M/S AMLOK SINGH KUMAR & SONS vs. COMMISSIONER OF INCOME TAX-2

Whether the Tribunal is right in law and facts of the case in dismissing the appeal of the appellant firm by refusing to condone the delay involved in filing of the appeal?

Whether the Tribunal is right in law and facts of the case in adopting a pedantic approach and refusing to condone the delay in filing of the appeal, as a result whereof a meritorious matter GURBACHAN SINGH 2014.08.12 12:37 integrity of this document High Court Chandigarh -2- had been thrown out at the very threshold?

Whether the Tribunal while refusing to condone the delay involved in filing of the appeal and dismissing the appeal, had therein failed to appreciate that when substantial justice and technical considerations are pitted against each other, the cause of substantial justice deserves to be preferred?

The facts necessary for adjudication of the present appeal as narrated therein may be noticed. The appellant is a partnership firm engaged in the business of trading in agricultural goods etc. A survey under Section 133A(1) of the Act was conducted at the business premises of the appellant firm on 28.9.2005 and minor discrepancies were found. On 31.10.2005, the assessee filed return of income declaring an amount of ` 42,480/-. The Assessing Officer vide order dated 30.11.2007 (Annexure A-2) framed assessment under Section 143 (3) of the Act at an amount of ` 19,97,570/-. Feeling aggrieved, the assessee filed an appeal before the Commissioner of Income Tax (Appeals) [for brevity “the CIT(A)”] on 23.1.2008. The CIT(A) vide order dated 25.2.2010 (Annexure A-3) partly allowed the appeal. Still not satisfied, the assessee filed an appeal before the Tribunal. As the appeal was barred by limitation, an application under Section 5 of the Limitation Act, 1963 (in short, the “1963 Act”) was also filed for condonation of 715 days' delay in filing the appeal. The Tribunal vide order dated 28.6.2013 (Annexure A-4) dismissed the application as well as the appeal filed by the assessee. Hence, the present appeal.

We have heard learned counsel for the appellant. GURBACHAN SINGH 2014.08.12 12:37 integrity of this document High Court Chandigarh -3-

The primary question that arises for consideration in this appeal is whether there was sufficient cause for condonation of delay of 715 days in filing the appeal before the Tribunal which was belated.

Examining the legal position relating to condonation of delay under Section 5 of the 1963 Act, it may be observed that the Supreme Court in Oriental Aroma Chemical Industries Ltd. v. Gujarat Industrial Development Corporation and another, (2010) 5 SCC 459 laying down the broad principles for adjudicating the issue of condonation of delay, in paras 14 & 15 observed as under:- “14.

The expression “sufficient cause” employed in Section 5 of the Indian Limitation Act, 1963 and similar other statutes is elastic enough to enable the courts to apply the law in a meaningful manner which GURBACHAN SINGH 2014.08.12 12:37 integrity of this document High Court Chandigarh -4- sub serves the ends of justice. Although, no hard and fast rule can be laid down in dealing with the applications for condonation of delay, this Court has justifiably advocated adoption of a liberal approach in condoning the delay of short duration and a stricter approach where the delay is inordinate-Collector (L.A.) v. Katiji N. Balakrishnan v. M. Krishnamurthy and Vedabai v. Shantaram Baburao Patil.”

It was further noticed by the Apex Court in R.B. Ramlingam v. R.B. Bhavaneshwari 2009(1) RCR (Civil) 892 as under:- “.....It is not necessary at this stage to discuss each and every judgment cited before us for the simple reason that Section 5 of the Limitation Act, 1963 does not lay down any standard or objective test. The test of “sufficient cause” is purely an individualistic test. It is not an objective test. Therefore, no two cases can be treated alike. The statute of limitation has left the concept of “sufficient cause” delightfully undefined, thereby leaving to the Court a well-intentioned discretion to decide the individual cases whether circumstances exist establishing sufficient cause. There are no categories of sufficient cause. The categories of sufficient cause are never exhausted. Each case spells out a unique experience to be dealt with by the Court as such.” It was also recorded that:- “For the aforestated reasons, we hold that in each and GURBACHAN SINGH 2014.08.12 12:37 integrity of this document High Court Chandigarh -5- every case the Court has to examine whether delay in filing the special leave petition stands properly explained. This is the basic test which needs to be applied. The true guide is whether the petitioner has acted with reasonable diligence in the prosecution of his appeal/petition....”

