M/S.KERALA MEDICAL SERVICES CORPN LTD,TRIVANDRUM vs. THE ITO, WD-1(4), TRIVANDRUM

Per CHANDRA POOJARI, AM:

These appeals filed by the assessee are directed against the different orders of

the CIT(A), Kottayam dated 26/11/2018 and pertain to the assessment years 2010-

11 to 2012-13.

dismissal of the appeals by the CIT(A) without condoning the delay of 303 days

and 301 days for the assessment years 2010-11 and 2011-12 respectively. The

assessee explained the delay for both the assessment years as follows:

I.T.A. Nos.107-109/Coch/2019 “1. I, Minhaj Alam, am the Managing Director of M/s. Kerala Medical Services Corporation Ltd.

For the reasons stated above, it is humbly prayed that the Hon. Commissioner of Income-tax(Appeals) may be pleased to condone the delay caused in filing the appeal within the stipulated time.

The copy of the medical certificate for the above cause is enclosed.”

observing as follows:

4.2. The admission of appeals filed with delay is governed by the provisions of section 249(3) of the Act and the same reads as under:

"The Commissioner(Appeals) may admit an appeal after the expiration of the said period if he is satisfied that the appellant had sufficient cause for not presenting it within that period."

4.3. Before going into issue of condonation of delay, it would be relevant to place on record principle laid down by Hon'ble Courts with regard to condonation of delay. In the case of Ram Mohan Kabra, 257 ITR 773, Hon'ble Punjab and Haryana High Court, while dealing with the issue of condonation of delay, has observed as under:

“3. The provisions of relating to prescription of limitation in every statute must not be construed so liberally that it would have the effect of taking away the benefit accruing to the other party in a mechanical manner. Where the Legislature spells out a period of limitation and provides for power to condone the delay as well, there such delay can be condoned only for sufficient and good reasons supported by cogent and proper evidence. Now it is a settled principle of law that the provisions relating to specified 2

I.T.A. Nos.107-109/Coch/2019 period of limitation must be applied with their rigour and effective consequences.

"Law of limitation may harshly affect a particular party but it has to be applied with all its rigour when the statute so prescribes and the courts have no power to extend the period of limitation on equitable grounds. The discretion exercised by the High Court, was, thus, neither proper nor judicious. The order condoning the delay cannot be sustained. This appeal, therefore, succeeds and the impugned order is set aside. Consequently, the application for condonation of delay filed in the High Court would stand rejected and the miscellaneous first appeal shall stand dismissed as barred by time. No costs" Once the concerned authority applies its mind and declines to condone the delay in filing the appeal for good and appropriate reasons, in that event it cannot give rise to a question of law for determination."

4.4 Further, the Hon'ble Supreme Court in the case of Ajit Singh Thakur Singh v. State of Gujarat AIR 1981 SC 733, 735, wherein the Hon'ble Supreme Court has made following important observations :

"It is true that a party is entitled to wait until the last day of limitation for filing an appeal. But when it allows limitation to expire and pleads sufficient cause for not filing the appeal earlier, the sufficient cause must establish that because of some event or circumstance arising before limitation expired it was not possible to file the appeal within time. No event or circumstance arising after the expiry of limitation can constitute such sufficient cause. There may be events or circumstances subsequent to the expiry of limitation which may further delay the filing of the appeal. But that the limitation has been allowed to expire without the appeal being filed must be traced to a cause arising within the period of limitation."

4.5. In the light of the decisions of Hon'ble High Court and Supreme Court, as above, it is evident that the Appellant seeking condonation of delay in filing of appeal must bring all the evidence explaining the cause for such delay. Further, the cause relied must be an event period of limitation.

4.6. Now, applying the above principles to the facts of the case, the merit of the reasons stated by the Appellant are examined as under:

a) The Appellant had stated that the authorized representative was laid up with severe back pain for the last one year and therefore the Appellant is 3

I.T.A. Nos.107-109/Coch/2019 prevented from filing the appeal within the time allowed. In support of the said claim, the Appellant had submitted copies of medical certificates and the same are as under:

MEDICAL CERTIFICATE This is to certify that Mr. K. Suresh, 55yr Chartered Accountant residing at Nandavanam, Trivandrum is under my treatment for Backache with Sciatica from 15.03.2014. he is advised rest for 3 months.

