2014 (5) TMI 325 - HC - Income Tax

Court Reverses Tribunal Decision on Tax Appeal Delay, Emphasizes Public Interest

Commissioner of Income Tax-II Versus Gruh Finance Ltd.

The court reversed the Tribunal's decision and condoned the substantial delay of 2005 days in filing the tax appeal by the Revenue for the assessment year ... Rejection of condonation of delay – Delay of 2005 days – Held that:- The Revenue desired to file appeal against the assessee for the present year also namely, the assessment year 2004-2005 - the delayed appeals of the Government agencies are treated more strictly and not to routinely condone such delay which is sought to be explained merely on administrative difficulties or mere shuffling of files from one table to another – Relying upon Post Master General v. Living Media India Ltd. reported in [2012 (4) TMI 341 - SUPREME COURT OF INDIA] - explanation by the Revenue is not of mere tossing file from one table to another or from one authority to another - The explanation is somewhat unusual, nevertheless, appears to be genuine - On account of unusual circumstances, where the person in charge proceeded on leave handing over the charge to another incumbent - No sooner did he resume duties after the leave period, he was transferred. The incumbent to whom he had given additional charge was also under order of transfer. Both these officers thus left on the same day - The charge was handed over to the new incumbent - In the process, one file for filing appeal before the tribunal was lost sight of - It is not even seriously disputed that the Revenue always desired to prefer appeal for the year 2004-2005 also - The fact that despite instructions of the Commissioner, the appeal was not filed came to the light of the department only when tax appeal of the same assessee for other year came up for hearing - the tribunal upon which after making inquiries and finding out that due to such lapse, the appeal was not filed, steps were taken to do so with condonation of delay application – the delay to be condoned – Decided in favour of Revenue. Issues Involved:1. Whether the Income Tax Appellate Tribunal committed an error in law in rejecting the delay condonation application of the Revenue.Detailed Analysis:Issue 1: Delay Condonation by the TribunalThe primary issue revolves around the substantial delay of 2005 days by the Revenue in filing an appeal against the order of the Commissioner of Appeals for the assessment year 2004-2005. The Tribunal refused to condone this delay, considering it inordinate and the reasons provided by the Revenue as insufficient and unsatisfactory. The Tribunal emphasized that mere failure of the concerned officer to hand over the charge to the successor officer would not justify ignoring such a significant delay.Explanation for Delay:The Revenue attributed the delay to administrative oversight during a period of transition between officers. Specifically, the delay was caused by the following factors:- The regular Assessing Officer proceeded on leave, and an additional charge was handed over to another officer.- Upon returning from leave, the regular Assessing Officer was immediately transferred, and the new incumbent took over the charge.- During this transition, the task of filing the appeal was overlooked and not communicated properly.Further Affidavit and Clarifications:In a further affidavit dated 10.2.2014 by the Commissioner of Income Tax, Ahmedabad, it was elaborated that:- The appeal authorization was issued on 13.06.2007, but due to the change of officers and lack of specific charge reports, the appeal filing was missed.- The lapse was discovered only in October 2012 during a hearing for another assessment year, prompting immediate action to file the appeal with a delay condonation application.Legal Provisions and Precedents:The judgment references Section 253(5) of the Income Tax Act, which allows the Appellate Tribunal to admit an appeal beyond the prescribed period if sufficient cause for the delay is demonstrated. The court acknowledged the recent trend of the Supreme Court to treat delayed appeals by government agencies strictly, citing the case of Office of the Post Master General v. Living Media India Ltd., which emphasized the need for reasonable and acceptable explanations for delays.Court's Consideration and Rationale:The court noted that the explanation provided by the Revenue was not merely about procedural delays but involved unusual circumstances of administrative transitions. The court also considered the substantial tax impact involved and the genuine intent of the Revenue to file the appeal. The court referred to previous judgments that highlighted the need for a pragmatic approach in justice-oriented processes, especially when public interest is at stake.Conclusion:Given the explanation rendered and the significant tax impact, the court decided to condone the delay, albeit by awarding costs to the respondent. The judgment of the tribunal dated 11.6.2013 was reversed, and the delay in filing the tax appeal by the Revenue was condoned. The tax appeal was restored to file and would be heard on merits, with the appellant required to pay costs of Rs. 25,000/- to the respondent by 30.5.2014. The tax appeal was thus disposed of.