2017 (8) TMI 286 - HC - Income Tax

Condonation of delay - reasons for delay of 1050 days in filing the appeal before ITAT - Held that - Law of limitation has been enacted which is based on public policy so as to prescribe time limit for availing legal remedy for redressal of the injury caused. The purpose behind enacting law of limitation is not to destroy the rights of the parties but to see that the uncertainty should not prevail for unlimited period. Under Section 5 of the 1963 Act, the courts are empowered to condone the delay where a party approaching the court belatedly shows sufficient cause for not availing the remedy within the prescribed period. The meaning to be assigned to the expression sufficient cause occurring in Section 5 of the 1963 Act should be such so as to do substantial justice between the parties. The existence of sufficient cause depends upon facts of each case and no hard and fast rule can be applied in deciding such cases. The reasons given by the assessee regarding matrimonial dispute of his daughter and huge loss in his business were not found to be satisfactory. The explanation tendered by the assessee does not satisfy the test of sufficient cause as required under Section 5 of the 1963 Act. Consequently, no substantial question of law arises and the appeal stands dismissed.

Issues:
1. Condonation of delay in filing an appeal under Section 260A of the Income Tax Act, 1961.
2. Consideration of reasons for delay by the Income Tax Appellate Tribunal.
3. Application of legal principles regarding condonation of delay under Section 5 of the Limitation Act, 1963.

Analysis:

1. The appellant-assessee filed an appeal under Section 260A of the Income Tax Act, 1961 against the order passed by the Income Tax Appellate Tribunal, Chandigarh Bench, for the assessment year 2009-10. The primary issue was the delay of 1050 days in filing the appeal. The appellant cited reasons related to personal circumstances, including a matrimonial dispute and financial losses, to explain the delay. However, the Tribunal dismissed the appeal, stating that there was no correlation between the delay and the reasons provided, ultimately leading to the current appeal before the High Court.

2. The Tribunal's decision was based on the finding that the reasons presented by the appellant for the delay were not satisfactory. The Tribunal noted that the marriage and subsequent family issues were not directly linked to the delay in filing the appeal, as the marriage occurred before the appeal to the CIT(A) was filed. The Tribunal emphasized that the appellant had previously filed an appeal with similar reasons, indicating that the delay in filing the current appeal was not justified. Consequently, the Tribunal held that the appellant failed to explain the delay adequately, leading to the dismissal of the appeal.

3. The High Court examined the legal principles governing the condonation of delay under Section 5 of the Limitation Act, 1963. Referring to previous Supreme Court judgments, the Court highlighted that the law of limitation aims to balance the need for timely legal remedies with the discretion to condone delays upon showing sufficient cause. The Court emphasized that the term "sufficient cause" is flexible, enabling courts to consider individual circumstances. It was noted that no fixed standard exists for determining sufficient cause, and each case must be evaluated based on its unique facts.

4. The High Court further emphasized the importance of establishing sufficient cause for condonation of delay. Citing Supreme Court decisions, the Court reiterated that while a liberal approach is favored for short delays, a stricter standard is applied for longer delays. The Court clarified that the burden lies with the party seeking condonation to demonstrate that the delay was beyond their control despite acting diligently. In the present case, the Court found that the appellant failed to meet the standard of sufficient cause required under Section 5 of the Limitation Act, leading to the dismissal of the appeal.

In conclusion, the High Court upheld the Tribunal's decision, stating that the appellant's explanation did not meet the criteria for condonation of delay under the law. The Court found no error in the Tribunal's findings and dismissed the appeal, emphasizing the importance of establishing sufficient cause for delays in legal proceedings.

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