2024 (7) TMI 509 - HC - Income Tax

Condonation of delay in filing an appeal before CIT(A) - Delay of 12 days due to the non-availability of our legal consultant who was out of station due to some personal reasons - HELD THAT - Filing an appeal in tax matters may require legal and technical assistance. The taxation laws and the procedures involved in filing an appeal may be beyond comprehension for a layman assessee. Therefore, in my view, the reason advanced by the petitioner for condoning the delay in filing the appeal is sufficient, and the delay should have been condoned by the 1st respondent. Rejection of appeal on technical grounds amounts to violation of principles of natural justice. As relying on COLLECTOR, LAND ACQUISITION VERSUS MST. KATIJI AND OTHERS 1987 (2) TMI 61 - SUPREME COURT there is sufficient cause for not presenting Ext. P2 appeal within the time provided under Section 249 (2) of the Act. Ext. P3 order is therefore set aside. The delay of 11 days has to be condoned and the appeal has to be admitted and adjudicated on merits. Direction to the 1st respondent to consider Ext. P2 appeal on merits within a period of two months from the date of receipt of a copy of this judgment, after affording an opportunity of hearing to the petitioner.

Summary

Issues:
1. Condonation of delay in filing an appeal under Section 246A of the Income Tax Act.
2. Application of principles of natural justice in dismissing a statutory appeal.
3. Interpretation of legal precedents regarding condonation of delay.

Analysis:
1. The petitioner, a Co-operative Society, filed for deduction under Section 80P of the Income Tax Act for the assessment year 2017-18. The Assessing Officer disallowed the deduction, leading to the petitioner filing an appeal under Section 246A. The appeal was delayed by 12 days due to the unavailability of their legal consultant. The Commissioner of Income Tax (Appeals) refused to condone the delay, citing the need for the appellant to explain each day's delay after the limitation period. The petitioner challenged this decision in a writ petition, arguing that the delay should have been condoned.

2. The petitioner contended that the dismissal of the appeal in limine by refusing to condone the delay was arbitrary and illegal. The petitioner argued that the application was dismissed without proper explanation and reasons, violating principles of natural justice. The court noted that rejection of the appeal on technical grounds could lead to injustice and emphasized the need for substantial justice over technical considerations. The court found that the legal precedents referred to by the Commissioner of Income Tax (Appeals) were misapplied.

3. The court analyzed various legal principles related to the condonation of delay, citing precedents from the Hon'ble Supreme Court. The court highlighted the importance of advancing substantial justice and the discretion of the courts to condone delay if sufficient cause is explained. The court emphasized that delay condonation applications should be decided based on specific parameters and not by disregarding statutory provisions. Applying these principles, the court found that there was sufficient cause for the delay in filing the appeal and set aside the order refusing to condone the delay.

In conclusion, the court directed the Commissioner of Income Tax (Appeals) to consider the appeal on merits within a specified period and ordered a stay on any recovery steps until the appeal is disposed of. The writ petition was disposed of in favor of the petitioner.