AVATHAR JEWELLERS ALWA TOWERS, vs. THE DEPUTY COMMISSIONER OF INCOME TAX,
What did the High Court hold?
The High Court held that the reason provided by the assessee for the delay, namely the Managing Partner being in police custody, is a genuine and bona fide reason. The Court found that laches cannot be attributed to the assessee under these circumstances. The Tribunal's finding that there was no proper explanation for condoning the delay was deemed incorrect. Citing the Supreme Court's decision in Esha Bhattacharjee, the High Court reiterated the need for a liberal approach in dealing with delay petitions to decide the lis on merits rather than technicalities. Consequently, the High Court condoned the delay of 217 days. The Tribunal was directed to pass final orders on the appeals on merits within three months. The issue of the original assessment was not decided on merits by the High Court.
What were the facts?
The assessee, Avathar Jewellers, a partnership firm engaged in the jewellery business, filed appeals before the Income Tax Appellate Tribunal (Tribunal) against assessment orders passed under Section 143(3) read with Section 153C of the Income Tax Act. The appeals were filed with a delay of 217 days. The assessee's petition to condone this delay cited the Managing Partner's police custody for several months as the reason for the inability to sign the necessary documents. The Tribunal dismissed the delay petition, holding that the explanation provided was not proper. The assessee is now appealing this order of dismissal of the delay petition before the High Court.
What were the issues?
1. Whether the High Court should condone the delay of 217 days in filing the appeal before the Income Tax Appellate Tribunal, considering the explanation provided by the assessee (Section 5 of the Limitation Act, 1963, read with Section 253(1) of the Income Tax Act, 1961). Assessee's Contentions: - The assessee argued that the delay was caused by the Managing Partner being in police custody for a few months, preventing him from signing the requisite documents to file the appeal. - Relied on the Supreme Court decision in Esha Bhattacharjee v. Managing Committee of Raghunathpur Nafar Academy and others [(2013) 12 SCC 649], advocating for a liberal, pragmatic, and justice-oriented approach in dealing with delay petitions, emphasizing that substantial justice should be paramount over technical considerations. Revenue's Contentions: - The judgment does not record any specific contentions made by the revenue regarding the delay petition.
Which sections of the Income-tax Act were involved?
AI-generated summary — verify with the full judgment below
Cause title — parties, addresses and appearances
JUDGMENT (Dated this the 1st day of April 2022) Basant Balaji
J.,
I.T.A.Nos.45, 47, 50 and 51 of 2019 are filed by the assessee, a partnership firm engaged in jewellery business, against the orders of the Income Tax Appellate Tribunal, Cochin Bench, Cochin in I.T.A. Nos.580/Coch/2017, 582/Coch/2017, 583/Coch/2017 and 582/Coch/2017 respectively.
The appellant’s business premises was searched and in the search certain documents were recovered and the assessment was completed under Section 143(3) read with Section 153C of the Income Tax Act as per the Assessment order dated 31.3.2014. Aggrieved by the said assessment
ITA NO. 45,
47, 50 & 51
OF 2019
-6- order, the appellant filed statutory appeal before the Commissioner of Income Tax (Appeals) and the appellate authority, by order dated 27.12.2016 dismissed the appeal. The appellant filed second appeal before the Income Tax Appellate Tribunal, Cochin Bench as I.T.A. Nos.580 to 583/Coch/2017. The appeals filed by the appellant were not in time and hence, the application to condone the delay of 217 days in filing the appeal was also filed along with the appeal memorandum. Annexure – D, petition to condone the delay, was filed through the power of attorney holder of the Managing Partner. The Tribunal, by the impugned order, dismissed the delay petition holding that the appellant failed to give proper explanation for condoning the delay. Aggrieved by the said order, these appeals are filed.
Annexure-D is the petition to condone the delay in filing the appeal, which was filed along with the appeals before the Appellate Tribunal. In the said application, the ITA NO. 45,
47, 50 & 51
OF 2019
-7- appellant has specifically stated that he was in police custody for few months and only after releasing from the custody, he could sign the requisite documents and hence, the delay occurred in filing the appeal.
Heard Shri.Anil D.Nair, learned counsel for the appellant and Shri.Jose Joseph, learned counsel for the respondent.
It is a fact that that the appeal was filed with a delay of 217 days, which was sought to be condoned by filing Annexure – D application. The reasons stated in the petition to condone the delay was that he was not physically present to sign the requisite documents to file
the appeal as he was in police custody. The person, who is physically not able to sign the documents for filing the appeal because he was in police custody, is a genuine and bonafide reason for condoning the delay. Laches cannot be attributed against him. Moreover, the finding of the Tribunal that there is no proper explanation for condoning
ITA NO. 45,
47, 50 & 51
OF 2019
-8- the delay, according to us, is not correct.
The learned counsel for the appellant relied on the decision of the honourable Supreme Court reported in Esha Bhattacharjee v. Managing Committee of Raghunathpur Nafar Academy and others [(2013) 12 SCC 649], to contend that in dealing with delay petitions, the court should take liberal approach. The Apex Court held in the said decision that:- “(i) there should be a liberal, pragmatic, justice – oriented, non-pedantic approach while dealing with an application for condonation of delay, for the courts are not supposed to legalise injustice but are obliged to remove injustice. (ii) The terms “sufficient cause” should be understood in their proper spirit, philosophy and purpose regard being had to the fact that these terms basically elastic and are to be applied in proper perspective to be obtaining fact – situation. (iii) Substantial justice being paramount and ITA NO. 45,
47, 50 & 51
OF 2019
-9- pivotal the technical consideration should not be given undue and uncalled for emphasis.”
The Honourable Apex Court in a catena of decisions held that in dealing with delay petitions, a liberal view has to be taken and lis has to be decided on the basis of its merits rather its technicalities. According to us, since the physical movement of the appellant was curtailed, since he was in the police custody, we are of the considered opinion that the Tribunal ought to have condoned the delay, and an opportunity to the assessee/appellant to contest the case on merits is afforded. In view of the matter, we set aside the order of the Income Tax Appellate Tribunal in I.T.A. Nos.580 to 583/Coch/2017. Taking note of the circumstances of the case and the explanation offered by the appellant to condone the delay in filing the appeal as well as the dictum laid down by the honourable Apex Court in the decision cited Esha Bhattacharjee (supra), we condone the delay
ITA NO. 45,
47, 50 & 51
OF 2019
-10- of 217 days in filing the appeal before the Tribunal. The Tribunal is directed to pass final orders in the appeals filed by the appellant on merits within a period of three months from the date of receipt of a copy of this judgment. In the result, Income Tax Appeals are allowed as above.
S.V.BHATTI,
JUDGE BASANT BALAJI,
JUDGE dl/
ITA NO. 45,
47, 50 & 51
OF 2019
-11-
Appendix — schedule of exhibits
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