2016 (5) TMI 1461 - HC - Income Tax

Condonation of delay - eligible reasons for delay - Held that - The Court is of the view that in view of the special circumstances explained in the petition, with the Petitioner company having been in liquidation for several years, the Petitioner should not be prejudiced in pursuing the appeal which has been decided ex parte against it by the ITAT. In the peculiar facts and circumstances, the Court sets aside the impugned order passed by the ITAT and allows the M.A. thereby condoning the delay on the part of the Petitioner in seeking recall of the ex parte order dated 3rd June 2003 of the ITAT dismissing the appeal.

Summary

Issues:
Challenge to order of ITAT dismissing restoration application for appeal; Delay in filing restoration application; Power of ITAT to condone delay; Special circumstances due to company being in liquidation.

Analysis:
The writ petition challenged the order of the Income Tax Appellate Tribunal (ITAT) dated 1st February 2016, which dismissed the Miscellaneous Application (M.A.) seeking restoration of ITA No. 4873/Del/1998. The petitioner, a company under liquidation, had its appeal dismissed in default by the ITAT on 3rd June 2003. Subsequently, the Income Tax Department claimed an outstanding demand from the petitioner. A revival petition was filed before the High Court of Punjab & Haryana, granting liberty to the petitioner to approach the Income Tax Department for settlement. The ITAT dismissed the M.A. seeking recall of the ex parte order, citing lack of power to condone the delay beyond four years and disregarding the High Court's observation on taking a sympathetic view due to the company's liquidation status.

Upon examining the documents and circumstances, the Court noted the special circumstances with the petitioner being in liquidation for several years and held that the petitioner should not be prejudiced in pursuing the appeal decided ex parte by the ITAT. Consequently, the Court set aside the ITAT's order, allowing the M.A. and condoning the delay in seeking recall of the ex parte order. The Court also set aside the ex parte order dismissing the appeal and restored ITA No. 4873/Del/98 for AY 1991-92 to the ITAT's file. The appeal was scheduled for listing before the ITAT on 1st August 2016, with the writ petition being allowed in the mentioned terms.