2016 (12) TMI 1578 - HC - Income Tax

Condonation of delay - Held that - We notice that the Revenue has filed this appeal after an inordinate delay of 646 days. The reason for the delay has not been properly explained. A general explanation that the process of e-filing required several procedural compliances which could not be fulfilled within the time and that the defects pointed out by the Registry too could not cured since there was overload of work on the part of the Revenue, is not sufficient cause to warrant condonation of delay. Besides, on merits too, the Court notices that the question of law urged - whether assembling of the ultimate product i.e. air springs - for use by the railways, which conformed to exact specifications - amounted to process of manufacture or amounted to manufacture. The ITAT concluded on detailed analysis that specialised nature of the task showed that the process was manufacture. It also relied upon the clearances given by various other authorities including the Central Excise Authorities on the self saying issue. Furthermore, the ITAT took note of the fact that for the previous year, same question had been gone into and a finding was rendered in favour of the assessee.

Summary

Issues Involved:
Delay in filing appeal under Section 260A of the Income Tax Act, 1961; Whether assembling air springs for railways amounts to manufacturing process.

Delay in Filing Appeal:
The High Court noted that the Revenue filed the appeal after a significant delay of 646 days without providing a satisfactory explanation. The Court highlighted that a general explanation citing procedural compliances and workload overload was not sufficient to warrant condonation of the delay. As a result, the Court refused to interfere with the order of the Income Tax Appellate Tribunal (ITAT) due to the unjustified delay in filing the appeal.

Manufacturing Process of Air Springs:
The central issue in the case was whether the assembling of air springs for use by railways, meeting exact specifications, constituted a manufacturing process. The ITAT conducted a detailed analysis and concluded that the specialized nature of the task indicated that the process amounted to manufacturing. Additionally, the ITAT considered clearances provided by various authorities, including the Central Excise Authorities, on the same issue. Notably, the ITAT also referenced a previous year's finding in favor of the assessee on the identical question. Based on these factors, the High Court upheld the ITAT's decision, emphasizing that no interference was warranted with the ITAT's order. Consequently, the appeal was dismissed by the Court.