Assessee was exploring review petition in good faith, delay in filing appeals could be condoned: Delhi HC


Assessee was exploring review petition in good faith, delay in filing appeals could be condoned: Delhi HC



1.An appeal was filed under Section 260A of the Income Tax Act, challenging the order dated 20.06.2016/21.06.2016 passed by the Income Tax Appellate Tribunal (ITAT) in ITA 1725/del/2012. The appellant sought condonation of a 79-day delay in filing the appeal.

2.The delay is explained by the appellant on the grounds that, after the arguments on 20.06.2016, no further date was fixed by the Tribunal, and the appellant was informed about the outcome only on 19.06.2019. Subsequently, the appellant applied for a certified copy of the order dated 21.06.2016, filed a review application on 09.10.2019, and learned about the review application’s disposal on 02.05.2023.

3.The appellant argued that due to the resignation of the director who presented the case and the senior age of other directors, combined with issues with the Tribunal’s portal, the delay occurred. The delay was also attributed to the appellant becoming aware of the appeal only in May 2019 during a meeting with auditors.

Hon Delhi HC held as below:

1.The appellant applied for certified copies of the impugned order and promptly filed review application. Similarly, on coming to know about dismissal of the review application also the applicant promptly applied for certified copies and soon thereafter filed the present appeal.

2.These circumstances clearly show that there were no lack of bona fides on the part of the applicant. Besides, the applicant had nothing to gain by not challenging the impugned order. The applicant in such circumstances cannot be denied the benefit of time spent by it in pursuing the review application as it was a sufficient cause which sought to explain the delay.

3.Besides, the time spent by the applicant while pursuing the review proceedings deserves to be excluded even under principles analogous to Section 14 of the Limitation Act because the applicant in good faith was prosecuting the challenge to the impugned order before the Tribunal with due diligence but the Tribunal was unable to entertain the review on account of defect of jurisdiction.

4.We find the case set up by the applicant to be an “explanation” and not an “excuse”. Most importantly, we would prefer in the facts and circumstances of this case to be guided by cardinal principle of justice that disputes should be decided on merits and not defaults, so the applicant having brought before us a cause with sufficient explanation concerning the delay, cannot be shown door.

The copy of the order is as under: