SRI.VARUGEHESE M. UTHUP,KOCHI vs. THE ACIT, CEN-CIRCLE,, KOCHI

Per CHANDRA POOJARI, AM:

These appeals filed by the assessee is directed against the common order of the

CIT(A)-III, Kochi dated 04/02/2019 which relates to quantum additions as well as

levy of penalty u/s. 271(1)(c) of the Act and pertain to the assessment years 2009-

10, 2010-11, 2012-13, 2013-14, 2014-15, 2015-16.

I.T.A. Nos.161-172/Coch/2019 within 30 days as permitted by section 249(2) and hence there was delay in filing the appeals.

2.1 The crux of the above grounds is that the CIT(A) erred in not adjudicating the

appeals on account of delay in filing the same before the CIT(A).

I.T.A. Nos.161-172/Coch/2019 3. The facts of the case are that Shri Varghese M Uthup is the Managing Director

of M/s Al Zarafa Travels and Manpower Consultants Pvt. Ltd., which is a manpower

recruitment agency. There was a search action u/s 132 of the Income Tax Act

against Shri Varghese Uthup on 27.03.2015. The assessments in these cases were

completed u/s 153A r.w.s 144 of the 1.T. Act, 1961 on 29.11.2016 & 30.11.2016.

Subsequently notices u/s 271(l)(c) of the IT Act were issued in this case and penalty

proceedings were finalized on 30.05,2017 & 31.05.2017 as till such time no appeals

were filed. Subsequent to the above appeals were filed before CIT(A) in the

aforesaid cases on the following dates:-

A.Y. Date of order Section Date of filing of appeal

2009-10 29.11.2016 153A r.w.s 144 19.03.2018 2010-11 30.11.2016 153A r.w.s.144 20.03.2018 2012-13 30.11.2016 153A r.w.s.144 20.03.2018 2013-14 30.11.2016 153A r.w.s.144 21.03.2018 2014-15 30.11.2016 153A r.w.s.144 21.03.2018 2015-16 30.11.2016 153A r.w.s.144 21.03.2018 2009-10 30.11.2016 271(1)(c) 25.03.2018 2010-11 31.05.2017 271(1)(c) 26.03.2018 2012-13 30.05.2017 271(1)(c) 26.03.2018 2013-14 30.05.2017 271(1)(c) 26.03.2018 2014-15 30.05.2017 271(1)(c) 26.03.2018 2015-16 30.05.2017 271(1)(c) 26.03.2018

3.1 Thus, there was a substantial delay in filing of appeals before the CIT(A) in the

aforesaid cases, with a delay ranging from several months to over one year. A show

cause notice for the validity of the aforesaid appeals was sent by CIT(A) to the

I.T.A. Nos.161-172/Coch/2019 assessee vide letter dated 29.01.2019. In response to the above, the assessee filed

a reply stating:-

“At the time of assessment proceedings and serving the assessment orders, appellant was a non resident residing outside India and could not travel to India due to travel ban imposed by UAE Govt on the request of Govt agencies in India. Subsequently, the Hon. High Court of Kerala granted permission to the appellant to travel to India. On 14th March, 2018, appellant had to appear in the CBI Court, Ernakulam in connection with getting his passport back as per directions of the Hon. High Court of Kerala. In the CBI Court, an order under section 230 against the appellant was handed over to the court in the form of a petition. Only at this point appellant was aware about the assessments. The assessment order was handed over to the office of Al Zarafa Travels and Manpower Consultants, Cochin, alleging that appellant is the managing director of the company, whereas appellant had resigned directorship on 01.10.2009 and was not associated with the company. In the assessment orders also, address of the appellant was written as the address of the company, whereas as per PAN records, the address of the appellant is his residence address at Puthuppally, Kottayam. Appellant contacted one of the employees of the company and was informed that the assessment order was handed over to the erstwhile Chartered Accountant on 16.03.2018. If at all the date of service of the order at the office, it is prayed to condone the delay in filing the appeal at it was due to reasons beyond the control of the appellant. It may be noted that appellant was not a director of the company "Al Zarafa Travels and Manpower Consultants (P) Ltd". He has resigned his directorship on 01.10.2009. His address as per PAN records is his residence address. The assessment orders and penalty orders were served on an ex-employee handed over the same to the erstwhile Chartered Accountant. The appellant got the assessment orders only on 16.03.2018. The appeals were filed on 20.03.2018. The service of the assessment order on the ex-employee of Al Zarafa Travels and Manpower Consultants (P) Ltd. cannot be taken as service of notice on the appellant Hence, there is no delay in filing the appeal. Condonation is sought as matter of abundant caution.