From the above, it emerges that the law of limitation has been enacted which is based on public policy so as to prescribe time limit for availing legal remedy for redressal of the injury caused. The purpose behind enacting law of limitation is not to destroy the rights of the parties but to see that the uncertainty should not prevail for unlimited period. Under Section 5 of the 1963 Act, the courts are empowered to condone the delay where a party approaching the court belatedly shows sufficient cause for not availing the remedy within the prescribed period. The meaning to be assigned to the expression “sufficient cause” occurring in Section 5 of the 1963 Act should be such so as to do substantial justice between the parties. The existence of sufficient cause depends upon facts of each case and no hard and fast rule can be applied in deciding such cases.

The Apex Court in Oriental Aroma Chemical Industries Ltd. and R.B. Ramlingam's cases (supra) noticed that the courts should adopt liberal approach where delay is of short period whereas the proof required should be strict where the delay is inordinate. Further, it was also observed that judgments dealing with the condonation of delay may not lay down any standard or objective test but is purely an individualistic test. The court is required to examine while adjudicating the matter relating to condonation of delay on exercising judicial GURBACHAN SINGH 2014.08.12 12:37 integrity of this document High Court Chandigarh -6- discretion on individual facts involved therein. There does not exist any exhaustive list constituting sufficient cause. The applicant/petitioner is required to establish that inspite of acting with due care and caution, the delay had occurred due to circumstances beyond his control and was inevitable.

According to the learned counsel for the appellant, the father of the partner of assessee-firm Shri Ajay Kumar expired on 22.6.2006 and his mother died on 9.5.2008. It was further submitted that Shri Ajay Kumar who was under medical treatment and influence of drugs being administered to him by the Doctor was unaware of the order of the CIT(A) and was under bonafide impression that the needful was being done by the counsel. Furthermore, Shri Ajay Kumar filed an application dated 16.5.2011 to get copy of order dated 25.2.2010 passed by the CIT(A). Due to the mistake of the counsel for the assessee, the appeal could not be filed in time. It was urged that the delay, if any, has occurred in the aforesaid circumstances in filing the appeal before the Tribunal. Learned counsel further argued that the delay was unintentional and due to the circumstances beyond the control of the appellant.

Adverting to the factual matrix in this case, we do not find any merit in the appeal. The question regarding whether there is sufficient cause or not depends upon each case and primarily is a question of fact to be considered taking into totality of events which had taken place in a particular case. In the present case after appreciating the matter it cannot be said that there was sufficient cause for condonation of delay. The CIT(A) had decided the matter on 25.2.2010 and a copy thereof was sent to the appellant. However, the appeal GURBACHAN SINGH 2014.08.12 12:37 integrity of this document High Court Chandigarh -7- before the Tribunal was required to be filed within the stipulated period of limitation of sixty days. But the appellant filed the appeal before the Tribunal on 23.4.2012, after a delay of 715 days. The plea of the appellant as mentioned above relating to death of his father and mother in 2006 and 2008 respectively was much before the decision of the appeal by the CIT(A) on 25.2.2010 and, thus, would not satisfy the test of sufficient cause. The explanation of the appellant is bereft of details of delay caused in filing the appeal and, therefore, the Tribunal has rightly rejected the appeal keeping in view the totality of facts and circumstances of the present case.

In view of the above, no question of law much less a substantial question of law arises in this appeal. Accordingly, finding no merit in the appeal, the same is hereby dismissed. (AJAY KUMAR MITTAL) JUDGE July 4, 2014