1998 (10) TMI 54 - HC - Income Tax

Reference Condonation Of Delay Reversal Of Decision Personal Inability Limitation Actual Payment

Summary

Issues:
1. Applicability of section 5 of the Limitation Act, 1963 to petitions under section 256(2) of the Income-tax Act, 1961.
2. Whether a change in the view of the law can be a sufficient cause for condoning the delay in preferring a petition under section 5 of the Limitation Act.

Analysis:
1. The first issue revolves around the applicability of section 5 of the Limitation Act, 1963 to petitions under section 256(2) of the Income-tax Act, 1961. The court clarified that the change in law brought about by the introduction of the Limitation Act, 1963, is significant. Under the previous Limitation Act, section 5 could not be applied to special or local laws unless expressly provided. However, under section 29(2) of the Limitation Act, 1963, the applicability of section 5 extends to special or local laws unless specifically excluded. The court cited a Supreme Court case to support this interpretation. The Division Bench of the Delhi High Court in a previous case also held that section 5 of the Limitation Act applies to petitions under section 256(2) of the Income-tax Act, 1961.

2. The second issue deals with whether a change in the view of the law can constitute a sufficient cause for condoning the delay in filing a petition under section 5 of the Limitation Act. The court considered previous legal precedents and emphasized that in legal battles based on legal issues, litigants rely on the advice of their lawyers. The court highlighted that a delay due to conflicting legal decisions misleading the parties can be a valid reason for condonation. The court referred to a Supreme Court case where it was held that a delay caused by mistaken advice of counsel may justify an extension of time, depending on the bona fides of the litigant. In this case, the court noted that the petitioner promptly acted upon becoming aware of the change in law and entrusted the matter to counsel. The delay of about 25 days was attributed to personal inability of counsel, and no gross negligence or misconduct was found. The court adopted a justice-oriented approach, emphasizing the importance of not depriving a litigant of adjudication on merits and avoiding a rigid and pedantic approach in condoning delays.

In conclusion, the court allowed the application, condoning the delay in filing the petition under section 256(2) of the Income-tax Act, 1961, based on the sufficient cause established, and treated the petition as filed within the prescribed period of limitation.