2019 (1) TMI 957 - HC - Income Tax

Delay in filing appeal - condonation of delay - bonafide on the part of the appellant in not filing the application for condonation of delay alongwith appeal - Approval u/s 10(23C)(vi)rejected - Held that - Though there was some negligence on the part of Management of the Society in not pursuing the filing of appeal after entrustment of the documents to its counsel through mail but the negligence was not such of a degree that the Tribunal ought to have dismissed the appeal being barred by limitation. The application was duly supported by an affidavit. The necessity to disclose the name of the counsel alone would have embarrassed the Advocate concerned and amounted to casting aspersion on a Member of Bar. The fact that the application for condonation of delay was moved after receiving show cause notice from the Registry of the Tribunal gives credence to the appellant s plea that it was under a bonafide impression that the appeal had been filed and it was only when the show cause notice was received that the appellant came to know that the counsel to whom documents were mailed had taken no steps to file the appeal. The aforesaid fact was suggestive of the bonafide on the part of the appellant in not filing the application for condonation of delay alongwith appeal. The only negligence on the part of the appellant society was that it failed to pursue the matter with the counsel to whom the documents were mailed. In the case of such type of negligence, equities can be well balanced by imposing costs on the party negligent. We are thus of the view that the Tribunal s endeavour ought to have been to decide the appeal on merits instead of rejecting the same on technical ground of being barred by limitation.

Summary

Issues involved:
Delay in filing appeal, Justification for condonation of delay, Negligence in filing appeal, Bonafide impression of filing appeal, Tribunal's decision on technical grounds

Analysis:

1. Delay in filing appeal:
The case involved an Income Tax Appeal against an order rejecting an application seeking approval under Section 10(23)(iv) of the Income Tax Act, 1961. The Tribunal dismissed the appeal as time-barred, leading to the appellant seeking condonation of delay. The appellant's plea was based on the grounds of being a State instrumentality and the misunderstanding regarding the filing of the appeal.

2. Justification for condonation of delay:
The Tribunal found the reasons for delay to be general and vague, leading to the dismissal of the appeal. However, the High Court noted that the negligence on the part of the appellant was not of such a degree to warrant the dismissal of the appeal. The appellant's application for condonation of delay was supported by an affidavit, and the Court found merit in the argument that the delay was due to a bonafide impression that the appeal had been filed.

3. Negligence in filing appeal:
The Tribunal highlighted the appellant's negligence in filing the appeal, stating that the reasons for delay were not justifiable. However, the High Court opined that the negligence was not severe enough to dismiss the appeal on technical grounds. The Court emphasized that the appellant's failure to pursue the matter with the counsel to whom the documents were mailed did not warrant such a harsh outcome.

4. Bonafide impression of filing appeal:
The High Court acknowledged the appellant's bonafide impression that the appeal had been filed, which was shattered only upon receiving a show cause notice from the Registry of the Tribunal. The Court found that the appellant's actions were indicative of a genuine belief that the appeal process was underway, and the subsequent steps were taken promptly upon realizing the oversight.

5. Tribunal's decision on technical grounds:
The Tribunal's decision to dismiss the appeal based on technical grounds was overturned by the High Court. The Court emphasized the need to balance equities in cases of negligence, suggesting that costs could be imposed on the negligent party instead of outright dismissal. The High Court allowed the appeal in part, setting aside the Tribunal's order, and condoned the delay in filing the appeal subject to the payment of costs.

In conclusion, the High Court's judgment focused on the balance between technicalities and substantive justice, ultimately allowing the appeal in part and emphasizing the importance of considering the circumstances leading to the delay in filing the appeal.