Commissioner of Income Tax-1 vs K.F. Bioplants (P.) Ltd.

This Notice of motion by the revenue seeks restoration of the accompanying Appeal which had been dismissed by an order of this Court dated 7.11.2009. The order dated 7.11.2009 of this Court was a conditional order giving time to the revenue to remove objections within a period of eight weeks from the date of the order failing which the Appeal would stand dismissed. However, as the Notice of motion has been taken out belatedly on 21.1.2015 a condonation of a delay of 1845 days in taking out the Notice of motion is also sought. The Affidavit in support of the Notice of motion points out that the order dated 7.11.2009 was passed on a Court working Saturday. At that time, the appellant was represented. However, it appears that due to miscommunication the appellant did not receive any communication from the Advocate intimating the conditional disposal of their Appeal. It is also submitted that the officer of the Department assigned to attend the Court did not attend the Court on Saturday as the office of the department was closed. Moreover, it is submitted the appellant also did not find the conditional order dated 7.11.2009 loaded on the web-site of this Court all of which cumulatively led the Appellant to believe that its Appeal for A.Y. 2004-05 was still pending in this Court awaiting its admission. Mr. Vimal Gupta the learned senior counsel for the revenue states that for Assessment years 2001-02, 2003-04, 2005-06 and 2006-07 a common order dated 22.2.2012 was passed by the Tribunal allowing the assessee''s appeal and dismissing the department''s appeal by following the order passed by the Tribunal in Assessment year 2004-05 (subject matter of the present appeal). The Appellant filed appeals for Assessment years 2001-02, 2003-04, 2005-06, 2006-07 in July, 2012 in this Court. However, at that time also the Appellant had proceeded under a bona fide belief that the appeal for Assessment year 2004-05 (accompanying Appeal) was still awaiting admission by this Court. The affidavit in support points out that only on 12.1.2015 when the Appeals for Assessment years 2001-02, 2002-03, 2003-04 and 2004-05 were listed on board of this Court for admission that the appellant realized that the Appeal for Assessment year 2004-05 was not listed because, the same had already been dismissed. Immediately, thereafter the appellant took out the present Notice of motion and sought condonation of delay essentially on the ground that at all times till 12.1.2015 they bonafide believed that the appeal for Assessment year 2004-05 was pending before this Court.

In view of the above, Mr. Vimal Gupta learned senior counsel for the Appellant prays that the delay be condoned and the Appeal be restored to file. It is submitted that the delay was on account of the mistake on the part of the appellants and not with any deliberate intent to gain any advantage at the cost of the assessee.

As against above, Mr. Thakkar learned counsel for the respondent-assessee strongly objects to the condonation of delay. In particular he points out that at the very latest, the appellant should have been put on notice with regard to the appeal for Assessment year 2004-05 being dismissed when they filed Appeals for Assessment years 2001-02, 2002-03, 2003-04 in July, 2012. This was for the reason that the common order of the Tribunal for the above assessment years specifically follows the order of the Tribunal for Assessment year 2004-05. Mr. Thakkar states that contention of the appellant smacks of gross negligence as no necessary inquiries were made about the facts of the present appeal at that time. It is also submitted by him that grave prejudice would be caused to the respondent-assessee as in case the appeal is finally allowed by the Court the respondent-assessee would be saddled with costs on account of interest on delayed payment of tax. He has taken us through the affidavit-in-reply filed to oppose the notice of motion.

We find that the conduct of the appellant in handling this matter certainly leaves much to be desired. The fact that the Appeal was dismissed on 7.11.2009 should have been known to the appellant as it was a Court working Saturday and the reason that the Income-tax Officer assigned to Court was not present in Court as the Income-tax Department is closed on Saturday is preposterous. It is the responsibility of the Revenue''s representative to be present and instruct their counsel representing them even on a Saturday which otherwise is a non-working day for the Income-tax Department. In case the revenue fails to be present in Court, then they must accept the consequence of their failure to attend Court. Therefore, it is expected of the re venue to carry out an inquiry into this and fix responsibility at an appropriate level so as to ensure such negligence does not take place in the future and such callous attitude is not tolerated.

Be that as it may, Mr. Gupta the learned counsel for the Revenue emphasized that there was a genuine mistake on the part of the revenue in not having kept them abreast with the developments after filing of the appeal. It is accepted that the mistake should not have happened. We do find that there was an unintentional lapse on the part of the revenue as the lapse could have been corrected much earlier when the appeal for A.Y. 2001-02, 2003-04, 2005-06, 2006-07 was filed in 2012. In fact, there was no earthly reason for the revenue not to pursue the present appeal when on the same issue appeals are filed from subsequent order of the Tribunal to this Court and the same are pending. We would expect the revenue to be more cautious henceforth and ensure that matters are properly attended to and proper follow-up is done with regard to the orders passed by this Court.

However, before condoning the delay one would have to consider whether the condonation of delay would cause gross prejudice to the other side only on the above account. It is contended by the Revenue- assessee that it would be saddled with costs on account of interest if the revenue succeeds in appeal. We find that even if the revenue had removed the objections within the prescribed period as provided in the order dated 7.11.2009 and the appeals were admitted it would as of today still awaiting its final disposal in this Court. Thus, this condonation of delay for considering the appeal for admission does not by itself cause any prejudice to the appellant as this costs on account of interest would be a likely situation even if in the event of the appeal being not dismissed by order dated 7.11.2009. We have considered the application for condonation of delay keeping in mind the following observations of the Apex Court in State of M.P. and Another Vs. Pradeep Kumar and Another, (2000) 4 CTC 434 : (2000) 10 JT 349 : (2000) 6 SCALE 347 : (2000) 7 SCC 372 : (2000) 3 SCR 235 Supp : (2000) 2 UJ 1375 :

"It is true that the pristine maxim" Vigilantibus Non Dormientiobus Jura Subveniunt (Law assists those who are vigilant and not those who sleep over their rights). But, even a vigilant litigant is prone to commit mistakes. As the aphorism "to err is human" is more a practical notion of human behaviour than an abstract philosophy, the unintentional lapse on the part of a litigant should not normally cause the doors of judicature permanently closed before him..."

This we counter-balanced by the likely prejudice to the other side on account of condoning the delay. We are of the view that in view of revenue''s mistake the delay of 1845 days in taking out the present motion be condoned and we also set aside the order dated 7.11.2009 and restore the Appeal to the file of this Court. However, a mistake on the part of the revenue would have been averted if appropriate care had been taken by them. Thus, the lack of care which led to a mistake of 1845 days cannot be without costs. Therefore, the delay is condoned subject to the Appellant-revenue paying a cost of Rs. 20,000/- to the respondent-assessee on or before 30.3.2015. Needless to state the appellant will also remove the office objections on or before 30.3.2015.

Notice of motion is made absolute in terms of prayer clauses (A) and (B) on payment of costs of Rs. 20,000/- to the Respondent-assessee on or before 30.3.2015.