2023 (3) TMI 1450 - HC - Income Tax

Condonation of delay - present Appeal has been filed after delay of 4 years and 100 days as per the Appellant/Revenue i.e., 1560 days and 1589 days as per the Registry of this Court - Connection usage charges paid to Foreign Telecom Operator(s) - Royalty OR Fees for Technical Services - HELD THAT - The law requisites that an applicant seeking condonation of delay is required to explain the delay in filing the Appeal. The reasons as cited in the Application for condonation of delay as filed by the Appellant/Revenue completely fails to explain the immense delay of over 4 years and a 100 days. The record before this Court shows that even after the filing of the Appeal the Appellant/Revenue has taken adjournments on almost each date of hearing over the last two years. In any event the Apex Court in Bherulal case 2020 (10) TMI 1231 - SUPREME COURT while relying upon an earlier decision in Postmaster General And Others. Vs. Living Media India Limited and Another 2012 (4) TMI 341 - SUPREME COURT has categorically held that the law of limitation binds everybody including the Government and there is no separate statute of limitation provided for governmental appeals. As such we find that the Appellant/Revenue has not been able to give any adequate or sufficient reasons to explain the delay. We are therefore unable to condone the huge delay of more than 4 years and 100 days in filing of the present Appeal which is dismissed as being time barred.

Summary

Issues Involved:
The judgment concerns Assessment Year (AY) 2008-09. The main issue revolves around whether the inter-connection usage charges paid to Foreign Telecom Operator(s) constitute 'Royalty' or 'Fees' for Technical Services. The Appeal was filed against the Order passed by the Income Tax Appellate Tribunal (ITAT) which held that these charges are neither 'Royalty' nor 'Fees' for Technical Services. The delay in filing the Appeal, reasons for the delay, and the subsequent request for condonation of delay are also significant issues in this case.

Delay in Filing of Appeal:
The Appeal was filed after a delay of 4 years and 100 days, as per the Appellant/Revenue. The Application for condonation of delay cited a contrary decision of the Bangalore Bench of ITAT in favor of the Revenue as the reason for the belated filing. However, the ITAT chose to rely on decisions of the jurisdictional High Court instead. The law mandates that an applicant seeking condonation of delay must explain the delay, which the Appellant/Revenue failed to do adequately in this case. Despite the filing of the Appeal, the Appellant/Revenue sought adjournments on almost every hearing date over the last two years.

Arguments and Court's Decision:
The Appellant/Revenue argued that contradictory decisions of other Benches led to the delay in filing the Appeal, necessitating reconsideration of an earlier administrative decision. However, the Respondent/Assessee emphasized the significant delay and opposed further adjournments. The Court noted that the Appellant/Revenue failed to provide sufficient reasons for the delay, as required by law. Citing Supreme Court precedents, the Court held that the law of limitation applies to government appeals as well, and the delay of over 4 years and 100 days could not be condoned. Consequently, the Appeal was dismissed as time-barred, without delving into the merits of the case.

Conclusion:
The judgment highlights the importance of timely filing of appeals and the necessity for applicants, including government departments, to provide valid and acceptable reasons for any delays. In this case, the failure to adequately explain the significant delay in filing the Appeal resulted in its dismissal on grounds of limitation. The parties were instructed to act based on a digitally signed copy of the order.