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Judgment
This Notice of Motion seek condonation of 1873 days in filing the accompanying Appeal from the order dated 5th June, 2009 of the Income Tax Appellate Tribunal (Tribunal), relating to Assessment Years 1998-1999. The last date of filing the appeals from the impugned order was 28th October, 2009, while the appeal is filed on 17th December, 2014.
The learned Counsel appearing for the Applicant pointed out the following events leading to the delay in filing the appeal is as under:-
(a) The appeal for Assessment Year 1998-1999 filed by the Applicant before the Tribunal claimed relief on the following issues:-
(i) The re-opening of the assessment was without jurisdiction; and
(ii) The Appellant was entitled to deduction under Section 80IB of the Income Tax Act, 1961 (the Act) in respect of the customs duty draw-back.
Before the Tribunal, so far as issue (i) above viz: of re-opening of assessment was concerned, the Applicant did not press the same and it was dismissed as not pressed. However, the challenge on the second issue viz: entitlement to benefit of Section 80IB of the Act was upheld by following the decision of the Delhi High Court in CIT v/s. Eltek SGS Pvt. Ltd. , (2008) 300 ITR 6(Delhi). The impugned order of the Tribunal was received by the Applicant on 30th June, 2009;
(b) On 31st August, 2009, the Apex Court in Liberty India v/s. CIT , (2009) 317 ITR 218 (SC), reversed the decision of Delhi High Court in Eltek SGS Pvt. Ltd. (supra). Thus, the benefit of Section 80IB of the Act was not available to the Applicant;
(c) In view of the decision of the Supreme Court in Liberty India (supra) declaring the law, the Revenue filed a Miscellaneous Application with the Tribunal seeking to rectify the order dated 5th June, 2009, to the extent it had granted benefit of Section 80IB of the Act to the Applicant. On 23rd March, 2010, the Tribunal allowed the application of the Revenue and rectified the order dated 5th June, 2009, so as to hold that in view of the decision of the Apex Court in Liberty India (supra), the Applicant is not entitled to the benefit of Section 80IB of the Act. Thus, the appeal of the Applicant before the Tribunal were dismissed in its entirety;
(d) On 5th February, 2011, the Applicant filed a Miscellaneous Application, seeking to rectify the order dated 5th June, 2009 of the Tribunal to the extent it dismissed the Applicant''s appeal on the issue of re-opening of the assessment as not being pressed. This Miscellaneous Application was rejected by the Tribunal by its order dated 29th April, 2011. The Applicant, thereafter, filed two more Miscellaneous Application, seeking to rectify the order dated 5th June, 2009 on the re-opening of assessment issue and both these subsequent applications also came to be rejected by the Tribunal. The last of such rejection of the Miscellaneous Applications filed by the Applicant was by order dated 11th October, 2013 and received by the Applicant on 30th June, 2014;
(e) Being aggrieved, the Applicant filed a Writ Petition No. 1307 of 2014 challenging the Tribunal''s order dated 11th October, 2013, dismissing the Applicant''s Miscellaneous Application for rectification of order dated 5th June, 2009. On 30th July, 2014, the Writ Petition No. 1307 of 2014 was dismissed by this Court. In the meanwhile, pending the disposal of the Writ Petition in this Court, the Applicant filed an appeal, being Income Tax Appeal (L) No. 1385 of 2014, challenging the order dated 11th October, 2013 passed on the Miscellaneous Application;
(f) The Income Tax Appeal No. 1385 of 2014 was withdrawn on 30th October, 2014; and (g) On 17th December, 2014, the present appeal challenging the order of the Tribunal dated 5th June, 2009 was filed along with this Notice of Motion, seeking condonation of delay of 1835 days in filing the accompanying appeal i.e. from order dated 5th June, 2009 (received on 30th June, 2009) up to 17th December, 2014.
Mr. Tralshwalla, learned Counsel appearing in support of the Notice of Motion, submits as under:-
(a) The Applicant had not originally filed an appeal against the common order of the Tribunal dated 5th June, 2009 even though the issue of re-opening of assessments, was adverse to it only because the issue on merits, namely the benefit of Section 80IB of the Act was decided in its favour. Thus, it was only after order dated 23rd March, 2010 by which the Tribunal rectified its order dated 5th June, 2009, withdrawing the benefit of Section 80IB of the Act that the Applicant was aggrieved by the finding of the Tribunal on the issue of re-opening of assessment. Thus, the period of time up to the 23rd March, 2010 is to be ignored for computing the period to challenge it before this Court;
(b) The period spent between 22nd February, 2011, (when the Applicant filed its first Miscellaneous Application) upto 30th October, 2014, (when the Applicant withdrew its Income Tax Appeal from the order on Miscellaneous Application) should be excluded. This is so as the Applicant was bonafide prosecuting its remedy by filing an application for rectification before the Tribunal. In support, reliance is placed upon the decision of the Supreme Court in M.P. Steel Corporation v/s. Commissioner of Central Excise, , (2015) 7 SCC 58; and
(c) A liberal approach in the applications for condonation of delay has to be adopted in the present facts and the delay be condoned. This would enable adjudication of the issue of re-opening of assessments on merits.
As against the above, Mr. Mohanty, learned Counsel appearing for the Revenue, submits as under:-
(a) The Court should not exercise its discretion to condone the delay in filing the appeal, as there has been a gross delay of 1873 days in moving this Court from the impugned order of the Tribunal dated 5th June, 2009;
(b) The time spent in making repeated applications for rectification before the Tribunal was not of a bonafide and diligent manner of prosecuting a remedy. This itself evidences lack of bonafides and diligence on the part of the Applicant, resulting in destroying accrued rights of the Revenue. Thus, the decision of the Apex Court in M.P. Steel Corporation (supra) would have no application in the present facts; and
(c) In any view, the period between 30th June, 2009 to 22nd February, 2011 i.e. from the date of receipt of the order dated 5th June, 2009 upto the filing of the first Miscellaneous Application as well as the period from 30th October, 2014 when appeal against Miscellaneous Application was withdrawn upto 17th December, 2014 when the present appeal was filed i.e. a period in the aggregate of 19 months, no attempt is even made to explain the delay. Therefore, the application be dismissed.
