2024 (8) TMI 1510 - HC - Income Tax

Delay filling appeal - Dismissal of the appeal at the threshold on the ground of limitation - appeal was filed with a delay of 98 days - as submitted entire matter was entrusted with one accountant and he was in hold of the matter, but he did not perform his duty and because of certain other irregularities his services were dispensed with and at the time of leaving the office, abruptly he left and did not inform that the appeal has not been filed. HELD THAT - It is not in dispute that the appeal which should have been filed within 60 days had expired on 15.10.2021. Since the COVID intervened, the appeal period in all the cases were extended by the Hon'ble Supreme Court up till 30.05.2022 and subsequently, the appeal was filed on 05.09.2022. The bona fide of the appellant can be assumed from the fact that the challan for filing the appeal was paid on 10.11.2021. Consequently, the intention on the part of the appellant can be gathered from the fact that some of the employees who was entrusted in the job to file the appeal, has failed to perform his duty. Eventually, his services were terminated. One of the reason has also been assigned that some raid was conducted on the premises of the appellant. Therefore, it can be inferred that because of such raid the entire focus might have been diverted that of assessee, coupled with the fact that the duty of filing the appeal since was entrusted to accountant, by the company and on account of non filing of the appeal, the services of concerned employee was terminated. In such case, the non filing of the appeal within time appears to be reasonable. Even otherwise, in condonation of delay, the Courts would lean more in favour of deciding of the appeal on merit instead of side lining the hearing of cases on merits on technical ground of the limitation. Delay appears to be reasonable. Accordingly, the appeal is allowed.

Summary

1. ISSUES PRESENTED and CONSIDERED

The core legal question addressed in this judgment is:

• Whether the dismissal of the appeal at the threshold on the ground of limitation was justified under the given facts and circumstances.

2. ISSUE-WISE DETAILED ANALYSIS

Issue: Justification of Dismissal on Grounds of Limitation

Relevant Legal Framework and Precedents:

The legal framework concerning the limitation period for filing appeals is primarily governed by statutory provisions and judicial precedents. The Supreme Court had extended the limitation period due to the COVID-19 pandemic, which is a crucial factor in this case.

Court's Interpretation and Reasoning:

The court interpreted the circumstances surrounding the delay in filing the appeal. It noted that the appellant had paid the challan for filing the appeal on November 10, 2021, indicating an intention to file the appeal. The delay was attributed to the actions of an accountant whose services were terminated due to non-performance. The court also considered the impact of a raid on the appellant's premises, which might have diverted their focus.

Key Evidence and Findings:

The evidence presented included the timeline of events, such as the payment of the challan and the termination of the accountant's services. The appellant argued that these factors demonstrated bona fide intentions to file the appeal, despite the delay.

Application of Law to Facts:

The court applied the principle that in matters of condonation of delay, the courts should prefer to decide cases on their merits rather than dismiss them on technical grounds. It found that the reasons provided by the appellant were reasonable and justified the delay.

Treatment of Competing Arguments:

The respondent argued that there was no documentary evidence proving the accountant's employment, which undermined the appellant's claim of bona fide intent. However, the court found the appellant's explanations credible and persuasive, given the overall context and the extended limitation period due to COVID-19.

Conclusions:

The court concluded that the delay in filing the appeal was reasonable and should be condoned. It emphasized that the merits of the case should be heard rather than dismissed on procedural grounds.

3. SIGNIFICANT HOLDINGS

Preserve Verbatim Quotes of Crucial Legal Reasoning:

"In condonation of delay, the Courts would lean more in favour of deciding of the appeal on merit instead of side lining the hearing of cases on merits on technical ground of the limitation."

Core Principles Established:

• The courts should prefer adjudicating appeals on their merits rather than dismissing them due to procedural delays, especially when reasonable explanations are provided.
• The impact of extraordinary circumstances, such as the COVID-19 pandemic, must be considered in evaluating the timeliness of legal filings.

Final Determinations on Each Issue:

The court determined that the delay in filing the appeal was justified and reasonable. Consequently, it set aside the order of the Appellate Tribunal and remitted the appeal back to the Income Tax Appellate Tribunal for fresh adjudication on merits.