Case Note & Summary
Two Miscellaneous Civil Applications were filed before the High Court of Bombay at Goa by Neelam Ajit Phatarpekar, an assessee, and as legal heir of late Ajit Phatarpekar, seeking condonation of delay of 40 days in instituting Tax Appeals under Section 260A of the Income Tax Act, 1961. The background involved assessment for the Assessment Year 2009-2010; the assessees filed appeals before the Commissioner of Income Tax (Appeals) which were allowed, prompting the Revenue to approach the Appellate Tribunal. The Income Tax Appellate Tribunal, Panaji Bench, reversed the CIT(A) order and restored the additions. The applicants contended they were not aware of the Tribunal's decision as they were not represented by their counsel and the order was passed ex-parte against them. They discovered the decision only upon receiving a notice for recovery of penalty and demand on May 14, 2024, and immediately obtained a certified copy on May 17, 2024. The Revenue opposed condonation, arguing that the applicants were aware of the proceedings. The Court examined the sequence and found that the applicants' previous counsel had not appeared before the ITAT, leading to an ex-parte order. The applicants then filed a recall application which was rejected on the ground that the ITAT had become functus officio. The Court observed that the applicants were not duly served and not heard, and thus the delay was bonafide. Emphasizing the principle that a litigant should not suffer for the fault of their counsel, the Court condoned the delay in both applications. However, the relief was made conditional upon each applicant paying costs of Rs.10,000/- to the respondent within four weeks, with a direction that failure to pay costs would result in automatic dismissal of the applications. The judgment ensures that the merits of the tax appeals can be heard while compensating the Revenue for the delay.
Headnote
A) Income Tax - Appeals - Condonation of Delay - Section 260A, Income Tax Act, 1961 - Sufficient cause - Applicants not aware of ITAT decision as they were not represented by counsel and order was passed ex-parte - Delay of 40 days explained by receipt of penalty/demand notice on 14.05.2024 and certified copy obtained on 17.05.2024 - Held: Delay condoned in the interest of justice, subject to each applicant paying costs of Rs.10,000/- to respondent within four weeks; if costs not paid, applications stand dismissed. (Paras 1-10)
Issue of Consideration
Whether the delay of 40 days in filing the tax appeals under Section 260A of the Income Tax Act, 1961, is sufficient cause for condonation when the applicants were not heard by the ITAT and the order was passed ex-parte.
Final Decision
The delay of 40 days in filing the tax appeals was condoned, subject to each applicant paying costs of Rs.10,000/- to the respondent within four weeks; failure to pay costs will result in automatic dismissal of the applications.
Law Points
- Condonation of delay under Section 260A of the Income Tax Act
- 1961
- sufficient cause includes party not being heard and ex-parte order passed
- litigant should not suffer for fault of counsel
- bonafide delay may be condoned subject to costs
