In a significant ruling, the Kerala High Court has condoned an 11-day delay in filing an appeal by The Meenachil Taluk Cooperative Employees Cooperative Society Limited against an income tax assessment order. The judgment, delivered by Justice Murali Purushothaman, emphasized the importance of substantial justice over technicalities.
Background of the Case
The petitioner, The Meenachil Taluk Cooperative Employees Cooperative Society Limited, represented by its Secretary, Sri. Bijukumar G., filed its income tax return for the assessment year 2017-18, claiming a deduction under Section 80P of the Income Tax Act, 1961. The Assessing Officer, however, disallowed this deduction and passed an assessment order under Section 143(3) of the Act on December 17, 2019 (Exhibit P1).
The petitioner subsequently filed an appeal (Exhibit P2) before the Commissioner of Income Tax (Appeals) but did so with a delay of 12 days. The reason cited for the delay was the unavailability of their legal consultant. The Commissioner of Income Tax (Appeals) refused to condone the delay and dismissed the appeal in limine (Exhibit P3).
Legal Issues Involved
The primary legal issue in this case was whether the delay in filing the appeal could be condoned. The petitioner argued that the delay was due to unavoidable circumstances and should be excused to ensure justice. The respondent, represented by Senior Standing Counsel Sr. Jose Joseph and Government Pleader Sri. Cyriac Tom, contended that the delay was not justified and that each day’s delay must be adequately explained.
Court’s Decision
Justice Murali Purushothaman, in his judgment, highlighted several key points:
1. Substantial Justice vs. Technical Considerations: The court noted that when substantial justice and technical considerations are pitted against each other, substantial justice should prevail. The court emphasized that the judiciary is respected for its ability to remove injustice rather than for legalizing injustice on technical grounds.
2. Explanation of Delay: The court referred to the Supreme Court’s principles in Collector, Land Acquisition, Anantnag v. Mst. Katiji and Pathapati Subba Reddy v. Special Deputy Collector (LA), which advocate a liberal approach in condoning delays to advance substantial justice. The court found the petitioner’s reason for the delay—non-availability of their legal consultant—sufficient and reasonable.
3. Violation of Natural Justice: The court observed that rejecting the appeal on technical grounds without considering the merits amounted to a violation of natural justice principles.
4. Discretionary Power of Courts: The court reiterated that while the power to condone delays is discretionary, it should be exercised to prevent injustice. The court found that the Commissioner of Income Tax (Appeals) had misapplied judicial precedents and failed to exercise discretion appropriately.
Important Observations
Justice Purushothaman made several noteworthy observations in his judgment:
– “Every day’s delay must be explained” does not mean a pedantic approach should be taken. The doctrine must be applied in a rational, common-sense, pragmatic manner.
– There is no presumption that delay is occasioned deliberately or on account of culpable negligence or mala fides. A litigant does not stand to benefit by resorting to delay.
– The judiciary is respected not for its power to legalize injustice on technical grounds but for its capability to remove injustice.
Conclusion
The Kerala High Court set aside the order of the Commissioner of Income Tax (Appeals) and directed the appeal to be considered on its merits within two months. The court also ordered that no recovery steps should be taken pursuant to the assessment order until the appeal is disposed of.
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Case Details:
– Case Number: WP(C) No. 21866 of 2024
– Bench: Justice Murali Purushothaman
– Petitioner: The Meenachil Taluk Cooperative Employees Cooperative Society Limited
– Respondents: Commissioner of Income Tax (Appeals), Income Tax Officer
– Lawyers: G. Mini, A. Kumar (Sr.), P.J. Anilkumar, P.S. Sree Prasad, Balasubramaniam R. for the petitioner; Sr. Jose Joseph (Sr. SC), Sri. Cyriac Tom (GP) for the respondents
