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Income Tax Appellate Tribunal, “SMC” BENCH,
Before: SHRI ABY T. VARKEY, JM & S PADMAVATHY S, AM
IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH, MUMBAI BEFORE SHRI ABY T. VARKEY, JM AND S PADMAVATHY S, AM आयकर अपील सं/ I.T.A. No.2487/Mum/2023 (निर्धारण वर्ा / Assessment Year: 2014-15) Everest Grande Commercial बिधम/ CPC/ITO-24(1)(1) 3rd Floor, Piramal Premises Vs. CTS-46/34, Plot 3A Everest Chambers Lalbaugh, Grande Society, Mahakali Mumbai-400034. Caves Road, Andheri Kurla Road Andheri (East), Mumbai-400093. स्थधयी लेखध सं./जीआइआर सं./PAN/GIR No. : AAAAE5455A (अपीलार्थी /Appellant) .. (प्रत्यर्थी / Respondent) Assessee by: Shri Dinesh Kukreja Revenue by: Shri Rajesh Meshram (Sr. AR) सुनवाई की तारीख / Date of Hearing: 25/10/2023 घोषणा की तारीख /Date of Pronouncement: 21/11/2023 आदेश / O R D E R PER ABY T. VARKEY, JM: This is an appeal preferred by the assessee against the order of the Ld. Commissioner of Income Tax (Appeals)/(NFAC), Delhi dated 19.06.2023 for the assessment year 2014-15. 2. The main grievance of the assessee is against the action of the Ld. CIT(A) dismissing the appeal of the assessee without admitting the same on grounds of delay.
Brief facts are that the assessee is a Commercial Premises Co-op Society and had filed its return of income (ROI) on 16.09.2014; and the CPC processed the ROI u/s 143(1) of the Income Tax Act, 1961 (hereinafter “the Act”) by order dated 20.05.2015 wherein the deduction u/s 80P(2)(d) of the Act claimed by the assessee to the tune
2 A.Y. 2014-15 Everest Grande Commercial Premises Co-op Soc. Ltd of Rs.6,73,364/- (interest earned on fixed deposit with Co-op Banks) was disallowed. Aggrieved, the assessee preferred an appeal before the Ld. CIT(A) on 07.02.2023. Thus there was a delay of 2790 days, but according to assessee, if Covid-19 Pandemic period is excluded it will be reduced to 1730 days (i.e. excluding the 716 days as per the period of Covid-19, as per the Hon’ble Supreme Court suo-motto orders). And even though, it was brought to our notice that the Ld. CIT(A) was made aware of the fact that the assessee’e/societies taxation & auditing were handled by Shri. Shabbir N Akolawala and his wife was suffering from a very rare medical ailment “Tuknyasu Arthritics” (her body cells kills the blood vessels in the body and is a rare disease detected in one in million persons) because of which she had to be regularly hospitalized and undergo vascular surgeries; and due to this unfortunate ailment of his wife, Shri Shabbir N Akolawala was not able to regularly check/monitor the email/correspondence from the department/CPC; and due to such an omission on the part of official, assessee was not aware about the CPC’s intimation order dated 20.05.2015 and only when the tax demand was raised, the assessee came to know about disallowance made by CPC, and when the same was confronted with the official/Shri Shabbir N Akolawala, they realized his omission to check the email (CPC intimation order on 20.05.2015). Thereafter, the assessee immediately took steps to file the appeal before the First Appellate Authority, but due to Covid-19 Pandemic in March, 2020, the assessee was able to file the same only on 07.02.2023. So according to the Ld. AR, if the period of Covid-19 Pandemic period is excluded (as per the suo-motto orders of the 3 A.Y. 2014-15 Everest Grande Commercial Premises Co-op Soc. Ltd Hon’ble Supreme Court) then the delay caused for filing the appeal gets reduced to 1730 days. According to Ld. AR, thus it can be seen that delay in filing appeal was not intentional and on this score, no negligence can be attributed on the part of assessee. And it was submitted that the issue regarding exemption u/s 80P(2)(d) of the Act has been decided in favour of assessee by Ld. CIT(A) in subsequent assessment year. And even though, the aforesaid facts and explanation/reason were brought to the notice of the Ld. CIT(A), the Ld. CIT(A) declined to condone the delay and dismissed the appeal in limine without admitting the same. Aggrieved, the assessee is before us. 4. Per contra, the Ld. DR submitted that law only helps the vigilant and since the assessee was negligent, the Ld. CIT(A) rightly did not admit the appeal of assessee and has rightly dismissed the appeal of the assessee. 