigilant not to expose the other side unnecessarily to face such a litigation.

(xi)

It is to be borne in mind that no one gets away with fraud, misrepresentation or interpolation by taking recourse to the technicalities of law of limitation.

(xii)

The entire gamut of facts are to be carefully scrutinized and the approach should be based on the paradigm of judicial discretion which is founded on objective reasoning and not on individual perception.

(xiii)

The State or a public body or an entity representing a collective cause should be given some acceptable latitude.

[Emphasis supplied.]

6. In the present case, the inordinate delay of 2376 days calls for a strict approach and the principles or guidelines given by the Supreme Court in the above-said decision on the conduct that cannot be favourably considered, are clearly attracted to the facts of the present case. The Hon’ble Court had further observed that increasing tendency to perceive delay as a non- serious matter requires to be curbed. In the present case, we find that the assessee was lackadaisical in its approach and it had tried to seek condonation of delay in a nonchalant manner. The delay has been explained by the assessee due to inaction on the part of one Shri Bhogilal Kodarbhai Patel, a close relative and earlier POA holder, who expired on 13.06.2024. However, it is found that the GPA in favour of Shri Bhogilal Kodarbhai Patel was executed only on 19.02.2022, whereas the due date of the filing of the present appeal had expired long back in the year 2019 itself. The Ld. CIT(A) had passed the order on 29.03.2019 and the assessee was required to file the appeal within 60 days. Though the assessee has taken a plea of COVID pandemic, it has not been explained as to why appeal could not be filed prior to the onset of COVID pandemic. The assessee was not diligent to ensure that the present appeal was filed at least immediately after executing the GPA in favour Shri Bhogilal Kodarbhai Patel on 19.02.2022. It is thus found that there was gross negligence on the part of the assessee and he had not exercised any care for making compliance before the lower authorities and also to file the present appeal in time and has merely tried to shift the responsibility on the POA holder. Even the GPA executed in favour of Shri Bhogilal Kodarbhai Patel has not been brought on record. The assessee cannot escape by merely passing on the blame for delay in filing the appeal on his POA holder. The attitude of the assessee was of gross negligence, as he did not watch his affairs and his explanation for the delay in filing the appeal is not found bona-fide. Therefore, the delay in filing of the present appeal is not condoned.

7. The parameters laid down by the Supreme Court when not to condone delay, as reproduced earlier, is squarely attracted to the facts of the present case. We do not find that the explanation rendered for the delay was either sufficient or one which would inspire confidence. In the case of Mani Mandir Sewa Nyas Samiti Ramghat Ayodhya v. CIT 277 (SC), the Hon’ble Supreme Court has held that it was the duty of the assessee to watch the affairs of its firm and the delay of few days or months can be considered but delay of years is required to be examined minutely. As already discussed earlier, there was gross negligence on the part of the assessee and it had not exercised any care to ensure that the appeal was filed within time and this approach continued for year after year. This apart, as already discussed earlier, the assessee has tried to explain the delay on the basis of inadmissible evidences. We, therefore, are of considered opinion that this is fit case for not condoning the delay in filing of the appeal. Accordingly, the delay in filing of the appeal is not condoned and the appeal is dismissed.

8. In the result, the appeal of the assessee is dismissed.