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

                                                              310_IA_7613_2025.DOCX



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

                INTERIM APPLICATION NO.7613 OF 2025
                                IN
               INCOME TAX APPEAL (L) NO.25545 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 1854 days in filing the Income Tax Appeal (L) No.
25545 of 2024. The said Appeal is preferred under Section 260A of the Income-
tax Act, 1961 (‘the Act’) and assails the order dated 10 th April 2019 passed by the
Income Tax Appellate Tribunal, Mumbai Bench “A”, Mumbai (‘the Tribunal’) in
ITA Nos. 1974 and 1975/Mum/2017, insofar as that order relates to ITA No.
1975/Mum/2017 for Assessment Year 2009–10.

2.     The Applicant’s assessment was reopened under Section 147 of the Act on
information received from the Investigation Wing that he was engaged in
discounting cheques and demand drafts for commission through bank accounts
standing in his name. The Applicant neither appeared nor furnished particulars,
and the Assessing Officer completed the assessment, estimating commission
income at 2% of the turnover of that business. In an appeal preferred by the


                                   Page 1 of 6
                                                                 310_IA_7613_2025.DOCX



Applicant, the Commissioner of Income Tax (Appeals)–54, Mumbai, by order
dated 27th December 2016, scaled the rate down to 1%, recording that the
Assessing Officer had not given any basis as to why the facts of the present case
warrant adoption of the rate of commission earned at 2%. The Applicant preferred
an appeal against this order dated 27 th December 2016 before the Tribunal. The
Tribunal passed the impugned order dated 10th April 2019, dismissing the
Applicant's appeal.

3.     The sequence of events that followed is not in dispute. The Applicant
received the impugned order on 17th July 2019, and the 120-day period prescribed
by the Act expired on 14th November 2019. 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 that if the
Tribunal rectified its order, an appeal would not be necessary. Acting on that
advice, he filed Miscellaneous Application No. 477/Mum/2019 on 22 nd August
2019. The Tribunal dismissed the said application ex parte by order dated 4th May
2022. The Applicant states that he received that order on 15 th September 2022. He
was then advised to file a second application, and he did so on 27 th January 2023,
being Miscellaneous Application No. 101/Mum/2023, assailing the order dated 4 th
May 2022. In October 2023, while the second miscellaneous application was
pending, he contracted Chikungunya and was advised rest for six to eight weeks.
The Tribunal dismissed the second application on 6 th November 2023, again ex
parte, holding that the assessee was challenging the order passed in the previous
Miscellaneous Application through another Miscellaneous Application, which did
not warrant merit. The Applicant received the said order on 17 th November 2023.
Thereafter, 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 6th November 2023 to his consultant in May 2024, he was
advised, for the first time, to file an appeal against the order of 10 th April 2019. He



                                     Page 2 of 6
                                                                310_IA_7613_2025.DOCX



then procured papers from the Tribunal, and the present Appeal was lodged on 13 th
August 2024.

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. He pointed out that the first Miscellaneous Application was filed well within
limitation, which negates any claim that the Applicant had neglected his rights. He
submitted that a litigant relying on his professional adviser's guidance should not
be barred because that advice later proved incorrect. Additionally, he noted that co-
ordinate benches of the Tribunal have accepted commission rates ranging from
0.10% to 0.30% in cases involving others whose bank accounts, run by Shri Lalit T.
Jain, engaged in the same business, and that the Applicant is entitled to have this
examined. 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 in Vijay
Vishin Meghani v. DCIT1.

6.         No affidavit in reply has been filed on behalf of the Respondent. Mr Sharma
opposed the Application. The delay is inordinate, running to over five years, and
the explanation offered for a large part of the delay is no more than the pendency
of two applications 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. CIT3, where a delay of 439 days explained

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)



                                               Page 3 of 6
                                                                310_IA_7613_2025.DOCX



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. CIT4. The Applicant’s own conduct tells against him.
The Tribunal’s order of 4th May 2022 records that none appeared for him on
nineteen dates between 18th October 2019 and 1st April 2022, and the second
application too came to be heard ex parte. Beyond this, the explanation offered is
unsupported by material; the illness rests upon a single laboratory report with
nothing for any period after October 2023; of the mother’s illness there is no
material whatsoever; and the intervals between 15th September 2022 and 27th
January 2023, and between May 2024 and 13 th August 2024, are left unexplained.
He submitted that delay is not to be condoned where want of due diligence is
established, however plausible the explanation offered; 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 estimate at 1% being a concurrent finding of fact.

