Limras Lottery and Trading Company Pvt Ltd vs. The Income Tax Officer

TCA/38/2025HC Madras25 February 2025Bench: Honourable Mr Justice S. S. SUNDAR5 pages

AI SummaryRemanded

What did the High Court hold?

The High Court held that the reasons provided by the appellant for the delay in filing the appeal were not to be discarded. The Court found that a bona fide attempt was made by the appellant to explain the delay, and there was no reason for the appellate tribunal to dismiss these reasons. The High Court also noted that the ITAT had observed the appeal to be devoid of merits while dismissing it on the ground of limitation, deeming this an irregularity. Consequently, the High Court was convinced that there were explanations for the delay and no reason to suspect the appellant's bona fides. The petition to condone the delay should not have been dismissed for reasons not germane. Therefore, the appeal was allowed, the ITAT's order was set aside, and the matter was remanded to the ITAT for de novo consideration.

What were the facts?

The appeal concerns assessment year(s) not explicitly stated, but the assessment order was dated 14.11.2019 and served on 18.11.2019. The appellant, M/s. Limras Lottery & Trading Company Pvt Ltd, filed an appeal with the Income Tax Appellate Tribunal (ITAT) with a delay of 1260 days. The ITAT dismissed the appeal, finding insufficient cause for the delay, even after excluding the Covid-19 pandemic period, which still left a delay of 544 days to be explained. The appellant's business was defunct, its deposits were frozen, and its counsel passed away due to Covid-19. The High Court is hearing a Tax Case Appeal against the ITAT's order.

What were the issues?

1. Whether the Income Tax Appellate Tribunal erred in law and on facts by holding that the appellant failed to establish sufficient cause for the inordinate delay in filing the appeal, thereby dismissing the appeal on the ground of limitation? Assessee's Contentions: The appellant argued that the delay was due to several factors, including misplacement of the assessment order copy during renovation, inability to contact their counsel due to the Covid-19 pandemic, the death of their counsel, and difficulties in tracing relevant papers and appointing a new counsel for a defunct company. They contended that the delay was minimal if the Covid-19 period was excluded and that their reasons were bona fide. They also pointed out that the Tribunal considered the merits of the case while dismissing the appeal on limitation, which they argued was an irregularity. Revenue's Contentions: The judgment does not record specific contentions made by the revenue before the High Court regarding the delay. However, the ITAT's order, which is under challenge, found the appellant unable to establish sufficient cause for the delay.

Which sections of the Income-tax Act were involved?

Section 260A

AI-generated summary — verify with the full judgment below

T.C.A. No.38 of 2025 IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 25.02.2025 CORAM THE HONOURABLE MR.JUSTICE S.S.SUNDAR and THE NONOURABLE MR.JUSTICE C.SARAVANAN T.C.A. No.38 of 2025 M/s.Limras Lottery & Trading Company Pvt Ltd No.164, Near Hotel Orchid Inn Peters Road Opp., New Colony Chennai - 600 014 PAN: AAACL7724R .. Appellant Vs. The Income Tax Officer Corporate Circle - 4(1) Chennai .. Respondent * * * Prayer : Tax Case Appeal filed under Section 260A of the Income Tax Act, 1961, against the order of the Income Tax Appellate Tribunal, Chennai Bench 'A' dated 21.05.2024 in ITA No.738/Chny/2024. * * * For Appellant : Mr.Poojesh.J For Respondent : Mr.J.Narayanasamy, Sr. Standing Counsel and M/s.V.Pushpa, Sr. Standing Counsel JUDGMENT ________ Page 1/5 https://www.mhc.tn.gov.in/judis ( Uploaded on: 06/03/2025 07:52:08 pm ) T.C.A. No.38 of 2025 (delivered by S.S.SUNDAR, J.) This appeal is directed against the order of the Income Tax Appellate Tribunal dismissing the appeal filed by the appellant on the ground that the appellant was unable to establish sufficient cause for the delay in filing the appeal. The following facts are not in dispute. 2. The order of assessment against the appellant was on 14.11.2019 and the same was served on the appellant on 18.11.2019. The appeal was filed with a delay of 1260 days. Excluding the time during which Covid 19 pandemic was alarming, the appellate Tribunal has noted that the appellant has to explain the delay of 544 days. It is the case of the appellant that the appellant was doing lottery business and the business was closed long back. It is further submitted that the deposits maintained by the appellant were freezed. It is the further case of the appellant that the counsel for the appellant had passed away due to Covid. This is not a case where there is no reason for the delay. However, the appellate Tribunal has held that the appellant was unable to establish sufficient cause for the delay. The Tribunal also considered the matter on merits and formed an opinion that it is in agreement with the adjudication of the learned CIT (Assessor) in the impugned order and the ________ Page 2/5 https://www.mhc.tn.gov.in/judis ( Uploaded on: 06/03/2025 07:52:08 pm ) T.C.A. No.38 of 2025 same is challenged in this Tax Case Appeal. 3. The appellant has given the following reasons for the delay: Though the order of the Assessment Officer dated 14.11.2019 was received on 18.11.2019 at the office premises, the order copy did not reach the appellant due to misplacement on account of some renovation. In March 2020 due to Covid pandemic, the appellant was not in a position to contact his counsel, who was looking after all the income tax issues of the appellant. Meanwhile, the counsel for the appellant also died. Even after receiving the penalty order, the appellant was not in a position to trace the relevant papers. Therefore, the appellant felt handicapped and was unable to file the appeal in time. Since the appellant was defunct, the process of appointing a new counsel to look after all their cases relating to the income tax of the company took some time. Therefore, the delay in filing the appeal had occurred. The delay is very minimal, if Covid 19 period is excluded. 4. This court is unable to discard the reasons stated by the appellant before the appellate tribunal. Even though the delay is inordinate, a bona fide attempt has been made by the appellant to explain the delay and there was no ________ Page 3/5 https://www.mhc.tn.gov.in/judis ( Uploaded on: 06/03/2025 07:52:08 pm ) T.C.A. No.38 of 2025 reason for the appellate tribunal to discard the reasons. Further, the appellate tribunal has also observed that the appeal is devoid of merits, while dismissing the appeal on the ground of limitation. This is again an irregularity while dismissing the appeal on the ground of limitation and not on merits. Therefore, this court is fully convinced that there are explanations for the delay and there is no reason to suspect the bona fides of the litigant or to discard the reasons for the delay. Petition to condone the delay cannot be dismissed for multiple reasons which are not germane. 5. Therefore, for the reasons stated above, this appeal is allowed and the order of the appellate tribunal dated 21.05.2024 made in ITA No.738/Chny/2024 is set aside and the matter is remanded to the respondent for a de novo consideration. [S.S.S.R., J.] [C.S.N., J.] 25.02.2025 Asr To The Income Tax Officer Corporate Circle - 4(1) Chennai S.S.SUNDAR, J. ________ Page 4/5 https://www.mhc.tn.gov.in/judis ( Uploaded on: 06/03/2025 07:52:08 pm ) T.C.A. No.38 of 2025 and C.SARAVANAN, J. Asr T.C.A. No.38 of 2025 Dated : 25.02.2025 ________ Page 5/5 https://www.mhc.tn.gov.in/judis ( Uploaded on: 06/03/2025 07:52:08 pm )

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