2019 (2) TMI 1521 - SC - Income Tax

Condonation of delay - Reasons of delay - HELD THAT - The explanation given by the appellant and rejected the Notice of Motion. The main reason given in the affidavit was that Ex- Chairman and Shareholder of the appellant/company Late Shri Inder Bhan Bhasin, who was looking after the affairs of the appellant, was suffering from health ailment due to which he was hospitalized, who subsequently died on 08.05.2017. The explanation given by the appellant was not accepted by the High Court. We are of the view that sufficient cause was shown for condonation of delay in filing the appeals which ought to have been accepted by the High Court. We, thus, set aside the order of the High Court dated 05.07.2018, condone the delay in filing the appeals. Appeals are restored before the High Court to be heard on merits.

Summary

Issues: Delay in filing appeals under Section 260A of the Income Tax Act

In this case, the primary issue involved was the condonation of a 224-day delay in filing appeals under Section 260A of the Income Tax Act. The appellant had filed appeals against an order of the High Court dated 05.07.2018, which refused to accept the explanation provided for the delay. The appellant cited the health issues and subsequent demise of the Ex-Chairman and Shareholder of the company as the reason for the delay. The High Court rejected this explanation, leading to the appeal before the Supreme Court.

The appellant's explanation for the delay centered around the health ailments and eventual demise of the Ex-Chairman and Shareholder of the company. The appellant argued that due to the ill-health of the deceased, they had to take over the tax matters of the company, which required time to understand and address. The appellant received notices from the Assessing Officer following the Tribunal's decision, which further delayed the process. However, the High Court did not accept this explanation and refused to condone the delay.

Upon hearing the arguments from both parties, the Supreme Court found that the appellant had shown sufficient cause for the delay in filing the appeals. The Court disagreed with the High Court's decision and held that the explanation provided was valid and warranted condonation of the delay. Consequently, the Supreme Court set aside the High Court's order dated 05.07.2018, condoned the delay, and restored the appeals before the High Court to be heard on merits. The appeals were disposed of accordingly, emphasizing the importance of considering valid reasons for delays in legal proceedings.