2012 (7) TMI 520 - HC - Income Tax

Condonation of the delay of 2046 days for filling appeal - Held that - Nature of the negligence does not warrant a dismissal of the appeal for it is possible in view of what is stated that the appellant who had taken steps to prosecute the appeal legitimately expected the appeal to come up for admission on account of the objections having been removed albeit belatedly and had even appointed an advocate to prosecute the appeal - the records pertaining to the appeal were transferred to the Income Tax Department from the Ministry of Law and Justice - is the consequence of a dismissal of the appeal resulting in a possible loss to the revenue in a matter where some of the allegations especially relating to the alleged hawala transactions are serious - there is a reasonable explanation for the delay in this case.

Summary

Issues:
Delay in filing notice of motion for restoring the dismissed appeal.

Analysis:
The appellant filed an appeal on 1.7.2005, but due to failure in removing office objections, the appeal was dismissed on 8.3.2006. However, the office later allowed the objections to be removed on 28.4.2006, seemingly due to unawareness of the dismissal. The appellant, under the impression that the appeal was still active, engaged an advocate in 2008. The court noted the negligence but found it insufficient to warrant dismissal, especially considering the significant amount involved and the serious allegations (para. 1-8).

The respondent argued against condoning the delay, emphasizing potential prejudice due to interest liabilities. However, the court reasoned that even if the appeal succeeded, the respondent would have faced interest payments regardless, given the typical timeline for appeals. The court dismissed the argument that the delay deprived the respondent of the opportunity to deposit the disputed amount under protest (para. 9-14).

The court considered the balance of prejudice, noting the seriousness of the allegations and the potential loss to revenue if the appeal was dismissed due to officers' negligence. Citing a Supreme Court judgment, the court emphasized the need for government bodies to provide reasonable explanations for delays. In this case, the court found a reasonable explanation for the delay and allowed the notice of motion, subject to the appellant paying costs to the respondent (para. 15-17).