Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2010 (3) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2010 (3) TMI 1119 - AT - Income TaxCondonation of delay - Huge delay of more than 1358 days in filing of the appeals before the Ld. CIT(A) - whether the ITAT has power to admit such appeal dismissed by the CIT(A) in limine that the appeal was filed beyond the prescribed time limit before CIT(A)? - HELD THAT - A right of appeal is a statutory one, and, unless there is anything explicit in the statute or the rules made there under, such right cannot be restricted. The construction which deprives the parties of valuable rights should be avoided. That taking the plea of limitation when there is a judgment or order against which the statute provides a right of appeal but none is preferred within the time prescribed therefore, the respondent acquires a valuable right, of which he cannot be deprived by an order condoning delay and admitting the appeal behind his back. And when such an order is passed ex parte, he has a right to challenge its correctness at the hearing of the appeal. That is the position under the general law, and there is nothing in the provisions of Act, which enacts a different principle. Therefore, the contentions relating to preliminary issues are open to consideration at the time of the hearing of the appeal, and that the jurisdiction of the CIT(A) is not limited to the hearing of the appeal on the merits of the assessment only. In this view, the orders of the CIT(A) holding that there were no sufficient reasons for excusing the delay and rejecting the appeals as time-barred would be orders passed u/s 250 and would be open to appeal, and it would make no difference in the position whether the order of dismissal is made before or after the appeal is admitted. It is well established that rules of limitation pertain to the domain of adjectival law, and that they operate only to bar the remedy but not to extinguish the right. An appeal preferred in accordance with section 30(1) of the 1922 Act must, therefore, be an appeal in the eye of law, though having been presented beyond the period mentioned in section 30(2) it is liable to be dismissed in limine. Therefore, it must be held that an appeal presented out of time is an appeal, and an order dismissing it as time-barred is one passed in appeal. Section 31 of the 1922 Act is the only provision relating to the hearing and disposal of appeals, and if an order dismissing an appeal as barred by limitation is one passed in appeal, it must fall within section 31. And as section 33 confers a right of appeal against all orders passed under section 31, it must also be appealable. Thus the law laid down by the Apex Court in the case of Meal Ram Sons V. CIT 1956 (2) TMI 5 - SUPREME COURT is that an appeal presented out of time is an appeal, and an order dismissing it as time barred is one passed in appeal and that section 250 of Income Tax Act 1961(Section 31 of the Act 1922) should be liberally construed so as to include not only orders passed on a consideration of the merits of the assessment but also orders which dispose of the appeal on preliminary issue, such as limitation and the like. On the basis of law laid down by the Apex Court we can say that If the CIT(A) holds that the appeal does not comply with the requirements of section 249(2) and rejects it on that ground, the order must be one made u/s 250. All the orders u/s 250 being appealable u/s 253. The order of dismissal for non-compliance with section 249(2), not filing appeal in time is also be appealable. In the light of above discussions we do not find substance in submission of the Learned DR therefore his contention is rejected. Law of limitation is founded on public policy. It is enshrined in the maxim interest reipublicae ut sit finis litium (it is for the general welfare that a period be part to litigation).The very scheme of proper administration of justice pre-supposes expediency in disposal of cases and avoidance of frivolous litigation. Where the parties chose to sleep over their rights for prolonged periods without any just cause, can hardly claim equity in justice particularly faced with the statutory provisions of Section 5 of the Act. In the light of the above discussion and considering to make justice oriented approach, We find that there was sufficient cause for condoning the delay in the institution of appeal before the CIT(A) by the assessee. The CIT(A) ought to have condoned the delay keeping in view of the laws laid down in the case of N. Balakrishnan V. M. Krishnamurthy 1998 (9) TMI 602 - SUPREME COURT , and ratio laid down in the case of Areva T and D India Ltd., Vs. JCIT, 2006 (2) TMI 142 - MADRAS HIGH COURT wherein on identical set of facts, affidavit filed by the Director of the assessee company for the delay in filing the appeal, the delay was condoned. Since the matter has been sent back to the file of the CIT(A) on the first ground of appeal itself, therefore, we do not express any opinion on merit of the case. We remit the matter back to the file of the CIT(A) and the CIT (A) is directed to condone the delay and decide the appeal on merit after providing reasonable opportunity of being heard to both the sides. Appeal of the assessee is allowed.
Issues Involved:
1. Condonation of delay in filing the appeal. 2. Decision on the merits of payments made to the processing department. 3. Decision on the merits of payments made to the common staff. Detailed Analysis: 1. Condonation of Delay in Filing the Appeal: The primary issue was whether the delay of 1358 days in filing the appeal before the CIT(A) could be condoned. The CIT(A) had dismissed the appeal in limine due to the delay, stating that the appellant did not provide sufficient reasons for the delay. The appellant argued that the delay was caused by the previous AR, who failed to advise them on the necessity of filing an appeal against the original assessment order. The appellant provided an affidavit from their Chief Accountant affirming this. The appellant cited the Supreme Court judgment in Concord of India Insurance Co. Ltd. v. Smt. Nirmala Devi and Others, which states that the mistake of counsel can be considered a sufficient cause for condonation of delay if it is bona fide. The appellant also referred to the case of Areva T and D India Ltd. v. JCIT, where a similar delay was condoned based on an affidavit. The DR opposed the condonation, arguing that the appeal was not maintainable under Section 253 of the IT Act and that the appellant did not furnish sufficient reasons for the delay. The DR cited several judgments to support their contention. The Tribunal held that the right of appeal is a statutory one and should not be restricted unless explicitly stated in the statute. The Tribunal referred to the Supreme Court judgment in Mela Ram and Sons v. Commissioner of Income-tax, which established that an appeal presented out of time is still an appeal, and an order dismissing it as time-barred is one passed in appeal. The Tribunal concluded that the CIT(A) should have condoned the delay, considering the laws laid down by the Apex Court and the Hon'ble Madras High Court. The Tribunal directed the CIT(A) to condone the delay and decide the appeal on merit after providing a reasonable opportunity of being heard to both sides. 2. Decision on the Merits of Payments Made to the Processing Department: The CIT(A) did not decide on the merits of the payments made to the processing department amounting to Rs. 2,61,36,753/- due to the dismissal of the appeal in limine. Since the matter was sent back to the CIT(A) for condoning the delay, the Tribunal did not express any opinion on the merits of this issue and directed the CIT(A) to decide it afresh. 3. Decision on the Merits of Payments Made to the Common Staff: Similarly, the CIT(A) did not decide on the merits of the payments made to the common staff amounting to Rs. 20,06,098/- due to the dismissal of the appeal in limine. The Tribunal did not express any opinion on the merits of this issue either and directed the CIT(A) to decide it afresh after condoning the delay. Conclusion: The Tribunal allowed the appeal of the assessee, directed the CIT(A) to condone the delay, and instructed the CIT(A) to decide the appeal on its merits after providing a reasonable opportunity of being heard to both parties.
|