Mashreq Bank PSC Vs DDIT (ITAT Mumbai)
The Mumbai Bench of the Income Tax Appellate Tribunal considered a Cross Objection filed by Mashreq Bank PSC against the departmental appeal in ITA No. 3283/Mum/2009 concerning A.Y. 2005-06. The departmental appeal had already been dismissed as withdrawn on 10/04/2026 due to low tax effect, leaving only the assessee’s Cross Objection for adjudication. The Cross Objection was filed with a delay of 6 years and 35 days, approximately 2,227 days. The assessee explained that the departmental appeal had been served on 12/11/2009 and the Cross Objection was required to be filed by 11/12/2009. According to the assessee, the issue concerning allowability of Head Office expenses was then covered against it by earlier Tribunal orders for A.Ys. 1995-96 to 1997-98, and it therefore did not file a separate Cross Objection to avoid multiplicity of litigation. Subsequently, the Tribunal, in the assessee’s own case for A.Y. 1998-99, by order dated 08/05/2015, held that the entire Head Office expenses allocated to Indian branches were allowable under Article 7(3) of the India-UAE DTAA. The assessee thereafter filed the present Cross Objection on 15/01/2016 without further delay and relied on several judicial decisions in support of condonation.
The Department opposed the application, submitting that the explanation did not constitute “sufficient or reasonable cause”. It contended that the statutory limitation expired on 11/12/2009 and that a subsequent favourable judicial decision could neither revive a remedy that had become time-barred nor constitute a fresh cause of action. The Department also submitted that the assessee had consciously chosen not to pursue the statutory remedy because of the prevailing judicial position and had not demonstrated any unavoidable circumstance preventing timely filing.
