While the Indian justice system is infamous for its apathy, lack of urgency and efficiency, the Courts are not always to blame.

Here are six cases where there was an inordinate delay in filing the appeal and the reasons given by the court in allowing or rejecting the condonation.

One of the cases has a delay of more than 60 months even as the statutory limitation period expired in 60 days! Read on to know more.

Condonation of delay: The Income Tax Act provides that under normal circumstances and with a substantial question of law [section 260A(2)], an appeal against the order of CIT(A) to ITAT needs to be filed within 60 days from date of receiving order [section 253(3)] and an appeal to be filed before High Court has a limitation period of 120 days. In the event limitation period expires, appeals can still be filed in the Appellate Court by applying for Condonation of delay.

Surbhi Milkfood and Beverage Pvt. Ltd. vs. ACIT (Ahmedabad ITAT, 31 July 2013)

Delay: 1176 days (3+ years) by Assessee

Statutory limitation period: 60 days

The reason stated for the delay: Misplaced order of CIT(A) against which appeal was to be filed

Was delay condoned? No.

About the case: The MD of the assessee-company explained that the order of CIT(A) against which the appeal was filed, was misplaced and kept in the company godown with the other documents after the company shut down in 2006. It was re-discovered when the staff was gathering documents for hearing in another matter. The MD emphasized that after the discovery, he had immediately asked the lawyer to file an appeal and stated there was no mala fide intent.

The Court stated that the dates between re-discovery of order and the actual filing of appeal were not clear and the cited cases were distinguishable on facts, hence the delay was not satisfactorily explained.

CIT vs. Harsha Interior Decorators (Delhi HC, 2 February 2016)

Delay: 805 days (2+ years) by Revenue

Statutory limitation period: 120 days

The reason stated for the delay: Budgetary restrictions of the Revenue and insufficient time to follow Court directions regarding the filing of paper books in soft copy in tax matters.

Was delay condoned? No.

About the case: Bench of S. Muralidhar and Vibhu Bakhru ripped into Revenue’s argument and recorded that the Department (despite having an office in Delhi HC) could not bother to follow up if an appeal entrusted to a counsel has not been filed in the court.

Two standard excuses given by Revenue are the budgetary constraints of the Department which delayed payment of the differential court fees as a result of the Court Fees Delhi Amendment Act, 2012. This was dismissed by the Court which stated the amendment was in force long before the initial appeal was filed. Further, on the second ground of practice directions issued by the Court pertaining to filing of soft copies of the paper books in tax matters leading to delay, the Court said sufficient provisions and time has been given to get this in order, whatever the case may be, this doesn’t explain the delay of 2 years.

Karnataka Road Development Corporation vs. ACIT (Bengaluru ITAT, 21 August 2018)

Delay: 1928 days (5+ years) by Assessee

Statutory limitation period: 60 days

The reason stated for the delay: Wrong professional advice

Was delay condoned? No.

About the case: The Court pointed out the difference between ‘inordinate delay’ and delay for a few days, with the latter being treated with liberally and with discretion. Condonation is not a matter of right and there has to be reasonable cause for the delay. The assessee did not give sufficient or reasonable cause in its arguments for such an inordinate delay and this would not have arisen had the assessee exercised due care and attention.

ACIT vs. RPP Infra Projects Ltd. (Chennai ITAT, 17 July 2018)

Delay: 546 days (1+ years)

Statutory limitation period: 60 days

The reason stated for the delay: Wrong professional advice

Was delay condoned? Yes.

About the case: The Court noted that wrong advice was indeed given by tax professional that on the initiation of search proceedings, regular assessment stands dismissed hence there is no need to file an appeal against that order. This amounts to reasonable cause to not filing the appeal.

Manisha N. Darjee vs. ITO (Mumbai ITAT, 23 August 2017)

Delay: 706 days (1+ years)

Statutory limitation period: 60 days

The reasons stated for the delay: Department notices not received as the registered address was under redevelopment and lack of knowledge about tax regime lead to an inordinate lapse in time in consulting a tax practitioner and deciding the course of action

Was delay condoned? Yes.

About the case: The Court observed that the assessee had presented a fair picture of the bona fide delay and they could not attribute any mala fide or lapses on part of the assessee. Though making a note that the assessee should have been more cautious, the condonation was allowed.

Also Read: Can deduction be denied for partial cultivation on agricultural land?

ACIT vs. Chandrasekaran (Chennai ITAT, 23 August 2013)

Delay: 714 days (1+ years)

Statutory limitation period: 60 days

The reason stated for the delay: Delivery of appeal file to wrong CIT office

Was delay condoned? No.

About the case: The Court stated that even if there was a mistake with the dispatch section, the appeal file should not take more than a year to reach the right office. No details were mentioned, which are very much necessary to find out whether there is sufficient cause for delay or not such as, when the appeal papers were delivered to the CIT-DR, to whom it was delivered, the range of the CIT-DR, when those papers were received back by the Department, etc. Unless these details are substantiated, there is no reasonable cause for the delay.

The discretion to condone delays lies with the courts. However, it won’t be incorrect to say that parties have tested the court’s patience by filing appeals well outside the limited period.

While researching for this article, I observed that the Courts come down hard on the Revenue whenever there is an inordinate delay on their side. What do you think about it? Do you think it is fair or unfair? Let us know using the comment section below.


Written by Ankit Sinha, Product Manager, Legal @ Riverus

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