2016 (1) TMI 1371 - HC - Income Tax

Condonation of delay - Held that - Much prior to the initial filing of the appeal the Court Fees Act applicable to Delhi stood amended. As regards the second ground again sufficient advance notice had been given to the litigants and Advocates about the filing of soft copies of the paperbooks. Further the Registry of the Court had made appropriate arrangements for scanning services at the filing counters to facilitate the making of soft copies so that the inconvenience if any caused to the Advocates and the litigants is minimised. In any event the change could not have entailed a delay of more than two years. It is not possible to accept that no one followed up on the filing of appeals and allowed a period of more than two years to elapse before the appeal could be re-filed. The Department has a cell in the High Court which is under the supervision of a Deputy CIT. He ought to be keeping track of the filing of appeals and should be able to know if any appeal entrusted to the panel counsel for filing has not been listed even once before the Court for a long time. Treatment of interest on Non Performing Assets (NPAs) - Revenue contends that given the obligation of the assessee to maintain books in accordance with Section 209 of the Companies Act 1956 on accrual basis it had to reflect the interest accrued upon unpaid loans (NPAs) - Held that - Assessee successfully contended that the treatment it accorded to such transactions was in accord with the decision of this Court in CIT v. Vasisth Chay Vyapar Ltd. (2010 (11) TMI 88 - DELHI HIGH COURT) wherein held Assessee bound by Reserve Bank of India directions to treat deposit as non-performing asset Interest does not accrue - question of law decided against the Revenue

Summary

Issues: Delay in re-filing the appeal, Excuses for delay, Merits of the case

Delay in re-filing the appeal:
The judgment addresses the inordinate delay of 865 days in re-filing the appeal. The Court notes the standard excuses put forth by the department for the delay, including budgetary constraints and practice directions regarding filing soft copies of paperbooks in tax matters. The Court finds these excuses unconvincing, stating that the Court Fees Act applicable to Delhi was amended before the initial filing of the appeal, and there was sufficient notice given about the requirement for soft copies. The Court emphasizes that the delay of over two years is unacceptable, especially considering the Department's resources and the oversight responsibilities of the Deputy CIT.

Excuses for delay:
The judgment scrutinizes the excuses provided for the delay in re-filing the appeal. It dismisses the department's reasons related to budgetary constraints and practice directions as insufficient. The Court highlights that the amendments to the Court Fees Act and the notice about filing soft copies should not have caused such a significant delay. It also points out that the Department should have mechanisms in place to track the filing of appeals and ensure timely actions, especially under the supervision of the Deputy CIT.

Merits of the case:
Despite examining the case on its merits, the Court finds no substantial question of law requiring determination. It references an earlier decision by the ITAT and a decision of the Court in a related matter. The Court concludes that there is no significant legal issue arising from the case that warrants further consideration. Consequently, the appeal is dismissed based on both the delay in re-filing the appeal and the lack of substantial legal questions on merits.