SHREE JALARAM FINANCE vs. INCOME TAX OFFICER

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TAXAP/920/2018HC GujaratGJHC24035193201824 September 2018Author: HONOURABLE MR. JUSTICE AKIL KURESHI,HONOURABLE MR. JUSTICE B.N. KARIA2 pages
AI SummaryAllowed

What did the High Court hold?

The High Court held that the Tribunal erred in refusing to condone the delay. The Court found that the Tribunal overlooked the crucial aspect of the starting point of limitation, which commences upon the communication of the order under challenge. The assessee's assertion that the order was not served earlier was not contested by the Revenue. Therefore, the High Court reversed the Tribunal's order, allowing the appeal. The Tax Appeal was restored to the file of the Tribunal for disposal on merits. The principle established is that the period of limitation for filing an appeal runs from the date of communication of the order, and if the assessee demonstrates non-receipt and the revenue does not contest it, delay should be condoned.

What were the facts?

The assessee, Shree Jalaram Finance, filed a Tax Appeal before the Income Tax Appellate Tribunal (Tribunal) challenging an order of the Income Tax Appellate Commissioner. The appeal was filed with a delay exceeding 600 days. The assessee sought condonation of this delay, attributing it to the non-receipt of the Commissioner's order for approximately two years, citing business closure and severe financial difficulties. The Tribunal rejected the condonation application, reasoning that while some partners might have ceased activity, others remained in India and managed the firm's affairs. The High Court noted that the Tribunal overlooked the starting point of limitation, which begins upon communication of the order. The Revenue did not contest the assessee's claim of delayed service of the order.

What were the issues?

1. Whether the Tribunal erred in refusing to condone the delay in filing the Tax Appeal, considering the assessee's explanation of non-receipt of the order and the Revenue's failure to contest this assertion. Assessee's Contention: The assessee argued that the delay was primarily due to the late receipt of the Commissioner's order, which was not served for nearly two years, and that the firm was facing financial difficulties and had closed its business. The assessee implicitly contended that the Tribunal's reasoning for rejecting condonation was flawed. Revenue's Contention: The judgment does not record any specific contentions made by the Revenue regarding the condonation of delay. However, the Tribunal's order, which was challenged, was based on the reasoning that other partners were still active.

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances
C/TAXAP/920/2018 ORDER IN THE HIGH COURT OF GUJARAT AT AHMEDABAD R/TAX APPEAL NO. 920 of 2018 ========================================================== SHREE JALARAM FINANCE Versus INCOME TAX OFFICER ========================================================== Appearance: MS VAIBHAVI K PARIKH(3238) for the PETITIONER(s) No. 1 MR.VARUN K.PATEL(3802) for the RESPONDENT(s) No. 1 ========================================================== CORAM: HONOURABLE MR.JUSTICE AKIL KURESHI and HONOURABLE MR.JUSTICE B.N. KARIA Date : 24/09/2018

ORAL ORDER (PER : HONOURABLE MR.JUSTICE AKIL KURESHI)

1.

Notice for final disposal was issued in this Appeal. Appellant- assessee has challenged the judgement of the Income Tax Appellate Tribunal dated 10.01.2018 refusing to condone the delay in filing Tax Appeal. Tax Appeal before the Tribunal was directed against the order of Income Tax Appellate Commissioner. Though there was delay in excess of 600 days, the assessee had sought to explain such delay entirely on the ground that the order of the Commissioner under challenge was not served for close to two years perhaps because the assessee firm had closed down its business and was in deep financial difficulties. The Tribunal refused to condone the delay primarily on the ground that though some other partners may have ceased to be active, the other partners were still in India and managing the affairs of the firm. In the process, the C/TAXAP/920/2018 ORDER issue of starting point of limitation for filing appeal was lost sight of. The period of limitation was begin to run upon communication of the order under challenge. In the present case, the assessee's assertion that such order was not served earlier was not contested by the Revenue. In that view of the matter, appeal is allowed. Order of the Tribunal is reversed. Tax Appeal is restored to the file of the Tribunal which may be disposed of on merits. (AKIL KURESHI, J) (B.N. KARIA, J) JYOTI V. JANI

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