Libertatem Magazine

Gujarat High Court Condones Delay of 342 Days in Filing the Tax Appeal

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By the present application, the Applicant had prayed to condone the delay in filing the Tax Appeal, which questioned the legality and validity of the order passed by the Income Tax Appellate Tribunal, Rajkot, dated 02.08.2018.


Various averments were made by the Applicant in the application seeking condonation of delay as the order being questioned was communicated to him on 17.10.2018. The period of limitation for filing the appeal before this Hon’ble Court was 120 days under the provisions of Section 260A(2)(a) of the Income Tax Act, 1961. But the present appeal came to be filed on 22.01.2020, i.e., with the delay of 342 days. The reason for the delay was mainly due to the fact that the branch manager of the applicant bank had retired and the advocate had passed away. Therefore, there was a good and sufficient reason to condone the delay in preferring the Tax Appeal.

Applicant’s Submissions:

Mr Hemani, the learned counsel appearing for the Applicant had submitted that the application seeking condonation of delay couldn’t be said to lack in bonafide, as alleged by the Revenue. He brought up that the Applicant was a cooperative bank. Its Branch Manager, who was looking after the litigation had retired and Mr Rajendra Shah, a practising Tax Advocate, who was engaged in handling the litigation had passed away, but this fact had not come to the notice of the applicant bank.

It was submitted that when substantial justice and technical consideration were pitted against one another, then the cause of substantial justice must prevail over the technical consideration hence, it was contended the tax appeal may be decided on merits rather than rejecting it on the ground of delay. According to Mr Hemani, in such circumstances, one chance may be given to the bank to pursue the appeal filed before the Appellate Tribunal, and that would be possible only if the delay will be condoned, tax appeal allowed and the matter remitted to the Appellate Tribunal.

Respondent’s Submissions:

The Revenue opposed the application seeking condonation of delay by filing an affidavit-in-reply, stating that it was clear that the Tribunal was willing to recall the ex-parte order, in case the Assessee bank would be able to show that there was any genuine cause for its non-attendance. Thus, there wasn’t any violation of principles of natural justice as alleged by the Applicant. The Applicant however without seeking recall had filed an appeal u/s 260 A of the Act, where he had raised the question of law, ignoring the fact that the ITAT, without going into the merits of additions had rejected the appeal. As there were found to be no merits in the appeal filed u/s 260A, the present application, therefore, must be rejected and moreover, the delay occasioned in filing the appeal should not be condoned.

The application was opposed by Mr Bhatt, the learned senior counsel appearing for the Revenue, by submitting that no case was made out for condonation of delay in filing the Tax Appeal. Moreover, he submitted that the averments made in the present application didn’t constitute a sufficient cause for condoning the delay and that the Applicant-bank could be said to be careless in pursuing the matter.

Consideration by Court:

The Court took into consideration the submissions made by the learned counsels appearing for the parties and had gone through the materials on record. The Court thus found that the only question that fell for Court’s consideration was, whether it should condone the delay of 342 days in filing the Tax Appeal.

In the aforesaid view of the matter, the Court reached to the conclusion that an opportunity could be given to the applicant bank, as it was a cooperative bank and hence, was not going to derive any personal benefit, even if the delay would be condoned. 

The Court also took into consideration the fact that there had been some lethargy on the part of the bank in pursuing the matter. However, it was not of such a type that the delay of 342 days could not be condoned. It was considered that the bank filed its return of income on 31st October 2007 declaring its total income as Rs.57,28,800.

Court’s Decision:

In the overall view of the matter, the Court was inclined to condone the delay and hear out the Tax Appeal on merits. Hence, in the result, the application was allowed. The delay in preferring the Tax Appeal was thereby condoned. 

However, the Court had imposed costs on the Applicant bank and directed it to deposit an amount of Rs.50,000 with the Gujarat High Court Advocates Welfare Fund. It was directed that when the receipt of a deposit of the required amount of costs will be produced, the Registry shall give a ‘pucca’ number to the Tax Appeal and will notify the same for admission.

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