Considering the above, kindly treat the appeals as valid.”

3.2 The CIT(A) called for remand report from the Assessing Officer and the

Assessing Officer vide his letter dated 01.02.2019 stated as follows:-

“In respect of point no (i), it is submitted that the notices u/s 153A was served at the address as seen in the warrant of authorization u/s 132. In response to the notice, one Shri James Thomas (erstwhile Chartered Accountant) appeared and filed his letter. Since the AR could not furnish any 4

I.T.A. Nos.161-172/Coch/2019 information subsequently the assessment had to be completed ex-parte. Hence, it is submitted that there was a response in this address.

The assessment orders were also served on the same address and they were properly acknowledged. (This is corroborated by the assessee himself as he has stated that he had contacted the company and got the orders from the erstwhile Chartered Accountant). It is incomprehensible that the assessee would not be knowing that the assessment orders have been passed when he was aware of the initiation of proceedings u/s 153A.

In respect of the assessee's contention that he did not know the passing of assessment orders since the address as per PAN is different, it is submitted that the TRO had served the notice of demand in I.T.C.P. 1 on 06.03.2017 itself at the address as per PAN by way of affixture. The assessee still had not bothered to respond to the demand notice. Moreover, the department's letters including the order 230 sent to the address as per PAN has been returned by the postal authorities as unclaimed. The assessee has also currently given the address of his chartered accountant as the address for communication. Therefore, it may appear apparent that the claim of the assessee in this regard is only an afterthought and not the real reason as it is clear that the he was not using the PAN address as seen from the above.

In respect of point (ii), the assessee's claim that he came to know about the assessment orders only on 14.03.2018, when the order u/s 230 was served on him is absolutely false. It is submitted that in respect of penalty proceedings initiated u/s 271(1)(c)/271AAB, the assessee's erstwhile authorized representative had replied to this office by email requesting for adjournment on 26.05-2017. It is pertinent to mention the assessee himself has accepted the letter dated 26.05.2017, as the same has been placed as an exhibit in the course of filing of writ petition on 25.03.2018, before the Hon'ble High Court against the order u/s. 230.

From the above, it is very clear that the assesse was aware of the assessment proceedings as could be evidenced by the filing of letter dated 26.05.2017. When the assessee could seek an adjournment from the penalty proceedings on 26.05.2017, it has to be the fact that he was aware of the assessment made. Therefore the claim that he was aware only on 14.03.2018, is false and misleading. In respect of point (iii), as stated supra, the assessee was clearly aware because of the filing of letter dated 26.05.2017. Therefore, it is clear that the assessee has got no reasons for the delay and it appears that the assessee had chosen to file an appeal only after his travel got prohibited by issue of an order u/s 230.

I.T.A. Nos.161-172/Coch/2019 3.3 On perusal of the records and submission made by the assessee with regard

to the substantial delay in filing of the appeals along with the remand report

furnished by the AO, the CIT(A) observed that the assessee had consistently not

co-operated with the department in any of the proceedings, including the penalty

and the assessment proceedings. According to the CIT(A), in spite of having full

knowledge of the proceedings, he continued to refrain from participating in any of

the departmental proceedings or address any of the notices. The CIT(A) observed

that not only were the assessments and the penalty proceedings completed ex parte

but the assessee for months did not deem it appropriate to file his appeals even

though he continued to participate in the proceedings of other governmental

agencies who were more coercive. The CIT(A) found that the assessee was not

prevented from filing the appeals on time due to any reasonable cause for

months/years and hence, his request for the condonation of delay in filing the

appeals was not granted. According to the CIT(A), as per the IT Act, for an appeal

to be valid, the appeal has to be filed, as per section 249(2)(b) within 30 days of

the notice of demand relating to the assessment or penalty. It was found that in

the aforesaid cases the notices of demand were duly served on the assessee as per

the prescribed procedure and the records indicated that the assessee was in

knowledge of the same.

