Sreenivas Charitable Trust vs The Deputy Commissioner of Income Tax, Exemptions III

P.D. Dinakaran, J.—Against the order of the Appellate Tribunal in ITA.No.1025/Mds/1999, dated 11.6.2004, the assessee has preferred the appeal and raised the following substantial question of law:

"Whether on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal was right in law in dismissing the appeal filed by the assessee as barred by limitation?"

The assessee is the appellant. The assessment year involved in the appeal is 1998-99. The assessee is a Charitable Trust enjoying the exemption u/s 11 of the Income Tax Act. The assessing officer brought to tax the investments made by the assessee in M/s.India Housing Finance and Development Limited in respect of which the renewal application for its approval u/s 36(1)(viii) of the Income Tax Act was not disposed of by the Central Board of Direct Taxes. The Commissioner of Income Tax (Appeals) upheld the action of the assessing officer. Aggrieved by the same, the assessee preferred an appeal before the Appellate Tribunal with a petition to condone the delay of 38 days in filing the appeal. The Appellate Tribunal dismissed the appeal as barred by limitation. Hence, the assessee has come forward with this appeal.

The Supreme Court in Vedabai alis Vaijayanatabai Baburao Patil Vs. Shantaram Baburao Patil and Others, held as under:

"In exercising discretion u/s 5 of the Limitation Act the courts should adopt a pragmatic approach. A distinction must be made between a case where the delay is inordinate and a case where the delay is of a few days. Whereas in the former case the consideration of prejudice to the other side will be a relevant factor so the case calls for a more cautious approach but in the latter case no such consideration may arise and such a case deserves a liberal approach. No hard and fast rule can be laid down in this regard. The court has to exercise the discretion on the facts of each case keeping in mind that in construing the expression "sufficient cause", the principle of advancing substantial justice is of prime importance."

The Calcutta High Court in Commissioner of Income Tax Vs. Orissa Concrete and Allied Industries Ltd., held as under:

"...what is really indicated in the various decisions cited and in Section 5 of the Limitation Act itself, is that a litigant would be required to explain why the appeal and/or application could not be filed within the period prescribed by limitation and explain the delay for such period for the purpose of linking up the circumstances which had caused the delay during the period of limitation and thereafter."

Recently, the Allahabad High Court in Ganga Sahai Ram Swarup and Another Vs. Income Tax Appellate Tribunal and Others, has taken the view that a liberal view ought to have been taken by the authority as the delay was only of a very short period and the appellant was not going to gain anything from it.

Applying the ratio laid down by the Apex Court as well as various High Courts, we find, it is stated in the petition filed by the assessee for condonation of delay that the order copy was misplaced and thereafter it was found and sent to the counsel for preparing the appeal and then, the appeal was prepared and filed before the Tribunal and in that process, the delay of 38 days occurred. As held by the Apex Court, no hard and fast rule can be laid down in the matter of condonation of delay and courts should adopt a pragmatic approach and the courts should exercise its discretion on the facts of each case keeping in mind that in construing the expression, ''sufficient cause'' the principle of advancing substantial justice is prime importance and the expression, ''sufficient cause'' should receive a liberal construction. We are, therefore, of the opinion that the Appellate Tribunal ought to have condoned the delay in filing the appeal, considering the reasons given by the assessee for the delay.

Accordingly, we find that the Appellate Tribunal was not right in dismissing the appeal as barred by limitation. The delay in filing the appeal before the Tribunal is condoned. The Tribunal is directed to take the appeal on file and dispose of the same on merits, in accordance with law. The tax case appeal stands allowed and the question of law is answered in favour of the assessee. No costs.