2005 (12) TMI 229 - AT - Income Tax

Summary

Issues Involved:
1. Condonation of delay in filing an appeal.
2. Bona fide mistake in filing the appeal before the wrong forum.
3. Application of legal principles for condonation of delay.

Detailed Analysis:

1. Condonation of Delay in Filing an Appeal:
The primary issue revolves around whether the delay of over five and a half years in filing the appeal before the Commissioner of Income Tax (Appeals) [CIT(A)] should be condoned. The assessee initially filed an appeal against the reassessment order dated 24-7-1996 before the Tribunal, which was dismissed as not maintainable. The CIT(A) dismissed the subsequent appeal for being time-barred, referencing the decision in CIT v. Rammohan Kabra, where a delay of five days was not condoned.

2. Bona Fide Mistake in Filing the Appeal Before the Wrong Forum:
The assessee argued that the delay was due to a bona fide mistake of filing the appeal before the Tribunal instead of the CIT(A). The Tribunal acknowledged that the assessee was actively pursuing a remedy during the intervening period, albeit before the wrong forum. The Tribunal found the explanation credible, noting that the appeal before the Tribunal was filed without delay and within a reasonable time, indicating the assessee's bona fide intention.

3. Application of Legal Principles for Condonation of Delay:
The Tribunal examined various legal precedents to determine whether the delay could be condoned. Citing cases such as Firm Bishan Das Brij Lal v. Firm Brij Mohan Lakhmi Narain and Noor Beg v. Ch. Abdul Rahman, the Tribunal noted that time spent in another proceeding with due diligence could extend the limitation period. The Supreme Court's decision in Concord of India Insurance Co. Ltd. v. Smt. Nirmala Devi was also referenced, which held that a wrong legal advice could constitute a reasonable cause for delay, provided there was no mala fide intent or recklessness.

Conclusion:
The Tribunal concluded that the delay should be condoned, given the bona fide mistake and active pursuit of the appeal by the assessee. The Tribunal directed the CIT(A) to condone the delay and decide the appeal on its merits, emphasizing the need for a fair opportunity for the assessee to present its case. The appeal of the assessee was allowed, and the matter was remanded to the CIT(A) for a fresh decision.

In the Result:
The Tribunal set aside the order of the CIT(A) and restored the appeal to the file of the CIT(A) with instructions to condone the delay and decide the appeal on merits after providing an opportunity for hearing to the assessee and considering any relevant material or stand. The appeal of the assessee was allowed.