MEWAT GRIT UDYOG BEHIND PNB BUILDING QUTUBPUR REWARI HARYANA vs. COMMISSIONER OF INCOME TAX GURGAON HARYANA

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ITA/17/2018HC Punjab & HaryanaPHHC01119010201822 October 2019Bench: MR. JUSTICE AJAY TEWARI,MR. JUSTICE HARNARESH SINGH GILL3 pages
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What did the High Court hold?

The High Court allowed the appeal, setting aside the ITAT's order. While acknowledging that the ITAT's reasoning for rejecting the delay condonation was not inherently wrong, the Court opined that no indefeasible right had accrued to the revenue. The Court found that any prejudice caused to the revenue could be compensated by costs. Consequently, the High Court condoned the delay of 312 days and directed the ITAT to hear the appeal on its merits. This was made conditional upon the assessee paying costs of Rs. 50,000/- to the revenue. The parties were directed to appear before the ITAT on 25.11.2019, with the cost to be deposited by the assessee by way of draft on that date.

What were the facts?

The assessee, Mewat Grit Udyog (now NKB Infrastructure Pvt. Ltd.), filed an appeal before the Income Tax Appellate Tribunal (ITAT). The ITAT declined to condone a delay of 312 days in filing this appeal, which was related to a matter under Section 263 of the Income Tax Act, 1961. The assessee's grounds for delay included the death of their original counsel and the inexperience of the new legal advisor. The ITAT rejected these grounds, stating that once represented by counsel, such reasons were not applicable. The assessee then appealed this order of the ITAT to the High Court.

What were the issues?

1. Whether the High Court can interfere with the ITAT's order declining to condone the delay in filing the appeal, particularly when the ITAT's reasoning was based on the assessee being represented by counsel, and the delay was substantial (312 days) under Section 263 of the Income Tax Act, 1961? Assessee's Contention: The assessee argued that the delay was due to the death of their original counsel and the inexperience of his son, who was their new legal advisor. They contended that they were unaware of the legal intricacies and the limitation period until they consulted a more seasoned practitioner. They sought condonation of delay to have their appeal heard on merits. Revenue's Contention: The revenue did not explicitly record arguments against the condonation of delay in the provided text. However, the ITAT's rejection of the assessee's grounds implies the revenue likely supported the ITAT's decision that the reasons provided were insufficient for condoning such a significant delay.

Which sections of the Income-tax Act were involved?

Section 263

AI-generated summary — verify with the full judgment below

ITA No.17 of 2018 (O&M) 1 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH 126+256 ITA No.17 of 2018 (O&M) Date of decision : 22.10.2019 Mewat Grit Udyog (Now NKB Infrastructure Pvt. Ltd.,) Behind PNB Building ...... Appellant versus Commissioner of Income Tax, Gurgaon, Haryana ...... Respondent CORAM : HON'BLE MR.JUSTICE AJAY TEWARI HON'BLE MR.JUSTICE HARNARESH SINGH GILL *** Present : Mr. Pankaj Jain, Senior Advocate with Mr. Divya Suri, Advocate for the applicant-appellant. Mr. Rajesh Sethi, Sr. Standing Counsel with Mr. Gaurav Kamboj, Advocate for the respondent-revenue.

*** AJAY TEWARI, J. (Oral) CM-16993-CII-2018 1. This application has been filed for impleadment of respondent namely “Commissioner of Income Tax (Central), Gurgaon” in place of “Commissioner of Income Tax, Gurgaon”. 2. For the reasons recorded, the application is allowed and the amended memo of parties is taken on record. CM-19344-CII-2019 3. For the reasons recorded, the application is allowed. Document Annexure A-11 is taken on record. POOJA SHARMA 2019.10.24 15:19 I attest to the accuracy and integrity of this document

ITA No.17 of 2018 (O&M) 2 Main case 4. This appeal has been filed against the order of the Tribunal declining to condone delay of 312 days which took place on filing of an appeal by the appellant in a matter under Section 263 of the Income Tax Act, 1961 (for short the Act). 5. The main reason given by the appellant was that the Assessee was not aware of the intricacies of the law and during the original proceedings his counsel had passed away and though the young son of the counsel was his legal advisor yet due to inexperience or lack of knowledge that new legal advisor (the son) did not advise him that the appeal could be filed and the limitation thereof, and it was only when he contacted another, more seasoned practitioner that he was given the advice. The Tribunal rejected the prayer on the ground that once the appellant was represented by a counsel these grounds of lack of knowledge etc. would not be applicable. 6. In our considered opinion, though the reasons given by the Tribunal cannot be stated to be wrong yet it cannot be said that any indefeasible right has accrued in favour of the revenue and whatever prejudice may have been caused to the revenue can be compensated by costs. In the circumstances, we allow the appeal. Condone the delay and direct that the Tribunal shall hear the appeal on merits subject to the payment of costs of Rs.50,000/- which would be borne by the Assessee. 7. Resultantly, the appeal is allowed in the above terms. Parties through their counsel are directed to appear before the Tribunal on 25.11.2019 and the appeal shall be heard as per the provisions of the Tribunal subject to the condition that on the date of appearance the POOJA SHARMA 2019.10.24 15:19 I attest to the accuracy and integrity of this document

ITA No.17 of 2018 (O&M) 3 appellant deposit a sum of Rs.50,000/- as costs by way of draft. 8. Since the main case has been decided, the pending C.M. Application, if any, also stands disposed of. (AJAY TEWARI) JUDGE (HARNARESH SINGH GILL) JUDGE 22.10.2019 pooja sharma-I Whether speaking/reasoned Yes/No Whether Reportable : Yes/No POOJA SHARMA 2019.10.24 15:19 I attest to the accuracy and integrity of this document

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