COMMISSIONER OF INCOME TAX- IX vs. SURENDRA DEVELOPERS

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ITA/650/2016HC DelhiDLHC01096011201625 October 2016Bench: HON'BLE MR. JUSTICE S. RAVINDRA BHAT,HON'BLE MS. JUSTICE DEEPA SHARMA2 pages
AI SummaryDismissed

What did the High Court hold?

The High Court dismissed the Revenue's application for condonation of delay and the appeal. Regarding the delay, the Court found that the explanations provided by the Revenue, namely the pendency of cases and panel re-organization, did not constitute "sufficient cause" to condone a delay of over 1088 days. The Court also observed that, on the merits of the case for previous years, it had already concluded that the activity of selling shares and securities is to be treated as short-term capital gains and not business income. Therefore, the ITAT's order was not found to suffer from any infirmity. The operative direction was the dismissal of both the application and the appeal.

What were the facts?

The Revenue (Commissioner of Income Tax-IX) filed an appeal before the High Court of Delhi against an order of the Income Tax Appellate Tribunal (ITAT). The appeal was filed with a delay of over 1088 days. The Revenue sought condonation of this delay, citing reasons such as appeals being returned for removal of objections and a reorganization of the revenue's panel. The assessee, Surendra Developers, was represented by no one. The High Court noted that the ITAT's order for previous years had concluded that the activity of selling shares and securities did not constitute business income but rather short-term capital gains.

What were the issues?

1. Whether the High Court should condone the significant delay of over 1088 days in filing the Revenue's appeal (question of law). Assessee's Arguments: None recorded. Revenue's Arguments: The Revenue argued that the delay occurred because the appeals were returned for removal of objections and could not be filed within the stipulated time due to a large number of pending cases. Another reason cited was the re-organization of the revenue's panel, which hindered diligent follow-up of the appeal. The Revenue contended that these constituted "sufficient cause" for condoning the delay. 2. Whether the ITAT's order, which held that the sale of shares and securities does not constitute business income but short-term capital gains, suffers from any infirmity (question of mixed law and fact, concerning the nature of income). Assessee's Arguments: None recorded. Revenue's Arguments: None recorded specifically for this issue, but the appeal itself implies disagreement with the ITAT's finding.

AI-generated summary — verify with the full judgment below

$~2 * IN THE HIGH COURT OF DELHI AT NEW DELHI + ITA 650/2016, CM No. 31013-31014/2016

COMMISSIONER OF INCOME TAX- IX ..... Appellant Through: Mr. Dileep Shivpuri, Sr. Standing Counsel along with Mr. Sanjay Kumar, Jr. Standing Counsel.

versus

SURENDRA DEVELOPERS

..... Respondent

Through: None.

CORAM: HON'BLE MR. JUSTICE S. RAVINDRA BHAT HON'BLE MS. JUSTICE DEEPA SHARMA

O R D E R %

25.10.2016

CM No. 31014/2016 (condonation of delay) This is an application seeking condonation of delay in filing of the appeal. The delay is over 1088 days. There is hardly any explanation-the grounds urged are that the appeals were returned for removal of objections but could not be filed within time on account of pendency of a large number of cases. The other ground is that the panel underwent re-organisation and as a result the revenue could not diligently follow up the appeal. Such explanations cannot reasonably be called “sufficient cause” to enable the court to condone the delay in the filing of the appeal. Application therefore has no merits. Even otherwise, the court has on the merits for the previous years concluded

that the activity i.e. the sale of shares and securities does not constitute business income of the assessee but rather falls within description of the short term capital gain. Consequently, the ITAT’s order does not suffer from any infirmity. For the above reasons, the application and appeal are dismissed.

S. RAVINDRA BHAT, J

DEEPA SHARMA, J OCTOBER 25, 2016 sapna

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