COMMISSIONER OF INCOME TAX JABALPUR vs. M/S VINDHYA TELELINKS LTD.

---1--- THE HIGH COURT OF MADHYA PRADESH R.P. No.612/2020 (Commissioner of Income Tax Vs. M/s Vindhya Telelinks Ltd.)

Jabalpur Dated : 1.4.2021 Shri Sanjay Lal, Advocate for the petitioner/Revenue Department.

Shri Narendra M. Sharma, Advocate appears through Video Conferencing assisted by Shri Abhishek Dhyani and Shri Sapan Usrethe, Advocates for the respondent.

This review petition has been filed by the Commissioner of Income Tax, Jabalpur seeking review and recall of the order dated 25.11.2019 passed by this Court in I.T.A. No.124/2012 dismissing the appeal as withdrawn with liberty “to the Revenue to file an application for revival of the appeal, in case something survives therein”.

This review application was filed by the Revenue on 2.7.2020. The affidavit in support of the review petition was sworn in before the Notary on 30.6.2020. The period of limitation for filing the review petition is 30 days.

The office pointed out the delay of 81 days as also the defect of not filing the application for condonation of such delay alongwith the review petition. It was thereafter that the Revenue had filed the application for condonation of delay belatedly on 8.1.2021. What is stated in the application seeking condonation of delay is that the delay has been caused due to administrative exigency such as collection of documents, signing authorization, drafting etc. and inasmuch as the major reason of delay in filing the review petition was restriction in place owing to Covid-19 lockdown and that the review application could be filed only after the Registry of this Court started functioning regularly.

Shri Sanjay Lal, learned counsel for the Revenue submitted that this matter was decided alongwith almost 100 appeals on one single day on the basis of the Circular No.17/2019 dated 8.8.2019 issued by the Government of India, Ministry of Finance, Department of Revenue, Central Board of Direct Taxes (Judicial Section), New Delhi. By the aforesaid Circular, a policy decision was taken by the Revenue to withdraw all such Income Tax Appeals where the tax effect involved is less than Rs.1 Crore. It was, ---2--- therefore, that the prayer for withdrawal of the appeal(s) was made.

However, learned counsel submitted that it was thought that there could be situation whereon scrutiny the tax effect might be more than Rs.1 Crore, therefore, prayer was made to grant liberty to the Revenue to file an application for revival of the appeal, in case something survives therein. It is further submitted that on scrutiny of all the cases it was discovered that the tax effect in the present case was more than Rs.1 Crore.

Learned counsel for the Revenue also argued that the Registry of this Court has given relaxation of the Covid-19 period to the Revenue pursuant to the judgment of Supreme Court dated 23.3.2020 passed in suo motu Writ Petition (Civil) No.3/2020 (2020 SCC online SC 343) (In Re: Cognizance for Extension of Limitation). The total period of relaxation comes to 109 days which when adjusted from the total period of delay of 220 days, this review petition, as per the report of the Registry is time barred by 81 days.

He further submitted that the delay occasioned on account of bona fide reasons, inasmuch as the appeal in the present case was not liable to be withdrawn as the tax effect was actually more than Rs.1 Crore. However, it was inadvertently withdrawn because almost 100 appeals were listed on the same day and timely scrutiny could not be possible.

Shri Narendra Sharma, learned counsel appearing for the Assessee/respondent has strenuously opposed the application seeking condonation of delay. Learned counsel submitted that the review petition filed on 2.7.2020 was wholly incompetent. The Revenue was fully aware that the limitation for filing the review petition was 30 days, yet it did not file the application seeking condonation of delay therewith. The review petition was, therefore, not maintainable. It was only after the Registry pointed out the defect of delay that the application for condonation of delay was filed highly belatedly on 8.1.2021. He further submitted that the reasons given in the application seeking condonation of delay do not make out a case for condonation of delay within the meaning of Section 5 of the Limitation Act as they do not constitute ‘sufficient cause’. Therefore, the application for condonation of delay as well as the review petition both deserve to be dismissed. It is submitted that the petitioner/Revenue may not be entitled to ---3--- any relaxation for the Covid-19 period because the order of which the review is sought was passed on 25.11.2019 much before the onset of pandemic of Covid-19, which came about sometime in the mid of March 2020 and the period of limitation being 30 days for filing of the review petition expired on 24.12.2019. Accordingly, it is prayed that the application seeking condonation of delay be dismissed with cost.

Having heard learned counsel for the parties and perused the order of which review is sought, this Court finds that the appeal was admittedly disposed of as withdrawn on the prayer of the Revenue, but at the same time liberty was granted to the Revenue to file an application for revival of the appeal, in case something survives therein. The Circular No.17/2019 dated 8.8.2019 provided for withdrawal of such appeal where the tax effect is less than Rs.1 Crore. It is not disputed even by the Assessee before us that the tax effect in the present case is more than Rs.1 Crore. However, the Assessee is opposing the condonation of delay contending firstly that the benefit of Covid-19 relaxation period in view of the judgment dated 23.3.2020 of Supreme Court in Re : Cognizance for Extension of Limitation (supra) may not be extended to the Revenue and secondly the review application when filed originally was incompetent as the same was not accompanied by the application seeking condonation of delay and thirdly the explanation offered for the delay in the application seeking condonation thereof does not constitute ‘sufficient cause’ within the meaning of Section 5 of the Limitation Act. No doubt the Revenue has been somewhat lethargic in filing the review petition alongwith the application for condonation of delay, but at the same time we are also cognizant of the fact that the said appeal was not decided on merits, but was allowed to be withdrawn pursuant to the policy of the aforesaid Circular of the Central Ministry, which itself imposes a condition to on withdrawal of the appeals only if the tax effect is less than Rs.1 Crore.

In the facts of the case the Revenue may not be wholly unjustified in requesting for revival of the appeal because such liberty was consciously reserved for them by this Court while allowing disposal of the appeal as withdrawn, but this Court is also persuaded to compensate the Assessee for ---4--- the inconvenience caused to them on account of delay in filing the review petition.

In view of the aforesaid reasons, we allow the application, I.A.

No.177/2021, seeking condonation of delay in filing the present review petition and as a consequence, we also allow this review petition and recall the order dated 25.22.2019, but at the same time, we deem it appropriate to direct the Revenue to pay Rs.5000/- (Rs. Five Thousand only) to the Assessee as costs within a period of four weeks from today.

It shall be open for the Revenue to recover the aforesaid amount of costs from the Officers of the department, if found negligent in filing of the application for condonation of delay as well as the review petition with enormous delay.

With the aforesaid directions, this review petition is disposed of. (Mohammad Rafiq) (Mohd. Fahim Anwar)

Chief Justice Judge Anchal ANCHAL KHARE 2021.04.01 17:12:17 +05'30'