JAYVANTSINH N VAGHELA vs. INCOME TAX OFFICER

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TAXAP/853/2013HC GujaratGJHC24023121201322 October 2013Author: HONOURABLE MR. JUSTICE M.R. SHAH,HONOURABLE THE CHIEF JUSTICE MS. JUSTICE SONIA GOKANI5 pages
AI SummaryRemanded

What did the High Court hold?

The High Court held that the learned Tribunal had committed an error in not condoning the delay and in dismissing the appeals on the ground of limitation. The Court noted that there was no observation by the ITAT indicating any deliberate delay or mala fide intention on the part of the assessee. The reasoning of the ITAT that an affidavit from the Income Tax Practitioner was not filed was found to be insufficient, especially when a change of practitioner had occurred. The High Court emphasized the cardinal principle that appeals should ordinarily be decided on merits rather than on technical grounds like delay, unless gross negligence or mala fide intention is established. Citing the Supreme Court's decision in Collector, Land Acquisition, Anantnag vs. Mst. Katiji and Others, the Court stated that refusing to condone delay can lead to meritorious matters being thrown out and justice being defeated, whereas condoning delay only results in a decision on merits. Therefore, the High Court condoned the delay and remitted the matters back to the ITAT to decide the appeals on merits.

What were the facts?

The assessee, Jayvantsinh N. Vaghela, filed two appeals before the Gujarat High Court challenging the order of the Income Tax Appellate Tribunal (ITAT). The ITAT had dismissed the assessee's appeals for assessment years 2007-08 and 2008-09 solely on the grounds of limitation. The assessee had filed appeals before the ITAT with a delay of 328 days for AY 2007-08 and 158 days for AY 2008-09. The assessee explained the delay by stating that their earlier tax matters were handled by a Chartered Accountant who did not advise them to file further appeals. Upon learning of the loss, they engaged a new Income Tax Practitioner who then filed the appeals. The ITAT refused to condone the delay, noting the inordinate delay and the absence of an affidavit from the Income Tax Practitioner.

What were the issues?

1. Whether the High Court was justified in quashing and setting aside the ITAT's order dismissing the appeals on the ground of limitation, and condoning the delay in filing the appeals before the ITAT? (Question of law and mixed fact and law, concerning the interpretation and application of principles for condonation of delay in filing appeals). Assessee's Contention: The assessee argued that the ITAT erred in not condoning the delay. They submitted that the delay was not deliberate or mala fide, attributing it to a change in their tax consultant. The assessee contended that it might not be possible to obtain an affidavit from the previous Income Tax Practitioner after changing consultants. They relied on the principle that appeals should generally be decided on merits rather than technical grounds like delay, citing the Supreme Court's decision in Collector, Land Acquisition, Anantnag vs. Mst. Katiji and Others. Revenue's Contention: The judgment does not record any specific contentions made by the revenue before the High Court regarding the condonation of delay.

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances
O/TAXAP/853/2013 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD TAX APPEAL  NO. 853 of 2013 With  TAX APPEAL NO. 854 of 2013   FOR APPROVAL AND SIGNATURE:     HONOURABLE MR.JUSTICE M.R. SHAH ­sd/­  and HONOURABLE MS JUSTICE SONIA GOKANI ­sd/­ ============================================= 1. Whether Reporters of Local Papers may be allowed to see  the judgment ? NO 2. To be referred to the Reporter or not ? NO 3. Whether their Lordships wish to see the fair copy of the  judgment ? NO 4. Whether this case involves a substantial question of law as to  the interpretation of the constitution of India, 1950 or any  order made thereunder ? NO 5. Whether it is to be circulated to the civil judge ? NO ============================================= JAYVANTSINH N VAGHELA....Appellant(s) Versus INCOME TAX OFFICER....Opponent(s) ============================================= Appearance: MRS SWATI SOPARKAR, ADVOCATE for the Appellant(s) No. 1 MR.VARUN K.PATEL, ADVOCATE for the Opponent(s) No. 1 ============================================= CORAM: HONOURABLE MR.JUSTICE M.R. SHAH and HONOURABLE MS JUSTICE SONIA GOKANI  Date : 22/10/2013

ORAL JUDGMENT (PER : HONOURABLE MR.JUSTICE M.R. SHAH)

1.0.