5. We have heard both the parties and perused the records. We note that the assessee which is a Co-operative Society has filed the return of income on 16.09.2014; and the CPC processed the return of income u/s 143(1) of the Act and vide order dated 20.05.2015 disallowed deduction u/s 80P(2)(d) of the Act claimed by assessee to the tune of Rs.6,73,364/- and the assessee filed an appeal against the impugned order of CPC only on 07.02.2023 (admittedly after delay of 2790 days, but after excluding Covid-19 period, the same will be reduced to 1730 days). The reasons for causing of delay (in filing appeal) was attributed to the omission on the part of official/Shri Shabbir Akolawala, who was entrusted the task of handling taxation issues. The omission (in filing of appeal by Shri Shabbir Akolawala) was due the fact that Shri Shabbir Akolawala was not aware of the 4 A.Y. 2014-15 Everest Grande Commercial Premises Co-op Soc. Ltd intimation order passed by CPC (dated 20.05.2015) since he was involved in taking care of his wife who was suffering from a rare medical problem “Takayasu Arthritis” which is noted to be a rare medical ailment/condition which affected one in million. Due to this serious illness, her body cells in-turn kill its own blood vessels in the body and due to which, bloods vessels need to be regularly operated upon by vascular surgeons; and due to excessive usage of steroids other complexities arose, viz, her bones were brittle/would break at the slightest fall. So, she needed constant medical care & attention and because of which, Shri Shabbir Akolawala could not regularly check the emails, and thus he missed to peruse the CPC order and thus was not aware about the impugned disallowance made by CPC. And only when demand was raised by the department in the year 2020, assessee came to know about the impugned action of CPC, and immediately took steps for filing of appeal before the Ld. CIT(A). And since Covid- 19 Pandemic hit India in 2020, assessee was able to file appeal only on 07.02.2023. Thus there was delay of 1730 days (excluding 716 days due to Covid-19, as per the Hon’ble Supreme Court suo-motto orders). Since the assessee filed the appeal after considerable delay, the Ld. CIT(A) refused to condone delay.
It is noted that the main reason for the delay in filing of appeal was the ill-health of assessee/Society’s official’s wife who was exclusively looking after the taxation matters of the Society. Reading of the condonation application shows that the assessee had explained before the Ld. CIT(A) that Shri Shabbir Akolawala was entrusted with 5 A.Y. 2014-15 Everest Grande Commercial Premises Co-op Soc. Ltd the duties related to taxation/litigation of assessee Society and due to medical treatment of his wife [who was suffering from a rare medical problem “Takayasu Arthritis”] he couldn’t regularly check the emails/updates from the income tax department, and thus omitted to know about the impugned action of CPC disallowing interest of Rs 6,73,364/- earned on fixed deposit with Co-op Banks claimed by assessee as exempt u/s 80(P)(2)(d) of the Act. And the assessee pointed out that non-filing of appeal in time was neither intentional not attributable to willful negligence on part of assessee or Shri Shabbir Akolawala. Before us, Shri Shabbir Akolawala appeared and brought to our notice the rare nature of medical ailment of his wife as well as documents relating to the hospitalisation and seriousness of the disease. After going through the relevant documents, we are convinced that non-filing of appeal in time by assessee was due to the reasons beyond the control of its employee Shri Shabbir Akolawala, and assessee should not suffer for non-filing of appeal in time. The aforesaid cause coupled with the fact that, the issue involved in the appeal relates to disallowance of interest by CPC [earned on fixed deposit with Co-op Banks claimed by assessee as exempt u/s 80(P)(2)(d) of the Act], which has admittedly been verified and allowed in earlier years; and especially in subsequent year by the Ld CIT(A) in AYs 2016-17 & 2017-18 [ Refer page 44 to 68 PB], clearly shows that a lenient view deserves to be taken for the purposes of deciding the plea of condonation of delay. The assessee has been able to demonstrate the delay was not deliberate in as much as this particular issue regarding exemption 80(P)(2)(d) of the Act had 6 A.Y. 2014-15 Everest Grande Commercial Premises Co-op Soc. Ltd already been decided in their favour in susequent years and therefore there was no cogent reason for the assessee to not pursue the claim in relevant AY 2014-15, but the delay occurred due to medical reason (supra), which has already been examined and found to be true in the foregoing. On these facts, refusal to condone the delay can result in a meritorious matter being thrown out at the very threshold and cause of justice being defeated. The Ld. CIT(A) failed to understand that when the delay is condoned, the highest that can happen is that the cause would be decided on merits after hearing the parties. On the given facts of the case, the approach of the Ld. CIT(A) should be justice oriented so as to advance cause of justice.
