Facts of the Case

The appellant filed an appeal before the Delhi High Court against the order of the Income Tax Appellate Tribunal dated 31 March 2006. According to the appellant, the Tribunal's order was received on 10 May 2006. However, no appeal was filed against the said order within the prescribed limitation period.

There was a delay of approximately one year and eleven months in filing the appeal. The appellant contended that it was under the impression that relief would be granted through an application filed under Section 254(2) of the Income Tax Act before the Income Tax Appellate Tribunal. However, even the application under Section 254(2) was filed only on 20 October 2007 and was itself beyond the prescribed limitation period.

The appellant further submitted that the delay in filing the application under Section 254(2) occurred due to a change of counsel.

Issues Involved

  1. Whether a delay of one year and eleven months in filing the appeal deserved to be condoned.
  2. Whether change of counsel constituted sufficient cause for condonation of delay.
  3. Whether any substantial question of law arose from the impugned Tribunal order warranting interference by the High Court.

Petitioner’s Arguments

  • The appellant submitted that it was pursuing relief through an application under Section 254(2) of the Income Tax Act before the Tribunal.
  • It was argued that the appellant genuinely believed that relief would be granted in those proceedings.
  • The appellant contended that the delay in filing the application under Section 254(2) was attributable to a change of counsel and, therefore, the delay in approaching the High Court deserved to be condoned.

Respondent’s Arguments

  • The Revenue opposed the condonation application and maintained that no sufficient cause had been shown for the extraordinary delay.
  • It was contended that mere change of counsel could not justify a prolonged delay in pursuing statutory remedies.
  • The Revenue further submitted that the appeal did not raise any substantial question of law.

Court Findings

The Delhi High Court observed that the appeal had been filed with a delay of one year and eleven months.

The Court noted that the appellant's explanation was based on an assumption that relief would be obtained through proceedings under Section 254(2) of the Income Tax Act. However, even that application had itself been filed beyond the prescribed limitation period.

The Court held that the explanation that delay occurred due to change of counsel was not a sufficient reason warranting condonation of delay. The Court found that no satisfactory cause had been established for condoning such a substantial delay.

The Bench further observed that, apart from the issue of limitation, no substantial question of law arose from the appeals.

Court Order

  • Application seeking condonation of delay was dismissed.
  • The Court declined to condone the delay of one year and eleven months.
  • The appeals were held to be time-barred.
  • The Court additionally held that no substantial question of law arose for consideration.
  • Consequently, the appeals were dismissed.

Important Clarification

This decision reiterates that:

  • Change of counsel by itself does not constitute sufficient cause for condonation of substantial delay.
  • Litigants must diligently pursue their statutory remedies within the prescribed limitation period.
  • Filing a delayed rectification application under Section 254(2) cannot automatically justify delay in filing an appeal before the High Court.
  • Even where limitation issues arise, the High Court may independently examine whether any substantial question of law exists.
  • In the absence of both sufficient cause and a substantial question of law, the appeal is liable to be dismissed.

Sections Involved

  • Section 254(2) of the Income Tax Act, 1961
  • Provisions relating to limitation and condonation of delay in filing appeals before the High Courta

Link to download the order –

https://delhihighcourt.nic.in/app/case_number_pdf/2009:DHC:7263-DB/AKS27082009ITA8252009_161918.pdf

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