CIT vs. Reliance Industries Ltd (Supreme Court)

DATE: October 26, 2018 (Date of pronouncement)
DATE: November 2, 2018 (Date of publication)
AY: -
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Condonation of abnormal delay of 1371 days in removing office objections: High Court refused to condone delay and held that Dept must "set its own house in order by sacking and removing the delinquent and negligent officials or penalising them otherwise so as to subserve larger public interest". The Supreme Court reversed this holding High Court ought to have condoned the delay and not dismissed the appeal. Dept to pay costs of Rs. 1 lakh (from taxpayers' funds) for condonation of delay



CIVIL APPEAL NO. 10774 OF 2018

(Arising out of S.L.P. (C) NO. 19880 OF 2018





Leave granted.

The appeal was filed by the Department(appellant herein) before the High Court against the judgment of the Income Tax Appellate Tribunal (ITAT).However, the said appeal was defective and the appellant took abnormal time of 1371 days in removing those defects.

An application for condonation of delay was also filed. Since there was abnormal delay, the Registrar/Prothonotary & Senior Master of the Bombay High Court passed the Order dismissing the appeal for non-removal of office objections.

The appellant herein took out a Notice of Motion against the aforesaid Order which has been rejected by the High Court vide the impugned Judgment.

No doubt, there is a long delay in removing the objections, we are of the opinion that in a case like this the High Court should have condoned the delay in removing the office objections and heard the matter on merits.

However, for the said delay caused by the appellant, the appellant shall pay cost of Rupees one lac within four weeks, which shall be deposited with the Supreme Court Bar Association Lawyers’ Welfare Fund.

In view of the above, we condone the delay in removing office objections and remit the matter to the High Court for consideration of the case on merits. The appeal is allowed as indicated above.

…………………….J.(A.K. SIKRI)

…………………….J.(ASHOK BHUSHAN)


OCTOBER 26, 2018





The Commissioner of Income Tax (LTU), Mumbai400 005. …. Applicant

In the matter between

The Commissioner of Income Tax Mumbai (LTU), Mumbai400 005. …. Appellant

Vs. M/s. Reliance Industries Ltd. …. Respondents

Mr. A.R. Malhotra with Mr. N.A. Kazi and Mrs. Padma Divakar for the Applicant/Appellant.

Mr. J.D. Mistri, Senior Counsel with Mr. Madhur Agarwal, Mr. Raj Darak & Mr. P.C. Tripathi for the Respondents.


DATE : AUGUST 22, 2017


1. This is a notice of motion seeking quashing and setting aside of an order passed by the Registrar/Prothonotary & Senior Master on 1362013.

2. The notice of motion to set aside this order of the Registrar/Prothonotary & Senior Master is moved as belatedly as 1632017.

3. We inquired from Mr. Malhotra, appearing in support of this notice of motion, as to why we should condone this enormous delay in moving this notice of motion, as also why we should allow the Department to now comply with the procedural rules and remove the defects and deficiencies in the appeal which has been lodged and filed in 2013.

4. The only reason assigned is that the Department came to know of the rejection order of 1362013 only when it was arguing certain other appeals and for the Assessment Years 200304 to 200607. It is only when the arguments were proceeding that the Department discovered that the appeal for the Assessment Year 200203 has been rejected.

5. It is stated that the appeal was drafted by Mrs. Padma Divakar, a Standing Counsel, but the Department was not aware of the office objections nor it could take steps to remove them in time. It is only because of nonremoval of office objections that the appeal came to be dismissed.

6. This dismissal is without adjudication on merits and though there is a delay of 1371 days in moving this application, the same be kindly condoned in the interest of justice.

7. We have already held in our order passed on 2182017 in Notice of Motion No.1156 of 2017 in Income Tax Appeal {L} No.1387 of 2014 that the Revenue is not a special litigant. The Revenue/Department of Income Tax routinely sets out this cause for not being able to comply with the Bombay High Court (Original Side) Rules, 1980 insofar as the same set out a procedure for filing of Income Tax Appeals. The Revenue’s appeals have to comply with the procedural rules and the moment they are lodged, if there is noncompliance, the defects and deficiencies are notified.

