2013 (11) TMI 1439 - HC - Income Tax

Condonation of delay Held that - The Tribunal in the case of another group company, namely, M/s Kamakhya Fresh Foods Ltd., Ghazipur had condoned the delay on the ground of illness of very same Director Sri S.K.Rai - It was not proper for the Tribunal to decline condonation of delay in the similar facts and circumstances of the present case Following Bharat Auto Center, Lanka,Ghazipur Versus Commissioner of Income Tax, Varanasi and another 2005 (7) TMI 46 - ALLAHABAD High Court - The delay in filing the appeal was condoned considering the same to be sufficient Decided in favour of assessee.

Summary

Issues:
1. Condonation of delay in filing an appeal before the Commissioner of Income Tax (Appeals) based on medical grounds.
2. Tribunal's discretion in condoning delays in filing appeals based on similar cases.
3. Justifiability of declining to condone delay in filing an appeal before the Commissioner of Income Tax (Appeals).

Analysis:

Issue 1: Condonation of delay in filing an appeal before the Commissioner of Income Tax (Appeals) based on medical grounds:
The case involved an assessee, a public limited company engaged in the business of Agro products, who filed a return for the assessment year 1998-99. The assessment was made ex-parte due to non-cooperation, leading to various expenses being disallowed. The assessee's appeal before the Commissioner of Income Tax (Appeals) was filed beyond the time limit, citing the illness of the Director as the reason for the delay. Despite submitting a medical certificate, the delay was not condoned, and the appeal was dismissed. The Tribunal was approached, which also dismissed the appeal. The issue revolved around the sufficiency of the medical grounds for condoning the delay, with the assessee arguing that the delay was not intentional or negligent.

Issue 2: Tribunal's discretion in condoning delays in filing appeals based on similar cases:
The Tribunal had previously condoned a delay in a similar case involving another group company where the Director's illness was accepted as a justifiable reason. However, in the present case, the Tribunal declined to condone the delay, citing reasons related to the Advocate challenging the assessment proceedings and the lack of a satisfactory explanation for the delay. This raised questions about the consistency of the Tribunal's decisions in similar circumstances and whether the Tribunal was justified in not applying the same reasoning as in the previous case.

Issue 3: Justifiability of declining to condone delay in filing an appeal before the Commissioner of Income Tax (Appeals):
The Court, after considering the arguments presented by both parties, found that the Tribunal's decision to decline condonation of delay in the present case was not appropriate. It noted that in a prior decision involving a different case, the delay had been condoned based on similar grounds of illness. Referring to a specific case where delay had been condoned, the Court held that the delay in filing the appeal should have been condoned. Consequently, the Court allowed the appeal, set aside the orders of the Tribunal and the Commissioner of Income Tax (Appeals), and remanded the matter back to the Commissioner of Income Tax (Appeals) for a decision on merits after providing an opportunity for a hearing in accordance with the law.

This comprehensive analysis highlights the legal intricacies surrounding the issues of delay condonation and the Tribunal's discretion in similar cases, as addressed in the judgment by the Allahabad High Court.