2022 (6) TMI 1496 - HC - Income Tax

Condonation of delay filling appeal before HC - delay of 535 days in filing the appeal - folder/file moves from one authority to another causing delay - HELD THAT - Last date for filing the appeal within the period of limitation expired on 20.07.2019. The decision/scrutiny report for filing the appeal was taken on 16.05.2019. Thereafter two months had lapsed for the necessary approval from the higher authorities of the Income Tax department and the judicial folder was sent to the Ministry of Law and Justice for filing the appeal on 17.07.2019. Had the appeal been filed before 20.07.2019 it would have been well within the period of limitation. However, between 17.07.2019 till 16.03.2021, the folder has been circulated to the junior Government counsel of the Ministry of Law and Justice, standing counsel for the department etc. and ultimately the draft of the condone delay petition was approved and returned to the Ministry of Law and Justice on 16.03.2020. As noted that the draft Memorandum of Appeal was settled by the senior standing counsel for the Income Tax department as early as on 23.09.2019. Therefore, it appears that the delay has occasioned after the application for condonation of delay was approved and returned to the Ministry of Law and Justice on 16.03.2020. From 15.03.2020, the period of limitation stood excluded. Therefore, we are of the view that by rejecting the application for condonation of delay would result in prejudice as substantial questions of law which have been suggested for consideration have already been entertained by this Court in other appeals filed in respect of the other assessees. Therefore, when technical considerations are pitted against the substantial justice, we are inclined to lean in favour of the appellant department by condoning the delay. The decisions which have been referred to are not decisions which are under the provisions of the Income Tax Act nor in any of those decisions, the legal issue is yet to be decided and pending before the High Court. Therefore, we would be well justified in exercising our discretion in condoning the delay.

Issues Involved:
1. Application for condonation of delay in filing the appeal.
2. Explanation for the delay by the revenue department.
3. Opposition by the respondent assessee.
4. Legal principles on condonation of delay.
5. Court's discretion in condoning the delay.

Detailed Analysis:

1. Application for Condonation of Delay in Filing the Appeal:
The revenue department filed an application to condone a delay of 535 days in filing an appeal under Section 260A of the Income Tax Act, 1961, against an order dated 08.03.2019 by the Income Tax Appellate Tribunal, Kolkata. The appeal should have been filed by 20.07.2019, but was filed on 04.01.2021.

2. Explanation for the Delay by the Revenue Department:
The department explained the delay as follows:
- The order was received on 22.03.2019.
- Appeal scrutiny report was requested on 26.03.2019 and submitted on 16.05.2019.
- Approval for filing the appeal was obtained on 15.07.2019.
- The judicial folder was sent to the Ministry of Law and Justice on 17.07.2019.
- Various steps, including drafting and approval of the Memorandum of Appeal and the application for condonation of delay, took place between 20.09.2019 and 16.03.2020.
- The delay was attributed to procedural formalities and the COVID-19 pandemic.

3. Opposition by the Respondent Assessee:
The respondent disputed the claimed date of receipt of the order and argued that the department acted negligently and with mala fide intentions. They contended that:
- The department's explanations were vague and lacked merit.
- Specific periods of delay were not explained.
- The conduct of the department was callous and negligent.
- The delay was unreasonable and would cause injustice to the assessee if condoned.

4. Legal Principles on Condonation of Delay:
The court referred to several Supreme Court decisions, including:
- *Post Master General vs. Living Media India Limited* and *Collector (LA) vs. Katiji*, emphasizing that delay should be explained in a rational, common-sense manner.
- *G. Ramegowda vs. Land Acquisition Officer* and *State of Haryana vs. Chandra Mani*, which highlighted that government decisions are collective and procedural delays should be considered.
- *Union of India vs. Central Tibetan Schools Administration*, where a significant delay was not condoned due to lack of sufficient cause.

5. Court's Discretion in Condoning the Delay:
The court acknowledged that while each day's delay was not explained, the period from 15.03.2020 onwards was affected by the COVID-19 lockdown. The court noted that substantial questions of law were involved, which had been entertained in other cases. The court emphasized the need to balance technical considerations against substantial justice.

Conclusion:
The court decided to condone the delay, noting that rejecting the application would result in prejudice and substantial questions of law were pending. The affidavit of apology tendered by the respondent assessee was taken on record. The application for condonation of delay was allowed, and the delay in filing the appeal was condoned.

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