3.4 In view of the above facts, the appeals of the assessee, both against

assessment orders of the AO u/s 153A rws 144 and Penalty orders 271(l)(c), for AY

I.T.A. Nos.161-172/Coch/2019 2009-10, 2010-12, 2012-13, 2013-14, 2014-15 & 2015-16, being invalid due to

reasons discussed above, were thus dismissed by CIT(A).

filed an affidavit dated 19/06/2019 stating as follows:

“A search u/s. 132 of the Income Tax Act. 1961 was conducted on 27.03.2015 against me at the premises of the company M/s. Al Zarafa Travels and Manpower Consultants (P) Ltd alleging that I was the Managing Director of the said company. I was a Non-resident and was settled outside India. At the time of assessment proceedings and serving of the assessment orders, I was residing outside India and was unable to travel to India due to travel ban imposed by the UAE Government upon request from Government Agencies in India. Subsequenly, I approached the Honourable High Court of Kerala seeking permission to return to India and the High Court granted me permission to come to India and surrender before the investigation agencies. On 14lh March. 2018, I had to appear before the CBI Court, Emakulam in connection with getting my passport back as per the directions of the Honourable High Court of Kerala. In the CBI Court, an order u/s. 230 of the Income Tax Act, 1961 was handed over to the court by the Department lawyer in the form of a petition. Only at this point, I was aware of the assessments and orders imposing penalty. The assessment orders and orders imposing penalty were handed over to one of the ex-employees of the company M/s. Al Zarafa Travels & Manpower Consultants (P) Ltd. alleging that I was the managing director of the company, when infact, I had resigned the directorship on 01.10.2009 and was not associated with the company. The address given in the assessment orders were that of the company whereas as per my PAN records available in Income Tax Data base, the address is my house at Puthuppally. Kottayam. I contacted one of the ex-employees of the company M/s. Al Zarafa Travels & Manpower Consultants (P) Ltd and it was informed that the assessment orders and orders imposing penalty were handed over to the erstwhile Chartered Accountant of the company. I approached the Chartered Accountant on 16.03.2018 and obtained the assessment orders and orders imposing penalty. I filed appeal before the Commissioner of Income Tax (Appeals) within a week of receipt of the assessment order, i.e well within the period of 30 days.”

I.T.A. Nos.161-172/Coch/2019 4.1 Further, the assessee has filed an affidavit dated 26/06/2019 from the ex-

employee of Al Zarafa Travels and Manpower Consultants (P) Ltd., Kochi which

reads as follows:

“I, PAUL VARGHESE, alias Roy, aged 57, Son of P. P. Varghese, residing at Vadakenadayil, Vadavathoor P. O., Kottayam District do hereby solemnly affirm and state as follows:-

I was an employee of the company Al Zarafa Travels and Manpower Consultants (P) Ltd. Kochi till 31.03.2015, when the company was functioning at Door No. 39, 1st Floor, Lakeview Apartments, Church Landing Road, Kochi-682 016. After the search initiated by the Income Tax Department at the premises of the company on 27.03.2015, 1 stopped attending the company as the business of the company was closed down. On the 16th day of December, 2016, a staff of the Income Tax Department contacted me over telephone and requested me to collect some documents relating to Sri. Varughese M. Uthup. I obeyed the request and collected the assessment orders relating to Sri. Varughese M. Uthup. Again on 31.05.2017, I was requested to collect the orders imposing penalty on Sri Varughese M. Uthup, which also I obeyed and collected the same on 31.05.2017. Since 1 had discontinued the services with the company Al Zarafa Travels and Manpower Consultants (P) Ltd after the closure of the company on 31.03.2015, 1 retained the said assessment orders and orders imposing penalty with me as I did not have the contact details of Sri. Varughese M. Uthup. I was not aware of the relevance and importance of these documents. On 15.02.2017, I handed over the assessment orders to the erstwhile Chartered Accountant of the company, CA. James Thomas. Again, on 01st July, 2017, I handed over the penalty orders also to CA. James Thomas. On both the occasion, Chartered Accountant James Thomas advised me to contact Sri. Varughese M. Uthup. However, since Sri. Varughese M. Uthup was out of the country, 1 could not contact him.

