1. Dismissal of income tax appeals by High Court due to inordinate delay in refiling, leading to a challenge regarding condonation of delay. (Para 3 )
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2023 Supreme(SC) 1824
SUPREME COURT OF INDIA
B.V. NAGARATHNA, PRASHANT KUMAR MISHRA, JJ.
Director Of Income Tax-II (International Taxation) – Appellant
Versus
Western Union Financial Services Inc. – Respondent
Civil Appeal No. 4274 of 2023 (@ SLP (C) No. 16669 Of 2016) With Civil Appeal No. Of 2023 (@ SLP(C) CC No. 15375 Of 2016), Civil Appeal No. Of 2023 (@ SLP(C) No. 35739 Of 2016)
Decided On : 07-07-2023
Important Points
The Court held that if substantial questions of law are significant, delays in refiling appeals should be condoned to allow consideration on merits, ensuring the interest of justice is served, despite the length of the delay, subject to payment of costs.
Subject
Taxation - Income Tax Appeals
Headnote
(A) Income Tax Appellate Tribunal - Dismissal of appeals based on delay - The High Court dismissed appeals for inordinate delay of 1110, 1117, and 991 days in refiling, stating the explanation for condonation could not be accepted - Substantial questions of law were not considered on merits. (Paras 3, 4)
(B) Delay Condonation - The substantial questions of law raised are significant and the High Court should have condoned the delay and considered the appeals on merits despite the lengthy delay - The initial filing was timely, making the dismissal unjust. (Paras 6, 8)
Facts of the case:
The appeals were dismissed due to substantial delay in refiling after initial timely submission, with the appellant arguing that the failure was due to procedural defects not removed in time.
Findings of Court:
The appeals were restored for consideration on merits, conditional upon the payment of costs to the respondents.
Issues: The core issue was whether the High Court should have condoned the delays and heard the appeals on substantive merits.
Ratio Decidendi: The court ruled that significant issues raised in the appeals justify condonation of delays, mandating the High Court to evaluate the cases substantively.
Result: Appeals allowed and restored for merits consideration.
(B) Delay Condonation - The substantial questions of law raised are significant and the High Court should have condoned the delay and considered the appeals on merits despite the lengthy delay - The initial filing was timely, making the dismissal unjust. (Paras 6, 8)
Facts of the case:
The appeals were dismissed due to substantial delay in refiling after initial timely submission, with the appellant arguing that the failure was due to procedural defects not removed in time.
Findings of Court:
The appeals were restored for consideration on merits, conditional upon the payment of costs to the respondents.
Issues: The core issue was whether the High Court should have condoned the delays and heard the appeals on substantive merits.
Ratio Decidendi: The court ruled that significant issues raised in the appeals justify condonation of delays, mandating the High Court to evaluate the cases substantively.
Result: Appeals allowed and restored for merits consideration.
Legal Category Hierarchy
Advocates Appeared:
For the Appellant : Mr. Balbir Singh, A.S.G., Mr. Raj Bahadur Yadav, AOR, Mr. Rupesh Kumar, Adv., Mr. Arjun Garg, Adv., Ms. Apoorv Kurup, Adv., Ms. Monica Benjamin, Adv., Mr. Ashok Panigrahi, Adv., Mr. Hemant Kumar, Adv.
For the Respondent: Mr. Pradeep Kumar Bakshi, AOR, Mr. Rajat Navet, Adv., Mr. Shashi Kant, Adv., Mr. Subodh S. Patil, AOR, Mr. Ved Jain, Adv., Mr. Nischay Kantoor, Adv., Ms. Mahua Kalra, AOR, Mr. Mayank Nagi, Adv.
For the Appellant : Mr. Balbir Singh, A.S.G., Mr. Raj Bahadur Yadav, AOR, Mr. Rupesh Kumar, Adv., Mr. Arjun Garg, Adv., Ms. Apoorv Kurup, Adv., Ms. Monica Benjamin, Adv., Mr. Ashok Panigrahi, Adv., Mr. Hemant Kumar, Adv.
