PCIT v Anil Bhalla (Delhi High Court)

In the case PCIT vs Anil Bhallathe Delhi High Court considered the tax department’s plea for 880-day delay in filing a fresh income tax appeal. The Ministry of Finance attributed this delay to a backlog of appeals accumulated due to the COVID-19 pandemic between March 2020 and March 2022. However, the court found these reasons insufficient to justify such a significant delay, resulting in leads to the request being rejected. The decision highlights the court’s position on respecting deadlines in legal proceedings and the need for appellants to meet deadlines despite external circumstances.

After the Ministry of Finance’s pardon application was rejected, the High Court decided that it did not need to assess the merits of the appeal. Nonetheless, a brief review of the underlying case revealed that the Finance Ministry was seeking to challenge a 2020 order of the Income Tax Appellate Tribunal (ITAT) relating to a 2007-08 assessment year . The ITAT had earlier upheld a decision of the Commissioner of Income Tax (Appeals) which set aside an important addition made by the assessing officer due to lack of incriminating evidence found during a search. The court noted that the issue was already covered by existing precedent, specifically referencing an earlier ruling limiting the scope of reassessments without new evidence.

Ultimately, the court denied the appeal, citing both the undue delay in refiling and the absence of any substantial legal issue warranting further review. This decision reinforces the importance of following procedures in tax disputes, highlighting that delays can result in the loss of appeal rights, regardless of the merits of the case itself.

FULL TEXT OF THE DELHI HIGH COURT JUDGMENT/ORDER

1. The Ministry of Finance has filed this application seeking forgiveness for the delay of 860 days in filing this appeal.

2. A bare perusal of the application indicates that the only reason for delay in re-filing is that there have been a large number of appeals, which were filed between March 2020 and March 2022. And, the said appeals do not could not be submitted. were continued due to the outbreak of the COVID-19 pandemic.

3. It is clear that there is an inordinate delay of 880 days in the re-filing of the appeal. We do not believe that there are sufficient grounds to justify such excessive delay.

4. The appeal is therefore dismissed.

ITA 525/2024

5. Since the Ministry of Finance’s request for excuse for delay in filing the appeal has been rejected, it is not necessary to consider the appeal of the Ministry of Finance on its merits. However, we also briefly considered the Ministry of Finance’s appeal on its merits.

6. The Ministry of Finance appeals against the order dated 15.10.2020 passed by the learned Income Tax Appellate Tribunal (hereinafter the ITAT scholar) in ITA No. 2113/Del/2017 for assessment year (AY) 2007-08.

7. The assessee had filed his income tax return for AY 2007-08 on 13.09.2007.

8. Mr. Aggarwal, learned senior counsel appearing for the assessee, submits that the said statement was retrieved for examination and an assessment order dated 31.08.2009 was passed under section 143(3) of the Act income tax (hereinafter the law).

9. A search was carried out at the premises of the assessee on 16.01.2013. Pursuant to the notice received under section 153A of the Act, the assessee had filed his return of income on 07.10.2014. Pursuant to the said declaration, the Assessing Officer (hereinafter the AO) framed an assessment order making an addition of ₹8,46,11,456/- under section 68 of the Act treating certain balances, as available in the books of accounts, as unexplained.

10. The assessee had preferred an appeal before the Commissioner of Income Tax (Appeals) (hereinafter learned CIT(A)) attacking said addition. The said appeal was allowed and the addition made by the AO was deleted on the ground that since no incriminating material was found during the search conducted, the reassessment could not be sustained. The learned CIT(A) had relied on the earlier decision of the Court in the case Commissioner of Income Tax v. Kabul Chawla: (2016) 380 ITR 573. Aggrieved by the said decision, the Revenue had preferred an appeal before the learned ITAT, however, the learned ITAT had not found any fault in the decision of the learned CIT(A).

11. Admittedly, this question is covered by the earlier judgment of this Court in the case Commissioner of Income Tax v. Kabul Shawla (above) which was recently cited with approval by the Supreme Court in Principal Commissioner of Income Tax, Central-3 v. Abhisar Buildwell Pvt. Ltd. : (2024) 2 CSC online 433.

12. Clearly, no substantial question of law arises in this appeal.

13. In view of the above, the present appeal is dismissed both on the statute of limitations and on the merits.