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 24th 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 27th 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 309-IA-7610-2025.DOCX 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 30th 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 24th June 2022, dismissing the Applicant’s further appeal and following its own order dated 10th 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 13th 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 3rd March 2023, contending that the appeal had been decided on his written submissions despite an application for adjournment. The Tribunal heard the application on 27th 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 23rd 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 24th June 2022. He then procured papers from the Tribunal, and the present Appeal was lodged on 13th August 2024. Page 2 of 6 309-IA-7610-2025.DOCX 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 10th 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 Tribunal2 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 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. In any event, the Miscellaneous Application was itself filed only on 3rd 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) 309-IA-7610-2025.DOCX 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 13th January 2023, and the delay from that date to the lodging of the Appeal on 13th 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 309-IA-7610-2025.DOCX 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 123 309-IA-7610-2025.DOCX 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