It is a settled position that an application for condonation of delay has to be liberally construed, as held by the Apex Court in various cases [see Collector, Land Acquisition v/s. Mst. Katiji, , (1987) 167 ITR 471 (SC).] However, this liberal construction of the sufficient cause while condoning delay has to be counter balanced by ensuring that the law of limitation which provides for definite consequence on the rights of the parties does not become ineffective. The rule of limitation is provided for general welfare of the society so as to put a period beyond which a party cannot agitate an issue in litigation. The rationale for the same is that once a litigation is decided, the dispute must repose. This is particularly so, if the party aggrieved by the order does not agitate the issue before the appellate forum within the time provided. The opposite party can then proceed on the basis that the dispute is settled and arrange its affairs on that basis. Thus, if the aggrieved party has not moved the appellate forum within the prescribed time, resulting in the other party securing an accrued rights, then the party moving an application for condonation of delay, must endeavor to explain the delay and show his bonafide in not having moved within the time prescribed (i.e. not being diligent). The law assist the vigilant and not the indolent as stated in the Latin Maxim "Vigilantsbus et non dormientibus jura subveniunt." The reasons for explaining the delay has to be plausible and therefore reasonable so that the Court can exercise its discretion. Moreover, although a party is not required to explain the reasons for not filing an appeal within the prescribed time, the party must explain the delay post period of limitation i.e. from the expiry of the period of limitation.
In the present facts, we find that the Applicant had given up the issue of re-opening of assessment being without jurisdiction before the Tribunal. The impugned order dated 5th June, 2009 of the Tribunal had no occasion to deal with the issue of re-opening of the assessment. The Applicant, if aggrieved by the decision dated 5th June, 2009 of the Tribunal, incorrectly recording its withdrawal of challenge to the re-opening of the assessment, the Applicant should have been filed an application for rectification immediately. The Applicant accepted the order of the Tribunal on the issue of re-opening of assessment and chose not to file any Miscellaneous Application, seeking to rectify any mistake in order dated 5th June, 2009. This itself would be an indication of the fact that the Applicant was not aggrieved by the Tribunal recording that the issue of re-opening of an assessment was not being pressed. This is so, as if the Applicant had any grievance, it would have filed a Miscellaneous Application. In any case, the right of filing an appeal in respect of re-opening of an assessment arose when the order dated 5th June, 2009 of the Tribunal was received by the Applicant. The right of appeal of the Applicant on the issue of re-opening of assessment did not arise as a consequence of the order of the Tribunal dated 23rd March, 2010 allowing the Revenue''s application for rectification, withdrawing the benefit of Section 80IB of the Act to the Applicant. There is no explanation as to what prevented the Applicant from filing an application for rectification before the order dated 23rd March, 2010 of the Tribunal allowing the Revenue''s application for withdrawing the benefit of Section 80IB of the Act. This event viz: order dated 23rd March, 2010 does not explain the delay from order dated 5th June, 2009 (received on 30th June, 2009) upto its first applications for rectification on 22nd February, 2011.
Be that as it may, even if we accept the submission made on behalf of the Applicant that the time spent between 22nd February, 2011 to 17th December, 2014, in prosecuting the repetitive Miscellaneous Application on the same issue before the Tribunal, filing Writ Petition and appeal from the order on the Miscellaneous Applications is a bonafide and diligent pursuit of a remedy, yet the affidavit in support of the Notice of Motion makes no attempt to explain the period spent between 30th June, 2009 to 22nd February, 2011. The Supreme Court''s decision in Liberty India (supra) was rendered on 31st August, 2009 and even if the Applicant had originally decided not to seek rectification of order dated 5th June, 2009 because the issue on merits has been decided in its favour, it should have moved a rectification application before the Tribunal immediately after the decision of the Apex Court in Liberty India (supra). Further, the Applicant also made no application for rectification when the Revenue has filed an application for rectification on the basis of the decision of the Apex Court in Liberty India (supra) is further evidence of the Applicant not acting diligently. There is no explanation for the aforesaid conduct on the part of the Applicant in the affidavit in support of the application. This clearly establishes that Applicant was not diligent.
In the present facts, we are of the view that the rectification application was moved on the ground that the recording of not pressing its grievance with regard to re-opening of the assessment at the time of hearing of an appeal, leading to the impugned order dated 5th June, 2009, was not correct. Therefore, even if we exclude the period between 22nd February, 2011 to 30th October, 2014, on the basis of the Apex Court''s decision in M.P. Steel Corporation (supra), the Applicant has not given any explanation, much less, any satisfactory explanation for the time spent between 30th June, 2009 to 22nd February, 2011,when the first Miscellaneous Application was filed i.e. 18 months. Besides, affidavit in support does not explain the delay of approximately one and half months after the withdrawal of the Appeal (L) No. 1385 of 2014 from the order on the Miscellaneous Application up to the filing of the accompanying appeal on 17th December, 2014. Thus, there being no explanation even attempted in the affidavit in support of the notice of motion, no occasion to condone the delay can arise.
In the above view, the application for condonation of delay cannot be allowed as the Applicant has not made out sufficient cause for condoning the delay.
Accordingly, the Notice of Motion is dismissed. No order as to cost.