2012 (9) TMI 699 - HC - Income Tax

Delay in 251 days of filing appeal - addition on undisclosed income - Held that - The counsel who had filed the appeal before the Tribunal having furnished his affidavit accepting the cause of delay and the explanation being plausible leads to the conclusion that there was sufficient cause for delay in filing the appeal. Once that was so, the application for condonation of delay ought to have been allowed. As the appeal order as given to the Councel by the party was inadvertently placed in some other file because during that time there was heavy rush filing the income tax returns for the assessment year 2010-11 & due to great efforts, the said order to the CIT(A)- II Ludhiana was traced from the office in the second week of June, 2011 and therefore, the appeal is now being filed - The substantial question of law is answered by holding that there was sufficient cause for condonation of delay in filing the appeal before the Tribunal - matter is remitted to the Tribunal to adjudicate the dispute on merits - in favour of assessee.

Issues:
Delay in refiling the appeal, Justification for dismissing the appeal by the ITAT, Legality and sustainability of the Tribunal's order.

Delay in Refiling the Appeal:
The appellant filed an appeal under Section 260A of the Income Tax Act, 1961 against the order of the Income Tax Appellate Tribunal (ITAT) for the assessment year 2005-06. The delay in filing the appeal was 251 days, which the appellant sought to condone. The appellant's counsel explained that the delay was due to inadvertently misplacing the appeal papers and being preoccupied with other tax-related matters. An affidavit by the counsel supported this explanation. The High Court examined the principles of condonation of delay under Section 5 of the Limitation Act, emphasizing that sufficient cause must be shown for the delay. The Court cited previous judgments to highlight that the determination of sufficient cause is a fact-specific inquiry, and no rigid criteria exist. The Court noted that the counsel's explanation for the delay was plausible and accepted, leading to the conclusion that there was sufficient cause for condonation of the delay. Consequently, the Court held that the Tribunal erred in refusing to condone the delay and allowed the appeal, remitting the matter back to the Tribunal for adjudication on merits.

Justification for Dismissing the Appeal by the ITAT:
The primary issue before the High Court was whether the Tribunal erred in not condoning the delay in filing the appeal against the CIT(A)'s order. The appellant received the CIT(A)'s order on 22.8.2010, with the appeal deadline being 21.10.2010. However, the appeal was filed on 5.7.2011, resulting in the aforementioned delay. The appellant's counsel attributed the delay to misplacement of appeal papers and work overload. The High Court analyzed the facts and the counsel's affidavit, concluding that there was sufficient cause for the delay. The Court emphasized that the determination of sufficient cause is a case-specific inquiry and that the explanation provided by the counsel was acceptable, warranting condonation of the delay. Therefore, the High Court found the Tribunal's decision to dismiss the appeal based on the delay unjustified and held in favor of the appellant.

Legality and Sustainability of the Tribunal's Order:
The High Court scrutinized the Tribunal's decision to dismiss the appeal due to the delay in filing. The appellant had approached the Tribunal after the CIT(A) confirmed the Assessing Officer's addition to the income. The Tribunal dismissed the appeal due to the delay of 251 days. However, the High Court, after evaluating the circumstances leading to the delay and the counsel's explanation, concluded that there was sufficient cause for condonation of the delay. As a result, the High Court held that the Tribunal's refusal to condone the delay was incorrect. The Court allowed the appeal and directed the Tribunal to adjudicate the dispute on merits in accordance with the law.

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