Condonation of delay – Appeal filed in wrong jurisdiction – An unintentional lapse on the part of the litigant – Liable to be condoned :

[Prashanth Projects Ltd vs. The Deputy Commissioner of Income Tax10(3),; ITA No. 7167/Mum/2011 Bench: C ; dt: 04/09/2013 ; (A Y: 2005-06 )]

Assessee company, engaged in the business of construction of storage handling Terminal of Petroleum Products, filed its return of income on 31.10.2005 . The AO finalised the assessment order u/s.143(3) determining the total income at Rs.1,11,17.010/-. Assessment order was received by the assessee on 25.01.2008 and accordingly appeal was to be filed by 24.02.2008, however, by mistake instead of the appeal being filed in the office of the CIT(A), it was filed on 8th February, 2008 (within the period of limitation) with the office of the Assessing Officer i.e. Deputy Commissioner of Income Tax10( 3), who accepted the same. Later on in May,2011,when it came to know that appeal was to be filed before the CIT(A), an application was moved by it to the AO for transferring the appeal to the office of the CIT(A). However same was refused. This resulted in the appellant having to file a fresh appeal on 9th June, 2011 to the CIT(A) from the order of the Assessing Officer dated 31st December, 2007. This appeal was accompanied alongwith an application for condonation of delay . Thus, there was delay of more than 3 years. The reason for the delay as explained by the assessee, was that by mistake it filed appeal in the office of the ACIT. After considering the submissions of the assessee,CIT(A) dismissed the appeal filed by it.

Effective Ground of appeal before ITAT was about not admitting the appeal by the CIT(A) on the ground of delay. Being aggrieved, the appellant filed a further appeal to the Tribunal. The Tribunal after citing various decisions of the Courts indicating the manner in which the application for condonation of delay has to be dealt with proceeded to reject the appeal.

The Assessee filed an appeal before the High court challenging the order of ITAT . The High Court held that it is an undisputed position that the appeal from order dated 31st December, 2007 of the Assessing Officer was prepared and filed in the prescribed Proforma viz. Form No.35. It was addressed to CIT(A). However, by mistake the same was tendered to the office of the Assessing Officer and the office of the Assessing Officer also accepted the same. In fact, as the appeal pertained to the CIT(A) and not its office, the Assessing Officer ought to have immediately returned the appeal which was filed in the office of the Assessing Officer. This would have enabled the appellant to take appropriate steps and file the appeal with the office of the CIT(A). It is not the case of the Revenue that the appeal addressed to the CIT(A) was not filed with the Office of the Assessing Officer on 8th February, 2008 i.e. within the period of limitation. In case, the Assessing Officer had returned the appeal immediately to the appellant or had forwarded it to the office of the CIT(A) as would be expected of the State no delay would have taken place. This would have resulted in the appeal being considered on merits.

Further, from the application made for stay in the same proceeding , it is very clear that the appellant as well as the department bonafide proceeded on the basis that its appeal before the CIT(A) was pending. The lapse on the part of the assessee was unintentional. Further, the analogy made in the impugned order with nature is inappropriate. Human interaction is influenced by human nature. Inherent in human nature is the likelihood of error. Therefore, the adage “to err is human”. Thus, the power to condone delay while applying the law of limitation. This power of condonation is only in view of human fallibility. The laws of nature are not subject to human error, thus beyond human correction. In fact, the Apex Court in State of Madhya Pradesh vs. Pradip Kumar 2000(7) SCC 372 has observed to the effect that although the law assists the vigilant, an unintentional lapse on the part of the litigant would not normally close the doors of adjudication so as to be permanently closed, as it is human to err. The High Court held that it was an unintentional lapse on the part of the appellant.

The appeal was restored to the file of the CIT(A) for fresh disposal in accordance with law, on payment of costs of Rs.10,000/- by a pay order drawn in the name of “The Principal Commissioner of Income Tax15, Mumbai”.