2013 (11) TMI 1054 - HC - Income Tax

Condonation of delay - The assessee requested the learned Tribunal to condone the delay by submitting that earlier tax matter were being looked after by a Chartered Accountant M/s. J M. Patel & Brothers and even after losing the appeal before the learned CIT(A), he did not advise the assessee to file further appeal before the Tribunal. - Held that - Considering the affidavits filed by the assessee before the Tribunal which are even reproduced by the learned Tribunal, the learned Tribunal has committed error in not condoning the delay and not considering the appeals on merits - There is no observation by the learned Tribunal that there was any deliberate delay on the part of the assessee and / or there was any mala fide intention on the part of the assessee in not preferring the appeals within a period of limitation. Once the Income Tax Practitioner is changed it may not be possible for the assessee to get affidavit of Income Tax Practitioner - The condonation of delay was not required to be refused on this very ground - It is a cardinal principle of law that normally by and large, the appeals are required to be decided on merits rather than dismissing the same on technical ground like delay etc. unless it is found that there was gross negligence on the part of the assessee and / or there was any mala fide intention on the part of the assessee in not preferring the appeal within the period of limitation - Following Collector, Land Acquisition, Anantnag and Another vs. Mst. Katiji and Others 1987 (2) TMI 61 - SUPREME Court - Refusing to condone delay can result in a meritorious matter being thrown out at the very threshold and cause of justice being defeated - Decided in favour of assessee.

Summary

Issues: Appeal against dismissal of appeals by ITAT on the ground of limitation, condonation of delay, consideration of appeals on merits.

Issue 1: Dismissal of Appeals on the Ground of Limitation

The appellant, a common assessee, challenged the order of the Income Tax Appellate Tribunal (ITAT) dismissing the appeals for the assessment years 2007-08 and 2008-09 on the basis of limitation due to delays of 328 days and 158 days, respectively. The appellant sought condonation of delay, explaining that their previous Chartered Accountant failed to advise on further appeals after losing before the Commissioner of Income Tax (CIT(A)). The ITAT refused to condone the delay, citing the absence of an affidavit from the new Income Tax Practitioner. The High Court observed that there was no deliberate delay or mala fide intention on the part of the assessee and emphasized that appeals should be decided on merits rather than technical grounds. The Court noted that changing practitioners might hinder obtaining such affidavits. Quoting the Supreme Court, the High Court stressed that refusing to condone delay could impede justice and that allowing delay would only lead to deciding the case on its merits after due process.

Issue 2: Condonation of Delay

The High Court, after considering the principles laid down by the Supreme Court and the specifics of the case, opined that the ITAT erred in not condoning the delay and in dismissing the appeals solely based on limitation grounds. The Court highlighted the importance of deciding cases on their merits and not on technicalities unless there is clear negligence or mala fide intent on the part of the appellant. Consequently, the High Court allowed the appeals, quashed the ITAT's order, condoned the delays, and remitted the matters back to the ITAT for a decision on merits and in accordance with the law.

Issue 3: Consideration of Appeals on Merits

The High Court, after a thorough review of the facts and legal principles, concluded that the ITAT should have considered the appeals on their merits rather than dismissing them on procedural grounds. By emphasizing the need for justice to prevail and cases to be decided on their substance, the Court set aside the ITAT's order, condoned the delays, and directed the ITAT to adjudicate the appeals based on their merits and in compliance with the law. As a result, both appeals were allowed, overturning the ITAT's decision and providing the appellant with the opportunity for a proper hearing and determination of their tax matters.