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Income Tax Appellate Tribunal, COCHIN “SMC” BENCH, COCHIN
Before: Shri Chandra Poojari
This appeal at the instance of the assessee is directed against the order of the CIT(A), dated 21.02.2018. The relevant assessment year is 2008-2009.
The assessee has raised the following grounds:-
“1) First appellate authority as well as the Assessing Officer ought to have understood the fact that the appellant is a Co-operative society and was not subject to assessment of Income Tax in any previous years 2) First appellate authority as well as the Assessing Officer ought to have considered the fact that, appellant was not asked by the department to file income tax return in any previous assessment year and the appellant was under bonafide belief that he is not bound to file income tax returns. 3) First Appellate Authority as well as the Assessing Officer ought to have appreciated the fact that, as per Section 139(1) of the Income Tax Act, a 2 M/s.Pattanakkad SCB Ltd. person shall file income tax return only if his total income exceeded the maximum amount which is not chargeable to income tax. As per Section 80P of the Act, the amount of profit and gains attributable to business of banking or providing credit facility to the members income by way of interest or dividend derived from the investment with any other Co- operative society are exempt from Income Tax. First appellate authority ought to have understood the fact that appellant total income computed as per Section 80(P) does not exceed maximum amount which is not chargeable to income tax and not required to file income tax return as per Section 139(1). 4) First Appellate authority ought to have considered the fact that the assessing officer erred in computing the total income without deduction of income from banking and credit business with members. 5) First Appellate authority ought to have considered the fact that the assessing officer erred in making addition of interest receivable, excess interest in receipt and payments account, reserve for bad and doubtful debts, reserve for leave salary and reserve for deficit stock because whole of the income of society is exempt under Section 80(P). 6) First Appellate authority ought to have considered the fact that the assessment is bad in law in the light of the decision of the Hon'ble High Court of Kerala in the case of Chirakkal Service Co- operative Bank Ltd and others, in which the High court held that, if a society is agricultural credit society and has obtained a certificate to this effect from the registrar of co-operative society , the income of the society is exempt under Section 80(P) of the Income Tax Act. First Appellate authority ought to have considered the fact that, the appellant is an agricultural credit society and has obtained a certificate to this effect from the registrar of society. Hence the income of the society is exempt from income tax. He also ought to have considered the fact that as per the verdict of the Hon’rable High Court of 3 M/s.Pattanakkad SCB Ltd. Kerala, society can file return of income upto the date of completion of first and second appeal. On the basis of the High Court verdict, the appellant has filed its return of income for the assessment year 2008-09 on 19.08.2016. 7) Appellant had clearly explained the facts before the first appellate authority for not filing appeal in time. First appellate authority ought to have considered the facts that, there was not intentional delay from the part of the appellant and dismal of appeal by the first appellate authority by non considering the contention raised by the appellant is bad in law. 8) For these and other grounds and documents to be submitted at the time of hearing it is humbly prayed that the Hon'ble Tribunal be pleased to allow the appeal. The appellant further craves to add, alter or amend the contentions raised herein, at the time of hearing.”
The facts of the case in brief are that the assessee is a co-operative bank engaged in banking business and is liable to file its return of income for the assessment year 2008-2009 u/s 139 of the I.T.Act. However, the assessee did not file the return of income. The Assessing Officer issued notice u/s 148 of the I.T.Act on 25.03.2015 and served the same on the assessee on 27.03.2015. The assessee did not file return of income in response to the notice u/s 148 of the Act. In view of the same, the Assessing Officer completed the assessment u/s 144 r.w.s. 147 of the Act on 08.12.2015 by estimating the total income atRs.44,19,295.
Against the order of assessment, the assessee went in appeal before the CIT(A). Before the CIT(A), there was a delay of 245 days in filing the appeal before him. It was explained
4 M/s.Pattanakkad SCB Ltd. before the CIT(A) by way of a petition the delay in filing the appeal before him as follows:-
“The assessment order relating to the A.Y. 2008-09 was received on 14.12.2015. There was a delay of 280 days in filing the appeal. This is because, the society has been undergoing certain turmoil during the last few years and which is being continued due to the financial manipulation and fraudulent activities committed by the erstwhile Secretary, Mr.Maniappan, who is now under suspension and also the crime branch had commenced investigation in respect of his corruption during his tenure as Secretary to the Society.”
