C S K REALTORS LIMITED,HYDERABAD vs. ITO, WARD-1(2), HYDERABAD

Brief facts of the case are that assessee was deriving income from the activity of construction of housing ventures and also sale of plots, and filed the return of income for the assessment year 2017-18 declaring income of Rs. 69,79,423/-. Assessment was complete by order dated 16/12/2019 making some disallowance under section 37(1) of the Act. Subsequently, on a perusal of record, the learned PCIT, by order dated 29/03/2022 found that the assessment order was erroneous insofar as it is prejudicial to the interest of Revenue because the learned Assessing Officer failed to verify the levelling expenses claimed by the assessee, thereby the disallowance falling short of Rs. 34,81,044/-.

Aggrieved by such an action of the learned PCIT, assessee preferred this appeal with a delay of 328 days stating that the learned PCIT failed to appreciate that there was no error, and the learned Assessing Officer took a conscious view after considering all the material required for verification of the levelling expenditure and satisfied with the disallowance of 10% thereof.

Learned DR, at the outset, submitted that there are no grounds to condone the delay because, the cause attributed by the assessee to the delay is not genuine and against the public policy. He submits that the impugned order was passed on 29/03/2022 and for more than one year, the assessee kept quiet, but contesting the consequential proceedings before the learned Assessing Officer and having lost the same, again it came back to contest the jurisdiction of the learned PCIT to pass the impugned order. If such a conduct of the assessee is permitted by condoning the delay, there will not be any end to litigation because, without any bona fide, the people will go on litigating against the State, taking one cause after the other till they eventually exhaust themselves. He placed reliance on the view taken by the Co-ordinate Bench of the Tribunal in the case of SRK Infracon (India) Pvt. Ltd., vs. ITO in by order dated 08/02/2023, wherein this sort of conduct of the assessee was deprecated.

We have gone through the record in the light of the submissions made on either side. It could be seen from the affidavit filed in support of the request of the assessee to condone the delay, it is stated that pursuant to the impugned order, the assessee thought that pursuant to the directions of the learned PCIT, the learned Assessing Officer would pass orders of assessment afresh considering all the facts and circumstances, but subsequently, on proper advice, came to know that the learned PCIT quantified the disallowance, and therefore, the learned Assessing Officer being bound by the orders of learned PCIT would add the amount quantified by the learned PCIT. Claiming that he did not receive proper legal advice at that point of time, the assessee came forward with this appeal on 21/04/2023 with a delay of 328 days.

The affidavit does not specify when did the assessee approach the counsel and got the advice. There is no reason as to why the assessee sought such an advice at a belated stage. There is no denial of the fact that the consequential order was also passed. On a consideration of all these facts, we are convinced that the assessee wanted to have the best of both the worlds and having tested its luck before the learned Assessing Officer in the consequential proceedings and having lost the same, it came back to agitate the legality of the impugned order. Assessee is not an individual, but it is a commercial entity with a battery of legally trained people available for assistance. The pleas available to the individual cannot be taken by the commercial entities with all the legal paraphernalia at their disposal. If a party like assessee is permitted to conduct litigation in this way, we are afraid there would be no end to litigation and it would be against the public policy.

In the case of SRK Infracon (India) Pvt. Ltd (supra), a Co-ordinate Bench of the Tribunal considered this aspect of assessee filing the appeal with considerable delay, having lost the case in consequential proceedings and held that in such an event, it would not be in the public interest to condone the delay. Following the said view, we do not find it proper to condone the delay and the reason stated by the assessee does not constitute sufficient cause for such purpose. We accordingly decline to condone the delay, and without adverting to the merits of the appeal, dismiss the same.

In the result, appeal of the assessee dismissed.