2014 (2) TMI 1396 - HC - Income Tax

Condonation of delay - Sufficient reason for delay - whether the transactions of the appellant with M/s. Bharat Petroleum Corporation Limited and M/s. Indian Oil Corporation Limited are transactions under which the appellant could be treated as providing vehicles for hire (tanker lorries to carry materials) or whether the appellant was employing herself as a carrier? - HELD THAT - It is not as if the appellant had not shown any cause at all to condone the delay. The sufficiency or otherwise in such matters have necessarily to be weighed also, on the scales of justice, depending upon the question whether the delay could be condoned at least on terms. This largely depends on the cause pleaded for the delay and the view that the appellate court, tribunal or authority could take on a prima facie superficial examination of the grounds of appeal, which may also point out that ends of justice require the appeals to be entertained. In this view of the matter, we see that the substantial question of law that arises for decision in these appeals is as to whether the Tribunal had acted, in accordance with law, while it refused to condone the delay, at least on terms. On hearing the learned counsel for the parties on that particular issue of law, we are satisfied that the said question is a substantial question of law, and, has to be answered in favour of the appellant. In the result, these appeals are allowed and the impugned orders are set aside on condition that the appellant pays the Department an amount of ₹ 10,000/- (Rupees ten thousand only) as costs in each of these appeals within a period of two weeks from today, by making appropriate remittance

Summary

Issues involved:
1. Dismissal of statutory appeals by the Income Tax Appellate Tribunal on the ground of delay.
2. Cause shown for condonation of delay based on health reasons.
3. Question raised regarding the nature of transactions for determining depreciation.
4. Whether the Tribunal acted in accordance with the law in refusing to condone the delay.

Analysis:
1. The appeals were dismissed by the Income Tax Appellate Tribunal due to delay, with the Tribunal finding the cause shown for condonation of delay unsatisfactory. The appellant, a woman, cited health issues such as undergoing treatment for Diabetes Mellitus and related problems, which caused her unawareness of the impugned orders issued by the Tribunal.

2. The High Court considered the materials and averments in the applications for condonation of delay, along with the merits of the appeals as presented before the Tribunal. The main issue raised was whether the appellant's transactions with certain corporations constituted providing vehicles for hire or self-employment as a carrier, impacting the applicable rate of depreciation under the Income Tax Rules.

3. The Court clarified that it was not making a final determination on the nature of the transactions but focused on whether the Tribunal's refusal to condone the delay was in accordance with the law. The sufficiency of cause for delay and the potential for condonation on terms were evaluated, emphasizing the need to balance justice while considering the grounds of appeal.

4. After hearing arguments from both parties, the Court concluded that the question of whether the Tribunal correctly handled the delay condonation issue was a substantial question of law. Consequently, the Court allowed the appeals, setting aside the impugned orders on the condition that the appellant pays a specified amount as costs within a designated timeframe. The Tribunal was instructed to proceed with the appeals after allowing the condonation of delay and providing adequate opportunity for the parties to present their case.