2025 (3) TMI 936 - HC - Income Tax

Rejection of application for condonation of delay in filing the appeal u/s 246A - sufficient cause has not been shown for condonation of delay of 597 days in filing the appeal - HELD THAT -Admittedly there is a delay of 597 days in filing the appeal before the ITAT and for which the appellant/assessee has assigned the reason that the communication of the order was made on an e-mail of which the appellant was not an active user and even the authorized representative of the assessee did not amend the e-mail id on which the order was to be communicated and therefore the order could not be communicated and as soon as the appellant came to know about the order the appeal was preferred. Supreme Court vide its Order passed in the matter of Vidya Shankar Jaiswal 2024 (4) TMI 986 - CHHATTISGARH HIGH COURT while setting aside the order of this Court rejecting the appeal on the ground of delay has held that the High Court ought to have adopted justice oriented and liberal approach by condoning the delay. Though the application of the appellant was supported by the affidavit but the revenue did not file any counter-affidavit controverting the reason assigned by the assessee and as such the delay of 597 days occurred in filing the appeal remained uncontroverted the delay of 597 days occurred in filing the appeal deserves to be and is hereby condoned subject to payment of cost of Rs. 5, 000/- by the appellant to the High Court Legal Services Committee and the appellant is also directed to file proof thereof within 15 days from today. The substantial question of law is answered accordingly.

ISSUES PRESENTED and CONSIDERED

The core legal question considered in this case was whether the Income Tax Appellate Tribunal (ITAT) was justified in rejecting the application for condonation of delay in filing the appeal under Section 246A of the Income Tax Act, 1961, by holding that sufficient cause had not been shown for the delay of 597 days in filing the appeal.

ISSUE-WISE DETAILED ANALYSIS

Relevant legal framework and precedents: The legal framework revolves around Section 246A of the Income Tax Act, 1961, which governs the filing of appeals and the condonation of delays. The appellant relied on precedents such as the Supreme Court's decision in Vidya Shankar Jaiswal, which emphasized a justice-oriented and liberal approach in condoning delays.

Court's interpretation and reasoning: The Court noted that the ITAT relied on a previous decision of the High Court in Vidya Shankar Jaiswal, which had been set aside by the Supreme Court. The Supreme Court had advocated for a more lenient approach in condoning delays, emphasizing justice over procedural technicalities.

Key evidence and findings: The appellant argued that the delay was due to the order being communicated to an inactive email address, which was not updated by the authorized representative. The appellant claimed that the appeal was filed promptly upon discovering the order. The Court found that the revenue did not file any counter-affidavit to contest the reasons provided by the appellant, leaving the delay uncontroverted.

Application of law to facts: The Court applied the principles from the Supreme Court's decision and found that the reasons provided by the appellant, coupled with the lack of opposition from the revenue, warranted condonation of the delay. The Court emphasized the need for a justice-oriented approach, aligning with the Supreme Court's directive.

Treatment of competing arguments: The respondent, represented by Mr. Ajay Kumrani, supported the ITAT's decision and argued for the dismissal of the appeal. However, the Court found the appellant's arguments more persuasive, particularly given the Supreme Court's stance on the matter.

Conclusions: The Court concluded that the delay of 597 days should be condoned, subject to the appellant paying a cost of Rs. 5,000 to the High Court Legal Services Committee. The appellant was directed to provide proof of payment within 15 days, with the stipulation that failure to do so would result in the dissolution of the order.

SIGNIFICANT HOLDINGS

The Court held that the ITAT's reliance on a High Court decision that had been set aside by the Supreme Court was misplaced. The Court emphasized a justice-oriented and liberal approach to condonation of delays, aligning with the Supreme Court's directive.

Core principles established: The judgment reinforced the principle that procedural delays should not overshadow substantive justice, especially when the delay is uncontroverted and reasonable explanations are provided. The Court underscored the importance of a liberal approach in condoning delays to ensure justice is served.

Final determinations on each issue: The Court allowed the appeal, condoning the delay of 597 days, and remitted the matter back to the ITAT for a decision on merits in accordance with the law. The Court made it clear that the appellant's failure to deposit the cost within the stipulated time would lead to the automatic dissolution of the order.

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