On 13.03.2018, Sri. Varughese M. Uthup contacted me and asked me whether I had received any communication from the Income Tax Department. I appraised him about the fact that the assessment orders and penalty orders were handed over to Chartered Accountant Sri. James Thomas.

4.2 It was further submitted that in similar circumstances in the case of Al Zarafa

Travels and Manpower Consultants (P) Ltd. in ITA Nos. 518-523/Coch/2018 vide 8

I.T.A. Nos.161-172/Coch/2019 order dated 04/02/2019, the Tribunal condoned the delay in filing the appeals

before the CIT(A) and remitted to the file of the CIT(A) to decide the issue on the

merit of additions made by the Assessing Officer. Accordingly, it was submitted that

on the same logic, the delay in filing the present appeals may be condoned and

remitted to the file of the CIT(A) to decide the issue on merit. The Ld. AR also

filed written submissions on this count which is placed on record.

Department and there is no reasonable cause for filing the appeals belatedly before

the CIT(A) and hence, the delay need not be condoned.

long delay in filing the appeals before the CIT(A). The reason advanced by the

assessee is that on closure of the company Al Zarafa Travels and Manpower

Consultants (P) Ltd., one of the employees of the company retained the assessment

orders and the penalty orders with him and on 01/07/2017, the papers were

handed over to the CA, Shri James Thomas which could be informed to the

assessee only on 13/03/2018. Hence, there was delay in filing the appeals before

the CIT(A). Admittedly, as pointed out by the Ld. AR, a similar issue was

considered by the Tribunal in the case of Al Zarafa Travels and Manpower

Consultants (P) Ltd. cited supra wherein it was held as under:

“8. We have heard the rival submissions and perused the record. There was a delay of 510 days from the date of receipt of the assessment order by the ex- 9

I.T.A. Nos.161-172/Coch/2019 employee of the assessee to the filing of the appeal by the assessee. On the other hand, it was submitted that the delay would be 71 days from the date of receipt of the assessment order taken as the date on which Smt. Susan Thomas’s husband received the assessment order from the ex-chartered accountant of the assessee. In our opinion, at this stage, it is more appropriate to consider the date of receipt of the assessment order by the husband of Smt. Susan Thomas as the effective date of receipt of the assessment order so as to condone the delay in this case. We have gone through the condonation petition explaining the reasons for the delay in filing the appeal. There is no dispute in this case that the original assessment order was passed ex parte u/s. 144 of the I.T. Act and this was received by the assessee’s ex-employee, namely Shri Paul Varghese on 31/12/2016 as per his sworn affidavit dated 15/01/2019. It was explained by the ex-employee of the Company, Shri Paul Varghese that after the search initiated by the Income Tax Department at the premises of the company on 27.03.2015, he stopped attending the company since the business of the company was closed down. On 31.12.2016, a staff of the Income Tax Department contacted him over telephone and requested him to collect some documents relating to the assessee-company which is said to be the assessment order. Thereafter, Mr. Paul Varghese went to the Railway station at Ernakulam Junction for collecting the assessment order from the staff of the Department. To that extent, there is no dispute that the assessee’s ex-employee had received the assessment order from the staff of the IT Department. The Department has not filed an counter affidavit in this regard. Shri Paul Varghese handed over the assessment order to the assessee’s erstwhile Chartered Accountant, Shri James Thomas on 15/02/2017 who later expired on 15/06/2018. The assessee had also filed death certificate dated 15/01/2019, confirming the sad demise of Shri James Thomas, CA on 15/06/2018.

8.1 It was submitted before the CIT(A) that assessee’s Managing Director, Shri Renny Eapen abandoned the company without informing the other Director, Smt. Susan Thomas. Smt. Susan Thomas is a non-resident who is employed in UAE for last two decades and was not conversant with the affairs of the company.

