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 10th 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 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 27th 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 22nd 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 15th September 2022. He was then advised to file a second application, and he did so on 27th January 2023, being Miscellaneous Application No. 101/Mum/2023, assailing the order dated 4th 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 6th 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 17th 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 10th April 2019. He 310_IA_7613_2025.DOCX then procured papers from the Tribunal, and the present Appeal was lodged on 13th 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 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 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) 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 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 13th 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 14th November 2019, and the delay from that date to the lodging of the Appeal on 13th 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) 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 22nd 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 15th 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 Limitation5, 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 117 310_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 PRASAD RAJENDRASING RAJPUT Digitally signed by PRASAD RAJENDRASING RAJPUT Date: 2026.09.28 18:24:47 +0530