THE PRINCIPAL COMMISSIONER OF INCOME TAX, (CENTRAL) , AHMEDABAD vs. M/S GANESH PLANTATION LTD.
What did the High Court hold?
The High Court condoned the delay of 1018 days in filing the Tax Appeal. The Court found that the applicant Revenue had pursued a remedy bona fide, and the delay occurred due to reasons beyond its control, including the Covid-19 pandemic. The Court also took into consideration the Supreme Court's order directing the exclusion of the period from 15.3.2020 to 28.2.2022 in computing the limitation period. For these reasons, the Court held that sufficient cause was made out. The application for condonation of delay was allowed, and the rule was made absolute. The substantive appeal, which was the subject of this application, would now proceed on merits. No issue was expressly left undecided.
What were the facts?
The applicant, the Principal Commissioner of Income Tax (Central), Ahmedabad, filed a Civil Application seeking condonation of a 1018-day delay in filing a Tax Appeal. The Tax Appeal is against an order dated 6.12.2016 passed by the Income Tax Appellate Tribunal (ITAT) for Assessment Year 2008-2009. The ITAT order had set aside the disallowance of a Rs. 4 crores loss in contract account claimed by the assessee, M/s Ganesh Plantation Ltd. The Revenue had previously filed a review application against the ITAT order, which was dismissed by the ITAT on 6.7.2021. This dismissal was challenged by the Revenue via Special Civil Application No. 13695 of 2022, which was disposed of on 26.7.2022, noting that a substantive appeal had been preferred. The delay in filing the Tax Appeal was attributed to the time taken for obtaining approval from the Principal Chief Commissioner of Income Tax, Gujarat, and the period affected by the Covid-19 pandemic, for which the Supreme Court had excluded time in limitation calculations.
What were the issues?
1. Whether the delay of 1018 days in filing the Tax Appeal against the ITAT's order dated 6.12.2016 is liable to be condoned on the grounds of sufficient cause. (Question of fact/mixed law and fact) Assessee's contentions: The Revenue argued that the delay was caused by the bona fide pursuit of remedies, including a review application before the ITAT and obtaining necessary approvals for filing the Tax Appeal. Furthermore, the unprecedented Covid-19 pandemic and the Supreme Court's order excluding the period from 15.3.2020 to 28.2.2022 from limitation calculations constituted sufficient cause for the delay. The Revenue relied on the Supreme Court's directions regarding the exclusion of time due to the pandemic. Revenue's contentions: No specific contentions were recorded for the Revenue in this regard, as the application was filed by the Revenue itself.
Which sections of the Income-tax Act were involved?
AI-generated summary — verify with the full judgment below
Cause title — parties, addresses and appearances
ORAL ORDER (PER : HONOURABLE MR. JUSTICE N.V.ANJARIA) Heard learned senior advocate Mr. M. R. Bhatt for M. R. Bhatt & Co. for the applicant-the Principal Commissioner of Income Tax (Central), Ahmedabad and learned advocate Ms. Nupur Shah for the respondent.
The present application is filed by the applicant Revenue praying to condone the delay of 1018 days in preferring the Tax Appeal. The Tax Appeal proposed to be preferred is against judgment and order dated 6.12.2016 of the Income Tax Appellate Tribunal, ‘C’ Bench, Ahmedabad in ITA No. 1520/AHD/2013 for Assessment Year 2008-2009. 3. It was stated that order of the Tribunal was received on 31.3.2017. C/CA/859/2022 ORDER DATED: 30/08/2022 Therefore, the appeal was required to be filed on or before 29.7.2017 to be within the limitation. It was further stated that against the said order of the Tribunal, the applicant preferred Misc. Application No. 115 of 2017 for review on 19.4.2017 which came to be disposed by the Tribunal by order dated 6.7.2021. It may be stated at this stage that the said order was challenged by the Revenue by filling Special Civil Application No. 13695 of 2022, which was disposed of on 26.7.2022 on the ground that the department had preferred substantive appeal before the court. It is the said appeal in which the delay is sought to be condoned by filling this application.
For completion of facts, the relevant portion of aforesaid order dated 26.7.2022 passed in Special Civil Application No. 13695 of 2022 may be noticed, “3. The facts in brief stated in the petition are inter alia that the respondent herein filed its return in respect of the assessment year 2008- 09 declaring its total income. He claimed Rs.4 crores under the head loss in contract account which claimed was disallowed by the Assessing Officer in its assessment order dated 22.12.2010. The ground weighed with the Assessing Officer was that the respondent failed to prove genuineness of the transaction with one Jay Corporation in respect of which the loss had occurred. The Commissioner of Income Tax (Appeals) confirmed the order of the Assessing Officer. When the respondent approached the Tribunal to challenge the appellate authority’s order, the tribunal set aside the said orders and allowed the claim of the aforesaid amount under the head of loss in contract account.
1 It appears that the said judgment and order of the Income Tax Appellate Tribunal dated 6.12.2016 was sought to be reviewed by filing C/CA/859/2022 ORDER DATED: 30/08/2022 Miscellaneous Application No.115 of 2017 which was dismissed by the Tribunal on 6.7.2021, which is the order impugned herein.
While learned senior advocate raised various contentions to urge the court that the review application ought to have been allowed by the Tribunal, he fairly admitted the factum that the department has already preferred appeal under Section 260A of the Income Tax Act against the aforementioned judgment and order of the Tribunal dated 6.12.2016. 5. The dismissal of the Special Civil Application by this court is only on the ground that the petitioner department has preferred substantive appeal before this court. It goes without saying that all the contentions of the petitioner will be open to be raised in accordance with law in the appeal proceedings. Accordingly, the present petition is disposed of. “
In the above background of the developments, it was averred in this application that the Principal Chief Commissioner of Income Tax, Gujarat, by letter dated 3.2.2022 granted approval for filling the Tax Appeal against the said decision dated 6.12.2016 of the appellate Tribunal and upon receiving such approval, the papers were sent to the office of the senior standing counsel of the department.
1 It was thereafter averred that the time period coincided with the unprecedented situation of Covid-19 pandemic where the affairs in the society virtually at stand-still. It was stated that the Supreme Court by order dated 10.1.2022 excluded the period from 15.3.2020 to 28.2.2022 in reckoning the limitation which may have been prescribed under any general or special law. C/CA/859/2022 ORDER DATED: 30/08/2022
2 It was on the aforesaid counts that the delay was sought to be explained.
There is no gainsaying that the applicant Revenue was pursuing bona fide a remedy. The delay occurred for that reasons and due to the pendamic period which were beyond the control of the applicant. Exclusion of the time as directed by the supreme court is also required to be taken into consideration.
For the above reasons, it could be said that sufficient cause is made out. Therefore, delay is condoned. Application is allowed. Rule is made absolute. (N.V.ANJARIA, J) (BHARGAV D. KARIA, J) C.M. JOSHI
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