8.2 Subsequent to the search action u/s 132 of the IT Act against Shri Varughese M. Uthup on 27.03.2015, notices u/s 153C was issued to the company M/s Al-Zarafa Travels and Manpower Consultants Private Limited in which the said Shri Varughese M. Uthup had played a vital role and also been the Director of the company. The proceedings resulted in a tax and penalty demand of Rs. 248 crores and Rs. 156 crores in the hands of the said company and directed respectively which is evident from para 7 of the CIT(A)’s order. Order u/s 179 was also passed on 14.08.2017 holding Shri Varughese M. Uthup jointly and severally liable for the payment of tax and penalty demand of M/s Al- Zarafa Travels and Manpower Consultants Pvt. Ltd. Due to complete non- cooperation by the assessing company, the assessment of the company had to be completed with the help of materials available on record. Taking into account 10

I.T.A. Nos.161-172/Coch/2019 the contumacious conduct of the said Shri Varughese M. Uthup an order u/s 230 of the IT Act was passed on 05/03/2018 after approval from the DGIT, rendering it necessary for him to obtain a certificate from the Income Tax Authority that he has no liabilities under this act or the wealth tax act or that satisfactory arrangements have been made for the payment of all or any such taxes that had become payable before he leaves the territory of India. Shri Varughese M. Uthup filed a writ petition against order u/s 230. The High Court Kerala upheld the order passed u/s 230. The matter was then taken to the Division Bench of the High Court Kerala wherein also it was upheld. The order passed u/s 230 had an element of demand passed u/s 179 being the demand of M/s Al-Zarafa Travels and Manpower Consultants Pvt. Ltd. The High Court Kerala had also directed this office to redo the order u/s 179 and also have a relook at order u/s 230. During the course of hearing, it was submitted that M/s Al-Zarafa Travels and Manpower Consultants Pvt. Ltd had decided to file appeals against the assessment and penalty orders passed. In the meantime, Smt. Susan Thomas's husband, Sri. Varughese M. Uthup had to appear in a court relating to his matter on 14.03.2018. On knowing about the demands, the assessee contacted one of the employees of the assessee-company who informed that the assessment orders were handed over to the erstwhile Chartered Accountant, Shri James Thomas of the company. Smt. Susan Thomas’s husband Shri Varughese M. Uthup received the assessment orders from him only on 13.03.2018. On receipt of the order, the managing director was contacted and was requested to file appeal against the order but no action was taken by him. In view of this, Smt. Susan Thomas took the initiative to file the appeal. But. for filing the appeal, Digital Signature was mandatory. To get Digital Signature, PAN was also mandatory. Hence, she had to apply for PAN, get PAN and then apply for Digital Signature. All this resulted in delay of filing the appeals before the CIT(A).

8.3 Therefore, we have to consider whether the assessee’s failure is sufficient cause for condoning the delay. The Madras High Court considered an issue in the case of Sreenivas Charitable Trust v. Dy. CIT (280 ITR 357) and held that mixing up of papers with other papers are sufficient cause for not filing the appeal in time. The Madras High Court further observed that the expression "sufficient cause" should be interpreted to advance substantial justice. Therefore, advancement of substantial justice is the prime factor while considering the reasons for condoning the delay.

8.4 There is a technical defect in the appeals since the appeals were not filed within the period of limitation. The assessee filed an affidavit stating that the appeals were not filed because of the improper service of notice by the Department. The Revenue has not filed any counter-affidavit to deny the allegation made by the assessee. While considering a delay in filing the appeal, the Apex Court in the case of Collector, Land Acquisition v. Mst. Katiji and Ors. (167 ITR 471) laid down six principles. For the purpose of convenience, the principles laid down by the Apex Court are reproduced hereunder: 11

I.T.A. Nos.161-172/Coch/2019 (1) Ordinarily, a litigant does not stand to benefit by lodging an appeal late.

(2) Refusing to condone delay can result in a meritorious matter being thrown 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.

(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, commonsense and pragmatic manner.

(4) When substantial justice and technical consideration are pitted against each other, the 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.

(5) 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.

(6) It must be grasped that the judiciary is respected not on account of its power to legalise injustice on technical grounds but because it is capable of removing injustice and is expected to do so.

