Income Tax Reassessment Passed in Violation of Calcutta HC Stay: SC dismisses SLP refusing to Condone 730-day Delay [Read Judgement]
The Supreme Court refused to condone a 730-day delay in the Income Tax Department’s appeal and dismissed the petition with Rs. 50,000 costs.
In a recent ruling, the Supreme Court rejected the Income Tax Department’s plea for condonation of a 730-day delay in filing a Special Leave Petition against a Calcutta High Court judgment that had set aside a reassessment order passed in violation of a subsisting High Court stay.
The Income Tax Department filed a Special Leave Petition before the Supreme Court challenging the judgment dated 29 August 2023 passed by the Calcutta High Court in a writ petition filed by Mangalkamna Commosale Private Limited. The High Court had set aside an assessment order passed under Section 147 read with Section 144 of the Income Tax Act, 1961 for the assessment year 2013-14.
Before the Calcutta High Court, the assessee had challenged the assessment order because it was passed despite a clear interim stay granted by the High Court on 15 March 2023. The stay order had restrained the Department from taking any further steps after the order under Section 148A(d). The High Court found that the assessment order dated 30 May 2023 was passed in violation of this subsisting stay and quashed the assessment order on that ground alone.
Aggrieved by the High Court’s decision, the Income Tax Department approached the Supreme Court. However, the appeal was filed with a delay of 730 days. Along with the Special Leave Petition, the Department filed an application seeking condonation of the delay.
When the matter came up for hearing, the Bench comprising Justice Rajesh Bindal and Justice Vijay Bishnoi examined the application for condonation of delay. The court observed that the explanation offered by the Department did not properly justify condoning such a long delay in filing the appeal.
The court held that the delay was excessive and could not be excused on the basis of the reasons given. The application for condonation of delay was dismissed. In consequence, the Special Leave Petition itself was also dismissed.
The Supreme Court imposed costs of Rs. 50,000 on the Income Tax Department for filing the appeal after an unjustified delay and directed that the amount be deposited in the Armed Forces Battle Casualties Welfare Fund within four weeks. All pending applications were disposed of accordingly.
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