Case Law Details
PCIT Vs Milestone Gears Private Limited (Himachal Pradesh High Court)
Introduction: In a significant ruling, the Himachal Pradesh High Court dismissed an appeal filed by the Principal Commissioner of Income Tax (PCIT) against Milestone Gears Private Limited. The appeal, concerning a 100% deduction under Section 80IC of the Income Tax Act, 1961, was dismissed due to a substantial delay of 224 days in refiling.
Background of the Case
The case originates from an assessment made by the Income Tax Department on Milestone Gears Pvt. Ltd. for the assessment year 2012-2013. The initial order, passed on January 30, 2015, assessed the income of the respondent at Rs. 4,40,99,840. This order was partially overturned on appeal by the Commissioner of Income Tax (Appeals), Shimla, on March 30, 2017. The respondent then escalated the matter to the Income Tax Appellate Tribunal (ITAT), Chandigarh, which ruled in favor of Milestone Gears on December 6, 2018, granting a 100% deduction under Section 80IC.
The ITAT’s Reconsideration
Subsequently, the ITAT revisited its decision on October 11, 2019, due to a modification requested in M.A. 99/Chd/2019. This recalibration rendered the department’s initial appeal to the Himachal Pradesh High Court, filed on April 16, 2019, infructuous. Consequently, the department was given the liberty to file a fresh appeal, which they did on October 12, 2022.
Delay in Filing the Appeal
The crux of the issue lies in the 224-day delay from the deadline for filing the appeal, exacerbated by the timeline impacted by the COVID-19 pandemic. The Supreme Court had extended the limitation period from March 15, 2020, to February 28, 2022, allowing an additional 90 days from March 1, 2022, for appeals whose limitation period had expired within this timeframe. However, since the initial limitation for the appeal had already expired on February 8, 2020, this extension did not apply to the appellant’s case.
Court’s Rationale for Dismissal
The High Court emphasized the necessity for adherence to the statutory timelines unless justified by exceptional circumstances. The appellant’s justification, which cited procedural delays and the pandemic, was deemed insufficient. The court highlighted the absence of due diligence and noted the established precedent from the Supreme Court that government bodies are not entitled to preferential treatment concerning statutory limitations.
FULL TEXT OF THE JUDGMENT/ORDER OF HIMACHAL PRADESH HIGH COURT
OMP no.61/2023
For the reasons assigned in the application, the same is allowed and delay in refiling the appeal is condoned. The application isn disposed of accordingly.
OMP(M) no.14/2023
This application is filed seeking condonation of delay of 1085 days in filing the appeal under Section 260-A of the Income Tax Act, 1961 challenging the order dt.11.10.2019 passed in M.A. 99/Chd/2019 filed in ITA no.885/Chd/2017 for the assessment year 2012-2013.
2. From the facts narrated by the applicant, it appears that the assessing officer initially passed an order on 30.01.2015 under Section 143(3) of the Income Tax Act 1961 and assessed the income of the respondent-asseessee at Rs.4,40,99,840/-.
3. This was challenged in an appeal by the respondent and the said appeal was partly allowed on 30.03.2017 by the Commissioner of Income Tax (Appeals), Shimla, in Appeal No. IT/73,286,283/14-15/Sml.
4. Against the said order, the respondent-assessee filed an appeal being ITA No.885/Chd/2017 before the Income Tax Appellate Tribunal, Chandigarh. The said appeal was allowed on 06.12.2018 and deduction under Section 80IC was granted to the assessee at Rs.6,79,25,673/-.
5. Questioning the said order, the department filed Income Tax Appeal no.10/2019 before this Court on 16.04.2019 within time.
6. It appears that Income Tax Appellate Tribunal then recalled its order dt. 06.12.2018 on 11.10.2019 in MA no.99/Chd/2019 granting 100% deduction under Section 80IC in respect of Unit-III of the respondent.
