2016 (1) TMI 1412 - HC - Income Tax

Condontion of delay - delay of 790 days in re-filing the appeal - HELD THAT - The practice directions were issued after consultation with the bar and after giving sufficient time for the bar to get acquainted with the requirement of e-filing. Additionally the Court has also provided scanning machines at the filing counter so that no difficulty is caused to the bar for switching over to the system of e-filing. In any event the delay of over two years on this ground is wholly unacceptable. The Court is not persuaded to condone the extraordinary delay of 790 days in re-filing the appeal. The application seeking condonation of the delay of 790 days in re-filing the appeal is dismissed. Addition on account of technical know-how and royalty expenses paid by the Assessee to Honda Motor Co. Ltd Japan - HELD THAT - Payment made on account of entry tax; provision for warranty and sales services; software expenses and cost of air tickets and other travel expenses. It is not in dispute that for the earlier AYs in each of the above issues the Court has answered the questions in favour of the Assessee and against the Revenue. The assessment order passed by the AO in fact notes that Question no.1 stands answered by this Court against the Revenue.

Summary

Issues:
1. Condonation of delay in re-filing the appeal
2. Merits of the appeal against the order passed by the Income Tax Appellate Tribunal

Condonation of Delay:
The High Court noted a delay of 790 days in re-filing the appeal. The explanation given was related to the practice directions for e-filing appeals issued by the Court. The Court emphasized that the practice directions were issued after consultation with the bar and adequate time was given to transition to e-filing. Despite providing scanning machines at the filing counter to facilitate e-filing, a delay of over two years was deemed unacceptable. Consequently, the Court refused to condone the delay and dismissed the application seeking condonation of the 790-day delay.

Merits of the Appeal:
The appeal by the Revenue was against an order passed by the Income Tax Appellate Tribunal for the Assessment Year 2008-09. The appeal raised seven questions, two of a general nature and five concerning the deletion of additions made by the Assessing Officer. These additions pertained to technical knowhow and royalty expenses, entry tax, provision for warranty and sales services, software expenses, and travel expenses. It was highlighted that previous decisions by the Court favored the Assessee on similar issues. The assessment order acknowledged the Court's previous rulings against the Revenue. The Court also referenced a recent order in another case where the question was decided in favor of the Assessee. Consequently, the appeal was dismissed on both grounds - the delay in re-filing and on merits, affirming the decisions in favor of the Assessee on the substantive tax issues.

This detailed analysis covers the issues of condonation of delay in re-filing the appeal and the examination of the appeal on its merits against the order of the Income Tax Appellate Tribunal.