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Income Tax Appellate Tribunal, ‘B’ BENCH, KOLKATA
Before: Shri Rajpal Yadav, Vice- & Shri Girish Agrawal
Per Shri Rajpal Yadav, Vice-President (KZ):- The assessee is in appeal before the Tribunal against the order of ld. Commissioner of Income Tax
ITA No. 641/KOL/2023 Assessment Year : 2011-2012 Karmick Solutions Private Limited (Appeals), National Faceless Appeal Centre (NFAC), Delhi dated 26th December, 2022 passed for A.Y. 2011-12.
The present appeal has been filed before the Tribunal on 28.06.2023 instead of due date of 24.02.2023. The Registry has pointed out that appeal is time-barred by 123 days. In order to explain the delay, the assesese has filed affidavit of Shri Sourav Roy, Director of the assessee. In his affidavit, he has deposed that their Chartered Accountant Shri Manoranjan Sen has expired during the time when this appeal was to be filed. Similarly his mother Shri Reba Roy is of 75 years and suffering from many illnesses. On account of cumulative setting of facts, the matter has slipped away from his mind and the delay has been occurred.
On the other hand, ld. D.R. contended that the assesee should be more vigilant and should have filed the appeal within the time limit provided in the Act.
With the assistance of the ld. Representatives, we have gone through the record carefully. Sub-section 5 of Section 253 contemplates that the Tribunal may admit an appeal or permit filing of memorandum of cross- objections after expiry of relevant period, if it is satisfied that there was a sufficient cause for not presenting it within that period. This expression sufficient cause employed in the
ITA No. 641/KOL/2023 Assessment Year : 2011-2012 Karmick Solutions Private Limited section has also been used identically in sub-section 3 of section 249 of Income Tax Act, which provides powers to the ld. Commissioner to condone the delay in filing the appeal before the Commissioner. Similarly, it has been used in section 5 of Indian Limitation Act, 1963. Whenever interpretation and construction of this expression has fallen for consideration before Honble High Court as well as before the Honble Supreme Court, then, Honble Court were unanimous in their conclusion that this expression is to be used liberally. We may make reference to the following observations of the Hon’ble Supreme court from the decision in the case of Collector Land Acquisition Vs. Mst. Katiji & Others, 1987 AIR 1353: 1. Ordinarily a litigant does not stand to benefit by lodging an appeal late.
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.
"Every day’s delay must be explained" does not mean that a pedantic approach should
ITA No. 641/KOL/2023 Assessment Year : 2011-2012 Karmick Solutions Private Limited be made. Why not every hour's delay, every second's delay? The doctrine must be applied in a rational common sense pragmatic manner.
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.
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 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.
Similarly, we would like to make reference to authoritative pronouncement of Honble Supreme Court in
ITA No. 641/KOL/2023 Assessment Year : 2011-2012 Karmick Solutions Private Limited the case of N. Balakrisknan Vs. M. Krishnamurtky (supra). It reads as under: “Rule of limitation are not meant to destroy the right of parties. They are meant to see that parties do not resort to dilatory tactics, but seek their remedy promptly. The object of providing a legal remedy is to repair the damage caused by reason of legal injury. Law of limitation fixes a life-span for such legal remedy for the redress of the legal injury so suffered. Time is precious and the wasted time would never revisit. During efflux of time newer causes would sprout up necessitating newer persons to seek legal remedy by approaching the courts. So a life span must be fixed for each remedy. Unending period for launching the remedy may lead to unending uncertainty and consequential anarchy. Law of limitation is thus founded on public policy. It is enshrined in the maxim Interest reipublicae up sit finis litium (it is for the general welfare that a period be putt to litigation). Rules of limitation are not meant to destroy the right of the parties. They are meant to see that parties do not resort to dilatory tactics but seek their remedy promptly. The idea is that every legal remedy must be kept alive for a legislatively fixed period of time. A court knows that refusal to condone delay would result foreclosing a suitor from putting forth his cause. There is no presumption that delay in approaching the court is always deliberate. This Court has held that the words "sufficient cause" under Section 5 of the Limitation Act should receive a liberal construction so as to advance substantial justice vide Shakuntala Devi lain Vs. Kuntal Kumari [AIR 1969 SC 575] and State of West Bengal Vs. The Administrator, Howrah Municipality [AIR 1972 SC 749]. It must be remembered that in every case of delay there can be some lapse on the part of the litigant concerned. That alone is not enough to turn down his plea and to shut the door against him. If the explanation does not smack of mala fides or it is not put forth as part of a dilatory strategy the court must show utmost consideration to the suitor. But when there is reasonable ground to think that the delay was occasioned by the party deliberately to gain time then the court should lean against
ITA No. 641/KOL/2023 Assessment Year : 2011-2012 Karmick Solutions Private Limited acceptance of the explanation. While condoning delay the Could should not forget the opposite party altogether. It must be borne in mind that he is a looser and he too would have incurred quiet a large litigation expenses. It would be a salutary guideline that when courts condone the delay due to laches on the part of the applicant the court shall compensate the opposite party for his loss”.
