ILAXI TEXTILES INDUSTRIES Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) PRESENT Application under Section 5 of the Limitation Act has been preferred by the applicant-M/s. Ilaxi Textiles Industries to condone the huge delay of 1745 days in filing the Misc. Civil Application for restoration of the Income Tax Reference being Reference No. 17 of 1996, which was closed by the order of the Court dated 22nd August 2006.

(2.) THE facts leading to the present Application in nutshell are as under :-

(3.) 1 Heard learned counsel Mr. Tushar Hemani for the applicant. He fervently urged the Court to keep in mind the objectives of Section 5 of the Limitation Act. He also further urged that there is neither any mala fides on the part of the applicant, nor such a delay had caused any advantage to the petitioner and disadvantage to the Department while condoning the delay. Whether there was any reasonable cause or not, needs to be explained rest is immaterial. He further urged that substantive justice is far more important than the procedural details and it is a well laid down principle over the years by the Apex Court that procedural law is the handmade of the substantive rights. He touched the merits of the case only for justifying the condonation of delay. However, as per his submissions, unless the delay is condoned, that aspect of merit is not to be further gone into. Following are the authorities sought to be relied upon to substantiate his stand for condonation of delay and grant of subsequent prayer of setting aside the closure of reference. [1] ITO v. S. Raman Chettier [55 ITR 630 (SC)] [2] CIT v. CA Taktawala [309 ITR 417 (Guj)] [3] K.V Produce & Ors. v. CIT [252 ITR 17 (Ker)] [4] Anand Kumar Saraf & Ors. v. CIT [211 ITR 562(Cal)] [5] CIT v. Suresh Changra Mittal [251 ITR 9 (SC)] [6] Sir Shadilal Sugar & General Mills Limited v. CIT [168 ITR 705 (SC)]; [7] CIT v. Reliance Petroproducts Pvt Limited [322 ITR 158 (SC)] [8] Taiyabji Lakmanji v. CIT [131 ITR 643 (Guj)] [9] Pradip J Mehta v. CIT [300 ITR 231 (SC)]. 5.2 So as to avoid making this order bulky, all authorities need no dilation. Emphasis was also made on the judgment of the Apex Court in case of Collector, Land Acquisition v. Mst. Katiji & Ors., reported in 167 ITR 471 where the Apex Court has emphasized the life purpose of the existence of the institution of the Courts. It has reiterated the need for liberal approach while considering request of condoning delay by holding thus; The Legislature has conferred the power to condone delay by enacting Section 5 of the Limitation Act of 1963 in order to enable the courts to do substantial justice to parties by disposing of matters on merits. The expression, sufficient cause employed by the Legislature is adequately elastic to enable the Courts to apply the law in a meaningful manner which subserves the ends of justice that being the life purpose of the existence of the institution of the Courts. It is common knowledge that this Court has been making a justifiably liberal approach in matters instituted in this Court. But the message does not appear to have percolated down to all the other Courts in the hierarchy. And such a liberal approach is adopted on principle as it is realized that : Ordinarily, a litigant does not stand to benefit by lodging an appeal late, Refusing to condone delay can result in a meritorious mater being thrown out at the very threshold and cause of justice being defeated. As against this, when delay is condoned, the highest that can happen is that a cause would be decided on merits after hearing the parties. Every day's delay must be explained does not mean that a pedantic approach should be made. Why not every hour's delay, every second's delay ? The doctrine must be applied in a rational, common sense and pragmatic manner. When substantial justice and technical considerations are pitted against each other, the cause of substantial justice deserves to be preferred, for the otherwise cannot claim to have vested right in injustice being done because of non-deliberate delay. There is no presumption that delay is occasioned deliberately, or on account of culpable negligence, or on account of mala fides. A litigant does not stand to benefit by restoring to delay. In fact, he runs a serious risk. It must be grasped that the judiciary is respected not on account of its power to legalize injustice on technical grounds but because it is capable of removing injustice and is expected to do so. The Apex Court, of course, was considering the cause of the State which had sought condonation of delay and emphasized on the doctrine of equality before the law and to avail and accord similar treatment to the State as a litigant. 5.3 Yet another decision, which is emphasized by learned counsel Mr. Hemani is that of N. Balakrishnan v. M. Krishnamurthy, reported in [(1998) 7 SCC 123]. The Apex Court, in this authority, once again reiterated that sufficient cause should be construed liberally and acceptability of explanation for the delay is the sole criterion and not the length of the delay. It also further held that in absence of anything depicting mala fides or deliberate as a dilatory tactics, the Courts should ordinarily condone the delay, by holding thus : The primary function of a court is to adjudicate the dispute between the parties and to advance substantial justice. The time-limit fixed for approaching the Court in different situations is not because on the expiry of such time, a bad cause would transform into a good cause. Rules of limitation are not meant to destroy the rights of parties. They are meant to see that parties do not resort to dilatory tactics but seek their remedy promptly. The object of providing a legal remedy is to repaid the damage cause by reason of legal injury. The law of limitation fixes a lifespan for such legal remedy for the redress of the legal injury so suffered. The law of limitation is thus founded on public policy. It is enshrined in the maxim interest reipublicae up sit finis litium (it is for the general welfare that a period be put to litigation). Rules of limitation are not meant to destroy the rights of the parties. They are meant to see that parties do not resort to dilatory tactics but seek their remedy promptly. The idea is that every legal remedy must be kept alive for a legislatively fixed period of time. Condonation of delay is a matter of discretion of the Court. Section 5 of the Limitation Act does not say that such discretion can be exercised only if the delay is within a certain limit. Length of delay is no matter, acceptability of the explanation is the only criterion. Sometimes, delay of the shortest range may be uncondonable due to a want of acceptable explanation whereas in certain other cases, delay of a very long range can be condoned as the explanation thereof is satisfactory. In every case of delay, there can be some lapse on the part of the litigant concerned. That alone is not enough to turn down his plea and to shut the door against him. If the explanation does not smack of mala fides or it is not put forth as part of a dilatory strategy, the court must show utmost consideration to the suitor. But when there is reasonable ground to think that the delay was occasioned by the party deliberately to gain time, then the Court should lean against acceptance of the explanation. A court knows that refusal to condone the delay would result in approaching the court is always deliberate. The words sufficient cause under Section 5 of the Limitation Act should receive a liberal construction so as to advance substantial justice.