BRIJESH CHARITABLE TRUST,PANIPAT vs. ACIT, CIRCLE PANIPAT, PANIPAT

The aforesaid two appeals arise out of orders passed by learned Commissioner (Appeals) while deciding assessee’s appeals against the assessment orders passed under section 144 of the Income-tax Act, 1961 (for short ‘the Act’) on 28.02.2005. The Registry has pointed out delay of 3853 days in filing these appeal.

We have considered rival submissions on the issue of condonation of delay. Along with memorandum of appeal, the assessee has filed an application seeking condonation of delay without any affidavit. The contents of the application seeking condonation of delay in both the assessment years under dispute are identical and read as under:

Thus, as could be seen from the contents of the applications seeking condonation of delay, the reason shown by the assessee is while preparing for filing of appeals against orders passed by learned Commissioner (Appeals) in the proceedings arising out of order passed by the Assessing Officer under section 154 of the Act, the counsel for the assessee had advised that it is necessary to challenge the orders passed by learned Commissioner (Appeals) in quantum proceedings. Hence, on such advice, the assessee has filed these appeals.

At the time of hearing before us, learned counsel appearing for the assesse has submitted, based on a complaint lodged by custom authority, the assessment in case of the assessee was reopened and assessment orders were passed. Subsequently, the Additional Chief Metropolitan Magistrate, New Delhi, vide order dated 05.06.2009 has quashed the complaint. Thus, it was submitted that the delay in filing of appeal is, therefore, attributable to the time taken in the collateral proceedings for the closure of the case. It was submitted that the delay in filing the appeal is not due to any deliberate negligence on the part of the assessee. Thus, he submitted, the appeals may be admitted for hearing on merits after condoning the delay. In support of his contention, he relied upon a case of the Coordinate Bench in case of ACIT Vs. Container Corporation of India Ltd. & Ors, and Ors., dated 23.02.2018.

Learned Departmental Representative strongly opposed condonation of delay.

I have considered rival submissions and perused the materials on record. As could be seen, as per assessee’s own admission, the impugned orders of learned Commissioner (Appeals) were served on the assessee on 08.10.2007. Whereas, the appeals have been filed before the Tribunal on 25.06.2018. Thus, there is a delay of 3853 days in filing these appeals. In other words, the appeals have been filed with inordinate delay of more than 10 years. Right to appeal under the Income Tax Act is a statutory right circumscribed by conditions prescribed in the statute. Section 253(1) permits the assessee to file an appeal before the Tribunal against orders specified therein. Sub-section (3) to section 253 prescribes the period of limitation of 60 days for filing the appeal before the Tribunal. However, sub-section (5) to section 253 empowers the Tribunal to admit an appeal filed beyond the period of limitation, if it is satisfied that there was sufficient cause for not presenting it within that period. Therefore, the power to condone delay under sub-section (5) to section 253 is neither automatic nor to be exercised in vaccum. The condition precedent for condoning delay is, the appellant must establish that the delay in filing the appeal was due to sufficient cause.

Keeping in perspective the statutory provision, as discussed above, if we examine the cause shown by the assessee for filing the appeal belatedly, it is to be noted that in the delay condonation application filed along with appeal memo, the assessee has simply submitted that the delay has occurred as the assessee did not knew the correct course of action to be taken and based on advice of its counsel, he filed these appeals. Whereas, in the written submission filed in course of hearing of appeal, a completely different stand has been taken by the assessee by submitting that the delay in filling of appeal was due to time taken in the collateral proceeding for the closure of the case. In other words, the assessee has attributed the delay to the proceedings undertaken before the Additional Chief Metropolitan Magistrate, Delhi, for quashing the complaint filed by the customs authorities. As far as the reason shown in the application seeking condonation of delay filed along with appeal memo, they are not at all satisfactory and, to say the least, vague. Even, the application seeking condonation of delay was not supported by any affidavit. Therefore, the reason shown for condonation of delay in the application does not establish sufficient cause in terms with sub-section (5) of section 253 of the Act.

As regards assessee’s contention that due to collateral proceedings before Additional Chief Metropolitan Magistrate, New Delhi, there was delay in filing the appeals, in my view, this reason also does not hold good. As per assessee’s own admission, the Additional Chief Metropolitan Magistrate, New Delhi, passed the order quashing the complaint on 05.06.2009. Whereas, the present appeals have been filed by the assessee in June, 2018, almost after 9 years. Therefore, the huge gap between the date on which the Additional Chief Metropolitan Magistrate, New Delhi, passed the order quashing the complaint and the actual date of filing the appeals remains unexplained. As could be seen from record, against the orders passed by the first appellate authority in quantum proceeding the assessee, originally, did not file any appeal before the Tribunal. Rather, he attempted to test his luck by filing rectification application under section 154 of the Act before the Assessing Officer to rectify the assessment orders. When the rectification applications were dismissed and the appeals against such rectification orders were also dismissed by learned Commissioner (Appeals). Sometime in 2012, the assessee preferred appeals before the Tribunal.

