79 Days of Delay In Filing Appeal under Income Tax Act: Delhi HC Condones Delay Considering Review proceedings Initiated by Assesse [Read Order]

The Delhi High Court condoned the 79 days of delay in filing an appeal under the Income Tax Act, 1961 considering the time review proceedings initiated. The assessee filed the review application for the Income Tax Appeal order when the department failed to give a copy of the order and passed the order without informing the assessee. Resorts Consortium India Limited, the appellant has sought condonation of delay of 79 days in filing the appeal (ITA 425/2023) under Section 260A of the Income Tax Act. The respondents/revenue filed a reply, opposing the application, which followed a rejoinder from the applicant/assessee.

The appeal under Section 260A of the Income Tax Act assails an order passed by the Income Tax Appellate Tribunal.  The appeal has been filed beyond the time prescribed by law and an application has been filed seeking condonation of delay.  It was submitted on behalf of the applicant/assessee that on 20.06.2016, arguments in income tax appeal(ITA) were heard by the Tribunal but no further date was fixed; that on 26.05.2019 on inquiry from Registry of the Tribunal qua status of the case, the applicant was informed on 19.06.2019 over telephone from Registry that ITA was decided in favour of the applicant but another ITA No. 1725/del/2012 was decided against the applicant.

The applicant applied for a certified copy of the order dated 21.06.2016 and received the same on 02.07.2019; on 09.10.2019, the appellant filed before the Tribunal an application seeking review of the order dated 21.06.2016, specifically pleading that the applicant had no notice or information about the outcome of the said appeal and also explaining the events mentioned hereinbefore.

The review application was disposed of by the Tribunal but knowledge of that order was acquired by the appellant only on 02.05.2023. After deducting the time spent in obtaining certified copies of the order impugned in the present appeal as well as the order passed in the review application, the present appeal got delayed by 79 days, for which the applicant has sought delay condonation, mainly because the Director of the applicant who had argued the matter before the Tribunal resigned and got settled abroad while other Directors of the applicant are senior citizens and not much conversant with the process.

Further argued that the portal of the Tribunal was not functioning effectively during the relevant period; and that it was only in May 2019 that during a meeting with the auditors, the issue of appeal filed before the Tribunal came to the knowledge of the Directors of the applicant, so a letter was sent seeking update and status of the appeal.  The respondents/ revenue pleaded that lack of diligence on the part of the appellant, in this case, would disentitle the applicant from any discretionary relief. The respondents/revenue pleaded that the actual delay in filing the appeal is 1471 days and not 79 days, for which the appellant has failed to set up a sufficient cause.

It was further pleaded on behalf of respondents/revenue that it is difficult to believe that to check the status of the case, the appellant would have kept sitting silent for 1070 days after the conclusion of the final arguments before the Tribunal and even after obtaining the certified copy of the impugned order, the applicant opted to seek review of the impugned order instead of promptly filing the appeal.

The delay in filing the appeal is sought to be explained by the appellant taking resort to Sections 5 and 12 of the Limitation Act. The provision under Section 12 Limitation Act stipulates that in computing the period of limitation for filing an appeal, inter alia, the time requisite for obtaining a copy of the order appealed from shall be excluded.

A litigant cannot be expected to be conversant with the complex technicalities of law about the exercise of review and appeal, in which many a time even the experienced lawyers fall in error. A division bench of Justice Rajiv Shakdher and Justice Girish Kathpalia viewed that the time spent by the applicant while pursuing the review proceedings deserves to be excluded even under principles analogous to Section 14 of the Limitation Act because the applicant in good faith was prosecuting the challenge to the impugned order before the Tribunal with due diligence but the Tribunal was unable to entertain the review on account of defect of jurisdiction.

The court viewed that the case was set up by the applicant to be an “explanation” and not an “excuse”. Further observed that the applicant having brought before us a cause with sufficient explanation concerning the delay, cannot be shown door and thus allowed the application under consideration by condoning the delay in filing the appeal.

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