2024 (7) TMI 788 - HC - Income Tax

Condonation of delay in re -filing the appeals by revenue - Delay of three years - delays in appeals filed by the government departments on account of impersonal official machinery - HELD THAT - Falling back to the present case, copy of the impugned common order dated 15.03.2019 having been admittedly received in the office of PCIT (Central-2) on 11.04.2019, the limitation period to file these appeals expired on 09.08.2019, while the present appeals were filed on 27.05.2022. The lack of sincerity, or rather complete absence thereof on the part of appellant/revenue in this case is glaringly conspicuous by their having not even filed an application seeking condonation of this colossal delay of about 03 years in filing these appeals, that too despite having faced a situation where they had to withdraw the earlier appeals and were granted liberty to file afresh. Apparently, the appellant/revenue remains under mistaken impression that being government department, all its laxities deserve to be ignored by the court. At the same time, we are also unable to clearly read in or rule out a conscious decision on the part of the responsible quarters of revenue to extend covert advantage to the assessee by filing the appeals with inordinate delay and that too, without any application seeking condonation of the delay. Be it the former or the latter, we find no reason in the present case to extend any further latitude to the appellant/revenue at the cost of frustration of the assessee, who certainly had reasons to believe across this period of three years that the revenue had accepted the decision of the Tribunal. The circumstances enumerated in the affidavits dated 17.05.2023 of the appellant/revenue as aforesaid, sound merely an excuse and not an explanation of delay. As discussed hereafter, none of the dates and stages recorded above can be accepted by any stretch of imagination as disclosure of factors beyond the control of the revenue and thereby sufficient cause which led to delay in filing the appeals. Coming to the explanation of time spent between 12.02.2021 (when earlier appeals were withdrawn) and 27.05.2022 (when the present appeals were filed), the explanation rendered on behalf of the appellant/revenue is that after withdrawal of the earlier appeals, it is only on 06.01.2022 that legal opinion of the Standing Counsel was sought. There is not even a whiff of explanation as to why it took almost one year for the appellant/revenue to seek legal opinion from Standing Counsel, that too when earlier the appeals had already been filed but had to be withdrawn merely on account of technical defect. After obtaining the legal opinion on 10.01.2022, it took further two months for the CIT to scrutinize the impugned common order on 09.03.2022 so as to direct the Standing Counsel to prepare draft appeal. The said draft appeal also took another period of 02 months for being placed before the concerned officer of the revenue for signatures and the same was filed on 27.05.2022. There is not even a whisper, explaining the delays on these stages as well, especially in the light of the previous stages enumerated above. Evidently, in the name of submitting through affidavits the sufficient cause to explain delay in filing the appeals, the appellant/revenue has presented merely a chronology of dates and stages, that too with prolonged vacuum periods. The same cannot be treated as an explanation of delay, much less setting up of circumstances which were beyond the control of the appellant/revenue, thereby precluding it from filing the appeals in time. The appellant/revenue has failed to set up any circumstance to satisfy us that they were precluded from filing the present appeals in time by any cause beyond their control. We are unable to find any sufficient cause to condone this inordinate delay in filing these appeals after removal of filing defects. Consequently, there is no occasion to condone the delay in re-filing these appeals. Both applications are therefore, dismissed.

Issues Involved:
1. Condonation of delay in re-filing the appeals.
2. Condonation of delay in the original filing of the appeals.
3. Legal principles governing condonation of delay.
4. Evaluation of the sufficiency of the cause for delay.
5. Impact of COVID-19 on the limitation period.
6. Examination of merit in the main appeals as a factor for condonation of delay.

Detailed Analysis:

1. Condonation of Delay in Re-filing the Appeals:
The appellant/revenue sought condonation of delay in re-filing the appeals after removing defects raised by the Registry. The court noted that despite the original filing being beyond the prescribed period, no specific application for condonation of delay in filing the appeals was initially filed. Affidavits were later submitted to explain the delay.

2. Condonation of Delay in the Original Filing of the Appeals:
The court examined the records and heard arguments on the delay in the original filing of the appeals. The appeals were filed under Section 260A of the Income Tax Act, assailing the order of the Income Tax Appellate Tribunal dated 15.03.2019. The appeals were filed on 27.05.2022 and 20.05.2022, respectively, well beyond the prescribed period.

3. Legal Principles Governing Condonation of Delay:
The court referred to Section 260A(1) and (2) of the Income Tax Act, which mandates a 120-day period for filing an appeal. Section 260A(2A) allows the High Court to admit an appeal after 120 days if there is a sufficient cause for the delay. The court cited various precedents emphasizing that "sufficient cause" must be construed liberally but should not render the law of limitation otiose.

4. Evaluation of the Sufficiency of the Cause for Delay:
The affidavits submitted by the appellant/revenue listed various dates and stages but failed to provide a satisfactory explanation for the delay. The court emphasized that an explanation is required to clarify the circumstances, whereas an excuse is often defensive and lacks credibility. The court found the explanations provided by the appellant/revenue to be mere excuses rather than valid explanations.

5. Impact of COVID-19 on the Limitation Period:
The appellant/revenue argued that the COVID-19 period should be excluded from the limitation period. However, the court noted that the prescribed limitation period expired on 09.08.2019, well before the onset of the pandemic. Therefore, the benefit of the Supreme Court's order on the exclusion of the COVID-19 period was not applicable.

6. Examination of Merit in the Main Appeals as a Factor for Condonation of Delay:
The court examined whether the delay could be condoned if there was merit in the main appeals. However, it cited the Supreme Court's view that the delay should not be condoned merely because there is merit in the case. The court stressed that the responsible officers should bear the consequences of their laxity.

Conclusion:
The court concluded that the appellant/revenue failed to set up any circumstance to satisfy that they were precluded from filing the appeals in time by any cause beyond their control. The delay was not sufficiently explained, and there was no valid reason to condone the delay in re-filing the appeals. Consequently, both applications for condonation of delay were dismissed, and the appeals were dismissed as time-barred.

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