2012 (10) TMI 179 - HC - Income Tax

Delay in filing appeal - petitioner has challenged three orders - writ petition - Held that - The last date for filing an appeal before the ITAT was 5.1.2008. It is of vital importance to note that the petitioner had by its letter dated 14.12.2007 i.e. before the time for filing an appeal had expired, instructed its CA in writing to file an appeal before the Tribunal. On 14.1.2008, the petitioner s Manager resigned. On 25.1.2008 the petitioner received through its CA the papers and proceedings in respect of the appeal to be filed. The appeal fees were paid on 31.1.2008. On 10.2.2008 the appeal papers were signed by the office bearers of the society. On 21.2.2008 the appeal was received by the Tribunal by post. There was thus a delay of about forty five days in filing the appeal. Neither the extent, nor the nature of the delay warrants the drastic consequences of denying the petitioner an opportunity of defending its case on merits. It is not as if there was no explanation for this delay. The appellant has indeed filed an appeal challenging the order dated 23.7.2009 along with a notice of motion for condonation of delay. It was contended that in view thereof, this writ petition is not maintainable is not agreeable. This writ petition is comprehensive and challenges all the impugned orders. In order to obtain complete relief the petitioner cannot be faulted for having filed this writ petition. The petitioner has been put to considerable expenses and effort merely to obtain a hearing on merits. The petitioner can, by no stretch of imagination be said to have waived its rights. This is clear from the fact that the petitioner has duly and diligently prosecuted the appeals in respect of the three other assessment years. But for the unfortunate circumstances fourth appeal would also have been heard on merits in the normal course. The petitioner is not entirely at fault for the delay and negligence in prosecuting the fourth appeal - The Tribunal is directed to hear the petitioner s appeal on merits - in favour of assessee.

Summary

Issues:
Challenging three orders pertaining to assessment years 2004-2005, denial of opportunity to appeal, delay in filing appeal, dismissal of Miscellaneous Application, rejection of further Miscellaneous Application, negligence in prosecuting appeal, denial of reliefs due to alleged delay and negligence.

Analysis:
1. Opportunity to Appeal:
The petitioner challenged three orders related to assessment years 2004-2005, where the Income Tax Appellate Tribunal rejected the appeal due to a delay in filing and lack of power of attorney. However, the High Court concluded that the petitioner should have the opportunity to have its appeal heard on merits, emphasizing that the delay was not entirely its fault and that the petitioner diligently prosecuted its cases.

2. Delay in Filing Appeal:
The delay in filing the appeal was about forty-five days, attributed partially to the resignation of the petitioner's Manager. The Court noted that the delay did not warrant denying the petitioner a chance to defend its case on merits, especially considering the steps taken promptly by the petitioner after receiving the order from the Commissioner of Income Tax (Appeals).

3. Dismissal of Miscellaneous Application:
The petitioner's Miscellaneous Application to set aside the order dismissing the appeal for default was also rejected. The Court disagreed with this decision, stating that the facts presented in the application justified recalling the order dated 23.7.2009, and the Court had the jurisdiction to consider the matter.

4. Negligence in Prosecuting Appeal:
The Tribunal dismissed the appeal for the assessment year 2004-2005 due to the lack of a power of attorney, despite the petitioner's advocate being present for other appeals. The Court found fault with the Tribunal's decision, emphasizing that the petitioner was not entirely responsible for the delay and should have been given the opportunity to rectify the technical defect.

5. Denial of Reliefs Due to Alleged Delay and Negligence:
The Court highlighted that the petitioner's successful appeals in other assessment years should not be disregarded due to alleged negligence. The Court emphasized that denying relief based on delay and negligence would be unjust, especially when the issues were similar in all appeals.

In conclusion, the High Court set aside the impugned orders, directing the Tribunal to hear the petitioner's appeal on merits and ensuring compliance with any directions issued by the Tribunal within a specified timeframe. The Court ruled in favor of the petitioner, emphasizing the need for a fair opportunity to present its case despite the delays and technical issues faced during the proceedings.