LALIT KUMAR M SHARMAversusDy Commissioner of Income tax Circle 6(1) Mumbai

                                                             309-IA-7610-2025.DOCX



          IN THE HIGH COURT OF JUDICATURE AT BOMBAY
             ORDINARY ORIGINAL CIVIL JURISDICTION

                INTERIM APPLICATION NO.7610 OF 2025
                                IN
               INCOME TAX APPEAL (L) NO.25544 OF 2024

Lalit Kumar M Sharma                                         ... Applicant
       Versus
Dy. Commissioner of Income Tax Circle 6(1) Mumbai            ...Respondent

                                      _______

Mr Sameer Dalal, for the Applicant.
Mr Akhileshwar Sharma, for the Respondent.
                                      _______

                           CORAM:         G. S. KULKARNI &
                                          DR. NEELA GOKHALE, JJ.

                           DATE:          18th SEPTEMBER 2026

P.C.


1.     By this Interim Application, the Applicant, i.e. the Appellant, seeks
condonation of a delay of 578 days in filing the Income Tax Appeal (L) No. 25544
of 2024. The accompanying Appeal is preferred under Section 260A of the
Income-tax Act, 1961 (‘the Act’) and assails the order dated 24 th June 2022 passed
by the Income Tax Appellate Tribunal, Mumbai Bench “A”, Mumbai (‘the
Tribunal’) in ITA No. 18/Mum/2019 for Assessment Year 2009–10.

2.     The Applicant’s assessment for Assessment Year 2009–10 was first
completed under Section 144 read with Section 147 of the Act by order dated 27 th
January 2016, the Assessing Officer estimating commission income at 2% of the
credits in four bank accounts through which the Applicant carried on the business
of discounting cheques and demand drafts; that assessment is the subject of the
Tribunal’s order dated 10th April 2019. On further information received from the



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Investigation Wing, the assessment was reopened, and the Assessing Officer added,
under Section 68 of the Act, the entire credits of Rs. 17,04,02,549/- in the
Applicant’s own bank account. In an appeal preferred by the Applicant, the
Commissioner of Income Tax (Appeals)–54, Mumbai, by order dated 30 th October
2018, restricted the addition to commission at 1% of those credits, holding that the
Assessing Officer had departed without reason from the principle adopted in the
earlier assessments. The Tribunal passed the impugned order dated 24 th June 2022,
dismissing the Applicant’s further appeal and following its own order dated 10 th
April 2019.

3.    The sequence of events that followed is not in dispute. The Applicant
received the impugned order on 15th September 2022, and the 120-day period
prescribed by the Act expired on 13 th January 2023. He states that his consultant
advised him to move the Tribunal under Section 254(2) by filing a Miscellaneous
Application, as the Tribunal is the final fact-finding authority and, if it rectified its
order, an appeal would not be necessary. Acting on that advice, he filed
Miscellaneous Application No. 225/Mum/2023 on 3 rd March 2023, contending
that the appeal had been decided on his written submissions despite an application
for adjournment. The Tribunal heard the application on 27 th October 2023, and
dismissed it by order dated 3rd January 2024, holding that the written submissions
had been duly considered, and that the application, in seeking a reduction of the
rate of commission upheld in the earlier years, sought a review which Section
254(2) does not permit. The Applicant received that order on 23 rd January 2024.
He states that he was then still recovering from Chikungunya, and that from
January 2024 to May 2024 he was required to be at his native village in Rajasthan
to attend upon his bedridden mother, aged about 80 years, returning to Mumbai
only in May 2024 and travelling back and forth thereafter. He pleads that he is not
well educated and attends to his affairs single-handed. On forwarding the order of
3rd January 2024 to his consultant in May 2024, he was advised, for the first time,
to file an appeal against the order of 24 th June 2022. He then procured papers from
the Tribunal, and the present Appeal was lodged on 13 th August 2024.



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4.        Heard Mr Sameer Dalal, learned counsel for the Applicant, and Mr
Akhileshwar Sharma, learned counsel for the Respondent–Revenue.

5.        Mr Dalal submitted that during this period, the Applicant was before a
competent forum under the Act, bona fide prosecuting a legal remedy available to
him, and that the Miscellaneous Application was contested and decided on its
merits. He submitted that a litigant relying on his professional adviser’s guidance
should not be barred because that advice later proved incorrect. He pointed out
that the impugned order follows the Tribunal’s order dated 10 th April 2019, which
is the subject of the connected appeal, so that the two appeals raise the same
question for the same Assessment Year. He said that refusal of the application for
condonation of delay would foreclose the only remedy the statute affords, while
condonation would not prejudice the Revenue in any manner. Mr Dalal relied
upon the decision inVijay Vishin Meghani v. DCIT1.

