2020 (10) TMI 844 - HC - Income Tax

Condonation of delay - ITAT refusing to condone the delay of 317 days, without considering the restoration application filed by the Appellant before CIT(A) was duly acknowledged by CIT(A) - HELD THAT - We are convinced that the assessee had filed an application before the CIT(A) on 24.07.2018 for recalling the order, dismissing the appeals for default and the date seal is sufficient proof of filing such application. It appears that this record was not placed before the Tribunal when it passed the impugned order. That apart, this Court has always been lenient, more particularly, to the Revenue when appeals are filed with inordinate delay. The reason being this Court is required to take a decision on a Substantial Questions of Law and it would be inequitable to reject the appeal on the ground of delay and also bearing in mind the legal principle that none benefits by lodging an appeal belatedly. The exception to this rule would be, where the delay is on account of mala fide reasons or for certain other collateral purposes. If such is the case, even a delay of one day can be rejected. We find the explanation offered by the assessee to be convincing and acceptable and therefore, the impugned order passed by the Tribunal warrants interference. Appeals filed by the assessee are allowed and the Substantial Questions of Law are answered in favour of the assessee. The order passed by the Tribunal is set aside. Consequently, the common order passed by the CIT(A) 2020 (2) TMI 1349 - ITAT CHENNAI is set aside and the appeals are restored on the file of the CIT(A) to be heard and decided on merits, after affording an opportunity of hearing to the appellant/assessee.

Summary

Issues:
- Delay condonation by ITAT
- Merits of the grounds of appeal

Delay Condonation by ITAT:
The appellant challenged the ITAT's refusal to condone a 317-day delay in filing appeals, arguing that their restoration application before CIT(A) was acknowledged. The appellant's representative was absent due to a family event, leading to the dismissal for default. The CIT(A) did not act on the restoration application, prompting the appeal to ITAT after the limitation period had expired. The ITAT dismissed the appeals citing lack of proof of the restoration application. However, the High Court found evidence that the appellant did approach CIT(A) for restoration, though no orders were passed. Citing a similar case, the High Court emphasized the CIT(A)'s inherent power to restore appeals for justice, not as a review. The Court accepted the appellant's explanation for the delay and set aside the ITAT's order, restoring the appeals to be heard on merits.

Merits of the Grounds of Appeal:
The ITAT also observed no merits in the grounds of appeal, despite no submissions or observations on the case's merits in their order. The appellant relied on a decision from the High Court of Allahabad regarding the CIT(A)'s power to review orders. The High Court found that the CIT(A) should have acted on the restoration application, as evidenced by the filing date. The Court noted its leniency towards delays, especially when substantial questions of law are involved. Ultimately, the High Court allowed the appeals, answered the substantial questions of law in favor of the appellant, and set aside the ITAT's order, restoring the appeals for a fresh decision by the CIT(A) on merits. The issue of the CIT(A)'s power under Section 251 was left open for future adjudication.