In support of the above proposition, we may take guidance of the decision of the Hon’ble Apex Court in the case of Collector, Land Acquisition v. Mst. Katiji AIR 1987 SC 1353 wherein the Hon’ble Court has held that, in such matters, a liberal approach is adopted as ordinarily a litigant does not stand to benefit by lodging an appeal late. The Hon’ble Court further laid down that when substantial justice and technical considerations are pitted against each other, cause of substantial justice deserves to be preferred for the other side cannot claim to have vested right in injustice being done because of a non- deliberate delay. The Hon’ble Supreme Court in the case of CIT Vs West Bengal Infrastructure Development Finance Corpn. Ltd. (334 ITR 269) had also inter alia observed that, looking at the amount of tax involved in that case, that the High Court ought to have to 7 A.Y. 2014-15 Everest Grande Commercial Premises Co-op Soc. Ltd decided the matter on the merits, rather than disposing of cases merely on the ground of delay.
It is trite in law that, the expression "sufficient cause" for condonation of delay should receive a liberal construction so as to advance the substantial justice when no negligence or inaction or want of bona fide is imputable to party. For this, we may refer to the decision of Hon’ble Supreme Court in the case of State of West Bengal v. Administrator, Howrah Municipality AIR 1972 SC 749. At this juncture, it is necessary to remind ourselves of the following propositions laid down by the Hon’ble Supreme Court in N. Balakrishnan v. M. Krishnamurthy AIR 1998 SC 3222 regarding sufficient cause and condonation of delay :-
(i) Length of delay is no matter; acceptability of the explanation is the only criterion. Sometimes delay of the shortest range may be un-condonable due to a want of acceptable explanation, whereas in certain other cases, delay of a very long range can be condoned as the explanation thereof is satisfactory.
(ii) The primary function of a Court is to adjudicate the dispute between the parties and to advance substantial justice. The time-limit fixed for approaching the Court in different situations is not because on the expiry of such time, a bad cause would transform into a good cause.
8 A.Y. 2014-15 Everest Grande Commercial Premises Co-op Soc. Ltd
(iii) There is no presumption that delay in approaching the Court is always deliberate.
The Hon’ble Supreme Court in the case of OP Kathpaliya v. Lakhmir Singh AIR 1984 SC 1744 has held that, if refusal to condone the delay results in grave miscarriage of justice, it would be a ground to condone the delay. In the facts of the present case, it is an admitted position that the assessee was allowed exemption u/s 80P(2)(d) of the Act in subsequent years as noted (supra). Hence, the deduction claimed in the relevant AY 2014-15 needs to be examined and should not be denied for omission on the part of the employee as noted supra. On these facts, mere denial of deduction, that too by way of an unreasoned adjustment by CPC u/s 143(1) of the Act, would result in gross miscarriage of justice. The Hon’ble Supreme Court in the case of Concord of India Insurance Co. Ltd. v. Smt. Nirmala Devi [1979] 118 ITR 507 has held that, what is to be looked into is whether there is any taint of mala fide or element of recklessness or ruse and if neither is present, legal advice honestly sought and actually given, must be treated as sufficient cause for condoning the delay. In the present case, there is no such malafide discernible from the facts placed before us.
Applying the ratio decidendi emerging from the above cited judgments (supra), and taking into consideration, the relevant facts of 9 A.Y. 2014-15 Everest Grande Commercial Premises Co-op Soc. Ltd this case and the relevant documents placed before us, we are inclined to condone the delay and restore the appeal back to the file of the Ld. CIT(A) with a direction to adjudicate the grounds of appeal raised by the assessee on merits as per sub-section (6) of section 250 of the Act in accordance to law.
With the above directions, the appeal of the assessee is partly allowed for statistical purposes. Order pronounced in the open court on this 21/11/2023. (PADMAVATHY S) JUDICIAL MEMBER मुंबई Mumbai; दिनांक Dated : 21/11/2023. Vijay Pal Singh, (Sr. PS) आदेश की प्रनिनलनि अग्रेनर्ि/Copy of the Order forwarded to : 1. अपीलार्थी / The Appellant 2. प्रत्यर्थी / The Respondent. आयकर आयुक्त / CIT 3. 4. दवभागीय प्रदतदनदि, आयकर अपीलीय अदिकरण, मुंबई / DR, ITAT, Mumbai 5. गार्ड फाईल / Guard file.
आदेशधिुसधर/ BY ORDER, सत्यादपत प्रदत //// उि/सहधयक िंजीकधर /(Dy./Asstt.