LI Network
Published on: January 17, 2024 at 17:55 IST
Expressing serious concern over a substantial delay exceeding four years in filing statutory appeals before the High Court, the Supreme Court has directed the Income Tax Department to provide an affidavit explaining the inquiry conducted and actions taken regarding the prolonged delay.
The directive came from a bench comprising Justices BV Nagarathna and Sanjay Karol.
The case involves the Income Tax Appellate Tribunal’s decision, which held that interconnection usage charges paid to Foreign Telecom Operator(s) are neither ‘Royalty’ nor ‘Fees’ for Technical Services.
The Commissioner of Income Tax (International Taxation) filed an appeal before the Delhi High Court after a delay of 1560 days. The High Court dismissed the appeal on the grounds of limitation due to the department’s failure to explain the delay.
Challenging the High Court’s decision, the department filed a Special Leave Petition (Civil) before the Supreme Court. The apex court expressed displeasure at the department’s failure to provide reasons for the substantial delay in filing the appeal and noted that three other appeals sharing a common order were also dismissed by the High Court due to extended delays.
The Supreme Court, despite dismissing the Special Leave Petitions related to those appeals, decided to delve into the matter to ascertain the department’s actions.
The bench, comprising Justices B.V. Nagarathna and Sanjay Karol, found it peculiar that the department sought approval for the High Court’s order without investigating the reasons behind the four-year delay.
In accordance with Section 260A of the Income Tax Act, appeals from orders of ITAT must be filed within 120 days. The Court granted the department three weeks to provide an explanation for the delay in filing the appeals before the High Court.
While acknowledging that the fate of the Special Leave Petition may align with other dismissed cases, the Court emphasized the need for the concerned officer to submit an affidavit within the stipulated three-week period.