By TIOL News Service

MUMBAI, MAR 14, 2018: THE issue is - Whether a court can allow admission of an appeal beyond the period of limitation provided it is satisfied with the bona fide reasons for delay. YES is the verdict.

Whether non appearance of Assessee for hearing of the matter, will bestow Revenue Department with an additional excuse for its delayed approach in filing of appeal, after paying costs. NO IS THE VERDICT.

Facts of the case:

The Revenue Department preferred the present notices of motion, seeking condonation of delay of almost an year in filing appeals against the order passed by ITAT relating to A.Ys 2008-09 and 2009-10. These Notices of Motion had first come up for consideration on Jan 05, at which time, the Motion was adjourned to enable completion of service. Consequent to the same, additional Affidavits were filed in support of the Motion, and the Revenue's counsel contended that this was done at the instance of the Court seeking better and fuller particulars. These additional Affidavits were stated to explain the delay in filing appeal, and it also stated that for subsequent A.Y 2010-11, the Revenue had filed its appeal within the period of limitation.

High Court held that,

++ there is no proper explanation for the delay on the part of the Applicant. Infact, the affidavits states that, the Applicant handed over the papers to his subordinate i.e. the Deputy Commissioner. This is also put in as one of the reasons for the delay. This even though when they appear to be a part of the same office. In any case, the date on which it was handed over to the Dy CIT (Exemptions), Pune is not indicated. Further, the affidavit also does not explain the period of time during which the proposal was pending before the Chief CIT, Delhi for approval. The Chief CIT is also an Officer of the Department and there is no explanation offered by the Chief CIT at Delhi or on his behalf, as to why such a long time was taken in approving the proposal. Infact, there is even no attempt to explain the same. The Applicant being a Senior Officer of the Revenue would undoubtedly be conscious of the fact that the time to file the appeals was running against the Revenue and there must be averment in the application of the steps he was taking to expedite the approval process. Further, there is no proper explanation for the delay after having received the approval from the Chief CIT, Delhi. Thus, the reasons set out in the Affidavits and additional Affidavits in support so as to condone the delay in filing the accompanying Appeal, is not justified;

++ as far as the reliance placed by Revenue upon the decision of the Apex Court in West Bengal Infrastructure Development Finance Corporation Ltd. is concerned, this Court is of the view that the Apex Court had condoned the delay on the part of the Revenue in filing the Appeal. After that, the Apex Court had observed that looking at the tax amount involved in all such cases, where there is delay on the part of the department, the High Court was requested to consider condonding the delay by imposing costs and examine the case on merits. It is sought to be contended by the Revenue that where large amounts are involved, the Revenue should, as a matter of right, be heard on merits of its appeal and the delay should be condoned on payment of costs. Such a reading would be rendering Section 260A(2A) of the Act which came into the statute by the Finance Act, 2010 with retrospective effect of 1998 completely otiose/redundant. Sub-section (2A) of the Section 260A allows the Court to admit an appeal beyond the period of limitation, if it is satisfied there is sufficient cause for not filing the appeal in time. Further, the observations of the Apex Court, do not in any way, fetter the High Courts from exercising its discretion to condone or not to condone the delay in filing of the Appeal. Therefore, the submission on behalf of the Revenue cannot be accepted that in the appeals by the Revenue, the delay has to be condoned, if large amounts are involved, on payment of costs;

++ one more submission made on behalf of the Revenue is that, the Assessee have been served and they have chosen not to appear. Therefore, it must necessarily follow that they have no objection to the delay being condoned and the Appeal being entertained. This submission ignores the fact that the object of the law of limitation is to bring certainty and finality to litigation. This is based on the Maxim "interest reipublicae sit finis litium” i.e. for the general benefit of the community at large, because the object is every legal remedy must be alive for a legislatively fixed period of time. Therefore, merely because the Assessee does not appear, it cannot follow that the applicant is bestowed with a right to the delay being condoned. This Court is conscious of the fact that the period of limitation should not come as an hindrance to do substantial justice between the parties. However, at the same time, a party cannot sleep over its right ignoring the statute of limitation and without giving sufficient and reasonable explanation for the delay, expect its Appeal to be entertained merely because it is a State. The Appeals which are filed by the Revenue in this Court u/s 260A are very large in number and on an average over 2000 per year from the orders of the Tribunal. Thus, the officers of the Revenue should be well aware of the statutory provisions and the period of limitation and should pursue its remedies diligently. It cannot expect their Appeals be entertained, because they are after all the State, notwithstanding the fact that delay is not sufficiently explained.

(See 2018-TIOL-441-HC-MUM-IT)