They are notified by recording them on the original memo itself and in the presence of the Revenue’s Advocate who has lodged the appeal. Once the Revenue has engaged an Advocate or there is a Department’s Advocate who has filed a memo of appearance or Vakalatnama, then, it is the bounden duty of such Advocate to keep a note of the compliances and procedural matters. It is his/her further duty to inform the concerned official of the Department/Revenue at the Commissionerate level.

If he/she fails to inform or seek instructions, the officials are not to be blamed as they are not conversant with procedural or substantive law. Such is the regular explanation and coming on record. It only means that the Department or Revenue official incharge can claim that he is not obliged to attend the case or give any instructions to the Advocate or the arguing Advocate and his responsibility is over the moment the appeals and papers are handed over to the Panel Advocate.

It is this disturbing trend and in matters after matters of the Revenue and which have been noted by this Court. Such explanations or reasons are routinely assigned though there is a fullfledged legal wing or branch in the Department.

8. We have found that if the number of appeals filed by the Revenue are approximately thousand per year or more, then, we expect the Revenue to appoint and depute responsible officials and to follow up the legal cases and matters in this Court. The officers cannot pass on the buck to some junior level employees or clerical staff.

This is routinely happening inasmuch as the Departmental heads have not been attending the cases by taking a periodical review of the proceedings or appeals lodged in this Court. They hand over the papers to Advocates and thereafter are not bothered about the outcome of these appeals. It is for the Revenue or the Department to take the necessary action but they do not feel obliged to do so.

They expect this Court to condone serious lapses in their functioning by accepting above cause as sufficient. The cause as set out and the explanation as forwarded today, on affidavit and belatedly, reflects total negligence and callousness of the Revenue officials.

Their attitude shows that they are not at all vigilant and interested in pursuing the cases filed by the Department involving a tax effect of crores of rupees. They expect the Court to be lenient and liberal and pardon them every time. It is this approach of the Revenue officials which is not only strongly deprecated in the earlier order but this Court has refused to uphold it after it was noticed that this is the position in almost every matter.

9. This is no explanation for the delay of 1371 days and if for all these years the Revenue officials have not noticed the lodging, filing or pendency of an appeal, a conditional order of the Registry, then, it must set its own house in order by sacking and removing the delinquent and negligent officials or penalising them otherwise so as to subserve larger public interest.

If they are found to be hand in glove with the assessee and adopt such tactics deliberately, then, we do not think that the Court is responsible for the same. The Registrar (O.S.) has been drawing up a list and notifying the appeals regularly and intimating the parties and their Advocates through the High Court website that they must attend to these cases or else all consequences including dismissal without adjudication on merit, will follow.

If this is a known fact to all practising Advocates, including the Revenue’s Advocates, then, we do not think that any special treatment can be claimed.

10. For the reasons that we have assigned in other matters and wherein similar request has been refused, we have no option but to dismiss the present notice of motion also. It is accordingly dismissed.



2 comments on “CIT vs. Reliance Industries Ltd (Supreme Court)
  1. the issue here is the delay is perpetuating, but the issue is falling into the canyon of half hearted attempts by the revenue as it is not aware of the the legal procedure, but yet the issue is a continuing one since so many days, there is no issue of condonation that arises, but here revenue is at the receiving end of not able to comprehend the issue, that cannot mean defect is not with the officials, but there seems some other unknown reasons that took over , so summary rejection of condonation is not completely right, so hon SC has given the relief to the Revenue, is also my view. I do not completely brush aside the High court view, u=it is also right but the revenue appellate pleading is nit satisfactory perhaps.

  2. N Sreenivasan says:

    Yes, all are equal before law and blatant negligence would no doubt be penalised suitably. At the same time government’s revenue interest should not be totally ignored by not considering the merit of the case, because of negligence on the part of the erring departmental officers. Mistake and lapses may occur, which should be considered generously, but will gross negligence should be penalised. Loss of revenue is also a matter of great concern in such cases, which may also be recovered from will full erring officials in suitable cases.

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