2015 (2) TMI 507 - HC - Income Tax

Condonation of delay - delay of five years (1825 days) - whether the applicant has shown sufficient cause so as to become entitled for condonation of delay? - Held that - Applicant cannot fall within the parameters of sufficient cause so as to confer a benefit of condonation to the applicant. This is for the reason that the applicant had taken a well considered decision not to move further proceedings against the order dated 31.10.2008. Applying the test of a prudent litigant it cannot be held that once the applicant by his own volition had decided to accept a judicial order, the applicant can at any time assail the same may be for the reason that subsequently new decisions are rendered on that issue. Section 5 of the Limitation Act cannot be stretched to bring about a situation of unsettling judicial decisions which stood accepted by the parties. If the contention of the applicant is accepted, it would create a situation of chaos and unsettling various orders passed from time to time by the Tribunal as accepted by the parties. We are of the considered opinion that only because the applicant has succeeded on the same issue for the Assessment Year 2008-09, the same can not be said to be a sufficient cause so as to condone the delay of five years for the applicant to approach this Court in filing the appeal. - Decided against assessee.

Issues Involved:
1. Condonation of delay in filing an appeal under Section 260A of the Income Tax Act, 1961.
2. Application of the principle of mutuality regarding transfer fees received by the applicant.
3. Impact of subsequent favorable judgments on previously accepted adverse decisions.

Detailed Analysis:

1. Condonation of Delay in Filing an Appeal:
The applicant sought condonation of a five-year delay (1825 days) in filing an appeal under Section 260A of the Income Tax Act, 1961, against the Tribunal's order dated 31.10.2008. The Tribunal's order was received by the applicant on 26.11.2008. The applicant initially decided not to pursue the matter further as their claim was rejected by three authorities, and there was no favorable judgment from the jurisdictional High Court. However, after a favorable decision in the applicant's own case for the Assessment Year 2007-08, the applicant decided to file a Miscellaneous Application on 3.5.2013, which was rejected on 7.2.2014. Subsequently, the applicant filed the appeal on 29.4.2014, seeking condonation of delay.

2. Principle of Mutuality Regarding Transfer Fees:
The Tribunal dismissed the applicant's appeal concerning the principle of mutuality in regard to transfer fees, following the decision in "Walkeshwar Triveni Co-operative Housing Society Ltd. Vs. ITO." The applicant's plea was initially rejected by the Assessing Officer, Commissioner of Income Tax (Appeals), and the Tribunal. However, in a subsequent case for the Assessment Year 2007-08, the Tribunal ruled in favor of the applicant, following the judgments in "Sind Co-operative Housing Society Ltd." and "Mittal Premises Cooperative Society Ltd."

3. Impact of Subsequent Favorable Judgments:
The applicant argued that the subsequent favorable decisions in "Sind Co-operative Housing Society Ltd." and "Mittal Premises Cooperative Society Ltd." justified the delay in filing the appeal. The applicant believed that these decisions, which were not available at the time of the original Tribunal order, constituted a sufficient cause for condonation of delay. The applicant relied on several decisions, including "Commissioner of Income Tax Vs. Sothia Mining and Manufacturing Corporation Ltd.," "Karamchand Premchand Pvt. Ltd. Vs. Commissioner of Income Tax, Gujarat," and "Prem Chand Bansal and Sons Vs. Income Tax Officer," to support the argument for condonation of delay based on subsequent legal developments.

Court's Findings:
The court, after considering the rival submissions, concluded that the applicant had not shown sufficient cause for condonation of the delay. The court noted that the applicant had consciously decided not to pursue the proceedings after the Tribunal's order dated 31.10.2008, despite being aware that there was no decision from the Jurisdictional High Court. The court held that subsequent favorable decisions in the applicant's own case for later assessment years did not entitle the applicant to reopen the issue concluded by the Tribunal's order, which the applicant had accepted. The court emphasized that condoning such a significant delay would create chaos and uncertainty, as it would unsettle judicial decisions that had attained finality.

Judgment:
The court dismissed the Notice of Motion seeking condonation of delay, stating that the reasons shown by the applicant did not fall within the parameters of sufficient cause. The court reiterated that each application for condonation of delay must be judged on its own facts and circumstances and that the legislative mandate of filing an appeal within the prescribed limitation period cannot be defeated by a litigant's decision not to pursue further proceedings. The court concluded that a new ruling is no ground for reviewing a previous judgment, and allowing such a practice would lead to confusion and inconvenience. The Notice of Motion was dismissed with no order as to costs.

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