We do not deem it necessary to re-cite or recapitulate the proposition laid down in other decisions. It is suffice to say that the Honble Courts are unanimous in their approach to propound that whenever the reasons assigned by an applicant for explaining the condonation of delay, then such reasons are to be construed with a justice oriented approach. 7. In the light of the above, we are of the view that while making this appeal time barred, the assessee will not give anything. The delay has not been adopted by the assessee as a strategy to litigate with the Revenue. The delay is the result of human lapses and, therefore, we condone the delay in filing the appeal. 8. On merit, the grievance of the assessee is that the ld. Assessing Officer has erred in visiting the assessee with penalty amounting to Rs.6,63,154/- under section 271(1)(c). 9. Brief facts of the case are that the assessee-company has filed its return of income on 07.09.2011 electronically declaring ‘NIL’ income. The Book Profit has been shown at Rs.26,25,335/-. Ld. Assessing Officer found that the assessee-company had interest income on Fixed Deposit as well as on Mutual Fund and 6
ITA No. 641/KOL/2023 Assessment Year : 2011-2012 Karmick Solutions Private Limited this has not been included in the return. Hence, he made an addition of Rs.21,46,127/-. The assessee did not challenge this addition in the quantum appeal. It has paid the taxes as determined by the ld. Assessing Officer.
The ld. Assessing Officer thereafter initiated the penalty proceeding by issuance of a show-cause notice under section 274 read with section 271(1)(c) of the Act. A copy of the show-cause notice is available at page 28 of the paper book. The stand of the assessee is that ld. Assessing Officer has not given specific show- cause notice exhibiting the fact that penalty is being levied for furnishing of inaccurate particulars or concealment of income. The ld. Assessing Officer has not struck off one of limb out of the two lapses and, therefore, according to the ld. Counsel for the assessee, it is defective notice for visiting the assessee with penalty. For buttressing his contention, he relied upon the following decisions and also placed on record copy of these decisions:-
Sl. No. Particulars Exhibit No. No. of pages Page No. 1. CIT –vs.- 16 25 68-92 Manjunatha Cotton And Ginning Factory (2013) 359 ITR 565 (Kar.) 2. CIT & Anr, -vs.- 17 04 93-96 M/s SSA’s Emerald Meadows (2015) (11) TMI 1620 – Karnataka high Court
ITA No. 641/KOL/2023 Assessment Year : 2011-2012 Karmick Solutions Private Limited 3. The Supreme 18 05 97-101 Court of india in the case of Commissioner of Income Tax –vs.- SSA’s Emerald Meadows confirmed the decision of Hon’ble Karnataka High Court in the case of CIT & Anr, - vs.- M/s SSA’s Emerald Meadows (2015) (11) TMI 1620 4. The Supreme 19 27 102-128 Court of India in the case of Dilip N. Shroff –vs.- Joint Commissioner of Income Tzax (Appeal No. 2746 of 2007); Date of Judgment – 18.05.2007. 5. The Calcutta High 20 11 129-139 Court in the case of Commissioner of Income Tax (ITA No. 291 of 2009) Date of Judgment – 02.02.2016..
On the other hand, ld. D.R. took us through the assessment order and submitted that in the concluding paragraph of assessment order, the ld. Assessing Officer has expressed the opinion that penalty is to be levied for furnishing inaccurate particulars of income. He did not dispute that in paragraph no. 3.2, ld. Assessing Officer has observed that penalty is being initiated for furnishing inaccurate particulars of income or
ITA No. 641/KOL/2023 Assessment Year : 2011-2012 Karmick Solutions Private Limited concealment of particulars of income. But after making the computation of income, ld. Assessing Officer has observed that penalty under section 271(1)(c) read with section 274 of the Act has been initiated separately for furnishing inaccurate particulars of income. The stand of the Revenue is that mentioning of expression ‘concealment of particulars of income’ is a consequence to furnishing of inaccurate particulars. Thus according to the ld. Assessing Officer, there is no confusion qua the charge levied against the assessee. The ld. Assessing Officer has construed the fact in a manner that the assessee has furnished inaccurate particulars, which lead to concealment of income. 12. There is no dispute with regard to the proposition that if ld. Assessing Officer has not specified charges for which he wishes to visit the assessee with penalty, then, penalty order is not sustainable. All the Hon’ble Courts in the above judgments are unanimous on this proposition. The proposition as propounded by the ld. D.R. is not discernable from the show-cause notice as well as from the assessment order. The ld. Assessing Officer has mentioned this aspect at three different occasions, namely twice in the assessment order and one in the show-cause notice. On two occasions, he failed to appreciate the charge for which assessee has to reply. He is not specific. No doubt, after computation of income, in the assessment order, there is only one line where he has specified his mind, but again in the show- cause notice that specification is missing. Therefore, respectfully
ITA No. 641/KOL/2023 Assessment Year : 2011-2012 Karmick Solutions Private Limited following the order cited supra, we allow this appeal and quash the penalty order.
In the result, the appeal of the assessee is allowed. Order pronounced in the open Court on August 9, 2023.
Sd/- Sd/- (Girish Agrawal) (Rajpal Yadav) Accountant Member Vice-President(KZ) Kolkata, the 9th day of August, 2023 (1) Karmick Solutions Private Limited, Copies to : 116A, Karmick House, Purbalok, Premises No. 1118, Street No. 6, Kolkata-700099 (2) Income Tax Officer, Ward-5(4), Kolkata, Aayakar Bhawan,8th Floor, P-7, Chowringhee Square, Kolkata-700069 (3) Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi (4) Commissioner of Income Tax , (5) The Departmental Representative (6) Guard File TRUE COPY By order Assistant Registrar Income Tax Appellate Tribunal, Kolkata Benches, Kolkata Laha/Sr. P.S.