When these appeals were pending, the assessee apprehending that the appeals may not succeed, challenged the orders of learned Commissioner (Appeals) passed in quantum proceedings preferred the present appeals. In my view, such decision taken by the assessee for filing appeals against the orders passed by learned Commissioner (Appeals) in quantum proceeding is only an afterthought. Once, the assessee has abandoned its statutory right of filing the appeals and has consciously taken such decision, he cannot again be permitted to pursue that right. More so, after considerable lapse of time, which in the present case is more than 10 years. Therefore, when the issue is, more or less, settled due to efflux of time, it cannot be permitted to be revived again because one of the parties to the lis suddenly wakes up and comes forward to file appeals without providing any valid and genuine ground for condonation of delay. The decision cited by learned counsel for the assessee would be of no help as the issue whether, in a particular case the delay is to be condoned or not is purely factual and has to be decided based on facts involved in a particular case. In any case of the matter, in the case cited before us, the delay in filing of appeals were of 585 and 502 days.

In the result, the appeals are dismissed.

These two appeals arise out of proceedings under section 154 of the Act.

Briefly the facts are, for the assessment year under dispute, the assessee did not file any return of income voluntarily under section 139(1) of the Act. Therefore, the Assessing Officer reopened the assessment under section 147 of the Act. In response to notice issued under section 148, the assessee did not file any return of income. Even, the assessee did not appear in course of assessment proceeding. Therefore, the Assessing Officer proceeded to complete the assessment to the best of his judgment under section 144 of the Act. While doing so, he determined the total income of Rs.40 lakhs in both the assessment years under dispute. The assessment orders so passed were subjected to proceedings under section 263 of the Act and vide orders dated 13.09.2003, learned Commissioner of Income Tax (CIT) set aside the assessment orders with a direction to frame de novo assessment. In pursuance to the direction of learned CIT, the Assessing Officer again initiated assessment proceedings. However, the assessee again defaulted in complying with the statutory notices issued by the Assessing Officer. Therefore, the Assessing Officer proceeded to complete the assessment to the best of his judgment under section 144 of the Act. Against the assessment orders so passed, the assessee preferred appeals before learned Commissioner (Appeals).

After dismissal of the quantum appeals by learned Commissioner (Appeals), the assessee on 05.01.2012 moved applications under section 154 for rectification of the assessment orders. The reason being, the complaint by the customs authority, based on which, the assessments were reopened under section 147 of the Act, in the meanwhile, has been quashed by the Additional Chief Metropolitan Magistrate, New Delhi, vide order dated 05.06.2009. While considering the applications filed under section 154 of the Act, the Assessing Officer observed that the rectification applications have been filed after expiry of four years from the end of the financial year, in which, the assessment orders sought to be amended, were passed. Further, he observed that the order passed by the Additional Chief Metropolitan Magistrate, New Delhi, quashing the complaint filed by the customs authority will not have any impact on income tax proceedings. Accordingly, he dismissed the applications filed by the assessee. Though, the assessee challenged the orders passed under section 154 of the Act before learned Commissioner (Appeals), however, it was unsuccessful.

Before us, learned counsel for the assessee reiterated the stand taken before the departmental authorities. Further, he submitted, the limitation prescribed under section 154 of the Act would not apply in a case where effect has to be given to an order of the court.

Learned Departmental Representative strongly relied upon the observations of the Assessing Officer.

I have considered rival submissions in the light of decisions relied upon and perused the materials on record. The facts on record clearly reveal that after the quantum appeals were dismissed by learned Commissioner (Appeals), the assessee instead of immediately filing any appeal before the Tribunal within the period of limitation prescribed under section 253 of the Act, filed applications under section 154 of the Act seeking rectification of the assessment orders. Admittedly, the rectification applications were filed beyond the period of 4 years prescribed under section 154 of the Act. Thus, from the aforesaid facts, it is very much clear that the assessee was pursuing a kind of trial and error method in the matter of seeking relief against the assessment orders. When the assessee failed in its attempt to get desired relief in the quantum proceeding, he tried his luck again by filing applications under section 154 of the Act, that too, much after the expiry of period of limitation. Therefore, the Assessing Officer, being bound by the statutory provisions, could not have extended the period of limitation. The contention of learned counsel for the assessee that limitation requirements of section 154 of the Act would not apply, as, effect was to be given to court orders, is fallacious considering that the order passed by the Additional Chief Metropolitan Magistrate, Delhi, is in respect of a completely separate proceeding and has no impact, whatsoever, in the proceedings before the Income Tax Authorities. In any case of the matter, I am of the view that the so called mistake sought to be rectified by the assessee, certainly, does not fall in the category of mistake apparent on the face of record as envisaged under section 154 of the Act. Therefore, in my considered opinion, learned Commissioner (Appeals) was justified in upholding the decision of the Assessing Officer. The grounds raised by the assessee, being devoid of merits, are dismissed. Accordingly, appeals are dismissed.

To sum up, all the appeals are dismissed.