SH SUBHASH CHAND AGARWAL vs. ACIT CIRCLE-I

Facts

The appeal before the High Court of Judicature for Rajasthan, Bench at Jaipur, was filed by the assessee, Sh Subhash Chand Agarwal, against a common order of the Income Tax Appellate Tribunal (ITAT) dated April 10, 2015. The appeal was filed under Section 260A of the Income Tax Act, 1961, and was found to be barred by 998 days. A similar appeal, D.B. Income Tax Appeal No.174/2018, filed by another assessee, Mr. Prateek Agarwal, against the same ITAT order, had been dismissed on July 1, 2019, due to an inordinate delay. The reasons provided for the delay in Mr. Prateek Agarwal's case involved an alleged mistake by a clerk who forgot to hand over the appeal papers to the counsel, attributing the delay to family problems and a lapse in memory. The High Court found these reasons to be cryptic and vague.

Held

The High Court held that the reasons provided for the delay of 998 days in filing the appeal were cryptic and vague. Specifically, the explanation involving a clerk forgetting to hand over papers, coupled with vague references to family problems and memory lapses, was found insufficient to constitute 'sufficient cause' within the meaning of Section 5 of the Limitation Act, 1963. The Court noted that the same reasons had been provided in a previous, similar appeal (D.B. Income Tax Appeal No.174/2018) which was dismissed on the same grounds. Consequently, the application for condonation of delay was dismissed, and as a result, the appeal itself was also dismissed. No decision was made on the merits of the ITAT's order.

Key Issues

1. Whether the delay of 998 days in filing the appeal under Section 260A of the Income Tax Act, 1961, is liable to be condoned. This is a mixed question of law and fact, turning on the interpretation of 'sufficient cause' under Section 5 of the Limitation Act, 1963. Assessee's Contention: The assessee argued that the delay was due to an inadvertent mistake on the part of their clerk, Mr. Om Prakash Sharma, who forgot to hand over the appeal papers to the counsel. The clerk's affidavit admitted to this mistake and attributed it to family problems and a lapse in memory. Revenue's Contention: The revenue did not explicitly record arguments in the judgment. However, the High Court's dismissal of the delay condonation application implies that the revenue's implicit stance was that the reasons provided did not constitute sufficient cause.