6.        No affidavit in reply has been filed on behalf of the Respondent. Mr Sharma
opposed the Application. The explanation offered for the bulk of the delay is
limited to the pendency of an application under Section 254(2) of the Act. The
two remedies are concurrent and not alternative; this Court has held in R. W.
Promotions (P.) Ltd. v. Income Tax Appellate Tribunal 2 that a Miscellaneous
Application under Section 254(2) is maintainable notwithstanding the pendency
of an appeal under Section 260A, and nothing therefore prevented the Applicant
from filing his Appeal in time and pursuing the Miscellaneous Application
alongside it. He relied upon Agnity Technologies (P.) Ltd. v. CIT 3, where a delay
of 439 days explained solely by a pending rectification application was held not to
disclose sufficient cause, and upon the dismissal of the Special Leave Petition
against that decision in Spinacom India (P.) Ltd. v. CIT 4. In any event, the
Miscellaneous Application was itself filed only on 3 rd March 2023, after limitation
for the Appeal had expired, and, as the Tribunal held, it sought a review. Beyond
1
    (2017) 398 ITR 250 (Bom)
2
    WP No.2238 of 2014 decided on 08.04.2015
3
    (2018) 97 taxmann.com 515 / 258 Taxman 129 (Delhi)
4
    (2018) 258 Taxman 128 (SC)



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this, the explanation offered is unsupported by material; nothing is annexed to
show the illness; no material is annexed regarding the mother’s illness; and the
periods between 15th September 2022 and 3rd March 2023, and between May
2024 and 13th August 2024, remain unexplained. He submitted that delay is not to
be condoned where want of due diligence is established, however plausible the
explanation offered; that condonation granted in another matter does not by itself
entitle an applicant to the same relief; that the merits are not to be considered in
deciding such an application; and that condonation cannot be granted on terms
where sufficient cause is absent. He added that the Appeal is in any event without
substance, the Tribunal having done no more than follow its own earlier decision.

7.    We have considered these rival submissions.

8.    Section 260A(2)(a) of the Act requires an appeal to the High Court to be
filed within 120 days from the date on which the order appealed against is received.
Sub-section (2A) empowers the High Court to admit an appeal after the expiry of
that period if it is satisfied that there was sufficient cause for not filing the same
within that period.

9.    The limitation period expired on 13 th January 2023, and the delay from that
date to the lodging of the Appeal on 13 th August 2024 is 578 days. Of that period,
326 days, from 3rd March 2023 to 23rd January 2024, were consumed by the
Miscellaneous Application and the receipt of the order disposing of it. The
remaining 252 days comprise 49 days between the expiry of limitation and the
filing of the Miscellaneous Application, and 203 days between the receipt of the
Tribunal’s order and the lodging of the Appeal.

10.   The Application turns upon a single question, for the greater part of the
period was consumed by the application before the Tribunal. That the two
remedies are concurrent is not in doubt, and R. W. Promotions (supra) establishes
that an application under Section 254(2) lies notwithstanding the pendency of an
appeal under Section 260A. It follows that a litigant who elects to pursue the one
instead of the other does so at his own risk, and that the mere pendency of a


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rectification application does not, as a matter of course, enlarge the time for an
appeal. In Agnity Technologies, the Delhi High Court held that the pendency of a
rectification application is not, by itself, sufficient cause. Whether it is sufficient
cause in a given case must turn upon the facts of that case: upon whether the
recourse to Section 254(2) was bona fide, and upon whether the litigant acted with
reasonable diligence.

11.       Tested thus, the Miscellaneous Application cannot explain the Applicant’s
failure to file the Appeal within the prescribed limitation period, as it was filed only
on 3rd March 2023, after the limitation expired. Furthermore, the period from
receipt of the impugned order to the filing date remains unexplained. Nonetheless,
the application should not be dismissed solely as a procedural tactic. The Tribunal
adjudicated the appeal based on written submissions despite an application for
adjournment, which it duly considered and addressed. The failure of this
application, and the Tribunal’s view that it was partially intended to seek a review,
do not, in our judgment, demonstrate a lack of bona fide intent. The 326 days
involved are, in our view, adequately accounted for.

12.       In N. Balakrishnan v. M. Krishnamurthy5, the Supreme Court observed
that a litigant does not benefit from resorting to delay, and that the length of the
delay is not by itself decisive; the acceptability of the explanation is the only
criterion. In Vijay Vishin Meghani (supra), a Division Bench of this Court
condoned a delay of 2984 days upon terms as to costs, holding that condonation is
not to be refused unless the delay is shown to be deliberate and intentional.

13.       On the material before us, we are satisfied that the Applicant did not sit idle;
that for the greater part of the period he was before a forum under the Act, upon
advice, pursuing a remedy which the Tribunal entertained and decided on its
merits; that his error was one of judgment; and that the delay, though not
adequately explained in every part, was neither deliberate nor intentional. We are
of the clear opinion that this constitutes sufficient cause within the meaning of

5
    (1998) 7 SCC 123



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                       Section 260A(2A) of the Act.

                       14.   For these reasons, we pass the following order:

                             (a)   The delay of 578 days in filing Income Tax Appeal (L) No. 25544 of
                                   2024 is condoned, subject to the Applicant paying to the Respondent
                                   costs quantified at Rs. 10,000/- (Rupees Ten Thousand only) within
                                   four weeks from today.

                             (b) The Registry shall number the Appeal and place it for admission in the
                                   ordinary course.

                       15.   The Interim Application is disposed of in the above terms.




                       (DR. NEELA GOKHALE, J)                                  (G. S. KULKARNI, J.)


PRASAD
RAJENDRASING
RAJPUT

 Digitally signed by
 PRASAD
 RAJENDRASING
 RAJPUT
 Date: 2026.09.28
 18:24:07 +0530




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