Dismissal of Appeal No. 25 for Delay; Appeal No. 23 Allowed for Merits Review

T. Kishan Versus Assistant Commissioner of Income-tax, Central Circle 2, Hyderabad

T. Kishan Versus Assistant Commissioner of Income-tax, Central Circle 2, Hyderabad - TMI Issues Involved:
1. Delay in filing the appeal by 2491 days.
2. Dismissal of the appeal by CIT(A) due to non-payment of admitted tax.
3. Request for restoration of the appeal after payment of admitted tax.
4. Powers of the Tribunal under Section 254(1) to pass orders on defective appeals.
5. Consideration of "sufficient cause" for delay and non-payment of admitted tax.

Detailed Analysis:

1. Delay in Filing the Appeal by 2491 Days:
The assessee filed an appeal with a delay of 2491 days against the order of the CIT(A), who dismissed the appeal in limine due to non-payment of admitted tax. The assessee argued that the delay was due to a bona fide impression that the appeal would be restored by the CIT(A) after payment of the admitted tax. The Tribunal noted that the delay was inordinate and not marginal, and personal problems or financial constraints could not constitute a reasonable cause for such a long delay. The Tribunal emphasized that it is only marginal delays that can be condoned, not inordinate delays running into several years. The Tribunal cited the Third Member decision of the Chennai Tribunal in Jt. CIT v. Tractors & Farms Equipments Ltd., which distinguished between normal and inordinate delays. Consequently, the Tribunal declined to condone the delay of 2491 days and dismissed the appeal as barred by limitation.

2. Dismissal of the Appeal by CIT(A) Due to Non-Payment of Admitted Tax:
The CIT(A) dismissed the appeal in limine due to the assessee's failure to pay the admitted tax at the time of filing the appeal, as required by Section 249(4) of the Act. The assessee later paid the admitted tax and requested the CIT(A) to restore the appeal. The CIT(A) rejected this request, stating that there is no provision under the Act to restore an appeal dismissed for violation of Section 249(4). The Tribunal acknowledged that the CIT(A) was correct in dismissing the appeal initially due to non-payment of admitted tax.

3. Request for Restoration of the Appeal After Payment of Admitted Tax:
The assessee argued that the appeal should be restored and adjudicated on merits after the payment of admitted tax. The Tribunal considered whether the defect due to non-compliance with Section 249(4) is curable and whether sufficient reasons existed for curing the defect after the expiry of the limitation period. The Tribunal noted that if the defect is cured by making payment of the agreed tax, the appeal can be decided on merits, subject to the limitation provided in Section 249(2) and its condonation as per Section 249(3).

4. Powers of the Tribunal Under Section 254(1) to Pass Orders on Defective Appeals:
The Tribunal referred to Section 254(1), which grants it wide powers to pass such orders as it thinks fit. The Tribunal also cited the Supreme Court's decision in Hukumchand Mills Ltd. v. CIT, which held that the Tribunal has the authority to direct further inquiry and dispose of the case based on such inquiry. The Tribunal concluded that it has the discretion to restore matters to the file of the CIT(A) for deciding the controversy on merits if sufficient reasons exist for curing the defect after the expiry of the limitation period.

5. Consideration of "Sufficient Cause" for Delay and Non-Payment of Admitted Tax:
The Tribunal emphasized that the expression "sufficient cause" should receive a liberal construction to advance substantial justice. The Tribunal noted that the assessee had paid the admitted tax during the pendency of the appeal and that it would be unfair to deny the opportunity to dispute the additions made by the AO on merits. The Tribunal cited the decision of the Orissa High Court in CIT v. Kalipada Ghose, which supported the view that appeals dismissed for non-compliance with Section 249(4) can be restored and decided on merits after curing the defect. The Tribunal concluded that there were sufficient reasons for not filing a valid appeal initially and that the appeals deserved to be allowed and restored to the CIT(A) for adjudication on merits.

Conclusion:
- The appeal IT(SS)A No. 25/Hyd/2011 was dismissed as barred by limitation due to the inordinate delay of 2491 days.
- The appeal IT(SS)A No. 23/Hyd/2011 was allowed, and the matter was restored to the CIT(A) for adjudication on merits after the payment of admitted tax.