The CIT(A), after examining the issue regarding the delayed filing of appeal before him, observed that the assessee has not filed any documentary evidence to prove that the grounds shown in the Form No.35 for condonation of delay. Further, from the grounds shown, it is not evident that such event has occurred within the period of limitation, i.e., between 14.12.2015 and 13.01.2016. In the absence of sufficient cause being not shown for filing the appeal within the limitation period, the delay in filing the appeal was not condoned by him.
Against this, the assessee once again came in appeal before us. There was a delay of 511 days in filing appeal before us also. It was explained by way of a submission accompanied by an affidavit of Smt.P.S.Sabimol, Secretary of the assessee-bank, as follows:-
AFFIDAVIT I, P.S.Sabimol, daughter of P.K.Sreedharan, aged 52 years, residing at Nandanam, Pattanakad.P.O, Cherthala-688531, do hereby solemnly affirm and state as follows:-
1. 1. I am the authorized signatory of the appellant. I know the facts of the case and I am duly authorized and competent to swear to this affidavit on behalf of the appellant.
2. The above appeal is filed seeking to challenge the order of the Commissioner Of Income Tax (Appeals), Public Library Building, Sastri Road, Kottayam-686001 dated 21-02-2018 in CIT(A)/KTM/16-17 which in turn was an appeal against the illegal Assessment Order dated 08.12.2015 passed by The Income Tax Officer, Ward-5 , Allapuzha for the assessment year 2008- 2009.
3. The appellate authority disallowed the appeal in a mechanical manner without evaluating the facts and circumstances of the case. The grounds raised in the appeal may kindly be treated and read as part of this affidavit.
4. Unfortunately the appellate order received by the appellant was misplaced by me. Due to this reason appellant could not file appeal in time and there is a delay of 572 days in filing appeal. The appellant has got good grounds to succeed in the appeal. Hence, in the interest of Justice, it is respectfully prayed 572 days delay in filing the appeal may kindly be condoned. What is stated above are all true and correct to the best of knowledge and belief.
6 M/s.Pattanakkad SCB Ltd. Dated this 30th day of September, 2019.
P.S.Sabimol Secretary
Thus, the main reason given by the assessee in filing the appeal belatedly before this Tribunal was due to misplacement of the CIT(A)’s order. However, there is nothing on record to suggest that how the appellate order was misplaced and who has misplaced the same, so that the delay cannot be condoned simply because the assessee’s case is hard and calls for sympathy or merely out of benevolence to the party seeking relief. In granting the indulgence and condoning the delay it must be proved beyond the shadow of doubt that the assessee was diligent and was not guilty of negligence whatsoever. The sufficient cause within the contemplation of the limitation provision must be a cause which is beyond the control of the party invoking the aid of the provisions. The Hon’ble Supreme Court in the case of Ramlal v. Rewa Coalfields Ltd. AIR 1962 SC 361 has held that the cause for the delay in filing the appeal which by due care and attention could have been avoided cannot be a sufficient cause within the meaning of the limitation provision. Where no negligence, nor inaction, or want of bona fides can be imputed to the assessee a liberal construction of the provisions has to be made in order to advance substantial justice. Seekers of justice must come with clean hands.
In the present case, I find that the assessee justified the delay only with reference to the affidavit of Smt.P.S.Sabimol,
7 M/s.Pattanakkad SCB Ltd. the Secretary of the assessee-bank. In the said affidavit, Smt.Sabimol stated that the CIT(A) order received by the assessee was misplaced. However, there was no mention about when it was misplaced and got it so as to file the appeal against the CIT(A) order. This clearly shows that the delay was due to negligence and inaction on the part of the assessee. The assessee could have very well avoided the delay by the exercise of due care and attention. In my opinion, there exists no sufficient and good reason for the delay of 511 days in filing this appeal before the Tribunal. I, therefore, inclined to dismiss the appeal in limine without going into the merits of the grounds raised by the assessee in this appeal.
In the result, the appeal filed by the assessee is dismissed Order pronounced on this 20th day of December, 2019.