8.5 When substantial justice and technical consideration are pitted against each other, the cause of substantial justice deserves to be preferred, for the other side cannot claim to have vested right for injustice being done because of non deliberate delay. Moreover, no counter-affidavit was filed by the Revenue denying the reasons advanced by the assessee. It is not the case of the Revenue that the appeal was filed deliberately with delay. Therefore, we have to prefer substantial justice rather than technicality in deciding the issue. As observed by Apex Court, if the application of the assessee for condoning the delay is rejected, it would amount to legalise injustice on technical ground when the Tribunal is capable of removing injustice and to do justice. Therefore, this Tribunal is bound to remove the injustice by condoning the delay on technicalities. If the delay is not condoned, it would amount to legalising an illegal order which would result in unjust enrichment on the part of the State by retaining the tax relatable thereto. Under the scheme of Constitution, the Government cannot retain even a single pie of the individual citizen as tax, when it is not authorised by an authority of law. Therefore, if we refuse to condone the delay, that would amount to legalise an illegal and unconstitutional order passed by the lower authority. Therefore, in our opinion, by preferring the substantial justice, the delay of 71 days has to be condoned. 12

I.T.A. Nos.161-172/Coch/2019 8.6 The next question may arise whether delay was excessive or inordinate. There is no question of any excessive or inordinate when the reason stated by the assessee was a reasonable cause for not filing the appeal. We have to see the cause for the delay. When there was a reasonable cause, the period of delay may not be relevant factor. In fact, the Madras High Court in the case of CIT vs. K.S.P. Shanmugavel Nadai and Ors. (153 ITR 596) considered the condonation of delay and held that there was sufficient and reasonable cause on the part of the assessee for not filing the appeal within the period of limitation. Accordingly, the Madras High Court condoned nearly 21 years of delay in filing the appeal. When compared to 21 years, 71 days cannot be considered to be inordinate or excessive. Furthermore, the Chennai Tribunal by majority opinion in the case of People Education and Economic Development Society (PEEDS) v. ITO (100 ITD 87) (Chennai) (TM ) condoned more than six hundred days delay. It is pertinent to mention herein that the view taken by the present author in that case was overruled by the Third Member.

8.7 We also place reliance on the decision of this Tribunal in the case of Midas Polymer Compounds (P.) Ltd vs. Asstt. CIT in ITA No. 288/Coch/2017 dated 25/06/2018 wherein this Tribunal condoned the delay of 2819 days. Insofar as the reliance on the decision of the Tribunal in the case of Midas Polymer Compounds (P) Ltd. cited supra is concerned, we are of the view that the Tribunal condoned the delay on the part of the assesse in filing the appeals by observing that the Chartered Accountant who was handling the matter failed to take proper steps to file the appeals and the Chartered Accountant filed affidavit stating that the appeals for AYs. 1999-2000 to 2004-05 in respect of the group concern and appeals for the AYs. 2005-06, 2007-08 and 2008-09 of the assessee were filed and represented by the Chartered Accountant at Cochin and he was under the impression that the appeal for the AY 2006-2007 was also filed by that Chartered Accountant in Cochin. It was also stated that the issue in all these appeals were covered in favour of the assessee by the order of the High Court of Kerala for the assessment years 2005-06 to 2008-09. The non- filing of the appeal was noted only when the Assessing Officer had enquired about the status of the case and payment of tax in the last week of May, 2017. The assessee was under the impression that the Chartered Accountant had already made arrangements for filing the appeal and as so many appeals were pending before the ITAT, he was under the impression that the appeal for this year also was filed. It was submitted that the non-filing of the appeal was due to an inadvertent omission on his part in handing over the file to the AR at Cochin. Hence, it was prayed that the delay of 2819 days in filing the appeal may be condoned. As such, this Tribunal condoned the above delay of 2819 days.

8.8 The Madras High Court in the case of Sreenivas Charitable Trust (supra) held that no hard and fast rule can be laid down in the matter of condonation of delay and the Court should adopt a pragmatic approach and the Court should exercise their discretion on the facts of each case keeping in mind that in 13

I.T.A. Nos.161-172/Coch/2019 construing the expression "sufficient cause" the principle of advancing substantial justice is of prime importance and the expression "sufficient cause" should receive a liberal construction. Therefore, this Judgment of the Madras High Court (supra) clearly says that in order to advance substantial justice which is of prime importance, the expression "sufficient cause" should receive a liberal construction. In this case, the issue on merit regarding granting of deduction u/s. 80IB was covered in favour of the assessee by the Judgment of the Madras High Court. Therefore, for the purpose of advancing substantial justice which is of prime importance in the administration of justice, the expression "sufficient cause" should receive a liberal construction. In our opinion, this Judgment of the Madras High Court is also squarely applicable to the facts of this case. A similar view was taken by the Madras High Court in the case of Venkatadri Traders Ltd. v. CIT (2001) 168 CTR (Mad) 81 : (2001) 118 Taxman 622 (Mad).