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.        At the outset, we record that limitation expired on 14 th November 2019, and
the delay from that date to the lodging of the Appeal on 13 th August 2024 is 1734
days, not 1854. The larger figure taken in the Application is the whole period from
receipt of the impugned order, so that the Applicant has asked us to condone as
delay the very period the statute allowed him. That is a careless way of drawing an
application, and we say so plainly. It is, however, an excess and not a deficiency, and
we propose, ex abundanti cautela, to deal with the Application as made.

10.       Notwithstanding the aforesaid, we propose to deal with the Application on
4
    (2018) 258 Taxman 128 (SC)



                                      Page 4 of 6
                                                               310_IA_7613_2025.DOCX



merits. The Application turns upon a single question, for the period in question is
very largely the time consumed by the two applications to 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 rectification application does not, as a matter of course, enlarge the
time for an appeal. In Agnity Technologies (supra), the Delhi High Court held
that the pendency of a rectification application is not, by itself, sufficient cause.
Whether it is sufficient cause in each 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 first Miscellaneous Application cannot be dismissed as a
mere procedural tactic. It was duly filed on 22 nd August 2019, shortly after the
receipt of the impugned order, and with 84 days remaining within the prescribed
limitation period. A litigant who acts within the limitation period based on
professional advice is not one who is sleeping over his rights. The application
remained pending for 986 days. Out of the nineteen dates on which the Applicant
was absent, thirteen fall between 15 th March 2020 and 28th February 2022 i.e.,
during the Pandemic. During this period, the Supreme Court, by its order dated
10th January 2022 in In Re: Cognizance for Extension of Limitation 5, directed that
the period should be excluded from limitation calculations due to the Covid-19
pandemic. However, this order does not assist the Applicant, as his limitation
period expired on 14th November 2019, prior to the commencement of the
excluded period; therefore, the exclusion is inapplicable. Nevertheless, when
assessing whether his absence before the Tribunal was contumacious, the Court
cannot treat those two years as ordinary periods.

12.     The second Miscellaneous Application stands on an altogether different
footing. An application under Section 254(2), which challenges an order passed

5
    (2022) 3 SCC 117

                                    Page 5 of 6
                                                                                                 310_IA_7613_2025.DOCX



                                upon an earlier application under the same section, is not permissible. The 283
                                days spent on the second application constitute time expended on a remedy the
                                statute does not afford, and we are not inclined to interpret this period as anything
                                other than the Applicant’s own mistake.

                                13.       In N. Balakrishnan v. M. Krishnamurthy6, the Supreme Court observed
                                that a litigant does not stand to benefit by resorting to delay, and that the length of
                                the delay is not by itself decisive, the acceptability of the explanation being 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.

                                14.       On the material before us, we are satisfied that the Applicant did not remain
                                inactive; rather, for most of the period in question, he was before a forum under the
                                Act, acting on legal advice and believing he was pursuing his remedy therein. His
                                error was a matter of judgment, and although the delay was considerable, it was
                                neither deliberate nor intentional. We are satisfied that the explanation offered by
                                the Applicant constitutes sufficient cause within the meaning of Section 260A(2A)
                                of the Act.

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

                                         (a)     The delay of 1754 days in filing Income Tax Appeal (L) No. 25545 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.
                                16.      The Interim Application is disposed of in the above terms.




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

                                6
                                    (1998) 7 SCC 123


             Digitally signed
             by PRASAD
PRASAD       RAJENDRASING
RAJENDRASING RAJPUT
RAJPUT       Date:
             2026.09.28
                                                                        Page 6 of 6
             18:24:47 +0530