Under the existing provisions, appeal u/s. 260A of the Act against the order of the Income Tax Appellate Tribunal can be filed with the High Court within a period of 120 days from the receipt of the order of the ITAT. Prior to introduction of the appeal provisions u/s. 260A w.e.f. 1st October, 1998, there were provisions of filing reference application before the High Court u/s. 256 of the Act, which also provided for similar period of 120 days from the receipt of the order of the ITAT.

None of the provisions were granting powers to the High Court to condone the delay in case where the assessee or the department failed to file the appeal / reference within the stipulated period. However, the High Courts under their inherent powers and also under the provisions of the Civil Procedures Code, 1908, were condoning the delay.

In Hongo India Pvt. Ltd. 236 E.L.T. 417 and Chaudharana Steels 238 E.L.T. 705, the Supreme Court held in the context of sections 35H & 35G of the Excise Act, that in the absence of specific powers, the High Court has no power to condone delay. Recently full bench of the Allahabad High Court in the case of CIT v. Mohd Farooq 317 ITR 305 held the high court has no power to condone the delay. Same verdict is given in following cases by various high courts:-

  • ACIT v Mahavir Prasad Verma & Others 225 CTR 305 (Chhattisgarh)
  • CIT v. Williamson Tea (assam) Ltd. 319 ITR 368 (Guwahati)
  • CIT v. Grasim Industries Ltd 319 ITR 154 (Bom)
  • ACIT v Shubhash Traders 318 ITR 402 (MP)
  • CIT v. West Coast Paper Mills Ltd 319 ITR 390 (Bom)

To obviate the difficulties likely to be created because of these ruling, a retrospective amendment (w.e.f. 1.6.81 in section 256 and w.e.f. 1.10.98 in section 260A) is proposed to grant power to condone delay to the high courts.

Similar amendments are also proposed in Section 27 and 27A of the Wealth Tax Act, 1957 for giving powers to the high court for condonation of delay in admitting reference / appeal filed under the Wealth Tax Act.

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June 2021