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Income Tax Appellate Tribunal, ‘B’ BENCH, KOLKATA
Before: Shri Rajpal Yadav, Vice-(KZ) & Dr. Manish Borad
order : February 10, 2023 O R D E R Per Rajpal Yadav, Vice-President (KZ):- The assessee is in appeal before the Tribunal against the order of ld. Commissioner of Income Tax (Appeals)-19, Kolkata dated 10.01.2018 passed for Assessment Year 2008- 09.
2. The Registry has pointed out that the appeal is time-barred by 1516 days. Before adverting to the application for condonation of delay, we deem it appropriate to make reference of certain facts. 1
Assessment Year: 2008-2009 Shri Vanila Vinimay Pvt. Limited
The assessee has filed its return of income electronically on 29.09.2008 showing total income of Rs.11,649/-. The case of the assessee was reopened by issuance of a notice under section 148 of the Income Tax Act. The assessment order was passed under section 143(3) read with section 147 on 30.04.2010. Thereafter the ld. Commissioner took cognizance of his revisionary powers under section 263 of the Income Tax Act and set aside the assessment order with a direction to pass a denovo assessment. This order was passed on 11.03.2013. During the scrutiny of accounts in the fresh assessment proceeding in pursuance of 263 order, the ld. Assessing Officer found authorized share capital of the assessee increased by Rs.27,40,000/- from Rs.2,00,000/- and an amount of Rs.12,53,50,000/- was introduced as fresh share capital by issue of 2,50,770 no. of shares to twenty-seven applicants with face value Rs.10/- and premium of Rs.490/-. The ld. Assessing Officer has issued a notice on 02.12.2013 under section 142(1), but it remained un-complied with. He again issued notice on 16.12.2013. Nobody attended before the ld. Assessing Officer. The ld. Assessing Officer thereafter issued a fresh notice on 15.01.2014 on the two separate addresses of the Company and initiated proceeding under section 144 i.e. best judgment proceeding. The hearing was fixed on 27.01.2014 but no one came present on behalf of the assessee. All of a sudden on 04.03.2014, written submissions alongwith certain documents were submitted before the ld. Assessing Officer. The ld. Assessing Officer vide notice under section 142(1) directed Shri Ashok Jain, FCA & A/R of the assessee to produce the Directors of the 2
Assessment Year: 2008-2009 Shri Vanila Vinimay Pvt. Limited assessee-company as well as of the share applicant Company. It was also made clear that since assessment will be going to time- barred on 31st March and he has responded to the notice on 4th March at the fag end, therefore, it is not possible by the ld. Assessing Officer to ensure the presence of these persons through exercise of statutory powers, but no one appeared thereafter. The ld. Assessing Officer under this circumstance made addition of Rs.12,53,50,000/-. He disallowed the salary and made addition of Rs.50,000/-. He also disallowed certain miscellaneous expenditure and determined the taxable income of the assessee.
Dissatisfied with this addition, the assessee filed an appeal before the ld. CIT(Appeals). The ld. CIT(Appeals) has recorded that notices were issued to the assessee through Registered Post on a number of occasions but no one come present. Hence he dismissed the appeal after reproducing the grounds and observing that no new material has been filed by the assessee for controverting the finding of the ld. Assessing Officer. This order was passed in 2018.
5. The present appeal has been filed on 05.05.2022, hence it is time-barred by 1516 days. In support of the application for condonation of delay, Shri S.L. Poddar, ld. Counsel for the assessee filed an application, which reads as under:-
Assessment Year: 2008-2009 Shri Vanila Vinimay Pvt. Limited Assessment Year: 2008-2009 Shri Vanila Vinimay Pvt. Limited Assessment Year: 2008-2009 Shri Vanila Vinimay Pvt. Limited Assessment Year: 2008-2009 Shri Vanila Vinimay Pvt. Limited Assessment Year: 2008-2009 Shri Vanila Vinimay Pvt. Limited Assessment Year: 2008-2009 Shri Vanila Vinimay Pvt. Limited Assessment Year: 2008-2009 Shri Vanila Vinimay Pvt. Limited Assessment Year: 2008-2009 Shri Vanila Vinimay Pvt. Limited
6. The Director the assessee-company Shri Akeel Khan has filed an affidavit, which also reads as under:-
Assessment Year: 2008-2009 Shri Vanila Vinimay Pvt. Limited
Assessment Year: 2008-2009 Shri Vanila Vinimay Pvt. Limited 7. With the assistance of ld. CIT(DR), 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 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 13
Assessment Year: 2008-2009 Shri Vanila Vinimay Pvt. Limited 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 pragmatic manner.
4. 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 Assessment Year: 2008-2009 Shri Vanila Vinimay Pvt. Limited 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 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 15
Assessment Year: 2008-2009 Shri Vanila Vinimay Pvt. Limited 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 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.
In the light of above, let’s examine the explanation of the assessee. The only explanation given by the assessee is that order was not served upon the assessee-company. It came to know when the ld. Counsel has visited ITBA Portal that appeal of the assessee-company was decided ex-parte on 10.01.2018. Such an exercise was carried out by the Director in last week of January, 2021 and thereafter COVID was there. Hence, appeal could not be filed within the time.
Assessment Year: 2008-2009 Shri Vanila Vinimay Pvt. Limited 11. On due consideration of the above explanation extracted supra, we are of the view that there is no plausible explanation at the end of the assessee, because the assessee has not prosecuted any of the proceeding before the Income Tax Authorities, namely it did not take participation in 263 proceeding, i.e. the revisionary proceedings before the ld. Commissioner. It did not challenge that order. Thereafter it did not take active participation before the ld. Assessing Officer in the assessment proceeding. It did not appear before the ld. CIT(Appeals) and again it did not appear before the Tribunal. Originally an adjournment letter was filed by Mr. Siddharth Jhajharia, FCA. On the date of hearing, i.e. 07.02.2023, he was present in the Court Room in connection with some other case, though he has already pleaded no instruction. Thereafter notices were sent through Registered Post. An effort was made to inform the assessee on the Mobile Nos. mentioned in the letter head of Mr. S.L. Poddar as well as given in Form No. 36, but whosoever has picked up the phone, he misbehaved with the colour, i.e. the Bench Clerk as well as the Office Superintendent (Judicial). This oral conduct suggests that somebody is looking after filing of appeals, etc. in the Court but seriously not prosecuting the litigation. Therefore, we do not find any reason for condoning huge delay from February 2018 to March, 2020 after excluding the period of limitation of filing the appeal upto March, 2020 when COVID has struck in the country. As far as COVID period is concerned, we exclude that period from the limitation counted by the Registry. But even if on exclusion of COVID period, the appeal is time-barred by more than 500 days. Therefore, we do
Assessment Year: 2008-2009 Shri Vanila Vinimay Pvt. Limited not deem it fit to condone the delay in filing this appeal. This appeal is dismissed being time-barred. 12. In the result, the appeal of the assessee is dismissed. Order pronounced in the open Court on 10th February, 2023. Sd/- Sd/- (Manish Borad) (Rajpal Yadav) Accountant Member Vice-President (KZ) Kolkata, the 10th day of February, 2023