For the Respondent: Mr. Pradeep Kumar Bakshi, AOR, Mr. Rajat Navet, Adv., Mr. Shashi Kant, Adv., Mr. Subodh S. Patil, AOR, Mr. Ved Jain, Adv., Mr. Nischay Kantoor, Adv., Ms. Mahua Kalra, AOR, Mr. Mayank Nagi, Adv.
Table of Contents
2. Revenue seeks condonation of refiling delay to argue substantial questions of law on merits; respondent opposes condonation due to the length of delay. (Para 4 , 5 )
3. If substantial questions of law are significant, the court should condone refiling delay to ensure cases are decided on merits despite considerable delay. (Para 6 )
4. Significant substantial questions of law justify the condonation of inordinate delay in refiling appeals to ensure adjudication on merits. (Para 6 )
5. Impugned orders set aside and appeals restored to High Court for merit consideration, subject to payment of costs and removal of defects. (Para 6 )
6. When should a court condone inordinate delay in refiling appeals?
When the appeals involve significant substantial questions of law, the court should condone the delay in refiling to ensure the cases are considered on their merits. (Para 6 )
7. What is the impact of the tax effect amount on the maintainability of a special leave petition?
A special leave petition may be dismissed if the tax effect involved is below a certain threshold, such as two crores rupees. (Para 7 , 8 )
ORDER :
Leave granted.
2. We have heard learned panel advocate for the appellant and learned counsel for the respondents.
3. The grievance ventilated in these appeals is regarding the dismissal of the I.T.A.No.141/2016 and Miscellaneous application(s) as well as analogous appeals filed before the Delhi High Court only on the ground of inordinate delay of 1110, 1117 and 991 days respectively in refiling the said appeals. The High Court has observed that the explanation offered for the condonation of delay sought for by the appellant herein could not be accepted, as, for a long time the appeals were lying in defect and therefore could not be listed before the Court.
4. Learned counsel for the appellant submitted that as a result, the substantial questions of law raised by the Department in the said appeals have not been considered on merits which has caused prejudice to the Revenue. He therefore submitted that the impugned orders may be set aside and the matters may be remanded to the High Court by condoning the delay in refiling the appeals, so that the High Court could consider the cases on merits.
5. Per contra, learned counsel appearing for the respondents vehemently objected to the condonation of the delay of 1110, 1117 and 991 days respectively in refiling by this Court and permitting the matters to be heard on merits. He sought to contend that unnecessarily, the previous standing counsel of the Department has been blamed for the failure in refiling the appeals whereas that was not the case at all as the defects were not removed by the appellant.
6. However, we find that the High Court has not dealt with the appeals on merits and if the substantial questions of law are of significance then the High Court, in our view, ought to have condoned the delay in refiling the appeals and considered the cases on merits. We note that initially the appeals were filed in time. However, it is also an aspect to be noted that the delay of 1110, 1117 and 991 days respectively in refiling the respective appeals is considerable. Hence, we set aside the impugned orders and allow these appeals and restore the appeals before the High Court with cost of Rs.50,000/- (Rupees fifty thousand only) to be paid by the appellant to the respondents in each of these appeals within a period of four weeks from today. It is needless to observe that unless the cost is paid to the respondent, the High Court on remand shall not take up the appeals for consideration on merits. The aforesaid, in our view, would subserve the interest of justice. Four weeks’ time is granted from the date of the release of this order for removal of the defects in the appeals restored before the High Court.
Pending application(s), if any, shall stand disposed of.
SLP(C) No. 26824/2016:
7. It is stated at the bar that the tax effect involved in the instant case is less than Rs.2 crores. (Rupees Two Crores Only).
8. Hence, the special leave petition is, accordingly, dismissed.
9. Pending application(s), if any, shall stand disposed of.
SLP (C) No.16669/2016, S.L.P.(C)...CC No. 15375/2016, SLP(C) No. 35739/2016:
10. Delay condoned in SLP.(C)...CC No. 15375/2016
11. Leave granted.
12. The appeals are allowed in terms of the signed order which is placed on the file.
13. Pending application(s) if any, shall stand disposed of.
SLP(C) No. 5813/2018:
14. The aforesaid petition is disconnected from the other appeals.
15. List on 11.07.2023.
