2023 (11) TMI 945 - HC - Income Tax

Delay in filing the appeal u/s 260A - condonation of delay of 79 days - exclusion of certain period while computing period of limitation - whether Sufficient cause of delay proved? - revenue pleaded that the actual delay in filing the appeal is of 1471 days and not 79 days, for which the appellant has failed to set up a sufficient cause - HELD THAT - Broadly speaking, the applicant/assessee has explained that the delay in filing the appeal occurred because firstly, the applicant was never informed about the fate of its appeal before the Tribunal after conclusion of final arguments, till the appellant sent a written communication and secondly, the applicant/assessee under good faith initiated and continued to prosecute the review remedy but met failure in view of the judgement of the Supreme Court in the case of Reliance Telecom. 2021 (12) TMI 211 - SUPREME COURT On the other hand, the respondents/revenue largely contended that the delay in filing the appeal was on account of extreme laxity on the part of the applicant/assessee. There is also no serious challenge to the contention of the applicant/assessee that its Director who had been addressing arguments in person had resigned and got settled abroad while the remaining Directors were not conversant about the proceedings before the Tribunal till their auditors pointed out. There is nothing on record to even feebly suggest any lack of good faith on the part of the Directors of the applicant/assessee in their having filed review application before the Tribunal. A litigant cannot be expected to be conversant with the complex technicalities of law pertaining to the exercise of review and appeal, in which many a time even the experienced lawyers fall in error. We cannot ignore the admitted situation that immediately upon coming to know about dismissal of appeal by the Tribunal, the applicant applied for certified copies of the impugned order and promptly filed review application. Similarly, on coming to know about dismissal of the review application also the applicant promptly applied for certified copies and soon thereafter filed the present appeal. These circumstances clearly show that there were no lack of bona fides on the part of the applicant. Besides, the time spent by the applicant while pursuing the review proceedings deserves to be excluded even under principles analogous to Section 14 of the Limitation Act because the applicant in good faith was prosecuting the challenge to the impugned order before the Tribunal with due diligence but the Tribunal was unable to entertain the review on account of defect of jurisdiction. As quoting the expression of the Hon ble Supreme Court in the case of Sheo Raj Singh 2023 (11) TMI 814 - SUPREME COURT we find the case set up by the applicant to be an explanation and not an excuse . Most importantly, we would prefer in the facts and circumstances of this case to be guided by cardinal principle of justice that disputes should be decided on merits and not defaults, so the applicant having brought before us a cause with sufficient explanation concerning the delay, cannot be shown door. The application under consideration is allowed and accordingly the delay in filing the appeal is condoned.

Summary

Issues Involved:
1. Application for condonation of delay in filing the appeal.
2. Examination of sufficient cause for delay.
3. Legal principles governing condonation of delay.

Summary:

1. Application for Condonation of Delay in Filing the Appeal:
The appellant sought condonation of a 79-day delay in filing the appeal under Section 260A of the Income Tax Act, citing Sections 5 and 12 of the Limitation Act read with Section 151 CPC. The appellant argued that the delay was due to lack of notification about the Tribunal's decision, subsequent efforts to obtain a certified copy, and the pursuit of a review application. The respondents opposed, claiming the actual delay was 1471 days and attributed to the appellant's laxity.

2. Examination of Sufficient Cause for Delay:
The court examined whether the appellant had sufficient cause for not filing the appeal within the prescribed period. The appellant explained that they were unaware of the Tribunal's decision until much later and pursued a review application in good faith. The respondents argued that the appellant showed extreme laxity and should not be granted discretionary relief.

3. Legal Principles Governing Condonation of Delay:
The court reiterated that condonation of delay is a discretionary power, dependent on the sufficiency and acceptability of the explanation provided, rather than the length of the delay. The court referenced several Supreme Court judgments, emphasizing that the expression "sufficient cause"� should be construed liberally in favor of the applicant, provided there is no gross negligence or lack of bona fides.

Judgment:
The court found that the appellant's delay was sufficiently explained by the lack of notification from the Tribunal and the subsequent pursuit of a review application in good faith. The court noted that the respondents did not provide evidence that the impugned order or the dismissal of the review application was communicated to the appellant. The court emphasized that disputes should be decided on merits rather than procedural defaults and concluded that the appellant's explanation constituted a sufficient cause. Consequently, the application for condonation of delay was allowed, and the delay in filing the appeal was condoned. The appeal was listed for arguments on 24.04.2024.