Dr. A. Gopal MS Ortho, D.Oortho, Mch Senior Consultant Orthopaedic Surgery AHRI, TVM

MEDICAL CERTIFICATE

This is to certify that Mr. K. Suresh 55yr is a case of Backache came for review on 15.06.2014. He is still having back pain. He is advised rest and to avoid long distance travel for another 3 months. Dr. A. Gopal MS Ortho, D.Oortho, Mch Senior Consultant Orthopaedic Surgery AHRI, TVM

MEDICAL CERTIFICATE

This is to certify that Mr. K. Suresh 55yr is a case of Backache came for review on 15.09.2014. He is still having back pain. He is advised rest and to avoid long distance travel for another two months. Dr. A. Gopal MS Ortho, D.Oortho, Mch Senior Consultant Orthopaedic Surgery AHRI, TVM

b) As per the medical certificates, as above, the authorized representative Sri K Suresh was suffering from backache from 15.03.2014. But the certificate does not show that the authorized representative is prevented from discharging the professional duties. Further, it is evident from the assessment order that the authorized representative Sri K Suresh has appeared before the Assessing Officer on 28.03.2014 and discussed the case. Thus, it is evident that Sri K Suresh was discharging the professional duties even after 15.03.2014. Therefore, there is no merit in the submission that the appeal could not be filed due to back pain of the authorized representative.

c) The Appellant had also stated that appeal could not be filed as the post of managing director of the company was held by five people and the frequent change in the post of managing director also prevented the company from filing the appeal in time. 4

I.T.A. Nos.107-109/Coch/2019 d) The Appellant had not specified the dates when managing directors were changed and what were the reasons for which the previous persons holding the post of managing director were prevented from filing the appeal. In absence of such evidence, the reason stated by the Appellant cannot be accepted.

4.7. Therefore, in view of the above discussion, it is held that the Appellant did not have sufficient cause for not filing of appeal within the limitation period. Hence, the delay in filing of appeal is not condoned and thereby, appeal is not admitted.

4.8 As the appeal is not admitted, the grounds raised on merits are not discussed as the same are not relevant. In summary, the appeal is dismissed.”

of 301 days and 303 days for the assessment year 2010-11 and 2011-12 in filing the

appeals before the CIT(A). The reason given by the assessee for the delay in filing

the appeals before the CIT(A) was that the Chartered Accountant of the assessee

was suffering from backache which was supported by the medical certificate issued

by the Orthopedic Surgeon. It was also submitted that there was frequent changes

of Managing Director of the assessee-Corporation. These facts were not believed by

the CIT(A) on the reason that the assessee’s Chartered Accountant, Shri K. Suresh

attended the hearing before the Assessing Officer on 28/03/2014. Further, the

CIT(A) stated that the assessee has not specified the dates when the managing

directors were changed and what were the reasons for which the previous persons

holding the post of managing director were prevented from filing the appeals before

the CIT(A). In our opinion, when there was a valid medical certificate issued by the

Specialist Doctor, the CIT(A) cannot doubt the same without bringing any material

contrary to the facts submitted by the assessee. The assessee’s present Managing

Director made a petition/affidavit affirming that there were frequent changes of 5

I.T.A. Nos.107-109/Coch/2019 Managing Directors of the assessee-Corporation and it was an inadvertent error on

the part of the assessee for not taking steps to file the appeals before the CIT(A).

The CIT(A) has not disputed the fact of frequent changes of Managing Directors of

the assessee-Corporation. However, the CIT(A) wants to know why the assessee

was prevented from filing the appeals before him. The assessee has already stated

that his Chartered Accountant was sick and hence, there was delay in filing the

appeals before the CIT(A). More so, the assessment orders for these assessment

years were passed ex parte by the Assessing Officer u/s. 144 of the Act which itself

shows that there is no proper presentation from the Counsel of the assessee before

the Assessing Officer. Hence, in our opinion, there are good and sufficient reasons

for filing the appeals belatedly before the CIT(A).

4.1 The Supreme Court in the case of Vedabai alias Vaijayanatabai Baburao Patil vs.

Shantaram Baburao patil (253 ITR 798) held as under:

“In exercising discretion under section 5 of the Limitation Act the courts should adopt a pragmatic approach. A distinction must be made between a case where the delay is inordinate and a case where the delay is of a few days. Whereas in the former case, the consideration of prejudice to the other side will be a relevant factor so the case calls for a more cautious approach but in the latter case no such consideration may arise and such a case deserves a liberal approach. No hard and fast rule can be laid down in this regard. The court has to exercise the discretion on the facts of each case keeping in mind that in construing the expression ’sufficient cause’, the principle of advancing substantial justice is of prime importance.”

