Model Exim Vs PCIT (Central) (ITAT Lucknow)
Conclusion: Assessee’s failure to file an appeal or pursue an alternative remedy under Section 263 of the Income Tax Act, 1961, could not be considered as negligence, as there was no undue benefit to be gained by not appealing against an assessment or related order. Assessee explained the 2564 days delay in filing of the appeal and such delay was bona fide and reasonable, then, the Courts must take a liberal approach and condone the delay in filing of the appeal.
Held: In the instant case, there was a delay of 2564 days in filing of the appeal before the Income Tax Appellate Tribunal (ITAT), for which, a petition for condonation of delay along with affidavit explaining reasons for such delay had been filed. Assessee had given reasons that as per the previous counsel, late Shri R.R. Jain (C.A.) had given advice no separate appeal against the order passed u/s 263 was filed before ITAT. Therefore, assessee was pursuing its remedy in the wrong forum on the advise of its previous counsel late Shri R.R. Jain. It was held that it was not a case for “negligence” of assessee that it was not filed appeal or not pursuing alternate remedy available under the Act to challenge the order of CIT u/s 263 of the Act, because no person would derive any undue benefit by not preferring appeal against any assessment order or other order passed under the Act. . It was well settled principle of law by the decision of various courts including the Hon’ble Supreme Court in the case of Collector Land Acquisition Vs. Mst. Katiji & Ors reported in [1987] 167 ITR 471 (SC), where, the Hon’ble Supreme Court clearly laid down the law in condonation of delay and held that ordinarily a litigant did not stand to benefit by lodging an appeal late. Further, refusing to condone delay result in meritorious matter being thrown out at the very threshold and cause of justice being defeated. As against this, when delay was condoned the highest that could happen was cause would be decided on merits after hearing the parties. At the same time, the Hon’ble Supreme Court made it clear that every day of delay must be explained. In case, the applicant explained the delay in filing of the appeal and such delay was bona fide and reasonable, then, the Courts must take a liberal approach and condone the delay in filing of the appeal. In this case, the reasons given by the assessee appeared to be bona fide and genuine and further reasonable. The delay was condoned in filing of appeal.
