Delhi High Court dismisses appeal for non-compliance, Tribunal restores appeal post belated pre-deposit.

The Delhi High Court dismissed the appeal due to non-compliance with the pre-deposit order, leading to the Tribunal's dismissal of the appeal. The Restoration Application was filed based on the BIFR decision allowing the pre-deposit in a Modified Draft Rehabilitation Scheme. The Tribunal ultimately allowed the Restoration Application, considering the belated but eventual pre-deposit made by the assessee-Appellants after settling their Income Tax Department case, condoning the delay and restoring the appeal to its original number.

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Issues:
Restoration of Appeal for non-compliance with pre-deposit order.

Analysis:
The assessee-Appellants filed an appeal against an Order-in-Original but were directed by the Tribunal to make a pre-deposit of 25% of the penalty amount. The BIFR allowed the application for pre-deposit in a Modified Draft Rehabilitation Scheme (MDRS). However, the Delhi High Court dismissed the appeal challenging the pre-deposit requirement. As the pre-deposit was not made in time, the Tribunal dismissed the appeal for non-compliance. The Restoration Application was filed to recall the dismissal order based on the BIFR decision.

The representative for the assessee-Appellants argued that due to financial constraints, the pre-deposit could not be made on time. They highlighted that the Income Tax Department had attached their properties until a favorable decision was reached in 2017. Refunds were received, and the pre-deposit was made in 2018. The representative contended that the pre-deposit order was not challenged before any higher forum, and there was a reasonable cause for restoration of the appeal.

On the other hand, the Respondent justified the dismissal of the appeal, citing a Supreme Court order related to the BIFR decision and the inapplicability of the BIFR order to the present case. The Respondent argued that the plea for Restoration of Appeal based on the BIFR order was not sustainable as the company's net worth had become positive in 2007, and the BIFR scheme had lapsed.

After considering both sides and the circumstances, the Tribunal found that the assessee-Appellants had eventually made the required pre-deposit, albeit belatedly, after settling their Income Tax Department case. The Tribunal condoned the delay in making the pre-deposit, noting the bonafide attitude of the assessee-Appellants, and allowed the Restoration Application, restoring the appeal to its original number.

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