2017 (10) TMI 178 - HC - Income Tax

High Court sets aside restoration orders for Income Tax Appeals due to procedural noncompliance, directs consideration on merits

Bharati Vidyapeeth, Pune Versus The Commissioner of Income Tax-1, Pune

The High Court set aside restoration orders for two Income Tax Appeals due to noncompliance with procedural rules by the Prothonotary and Senior Master. ... Condonation of delay - removal of office objections - Held that:- As far as this Court is concerned, whatever may be the mode or procedure of filing Appeals and which was known to departmental panel Advocates engaged earlier, which has now been stated to be dissolved and independent Advocates are entrusted with the duty to file Appeals, nothing of this nature will prevent the Revenue officials in-charge of the concerned Departments or wings from following up their matters. The papers being handed over to the Advocate, their responsibility does not come to an end. There has to be a follow-up and the Revenue Advocates as also their officials can learn a lesson or two from their counterparts or adversaries, namely, the assessees. That Advocates or officials are underpaid or not paid on time and Government matters remain neglected because of several reasons, some of which may be intentional and deliberate, does not mean such explanations have to be necessarily accepted. It is time and again held by the Hon'ble Supreme Court that Government and its Departments including the Department of Income Tax is not a special litigant. The law of limitation does not exempt it. If 30 days' time was given to remove office objections, they were not removed and no application was moved within the next 30 days to set aside the conditional order and there is a delay in this case, as is brought on record by the assessee, of 958 days, then, this is no explanation for the same. As a result Revenue officials are grossly negligent, we hold that there is no sufficient cause for condoning this enormous delay. The explanation on affidavit is devoid of any particulars, vague and general in nature. It is rejected. The Applications for restoration are dismissed. Issues:1. Restoration of Income Tax Appeals to the file of the Court2. Ambit and scope of powers of the Prothonotary and Senior Master3. Delay in restoration of Appeals4. Non-removal of office objections in the Appeals5. Explanation for delay by the Revenue officials6. Sufficiency of cause for condoning delay7. Dismissal of Appeals without adjudication on meritsAnalysis:1. The High Court was requested by the Revenue to restore two Income Tax Appeals to the Court's file. The Appeals were dismissed for noncompliance with procedural rules by the Prothonotary and Senior Master. The Court decided to set aside the restoration orders and considered the Revenue's request to restore the Appeals for consideration on merits by setting aside the conditional order of the Prothonotary and Senior Master. The Court directed the filing of additional affidavits and scheduled a hearing for further proceedings.2. The Court highlighted a Full Bench judgment regarding the powers of the Prothonotary and Senior Master. It was noted that the Prothonotary and Senior Master, not being a judicial officer, dismissed the Appeals for noncompliance with procedural rules. The Court intervened to set aside the restoration orders due to lack of proper hearings and objections consideration, emphasizing the need for adherence to legal procedures.3. The delay in restoring the Appeals was a crucial issue raised by the parties. The Court found the delay to be significant, spanning over two to three years. The objections raised by the assessee regarding the restoration process were not adequately addressed, leading to the Court's decision to set aside the restoration orders and proceed with a proper hearing.4. The Appeals faced dismissal due to non-removal of office objections within the stipulated timeframe. The Rules required removal of office objections within 30 days, failing which the Appeals could be rejected. The Prothonotary and Senior Master passed orders dismissing the Appeals for noncompliance with office objections, leading to subsequent applications for restoration.5. The Revenue officials provided explanations for the delay in removing office objections, citing restructuring within the Income Tax Department. However, the Court found these explanations vague and lacking specific details. The Court emphasized the need for diligence and promptness in pursuing legal matters, especially for government departments like the Income Tax Department.6. The sufficiency of cause for condoning the delay was a critical aspect considered by the Court. Despite the explanations provided by the Revenue officials, the Court deemed the delay unjustifiable due to negligence on the part of the officials. The Court rejected the vague explanations and dismissed the applications for restoration based on the lack of sufficient cause for condoning the delay.7. Consequently, the Court dismissed the Income Tax Appeals without adjudication on merits due to the gross negligence of the Revenue officials. The pending Notices of Motion were also disposed of in light of the Appeals' dismissal, emphasizing the importance of adherence to legal procedures and diligence in pursuing legal matters.