2021 (1) TMI 252 - HC - Income Tax

Condonation of delay - whether this Court should condone the delay of 342 days in preferring the Tax Appeal? - transaction of purchase and subsequent sale of the IDFC Deep Discount Bond and UPSFC - HELD THAT - In the overall view of the matter, we have reached to the conclusion that we should give one opportunity to the applicant. The applicant is a cooperative bank and is not going to derive any personal benefit if the delay is condoned and the Tax Appeal is heard on the questions of law as proposed in the memorandum of the Tax Appeal. We should not overlook the fact that there has been some lethargy on the part of the bank in pursuing the matter. However, the lethargy is not of such a type that the delay should not be condoned. The notices under Sections 143(2) and 142(1) of the Act were issued on 14th September 2009. Ultimately, the Assessing Officer finalized the assessment treating the transaction of purchase and subsequent sale of the IDFC Deep Discount Bond and UPSFC as not in the nature of banking but as a speculation business. Ultimately, the Assessing Officer made an addition of ₹ 75,05,000 00. The appeal filed by the applicant herein before the Commissioner of Income Tax (Appeals) also came to be dismissed. Ultimately, the appeal was filed before the Tribunal, and in the absence of any counsel appearing for the applicant, the appellate tribunal dismissed the appeal in limine. We are inclined to condone the delay and hear out the Tax Appeal on merits, i.e. on the two questions of law as proposed. In the result, this application is allowed. The delay of 342 days in filing the Tax Appeal is hereby condoned.

Summary

Issues:
Delay in filing Tax Appeal challenging ITAT order for Assessment Year 2007-08.

Analysis:
The applicant sought condonation of a 342-day delay in filing a Tax Appeal against an ITAT order for the Assessment Year 2007-08. The delay was attributed to the retirement of the Branch Manager and the demise of the advocate handling the matter. The applicant contended that substantial justice should prevail over technical considerations, urging the Court to decide on merits rather than rejecting the appeal based on delay. The Revenue opposed the delay condonation, arguing that the reasons provided were insufficient and factually incorrect. They highlighted that the Tribunal had given the applicant an opportunity to represent their case before dismissing the appeal for non-prosecution.

The Court considered the arguments from both sides and deliberated on whether to condone the delay in filing the Tax Appeal. It noted the history of the case, including the assessment by the Assessing Officer and subsequent dismissal of appeals before the Commissioner of Income Tax (Appeals) and the Tribunal. Despite acknowledging some lethargy on the part of the bank in pursuing the matter, the Court decided to grant one opportunity to the applicant, a cooperative bank, to pursue the Tax Appeal on its proposed questions of law. The Court emphasized that the bank would not derive personal benefit from the appeal and that the delay should be condoned to hear the case on merits.

In conclusion, the Court allowed the application, condoning the 342-day delay in filing the Tax Appeal. However, the Court imposed costs on the applicant bank, directing them to deposit ?50,000 with the Gujarat High Court Advocates Welfare Fund. Upon receipt of the deposit, the Court would assign a 'pucca' number to the Tax Appeal for admission.