Delay in Tax Appeals Excused Due to Tribunal Error; Lockdown Impact Recognized; Appeals Restored with Costs Imposed.

The HC condoned the delay in filing appeals under Section 260A of the Income Tax Act, 1961, acknowledging the Tribunal's error in dismissing appeals due to non-appearance. The Court accepted the argument that the limitation period should commence from the date of knowledge of the order. The delay was justified due to the lockdown, and the appeals were restored for hearing on merits, subject to costs of Rs. 10,000 per appeal to be paid to the Revenue within three weeks.

---

---

Issues Involved:
1. Condonation of delay in filing appeals under Section 260A of the Income Tax Act, 1961.
2. Justification of the Tribunal's dismissal of appeals due to non-appearance of the assessee.
3. Commencement of the period of limitation for seeking restoration of appeals.

Issue-wise Detailed Analysis:

1. Condonation of Delay in Filing Appeals:
The assessee sought condonation of a delay of 3062 days in filing appeals under Section 260A of the Income Tax Act, 1961. The Tribunal had dismissed the appeals on 01.02.2013 due to non-appearance of the assessee, and the assessee argued that the delay should be calculated from 19.11.2019, the date they gained knowledge of the dismissal, not from the date of the Tribunal's order.

2. Justification of the Tribunal's Dismissal of Appeals:
The Tribunal dismissed the appeals on 01.02.2013 due to the absence of the assessee. The assessee contended that under Rule 24 of the Income Tax (Appellate Tribunal) Rules, 1963, the Tribunal was required to decide the appeals on merits even if the appellant was absent. The Tribunal’s dismissal in default was argued to be without jurisdiction. The assessee cited the Supreme Court's decision in Commissioner of Income Tax Vs S. Chenniappa Mudaliar (1969) and other relevant cases, asserting that the Tribunal must adjudicate on merits rather than dismiss in default.

3. Commencement of the Period of Limitation:
The assessee argued that the period of limitation should commence from the date of knowledge of the order, not from the date the order was passed. The Tribunal initially dismissed the appeals on 01.02.2013, but the assessee claimed they only became aware of this on 19.11.2019 when the Tax Recovery Officer issued a notice to attach their immovable properties. The Tribunal rejected the applications for condonation of delay on 20.03.2020, stating there was no provision under Section 254(2) to condone such a delay. However, the assessee cited the Delhi High Court's decision in Golden Times Services Pvt. Ltd. Vs. Deputy Commissioner of Income Tax (2020), which held that the limitation period starts from the date of knowledge of the order.

Judgment Analysis:

The Court considered the facts and arguments presented by both parties. The Tribunal dismissed the appeals in limine due to the absence of the assessee, which was contested based on Rule 24 of the Rules of 1963, requiring the Tribunal to dispose of appeals on merits. The Court referenced the Supreme Court's decision in S. Chenniappa Mudaliar, which mandated that appeals should be decided on merits, not dismissed in default.

Regarding the period of limitation, the Court acknowledged the assessee's argument that the limitation period should commence from the date of knowledge of the order. The Court found that the assessee became aware of the Tribunal's dismissal on 19.11.2019 and subsequently took steps to restore the appeals. The Court accepted that the period from 01.02.2013 to 19.11.2019 should not be treated as delay, and the limitation period should start from the date of knowledge.

The Court concluded that the delay from 19.11.2019 to the filing of the appeals was sufficiently explained. The appeals were filed on 22.06.2020 during the lockdown, which further justified the delay. The Court condoned the delay, subject to costs of Rs. Ten thousand per appeal to be paid to the Revenue within three weeks.

Conclusion:
The Court allowed the applications for condonation of delay, recognizing the Tribunal's error in dismissing the appeals in default and accepting the assessee's argument regarding the commencement of the limitation period from the date of knowledge. The appeals were restored for hearing on merits, subject to the payment of costs.

---