2008 (7) TMI 392 - HC - Income Tax

Delay in filing an appeal to ITAT application of the provisions of limitation act section 5 held that - It is an admitted fact that interest imposed on the appellant under Section 201(1A) has been paid by the appellant on protest and pursued the appellate remedy by obtaining necessary sanction from the Government in G.O.Ms.No.114 dated 27.3.2002. Thus there is a delay of 701 days which is explained as administrative delay. The said reason cannot be rejected as it is not sufficient cause. In the facts of the present case every day s delay cannot be explained and as such the pedantic approach should not be made. The doctrine must be applied in a rational common sense pragmatic manner. The delay in this case cannot be regarded as occasioned deliberately or on account of negligence or on account of malafides. A litigant does not stand to benefit by resorting to delay but he runs a serious risk. Courts are not respected on account of its power to legalise injustice on technical grounds but because it is capable of removing injustice and is expected to do so.

Summary

Issues involved:
- Appeal against order of Income Tax Appellate Tribunal Madras 'C' Bench dated 4.4.2007 in I.T.A.Nos.17 to 20/Mds/2004 for the assessment year 2000-2001.
- Questions of law: Delay in filing appeal, application of Supreme Court decision, test of liberal and pragmatic approach for condonation of delay under Section 5 of Limitation Act.

Analysis:
- The appeals were filed challenging the order of the Income Tax Appellate Tribunal Madras 'C' Bench dated 4.4.2007. The substantial questions of law included whether the Tribunal erred in refusing to condone the delay in filing the appeal, failed to apply a Supreme Court decision, and correctly applied the test of liberal and pragmatic approach for condonation of delay under Section 5 of the Limitation Act.

- The facts of the case involved the Income-tax Officer issuing a notice for interest charges under Section 201(1A) of the Act due to failure to deduct tax from employees' salaries. The Commissioner of Income Tax (Appeals) upheld the interest levy, leading to an appeal to the Income Tax Appellate Tribunal with a delay of 708 days. The Tribunal dismissed all appeals solely based on the delay without considering the merits.

- The appellant argued that there was no deliberate inaction or negligence, and the entire demand had been remitted, causing no prejudice to the revenue. The Tribunal should have adopted a liberal approach, considering the Supreme Court's decision in a similar case.

- The High Court emphasized that the law of limitation aims to provide finality to proceedings without destroying statutory appellate remedies. It highlighted the need for a balance between technicalities and substantial justice, leaning towards the latter. The Court cited precedents emphasizing the elastic nature of "sufficient cause" under Section 5 of the Limitation Act to ensure substantial justice.

- Referring to various legal judgments, the Court stressed the importance of a pragmatic approach in condoning delays, especially in cases involving governmental organizations. It noted that the delay in this case was administrative and not deliberate, justifying the condonation of delay.

- Ultimately, the High Court set aside the Tribunal's order and remitted the matter back for fresh consideration on merits, emphasizing the need for a justice-oriented approach and the importance of advancing substantial justice in such cases.