2016 (4) TMI 401 - HC - Income Tax

High Court rules on jurisdiction issue over delayed appeal, emphasizes condonation process

Md. Sayeed, Son of Abdul Rauf Versus Deputy Commissioner of Income Tax

The Patna High Court held that the Income Tax Appellate Tribunal had no jurisdiction to entertain the appeal without condoning the delay in filing the ... Jurisdiction of tribunal - Held that:- Tribunal was not correct in entertaining the appeal without considering the issue of limitation and without condoning the alleged delay. That being the position since there was an application for condonation of delay, which has not been considered by the Tribunal and the final order has been passed allowing the appeal of the Revenue and the order of the Tribunal being couched in a manner that the appeal of the assessee cannot be separated from the appeal of the Revenue, the order dated 25.2.2001 has to be and is quashed in its entirety and the matter is remitted to the Tribunal to proceed in the matter after first considering the application for condonation of delay filed on behalf of the Revenue. Issues involved:1. Whether the Tribunal was correct in law in entertaining the appeal without considering the issue of limitation and without condoning the alleged delayRs.Analysis:The judgment by the Patna High Court involved an appeal regarding the assessment year 1995-96 under the Income Tax Act, 1961. The Deputy Commissioner of Income Tax passed an order on 31.3.1998, which was partially allowed by the Commissioner of Income Tax (Appeal)-II, Patna on 8.2.2001. The appellant was aggrieved by the remittance of the matter to the assessing authority on two aspects and filed an appeal before the Income Tax Appellate Tribunal. The Tribunal allowed the Revenue's appeal and dismissed the appellant's appeal. The crucial issue raised was the delay of 12 days in filing the Revenue's appeal before the ITAT, and whether the delay was condoned. The appellant contended that without condoning the delay, the Tribunal had no jurisdiction to entertain the appeal.The appellant relied on the Supreme Court decisions in Noharlal Verma Vs. District Cooperative Central Bank Limited and State of West Bengal Vs. Somdeb Bandyopadhyay to support their argument that limitation goes to the root of the matter, and if an appeal is barred by limitation, the authority has no jurisdiction to entertain it. The appellant argued that the Tribunal's final order was without jurisdiction due to the uncondoned delay in filing the Revenue's appeal. On the other hand, the Income Tax Department argued that the delay was deemed condoned once the final order was passed, and the appellant was equally at fault for being aware of the delay.The High Court held that unless the delay in filing the Revenue's appeal was condoned, the Tribunal had no jurisdiction to entertain the appeal. The Court emphasized that no appeal could be deemed pending before the Tribunal until the delay was condoned. The Court rejected the argument that the appellant's knowledge of the delay was relevant, stating that it was the Revenue's responsibility to press the condonation application. The Court distinguished the Hindustan Construction Company's case cited by the Revenue, emphasizing that passing a final order did not imply condonation of limitation. Consequently, the Court quashed the Tribunal's order and remitted the matter for the Tribunal to first consider the condonation of delay application.In conclusion, the High Court answered the substantial question of law against the Revenue, held that the Tribunal erred in entertaining the appeal without considering the limitation issue, and allowed both appeals. The Court directed the Tribunal to expedite the consideration of the limitation issue, rendering further discussion on other substantial questions unnecessary at that stage.