2015 (7) TMI 17 - HC - Income Tax

High Court overturns Tribunal's decision on appeal delay, emphasizes no penalty for accountant's mistake. Remanded for fresh consideration.

Mr. Kunal S. Surana Versus Income Tax Officer (14 (1) (3) ), Mumbai

The High Court set aside the Tribunal's decision upholding the Commissioner's refusal to condone the delay in filing the appeal for Assessment Year ... Condonation of delay rejected - Held that:- There has been a delay on the part of the appellant in filing the appeal. The Chartered Accountant attending to the appellant's affairs, has owned up before the Commissioner of Income Tax (Appeals) as well as before the Tribunal that the delay was entirely due to a mistake on his part, inasmuch as, after having received the papers from the appellant there was a delay in preparing and filing the appeal before the Commissioner of Income Tax (Appeals). In these facts, we are of the view that, there is no reason to disbelieve the Chartered Accountant and the delay ought to have been condoned as the appellant should not suffer on account of the Chartered Accountant, although the appellant should have been vigilant and followed up with his Chartered Accountant. - restore issue to the Tribunal for fresh disposal on merits. -Decided in favour of assessee. Issues:- Appeal challenging the order of the Income Tax Appellate Tribunal for Assessment Year 2006-07.- Justification of upholding the order of the Commissioner of Income Tax (Appeals) refusing to condone the delay in filing an appeal.Analysis:The High Court heard an appeal under Section 260A of the Income Tax Act, 1961, challenging the order passed by the Income Tax Appellate Tribunal for Assessment Year 2006-07. The substantial question of law before the court was whether the Tribunal was justified in upholding the order of the Commissioner of Income Tax (Appeals) refusing to condone the delay in filing the appeal. The appellant had received the assessment order on 6 January 2009 and was required to file an appeal by 5 February 2009. However, the appeal was filed on 5 June 2009, resulting in a delay of four months. The appellant sought condonation of delay, attributing it to the Chartered Accountant handling the affairs, who took responsibility for the delay due to a lapse on his part. Despite the explanation, the Commissioner of Income Tax (Appeals) dismissed the appeal as time-barred.Upon further appeal, the Tribunal upheld the order of the Commissioner of Income Tax (Appeals), even though the Chartered Accountant filed an affidavit taking responsibility for the delay. The Tribunal, unsatisfied with the affidavit, refused to interfere with the order and dismissed the appeal solely on the grounds of being time-barred. The High Court noted the delay and the Chartered Accountant's admission of fault, emphasizing that the appellant should not be penalized for the accountant's mistake, although the appellant should have been more vigilant. Consequently, the High Court set aside the Tribunal's order and remanded the case for fresh disposal on merits, considering the payment made by the appellant under the assessment order.In conclusion, the High Court set aside the impugned order and directed the Tribunal to reconsider the case. However, if the appellant failed to deposit the amounts due under the assessment order along with interest before the specified hearing date, the Tribunal was authorized to dismiss the appeal without delving into the merits. All contentions were left open, and the appeal was disposed of without any order as to costs.