In the above case, the Apex Court was considering a case where the application for

condonation was for a delay of 7 days in filing the appeal against the order of the

trial court. In the same case, the Jurisdictional High Court also cited recent decision

of Allahabad High Court in the case of Ganga Sahai Ram Swarup vs. ITAT (271 ITR

512). In this case it was held that it was not in dispute that there was only a delay

of 12 days in filing the appeal. A liberal view ought to have been taken by the 6

I.T.A. Nos.107-109/Coch/2019 authority as the delay was only for a very short period and the assessee was not

going to gain anything from it.

4.2 It is to be noted that the landmark decision on the issue of condonation by the

Apex Court in the case of Collector Land Acquisition vs. Mst. Katigi (167 ITR 471)

wherein the Apex Court has given guidelines that courts should have a liberal and

practical approach in exercising the power of condonation of appeal, the context

was dismissal as time barred for 4 days.

4.3 In the same case, the Apex Court had also held that doctrine of Equality Before

Law is applicable to all the litigants including the State as a litigant. They are

accorded the same treatment and the law is administered in an even handed

manner.

4.3 It is also well settled judicial principle that words or lines out of a decision

should not be exported to be interpolated as precedent with complete disregard of

the context.

4.4 Accordingly, we direct the CIT(A) to admit the appeals and dispose of the

appeals on merits. In view of this, we refrain from going into other grounds raised

by the assessee since the CIT(A) had dismissed the appeals in limene. Thus, the

appeals of the assessee are partly allowed.

I.T.A. Nos.107-109/Coch/2019 5. Regarding the appeal in ITA No.109/Coch/2019, the assessee has raised the

following grounds:

I.T.A. Nos.107-109/Coch/2019 record, which could be considered u/s.154. As such, the addition made by recourse to the order u/s.154 is also illegal.

For these and other grounds that may be urged at the time of hearing, the appellant humbly prays that the Hon'ble Income Tax Appellate Tribunal, Cochin Bench, may kindly be pleased to set aside the asst. order, accept the grounds urged herein and allow the appeal and render justice. *

Assessing Officer found that the assessee company had not remitted the amount of

Rs.4,89,48,224/- being VAT payable before the due date of filing of the return of

income. Hence, the same was disallowed as per the provisions of section 43B of

the Act.

not applicable to the assessee since the assessee had not produced any evidence to

show that the provisions of section 43B of the Act have been complied by the

assessee. In the absence of the same, the CIT(A) confirmed the addition of

Rs.4,89,48,224/-.

grounds of appeal.

I.T.A. Nos.107-109/Coch/2019 9. The Ld. DR relied on the order of the lower authorities.

authorities, the assessee has not produced any evidence to show that the provisions

of section 43B of the Act have been complied with by the assessee. In the absence

of the same, the CIT(A) sustained the addition. Before us, the Ld. AR pleaded that

the assessee may be given an opportunity to place necessary evidence in support of

the claim of the assessee. Considering this request of the assessee, we are inclined

to remit this issue to the file of the CIT(A) with a direction to give opportunity to the

assessee to produce evidence to show that the provisions of section 43B have been

complied with by the assessee. Accordingly, this issue is remitted to the file of

the CIT(A) for fresh consideration. This ground of appeal of the assessee is partly

allowed for statistical purposes.

are partly allowed and the appeal of the assessee in ITA No.109/Coch/2019 is partly

allowed for statistical purposes. Order pronounced in the open Court on this 20th May, 2019

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

Place: Kochi Dated: 20th May, 2019 GJ Copy to: 1. Kerala Medical Services Corporation Ltd., Near W & C Hospital, Thycaud, 10

I.T.A. Nos.107-109/Coch/2019 Thiruvananthapuram-695 014. 2. The Income Tax Officer, Ward-1(4), Trivandrum. 3. The Commissioner of Income-tax(Appeals), Trivandrum. 4. The Pr. Commissioner of Income-tax, Trivandrum. 5. D.R., I.T.A.T., Cochin Bench, Cochin. 6. Guard File. By Order

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