Appeal on substantial question of law should not be dismissed on technical ground

PCIT Vs Organon (India) Pvt. Ltd.  (Calcutta High Court)

Introduction: The Calcutta High Court recently addressed a crucial matter involving the Principal Commissioner of Income Tax (PCIT) and Organon (India) Pvt. Ltd. This case revolves around the appeal filed by the revenue, seeking to condone a substantial delay of 314 days. In response, the respondent, Organon, presented counter-affidavits, triggering a legal discourse on the justifiability of the delay.

Detailed Analysis: The contention raised by Mr. Paras Salva, the learned advocate, is centered on the inadequacy of the reasons provided in the affidavit supporting the delay condonation petition. He cites legal precedents, including the Supreme Court decisions in Union of India vs. Central Tibetan School Administration and Post Master General vs. Living Media India Ltd., emphasizing that a lack of explanation for the delay should not warrant condonation.

Incorporating principles outlined in Collector (LA) Vs. Katiji, the learned advocate underscores that justice could be compromised if a meritorious matter is dismissed due to a non-deliberate delay. Despite acknowledging an unexplained portion of the delay, the court leans on the fact that the appeal falls under Section 260A of the Income Tax Act, requiring scrutiny for substantial questions of law. Notably, the Tribunal’s reference to a related case involving Philips India Ltd. further influences the decision.

The court acknowledges the pendency of an appeal related to the Philips India Ltd. case and deems it appropriate to exercise discretion in condoning the delay. Balancing technicalities and substantial justice, the court grants the condonation, ensuring the appeal is not dismissed on procedural grounds.

Conclusion: In light of the legal principles invoked by the Hon’ble Supreme Court and considering the unique circumstances surrounding the appeal under Section 260A, the Calcutta High Court grants approval for condoning the 314-day delay. The decision underscores the importance of maintaining a delicate balance between technical considerations and the pursuit of substantial justice. The appeal is slated for admission alongside the Philips India Limited case on June 23, 2022, marking a pivotal juncture in the ongoing legal saga.

This application has been filed by the revenue to condone the delay of 314 days in filing the appeal. The respondent/assessee has filed affidavit-in-opposition to which an affidavit-in-reply has been filed by the appellant. Mr. Paras Salva, learned Advocate assisted by Mr. A. K. Dey, learned Advocate would vehemently contend that the affidavit filed in support of the condone delay petition, does not give any reason for the inordinate delay of 314 days in filing the appeal and the respondent has clearly mentioned about the various period during which there has been no explanation for the delay. In support of his contention, the learned Advocate has referred to the decision of the Hon’ble Supreme Court in the case of Union of India vs. Central Tibetian School Administration & Ors. reported in 2020 (21) SCC Online SC 119 as also the celebrated decision of the Hon’ble Supreme Court in the case of Post Master General vs. Living Media India Ltd. reported in 2012 (3) SCC 563. These decisions have been pressed into service to support the contention that when no explanation is offered, the Courts should not condone the delay and a separate law of limitation is not available for the Government and Governmental authorities and they are also to be treated in the same yardstick. In Living Media India Limited the Hon’ble Supreme Court took note of the decision in the case of Collector (LA) Vs. Katiji [1987] 2 SCC 107 where the Hon’ble Supreme Court pointed out various principles while considering the expression “Sufficient Cause”. Some of the relevant principles would be that ordinarily a litigant does not stand to benefit by lodging an appeal laid; refusing to condone delay can result in a meritorious matter being thrown out at the very threshold and cause of justice would be defeated; when substantial justice and technical consideration are pitted against each other because of substantial justice reserve to be deferred for the other side cannot claim to have vested right if injustice being done because of non deliberate delay. As pointed out earlier, there is a delay of 314 days in filing the appeal. The learned Advocate appearing for the respondent/assessee is right in submission of certain period of the delay remains unexplained. However, bearing in mind the legal principles which has been laid down by the Hon’ble Supreme Court if we examine the matter, we are of the view that since the present appeal has been filed under Section 260A of the Income Tax Act, 1961 and the Court is required to examine as to whether any substantial question of law would arise for consideration we are of the view that the appeal should not be thrown out on technical ground. That apart we find that Tribunal had referred to a decision of the Co-ordinate Bench in the case of Philips India Ltd. Vs. ACIT  in ITA/2489/Kol/2017 dated 4.4.2018. We are informed that as against the said order appeal has been preferred before this Court at the instance of the department and the same is pending. If such is the case, we are of the view that ends of justice would be met if we exercise discretion and condone the delay in filing the appeal. For such reason, the application is allowed and the delay in filing the appeal is condoned.

Let appeal be listed for admission along with the appeal filed in the case of Philips India Limited(supra) on 23^rd June, 2022 at the top.