Commissioner of Income-tax-4 vs Harinagar Sugar Mills Ltd.

These notice of motions seek condonation of delay of 117 days in filing of the Income Tax Appeal and of 1248 days in filing the Review Petition. The notice of motion is moved on 10th April, 2013 and it is supported by an affidavit of Mr. Umesh Agarwal, Assistant Commissioner of Income-tax. He has in the affidavit in support stated that the above mentioned appeal was filed in this Court challenging the order passed by the Income Tax Appellate Tribunal dated 30th March, 2005. An explanation is offered in para-3 of the affidavit stating that the Tribunal''s order is passed on 30th March, 2005, and thereafter, the order was received by the office of Commissioner of Income-tax-4, Mumbai on 20th May, 2005. The order was received by the Assessing Officer on 24th August, 2005. The scrutiny report was forwarded by the Assessing Officer to the Commissioner of Income-tax on 3rd October, 2005 and subsequently the Commissioner of Income-tax sent the report to the Chief Commissioner of Income-tax on 13th October, 2005. On 19th October, 2005, the Assessing Officer received approval from the office of the Commissioner of Income-tax and the Chief Commissioner of Income-tax. That is how the papers were forwarded for drafting the said appeal on 3rd January, 2008 and it was returned on 25th February, 2008. Thereafter, the appeal memo was sent for approval to Commissioner of Income-tax on 3rd March, 2008. The date or time for filing of the appeal expired on 14th January, 2007 whereas it came to be filed on 15th March, 2008. That is how the delay occurred in filing of the appeal.

We must at once clarify that we are not concerned with all these aspects and the explanation for the delay in filing of the appeal. Suffice it to note that such explanations are now being offered as an after thought and to cover up the lapses, which we note hereafter.

The appeal filed belatedly was placed before a Division Bench of Hon''ble Mr. Justice V.C. Daga and Hon''ble Mr. Justice J.P. Devadhar (as Their Lordships then were) and in the presence of the advocates a conditional order was passed on 17th June, 2009 directing the revenue to remove the office objections within a period of 4 weeks from the date of the said order after which the appeal would stand dismissed without any further reference to the Court. The matter was again listed on 23rd July, 2009 and since the office objections were not removed, the appeal came to be dismissed.

On the earlier occasion, and even today, our attention was invited by the counsel for the revenue to para-6 of this affidavit in support which reads as under:--

"6. I say that I first became aware of the dismissal of the above appeal from the letter of Advocate Vimal Gupta dated 26.06.2012 addressed to the Commissioner of Income-tax-4, Mumbai. I say that Advocate Vimal Gupta, while appearing in Appeal No. ITXA/6895/2010, noticed that the above Appeal has been dismissed for condonation of delay in appeal and non-removal of office objections. I submit that immediately steps have been taken to take out this Notice of Motion. Hence there is a delay of 1248 days for taking out this Notice of Motion and I respectfully pray that such delay be also condoned."

What we have noted is that the appeal was dismissed by the conditional order itself and which was re-affirmed on 23rd July, 2009. The revenue possibly, then, realized that the state of affairs being what they are, a Review Petition should be filed so as to recall the order passed by this Court and which we have referred to and noted in the above paragraph. That is how the review petition was filed on 22nd January, 2013. The office stamp on the same denotes that even this Review Petition was dismissed/rejected by the Prothonotary and Senior Master under Rule 986 of the Bombay High Court, Original Side Rules on 5th April, 2013. Possibly to get over all this, now the application is filed seeking condonation of delay in filing of the Review Petition but demonstrating that the Income Tax Department is unmindful and unaware of the endorsement by the registry. Be that as it may, we are concerned with the delay in filing of this Review Petition and the affidavit in support offers an explanation and which we have reproduced in para-6 above.

This stand of the department was orally reiterated before us by Shri Malhotra and on the earlier occasion we passed a detailed order and enabling Mr. Malhotra to take instructions. The detailed order was necessitated because the assessee filed a reply to these notice of motions in which the attention of this Court was invited to the events that took place in this Court after the lodging of the appeal and particularly the explanation. In para-9 of the affidavit in reply of the assessee which has been affirmed by Shri Madhavlal N. Pittle, it is categorically stated that the appellant-revenue was represented on 17th June, 2009 when the conditional order was passed by this Court as well as on 23rd July, 2009 when the appeal was dismissed. When the appellant had pointed out from record as to how the revenue or their counsel failed and neglected to ascertain the status of the appeal nothing has been clarified. The reference to a letter dated 26th June, 2012 (now stated to be erroneous), therefore, should not be improving the case of the revenue any further and this is the stand taken by the assessee in affidavit in reply and from paras-9 to 11 of the same.

