2023 (8) TMI 521 - HC - Income Tax

Condonation of delay of 2139 days in filing the Appeal against the order of ITAT - as explained petitioner came to know that the Tribunal erred in dismissing the appeal 2016 (10) TMI 1264 - ITAT CHENNAI as being repetitive, only on receipt of the order of Income Tax Appellate Tribunal 2022 (9) TMI 286 - ITAT CHENNAI , involving the same issue for other years - HELD THAT - We find that the inordinate delay in filing the present Tax Case Appeal is neither due to paucity of time in view of the financial crisis and the proceedings under the IBC nor due to lack of knowledge of the error in dismissal of the appeal as being repetitive, but due to negligence. Secondly and importantly, we find that the reasons adduced are preposterous and lack bonafide inasmuch as the submission of the petitioner that it came to know that the dismissal of 2016 (10) TMI 1264 - ITAT CHENNAI as repetitive, is incorrect and untrue for the reasons setout at paragraphs 5 to 7 of the affidavit filed in support of the Miscellaneous Petition, filed before the ITAT to reopen assessment would clearly reveal that the petitioner realised the error and after taking steps to redress the error/grievance by filing a miscellaneous petition before the Tribunal to restore, did not pursue it any further on its rejection. Having found that the reasons adduced are untrue and lacking bonafide we do not intend to exercise our discretion to condone the delay for it is trite law that while examining whether there was sufficient cause for the delay, the Courts would consider if the petitioner had been diligent and acted bonafide. We find that there is an inordinate delay of 2139 days and the reasons adduced are not convincing rather show that the petitioner was negligent, lethargic and casual in availing the remedy of appeal. More importantly, we are not convinced with the bonafide of the petitioner who had raised grounds which apart from being untrue, are mutually destructive and thus unacceptable. Yet another reason which would prompt us to observe that the miscellaneous petition lacks bonafide, apart from the fact that the reasons set out in the affidavit do not convince us, is that the present miscellaneous petition is apparently filed with a view to take advantage of the order of the Tribunal made pursuant to the order of this Court in the case of M/s.Marg Ltd. V. CIT 2020 (10) TMI 102 - MADRAS HIGH COURT resulting in the claim of the petitioner under Section 14A of the IT Act, being accepted in terms of the above decision of this Court. Having succeeded for the other assessment years, the petitioner is now attempting to resurrect the appeal after almost 5 years, which we would think, does not deserve any consideration. We find that the petitioner was not vigilant rather negligent and there is lack of bonafide even in explaining the delay. Petitioner had failed to demonstrate that there was sufficient cause for the delay of 2139 days in filing the Tax Case Appeal.

Summary

Issues Involved:
1. Condonation of delay in filing the Tax Case Appeal.
2. Examination of reasons for delay.
3. Assessment of "sufficient cause" for delay.
4. Legal precedents on condonation of delay.

Summary:

Condonation of Delay in Filing the Tax Case Appeal:
The petitioner sought to condone a delay of 2139 days in filing the Tax Case Appeal against the order of the Income Tax Appellate Tribunal (ITAT), Chennai. The respondent/Department opposed the petition, arguing that the petitioner, being experienced in filing appeals, failed to provide a valid explanation for the extensive delay.

Examination of Reasons for Delay:
The petitioner cited two main reasons for the delay:
1. The petitioner only realized the Tribunal's error in dismissing the appeal as repetitive upon receiving the ITAT order dated 12.08.2022.
2. The officer handling litigation inadvertently left out the specific ITA while dealing with other appeals, compounded by financial crises and proceedings under the Insolvency and Bankruptcy Code (IBC).

Assessment of "Sufficient Cause" for Delay:
The court found the reasons unconvincing and mutually destructive. The affidavit revealed that the petitioner was aware of the error much earlier, as evidenced by a miscellaneous petition filed on 08.03.2017, seeking to restore the dismissed ITA. The court concluded that the delay was due to negligence rather than any bona fide cause.

Legal Precedents on Condonation of Delay:
The court referred to several precedents, emphasizing that "sufficient cause" requires the petitioner to act diligently and in good faith. The judgments cited included Basawaraj v. Land Acquisition Officer and Ajay Dabre Vs Pyare Ram, which underscored that negligence or lack of bona fide action does not justify condoning inordinate delays.

Conclusion:
The court dismissed the Civil Miscellaneous Petition, finding no sufficient cause for the 2139-day delay. Consequently, the Tax Case Appeal was rejected at the SR stage itself, with no costs awarded.