8.9 The Mumbai Bench of this Tribunal in the case of Bajaj Hindusthan Ltd. v. Jt. CIT (AT) (277 ITR 1) has condoned the delay of 180 days when the appeal was filed after the pronouncement of the Judgment of the Apex Court. Furthermore, the Revenue has not filed any counter-affidavit opposing the application of the assessee for condonation of delay. The Apex Court in the case of Mrs. Sandhya Rani Sarkar vs. Smt. Sudha Rani Debi (AIR 1978 SC 537) held that non-filing of affidavit in opposition to an application for condonation of delay may be a sufficient cause for condonation of delay. In this case, the Revenue has not filed any counter-affidavit opposing the application of the assessee, therefore, as held by the Apex Court, there is sufficient cause for condonation of delay. The Supreme Court observed that when the delay was of short duration, a liberal view should be taken. "It does not mean that when the delay was for longer period, the delay should not be condoned even though there was sufficient cause. The Apex Court did not say that longer period of delay should not be condoned. Condonation of delay is the discretion of the Court/Tribunal. Therefore, it would depend upon the facts of each case. In our opinion, when there is sufficient cause for not filing the appeal within the period of limitation, the delay has to be condoned irrespective of the duration/period. In this case, the non-filing of an affidavit by the Revenue for opposing the condonation of delay itself is sufficient for condoning the delay in filing the appeals before the CIT(A).

8.9.1 In case the delay was not condoned, it would amount to legalise an illegal and unconstitutional order. The power given to the Tribunal is not to legalise an injustice on technical ground but to do substantial justice by removing the injustice. The Parliament conferred power on this Tribunal with the intention that this Tribunal would deliver justice rather than legalise injustice on technicalities. Therefore, when this Tribunal was empowered and capable of removing injustice, in our opinion, the delay in filing the appeals before the CIT(A) has to be condoned and the appeals of the assessee have to be admitted and disposed of on merit. 14

I.T.A. Nos.161-172/Coch/2019 8.9.2 In view of the above, we condone the delay in filing the appeals before the CIT(A) and remit the issue to the file of the CIT(A) to decide the issue on the merit of the additions made by the Assessing Officer. Since the assessment order was passed ex parte u/s. 144 of the Act, the CIT(A), if required, may call for the remand report from the Assessing Officer and confront the same to the assessee before deciding the appeals. We also make it clear that if the CIT(A) or the Assessing Officer relied on any statement of the third parties so as to frame the impugned assessments on an earlier occasion, the same is to be confronted to the assessee and if the assessee requires any cross examination of the parties concerned, the same is to be provided. With these observations, we remit the issue to the file of the CIT(A) to decide the issue afresh regarding the merit of the additions.”

6.1 Being so, following the same ratio laid down in the above order of this

Tribunal, we are of the opinion that there is reasonable cause in filing the appeals

before CIT(A) belatedly. Accordingly, we condone the above delay in filing the

appeals before CIT(A) and remit the issue to the file of the CIT(A) to admit the

appeals and decide the issues in dispute in accordance with law after affording

reasonable opportunity of being heard to the assessee.

sd/- sd/- (GEORGE GEORGE K.) (CHANDRA POOJARI) JUDICIAL MEMBER ACCOUNTANT MEMBER

Place: Kochi Dated: 8th July, 2019 GJ Copy to: 1. Shri Varghese M. Uthup, 1st Floor, Lake View Apartments, Church Landing Road, Kochi-682 016. 2. The Deputy Commissioner of Income-tax, Central Circle-2, Kochi. 3. The Commissioner of Income-tax(Appeals)-III, Kochi. 4. The Commissioner of Income-tax, Central, Kochi. 15

I.T.A. Nos.161-172/Coch/2019 5. D.R., I.T.A.T., Cochin Bench, Cochin. 6. Guard File. By Order

(ASSISTANT REGISTRAR) I.T.A.T., Cochin