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Income Tax Appellate Tribunal, MUMBAI BENCH “SMC”, MUMBAI
आयकर अपील�य अ�धकरण मुंबई पीठ “एस एम सी” , मुंबई �ी �वकास अव�थी, �या�यक सद�य के सम� IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “SMC”, MUMBAI BEFORE SHRI VIKAS AWASTHY, JUDICIAL MEMBER आअसं. 1112/मुं/2023 (�न.व 2010-11) (A.Y 2010-11) आअसं. 1114/मुं/2023 (�न.व 2012-13) ITA NO.1114/MUM/2023(A.Y 2012-13) Bizznet Online Systems Pvt. Ltd. 1st Floor, Gulshan Villa, Oomer Park, Warden Road, Gowalia Tank, Mumbai – 400 026. PAN: AABCB-2432-R ...... अपीलाथ� /Appellant बनाम Vs. ACIT Circle -1-Thane , 6th Floor, Ashar I.T. Park, Wagle Estate, Thane- 400 604. ..... ��तवाद�/Respondent अपीलाथ� �वारा/ Appellant by : Shri Bharat Gandhi ��तवाद� �वारा/Respondent by : Shri Sunny Kachhwaha सुनवाई क� �त�थ/ Date of hearing : 26/07/2023 घोषणा क� �त�थ/ Date of pronouncement : 26/07/2023 आदेश/ ORDER
These two appeals by the assessee are directed against the orders of Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi [in short ‘the CIT(A)], for the Assessment Years 2010-11 and 2012-13, respectively. Both the impugned orders are of even date i.e. 23/02/2023.
2. Since, the facts germane to the grounds raised in both the appeals are identical, these appeals are taken up together for adjudication and are decided by this common order.
(A.Y 2010-11) ITA NO.1114/MUM/2023(A.Y 2012-13)
Shri Bharat Gandhi appearing on behalf of the assessee submitted that the CIT(A) has dismissed appeal of assessee on the ground of limitation. Narrating the facts he pointed that the assessment order was passed u/s. 143(3) r.w.s. 147 of the Income Tax Act, 1961 [in short 'the Act'] on 18/02/2016. Against the aforesaid assessment order, the assessee intended to file appeal before the CIT(A). The assessee handed over relevant documents along with assessment order to the Tax Consultant Shri Hitesh K. Mehta, Chartered Accountant for filing of appeal before CIT(A). The said Chartered Accountant failed to file appeal before CIT(A) on time. By the time it was realized that no appeal has been filed for assessment year 2010-11, there was already delay of more than 180 days. The assessee immediately filed appeal before the CIT(A) along with application for condonation of delay. Along with the application the assessee has also field certificate from the Chartered Accountant Shri Hitesh Mehta stating that the delay in filing of appeal was on his account. The total delay in filing of the appeal before CIT(A) was 189 days. The CIT(A) without appreciating the facts dismissed the appeal on account of limitation. The Hon'ble Supreme Court of India in various cases has held that the delay in filing of appeal should be condoned taking a lenient view in paramount interest of justice. The ld. Counsel for the assessee further submits that on merits the assessee has a good case in its favour. The balance of convenience is also in favour of the assessee. He prayed that if appeal is restored to the CIT(A), the assessee would be able to defend the appeal on merit.
(A.Y 2010-11) ITA NO.1114/MUM/2023(A.Y 2012-13)
Per contra, Shri Sunny Kachhwaha representing the Department vehemently opposed the appeal filed by the assessee. The ld. Departmental Representative pointed that the assessee has miserably failed to show sufficient cause resulting in inordinate delay of 189 days in filing of the appeal before CIT(A). He submitted that the reason given in application for condonation of delay before CIT(A) and the reason given in certificate by the Chartered Accountant for not filing appeal within time are different. Hence, no reliance can be placed on the reasons given by the assessee for delay in filing of the appeal.
5. Both sides heard, orders of authorities below examined. Against assessment order dated 18/02/2016 passed u/s. 143(3) r.w.s. 147 of the Act, the assessee filed appeal before the CIT(A). The appeal was time barred by 189 days. The assessee filed application for condonation of delay in filing of appeal. Along with application assessee has also filed certificate of Chartered Accountant. The delay in filing of appeal has been attributed to oversight / pre-occupation of the Chartered Accountant. The Chartered Accountant in his certificate has fairly admitted that the delay in filing of the appeal is on his instance.
6. It is a well settled principle that acceptance of explanation furnished by the assessee explaining reasons causing delay should be the rule and refusal an exception.