The assessee''s counsel Ms. Vissanjee on the earlier occasion had invited our attention to several discrepancies and errors of dates in the affidavit in support of the revenue and submitted that these lapses and by large administrative machinery do not afford a ground to condone the delay, they cannot constitute sufficient cause and particularly when the explanation is not bonafide. The same exhibits complete negligence and that is how the assessee''s stand was reiterated in the oral submissions.

Noting all this, we gave an opportunity to Shri Malhotra to offer an explanation as to how such statements can be made in the affidavit in support in the teeth of the admitted and undisputed Court record.

The additional affidavit has been now filed and stated to be by one Shri Virender Singh, who is successor of the earlier deponent Shri Umesh Agarwal. This fresh affidavit affirmed on 16th July, 2014 maintains complete silence with regard to para-6 of the affidavit which we have reproduced above and the contents of which have been disputed and denied by the assessee. We do not see how involving the advocate in all this would carry the case of the revenue any further. We do not think such an explanation and coming belatedly as an afterthought, can be said to be bonafide. Such an affidavit is, therefore, nothing but misleading this Court and trying to question its records. The affidavit does not indicate that there was an error in mentioning that the department was unaware of the order passed by this Court till its advocate communicated the same. Pertinently, the advocate who had appeared before this Court on the two relevant dates is not supposed to be the one addressing the communication though it is relied upon namely Annexure-A to the additional affidavit. That is from a distinct advocate. The advocate who appeared for the Revenue is Mr. P.S. Sahadevan. The letter referred in the affidavit and annexed as Annexure-A is by Mr. Vimal Gupta. The revenue seems to be of the view that if such explanations are offered this Court would presume that the department always function in such a manner and the delay deserves to be condoned in the larger interest of justice. Precisely, this is what the Hon''ble Supreme Court has time and again found not to constitute sufficient cause for condonation of delay. The revenue or the State does not stand on a different footing nor does it enjoy a special status. Merely because none is bothered about public interest or matters of revenue and officers work in their own casual way that the Courts cannot condone the delay is now the principle and which has been reiterated from time to time. We do not find that this situation is in any way different than the one noted by the Hon''ble Supreme Court time and again.

In the case of Office of the Office of The Chief Post Master General and Others Vs. Living Media India Ltd. and Another, , the Hon''ble Supreme Court held as under:

"It is not in dispute that the person(s) concerned were well aware or conversant with the issues involved including the prescribed period of limitation for taking up the matter by way of filing a special leave petition in this Court. They cannot claim that they have a separate period of limitation when the Department was possessed with competent persons familiar with court proceedings. In the absence of plausible and acceptable explanation, we are posing a question why the delay is to be condoned mechanically merely because the Government or a wing of the Government is a party before us. Though we are conscious of the fact that in a matter of condonation of delay when there was no gross negligence or deliberate inaction or lack of bona fide, a liberal concession has to be adopted to advance substantial justice, we are of the view that in the facts and circumstances, the Department cannot take advantage of various earlier decisions. The claim on account of impersonal machinery and inherited bureaucratic methodology of making several notes cannot be accepted in view of the modern technologies being used and available. The law of limitation undoubtedly binds everybody including the Government.

In our view, it is the right time to inform all the government bodies, their agencies and instrumentalities that unless they have reasonable and acceptable explanation for the delay and there was bonafide effort, there is no need to accept the usual explanation that the file was kept pending for several months/years due to considerable degree of procedural red-tape in the process. The government departments are under a special obligation to ensure that they perform their duties with diligence and commitment. Condonation of delay is an exception and should not be used as an anticipated benefit for government departments. The law shelters everyone under the same light and should not be swirled for the benefit of a few. Considering the fact that there was no proper explanation offered by the Department for the delay except mentioning of various dates, according to us, the Department has miserably failed to give any acceptable and cogent reasons sufficient to condone such a huge delay. Accordingly, the appeals are liable to be dismissed on the ground of delay."