7. This is the order, which is sought to be challenged in the current appeal.
8. We may also point that on 28.06.2022, Income Tax Appeal no.10/2019 previously filed before this Court, was declared as having become infructuous on account of the modification made in MA no.99/Chd/2019 by the Income Tax Appellate Tribunal on 11.10.2019 and liberty was granted by this Court to file afresh.
9. The instant appeal came to be filed on 12.10.2022 by the appellant.
10. In the application seeking condonation of delay filed under Section 5 of the Limitation Act, 1963, the applicant/appellant contended that the appeal has to be treated as one within time from 28.06.2022, when Income Tax Appeal no.10/2019 was disposed of as infructuous by this Court. It is also contended that the delay is neither willful nor intentional.
11. We may point out that Income Tax Appeal no.10/2019 had no doubt become infructuous in view of modification of the order challenged therein (dt. 06.12.2018) by the Income Tax Appellate Tribunal by passing a fresh order on 11.10.2019.
12. The appellant had a right to question the order passed on 11.10.2019, by filing appeal under Section 260-A of the Act, within the period of 120 days prescribed under the Income Tax Act.
13. The said period ended on 08th February, 2020. Thereafter from around 15th March, 2020 the Covid Pandemic started, and in view of the same, the Hon’ble Supreme Court in its order dt. 10.01.2022 titled Re: Conginzance for Extension of Limitation directed that the period from 15.03.2020 till 28.02.2022 would stand excluded for the purposes of limitation as may be prescribed under any general or special laws in respect of all judicial or quasi-judicial proceedings. It further stated that if limitation had expired during the period between 15.03.2020 till 28.02.2022 notwithstanding the actual balance period of limitation remaining, all persons shall have a limitation period of 90 days from 01.03.2022.
14. However, in the instant case, the limitation having expired prior to 15.03.2020 on 08.02.2020 itself, the applicant cannot get the benefit of the said period of 90 days on 28.02.2022.
15. Admittedly, the instant appeal has been preferred on 12.10.2022, 224 days after 28.02.2022. No valid explanation for this period of delay is mentioned in the application. We are also of the opinion that the date on which Income Tax Appeal no.10/2019 was disposed of as infructuous on 28.06.2022 had no relevance, since the order impugned in that ITA and in the instant ITA would be different orders.
16. In this regard, another judgment being 2012 (3) SCC 563 (Office Of The Chief Post Master & Ors vs, Living Media India Ltd.& Anr), it was held:-
“26. In spite of affording another opportunity to file better affidavit by placing adequate material, neither the Department nor the person in-charge has filed any explanation for not applying the certified copy within the prescribed period. The other dates mentioned in the affidavit which we have already extracted, clearly show that there was delay at every stage and except mentioning the dates of receipt of the file and the decision taken, there is no explanation as to why such delay had occasioned. Though it was stated by the Department that the delay was due to unavoidable circumstances and genuine difficulties, the fact remains that from day one the Department or the person/persons concerned have not evinced diligence in prosecuting the matter to this Court by taking appropriate steps.
27. It is not in dispute that the person(s) concerned were well aware or conversant with the issues involved including the prescribed period of limitation for taking up the matter by way of filing a special leave petition in this Court. They cannot claim that they have a separate period of limitation when the Department was possessed with competent persons familiar with court proceedings. In the absence of plausible and acceptable explanation, we are posing a question why the delay is to be condoned mechanically merely because the Government or a wing of the Government is a party before us.
28. Though we are conscious of the fact that in a matter of condonation of delay when there was no gross negligence or deliberate inaction or lack of bonafide, a liberal concession has to be adopted to advance substantial justice, we are of the view that in the facts and circumstances, the Department cannot take advantage of various earlier decisions. The claim on account of impersonal machinery and inherited bureaucratic methodology of making several notes cannot be accepted in view of the modern technologies being used and available. The law of limitation undoubtedly binds everybody including the Government.”
17. Since we are satisfied that there has been negligence on the part of the applicant/appellant in filing the appeal within the time prescribed by law, this application is dismissed. Consequently, the appeal is dismissed.
Author Bio