As common  question of law and facts arise in both these appeals, they are being finally heard, decided and disposed of by this common judgment and order. 2. 0. Both these appeals have been preferred by the common appellant   ­assessee   challenging   the   impugned   common   order passed by the learned Income Tax Appellate Tribunal, Ahmedabad (hereinafter referred to as “the ITAT”) dated 22.3.2013 passed in ITA Nos. 563 and 564/AHD/2012 with respect to the assessment year 2007­08 and 2008­09, by which, the learned Tribunal has dismissed the said appeals on the ground of limitation.

2.1.

Being   aggrieved   and   dissatisfied   with   two   separate orders of CIT(A) dated 24.1.2011 for the assessment year 2007­08 and   22.7.2011   for   the   assessment   year   2008­09,   the   common appellant   herein   ­assessee   preferred   appeals   before   the   learned ITAT being ITA Nos. 563 of 2012 and 564 of 2012. There was a delay of 328 days in preferring the appeal against the order passed by the learned CIT(A) with respect to assessment year 2007­08 and there was a delay of 158 days in preferring the appeal against the order passed by the learned CIT(A) with respect to assessment year 2008­09. The assessee requested the learned Tribunal to condone the delay by submitting that earlier tax matter were being looked after by a Chartered Accountant M/s. J M. Patel & Brothers and even after losing the appeal before the learned CIT(A), he did not advise the assessee to file further appeal before the Tribunal. It was further stated in the affidavit that subsequently the assessee came to know about losing in the appeal and thereafter they contacted another Income Tax Practitioner Shri Sharad C. Patel and advised him   to   prefer   appeal   and   thereafter   they   preferred   appeals. Therefore, it was requested to condone the delay. By impugned common order, the learned Tribunal has refused to condone the delay and has dismissed the appeal on the ground of limitation observing that there is inordinate delay in preferring the appeals and affidavit of the Income Tax Practitioner is not filed.

2.2.

Being   aggrieved   and   dissatisfied   with   the   impugned common order passed by the learned Tribunal in dismissing the aforesaid appeals on the ground of limitation and not condoning the delay of 328 days and 158 days respectively, common appellant has preferred the present appeals.

3.0.

We have heard Shri Soparkar, learned advocate for the appellant   and   Shri   Varun   Patel,   learned   advocate   for   the respondent and perused the impugned common order passed by the   learned   Tribunal.   Considering   the   affidavits   filed   by   the assessee before the Tribunal which are even reproduced by the learned Tribunal, we are of the view that the learned Tribunal has committed error in not condoning the delay and not considering the appeals on merits. It is required to be noted that there is no observation  by the learned Tribunal that there was any deliberate delay on the part of the assessee and / or there was any mala fide intention on the part of the assessee in not preferring the appeals within a period of limitation. The reasoning given by the learned Tribunal that the assessee has not filed the affidavit of Income Tax Practitioner in support of the affidavits filed by the assessee is concerned, it is required to be noted that once the Income Tax Practitioner is changed it may not be possible for the assessee to get affidavit of Income Tax Practitioner. On the aforesaid ground, the condonation of delay was not required to be refused. It is a cardinal principle   of   law   that   normally   by   and   large,   the   appeals   are required to be decided on merits rather than dismissing the same on technical ground like delay etc. unless it is found that there was gross negligence on the part of the assessee and / or there was any mala fide intention on the part of the assessee in not preferring the appeal within the period of limitation and / or in filing the appeals belatedly. As observed by the Hon’ble Supreme Court in the case of by the Hon’ble Supreme Court that refusing to condone delay can

result   in   a   meritorious   matter   being   thrown   out   at   the   very threshold and cause of justice being defeated. As against this when delay is condoned the highest that can happen is that a cause would be decided on merits after hearing the parties.

4.0.

Considering the aforesaid principles laid down by the Hon’ble Supreme Court and the facts of the case on hand, we are of the view that learned Tribunal ought to have condoned the delay and ought to have decided and disposed of the appeals on merits rather than dismissing the same on the ground of limitation

5.0.

In view of the above and for the reasons stated above, both   these   appeals   succeed   and   the   impugned   common   order passed   by   the   ITAT  dated   22.3.2013   in   ITA   Nos.   563   and 564/AHD/2012 with respect to the assessment year 2007­08 and 2008­09 is hereby quashed and set aside and the delay caused in preferring   the   respective   appeals   is   hereby   condoned   and   the matter is remitted to the learned ITAT to decide and dispose of the said appeals in accordance with law and on merits. With this, both these appeals are allowed to the aforesaid extent. sd/­ (M.R.SHAH, J.) sd/­ (MS SONIA GOKANI, J.) Kaushik

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