And in the case of Maniben Devraj Shah Vs. Municipal Corporation of Brihan Mumbai, , the Hon''ble Supreme Court held as under:--

"What needs to be emphasised is that even though a liberal and justice oriented approach is required to be adopted in the exercise of power under section 5 of the Limitation Act and other similar statutes, the Courts can neither become oblivious of the fact that the successful litigant has acquired certain rights on the basis of the judgment under challenge and a lot of time is consumed at various stages of litigation apart from the cost. What colour the expression ''sufficient cause'' would get in the factual matrix of a given case would largely depend on bona fide nature of the explanation. If the Courts finds that there has been no negligence on the part of the applicant and the cause shown for the delay does not lack bona fides, then it may condone the delay. If, on the other hand, the explanation given by the applicant is found to be concocted or he is thoroughly negligent in prosecuting his cause, then it would be a legitimate exercise of discretion not to condone the delay. In cases involving the State and its agencies/instrumentalities, the Court can take note of the fact that sufficient time is taken in the decision making process but no premium can be given for total lethargy or utter negligence on the part of the officers of the State and/or its agencies/instrumentalities and the applications filed by them for condonation of delay cannot be allowed as a matter of course by accepting the plea that dismissal of the matter on the ground of bar of limitation will cause injury to the public interest."

Additionally, we find that there is complete silence as to why in para-6 of the affidavit a statement is made that the department was unaware of the Courts order and at the same time annexing photo copies of the order passed on 17th June, 2009 and 23rd July, 2009 both of which indicate the presence of the revenue/department counsel when these orders were passed. In these circumstances, we are of the opinion that the Court matters are taken lightly and casually and a impression has been created that the State or the Revenue seeks to get away or take a easy route of offering routine explanations and blaming officers or their advocates. If the cause shown cannot be said to be bona fide and demonstrating utter negligence and callousness, then, we do not see how it can assist the revenue any longer. The appeal which is lodged in the year 2008 remained on the file of this Court, and was pending for removal of office objections. None bothered to have them removed until this Court noted in June 2009 that the Revenue has failed to comply with the office objections or the rules in that behalf. Time was given to comply with that and it is only thereafter that the Court visited the Revenue with the consequences in law. Further, though the appeal stood dismissed and without any further reference to the Court in 2009, the revenue did not lodge a Review Petition until January 2013 and to be precise the lodging date is 22nd January, 2013. The Review Petition also remained unattended and we have from the original record found that there were office objections and which were to the knowledge of the advocate filing the Review Petition. Yet, nothing was done and the Review Petition was also rejected on 5th April, 2013 for non-removal of office objection.

Now, the above explanation is offered for this enormous delay and which we find to be contained in the affidavit in support of the application for condonation of delay.

There as well, we find that the notice of motion dated 8th April, 2013 is lodged in this Court on 10th April, 2013 but registered on 14th April, 2013. The affidavit in support thereof has been affirmed on 12th April, 2013 but the endorsement shows that even the same was not filed till 4th June, 2013. Thus, the Review Petition itself is belated and the application for condoning the delay in filing the Review Petition has an affidavit in support containing, to say the least, misleading statements. The additional affidavit filed today fails to offer any explanation despite an opportunity being given by this Court on the earlier occasion.

In these circumstances, that we are of the opinion that the delay does not deserves to be condoned. We are unable to accede to the submissions of Mr. Malhotra that the two officers representing the revenue have admitted the lapses on the part of the revenue. We find that their presence in the Court to own the lapse and deficiency will not assist and the revenue in any manner when they filed affidavits and made solemn statements before this Court but which are contrary to the record. Once the successors to those who were incharge in 2008-09 are trying to cover up the past lapses, then, it is evident that the whole attempt is to ensure that none is ever held responsible and accountable for these state of affairs. The Revenue''s notice of motion and seeking condonation of delay in filing the Review Petition does not deserves to be granted. The officials ought to realize that the Court cannot assist the departments merely on the plea of larger public interest or protection of public revenue being involved. If that is the reason for which they feel that the delay deserves to be condoned, then, they ought to have realized that the same warrants their acting diligently. The same also requires them to act swiftly and by upholding the status and dignity of the office. Public officers have a public duty to perform and if they fail to act accordingly, then, we cannot go on accepting such versions and coming belatedly as noted above. As a result of the above discussion, each of these notice of motions fail and they are dismissed. Copy of this order be forwarded to the Chief Commissioner of Income-tax and equally to the Secretary in the Department of Finance, Government of India so that suitable remedial action is taken.