The Hon'ble Supreme Court of India in the case Ramnath Sao vs. Gobardhan Sao and Others reported as 2002 AIR 1201 while dealing with the application seeking condonation of delay held as under:
(A.Y 2010-11) ITA NO.1114/MUM/2023(A.Y 2012-13)
“In a particular case whether explanation furnished would constitute "sufficient cause" or not will be dependant upon facts of each case. There cannot be a straitjacket formula for accepting or rejecting explanation furnished for the delay caused in taking steps. But one thing is clear that the courts should not proceed with the tendency of finding fault with the cause shown and reject the petition by a slipshod order in over jubilation of disposal drive. Acceptance of explanation furnished should be the rule and refusal an exception more so when no negligence or inaction or want of bona fide can be imputed to the defaulting party. On the other hand, while considering the matter the courts should not lose sight of the fact that by not taking steps within the time prescribed a valuable right has accrued to the other party which should not be lightly defeated by condoning delay in a routine like manner. However, by taking a pedantic and hyper technical view of the matter the explanation furnished should not be rejected when stakes are high and/or arguable points of facts and law are involved in the case, causing enormous loss and irreparable injury to the party against whom the lis terminates either by default or inaction and defeating valuable right of such a party to have the decision on merit. Which considering the matter, courts have to strike a balance between resultant effect of the order it is going to pass upon the parties either way.” [Emphasised by us] 8. The Hon’ble Apex Court in the case of N. Balakrishnan vs. M. Krishnamurthy reported as (1998) 7 SCC 123 has held as under:
“9. It is axiomatic that condonation of delay is a matter of discretion of the court. Section 5 of the Limitation Act does not say that such discretion can be exercised only if the delay is within a certain limit. Length of delay is no matter, acceptability of the explanation is the only criterion. Sometimes delay of the shortest range may be uncondonable 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.”
The Hon’ble Apex Court in the case of Collector, Land Acquisition vs. MST Katiji reported as 167 ITR 471 has held that a liberal approach should be adopted while considering explanation furnished causing delay. The broad principles laid down by the Hon’ble Apex Court to be kept in mind while considering application seeking condonation of delay are as under:
“ And such a liberal approach is adopted on principle as it is realized that : 1. Ordinarily, a litigant does not stand to benefit by lodging an appeal late.
(A.Y 2010-11) ITA NO.1114/MUM/2023(A.Y 2012-13)
Refusing to condone delay can result in a meritorious matter being thrown out at the very threshold and cause of justice being defeated As against this, when delay is condoned, the highest that can happen is that a cause would be decided on merits after hearing the parties. 3. "Every day's delay must be explained" does not mean that a pedantic approach should be made. Why not every hour's delay, every second's delay? The doctrine must be applied in a rational, common sense and pragmatic manner. 4. When substantial justice and technical considerations are pitted against each other, the 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.
There is no presumption that delay is occasioned deliberately, or on account of culpable negligence, or on account of mala fides. A litigant does not stand to benefit by resorting to delay. In fact, he runs a serious risk.
It must be grasped that the judiciary is respected not on account of its power to legalize injustice on technical grounds but because it is capable of removing injustice and is expected to do so.”
In the light of aforesaid decisions rendered by Hon'ble Apex Court explaining the principles as to how sufficient cause explained by the assessee in case of delay in filing appeals should be given liberal construction, the reason given by assessee is accepted in the interest of justice. The delay in filing of appeal before the CIT(A) is condoned and the appeal is restored to the file of CIT(A) for fresh adjudication on merits, in accordance with law and principles of natural justice.
Before parting, I may point out that some element of negligence is also attributable to the assessee, as the assessee fails to show any follow up action taken after handing over of the documents to the Chartered Accountant for filing of appeal before the CIT(A). For this negligence, the assessee is directed to pay cost of Rs.10,000/- in accordance with Rule 32A(2) of Income Tax
(A.Y 2010-11) ITA NO.1114/MUM/2023(A.Y 2012-13)
(Appellate Tribunal) Rules, 1963 within three weeks from the date of this order.
10.1 The assessee shall furnish proof of deposit of cost to the CIT(A) before the appeal is taken up for adjudication.
In the result, impugned order is set-aside and appeal of the assessee is allowed for statistical purpose, subject to the condition aforesaid.
ITA NO.1114/MUM/2023-A.Y.2012-13:
Both sides are unanimous in stating that the facts in assessment year 2012-13 are identical to assessment year 2010-11 except duration of delay. The ld. Departmental Representative pointed that in assessment year 2012-13 there is substantial delay of 739 days in filing of appeal before the CIT(A). The ld. Counsel for the assessee reiterated the submissions and placed reliance on the application for condonation of delay filed by the assessee before the CIT(A) and the certificate given by Chartered Accountant citing reasons for delay.
Both sides heard. On similar set of facts, the appeal of assessee for assessment year 2010-11 has been decided. The length of delay is of no consequences, the acceptability of explanation is the only criteria. Since, the reason given by assessee causing delay has been accepted in light of the principles expounded by the Hon'ble Apex Court, the delay in filing of appeal before the CIT(A) is condoned subject to payment of cost Rs.10,000/-, in similar terms as set out while deciding the appeal for assessment year 2010- 11.
(A.Y 2010-11) ITA NO.1114/MUM/2023(A.Y 2012-13)
In the result, the impugned order is set-aside and appeal is allowed for statistical purpose.
To sum up, appeal for assessment year 2010-11 and 2012-13 are allowed for statistical purpose.