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Income Tax Appellate Tribunal, COCHIN BENCH, COCHIN
Per CHANDRA POOJARI, AM:
This appeal filed by the assessee is directed against the order of the CIT(A),
Kottayam, dated 18/04/2018 and pertain to the assessment year 1994-95.
The assessee has raised the following grounds of appeal:
The proceeding of the CIT(A) passed under section 250 of the Act dismissing the claim of the appellant with respect to charging of interest under section 250(2) and 234D amounting to Rs.25,27,708/- and Rs.3,39,845/- is against the provisions of law and contrary to the facts and circumstances of the case.
The I Assessing Officer was unjustified in charging interest on the total demand under section 220(2) since the demand was partly adjusted against the refund due pertaining to previous assessment years. Considering that the
I.T.A. No.315/Coch/2018 part of the demand was settled by the assessee, interest charged under section 220(2) is against the provisions of the Act.
Levy of interest of Rs.3,39,845/- levied by vide order dated 01/11/2012 is misconceived, and cannot be sustained either on facts or in law especially when refund granted under section 143(1)(a) got converted into a demand as early as 1997 as no longer subsists as on date on which the provisions of section 23D came into force is against the provisions of the law.
The facts of the case are that the assessee filed the original return of income on
30/12/1994 and subsequently revised the same on 26/02/1995 admitting a total
income of Rs.30,84,183/-. Assessment was completed u/s. 143(3) of the I.T. Act on
27/12/1996 assessing the total income at Rs.46,23,186 after disallowing deduction
of Rs.15,39,003/- claimed u/s. 80HHC. Aggrieved by the assessment order, the
assessee had filed an appeal before the CIT(A) and the appeal was allowed vide
order dated 24/03/1998. On further appeal by the Revenue, the Tribunal by its
order dated 14/01/2002 confirmed the order of the CIT(A).
3.1 Against the order of the Tribunal, Revenue went on a further appeal to the
High Court of Kerala, High Court vide order dated 17/08/2012 reversed the order of
the Tribunal dated 14/01/2012 and restored the disallowance made by the
Assessing Officer in assessment order u/s. 143(3) of the Act dated 27/12/1996.
Consequent to the High Court order, the Assessing Officer passed an order giving
effect to the order of the High Court vide order dated 01/11/2012 and raised a final
demand of Rs.40,60,566/- after charging interest u/s. 220(2) and 234D of the Act.
The assessee filed a rectification petition dated 18/01/2013 against this order and
I.T.A. No.315/Coch/2018 an order under section 154 of the Act dated 08/04/2015 was passed by the
Assessing Officer revising the final demand to Rs.25,27,708/-.
Aggrieved, the assessee went in appeal before the CIT(A) raising the ground
with regard to charging of interest u/s. 220(2) and 234D of the I.T. Act. However,
there was a delay of 50 days in filing the appeal before the CIT(A). The assessee
filed appeal against the order under section 154 of the Act dated 08/04/2015 which
was received by the assessee on 17/04/2015 on 06/07/2015 with a delay of 50
days. The assessee explained the delay as follows:-
"The Nelliampathy Tea and Produce Company Limited had obtained an order passed by Assistant Commissioner of Income Tax pursuant to the High Court Order dated 17th August 2012 for which a rectification petition was filed before the Assistant Commissioner on 18.01.2013 for the Assessment Year 1994-95. The rectification order under section 154 was passed by the Assistant Commissioner on 20th May 2015 by not accepting the claim made by us, which was received on 22nd May 2015. We are filing an appeal against the interest charged under section 234D and under section 220(2) before your good selves. The order was received on 22nd May 2015 and we had to file an appeal before 21st June, 2015. Since the company was in the process of audit of its annual accounts for the year ended 31st March 2015, we are unable to file the petition before the expiry of the 30 days. There is a delay of 10 days from 22nd June 2015 and we request you to please condone the delay."
On verification of the assessment record, the CIT(A) observed that the
statements made in the condonation petition do not reflect the correct facts. The
Assessing Officer passed an order under section 154 of the Act on 08.04.2015 which
was received by the assessee on 17.04.2015. The assessee aggrieved by the said
order filed a petition before Assessing Officer on 18.05.2015 and the same was
I.T.A. No.315/Coch/2018 rejected by the Assessing Officer vide letter dated 20.05.2015. Therefore,
according to the CIT(A), if the assessee is aggrieved by the order dated 20.05.2015,
then the appeal should have been filed on the said order. Instead the assessee
chose to file appeal against the order dated 08.04.2015 which was received by the
assessee on 17.04.2015. In such a case, the assessee should have explained the
delay in filing of appeal
5.1 According to the CIT(A), 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."
5.2 For this purpose, the CIT(A) relied on the judgment of the Punjab and
Haryana High Court in the case of Ram Mohan Kabra (257 ITR 773), wherein while
dealing with the issue of condonation of delay, the Court has observed as under:
"3. The provisions 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 period of limitation must be applied with their rigour and effective consequences.”
5.3 In this regard, the CIT(A) relied on the latest law in the case of P. K.
Ramachandran v. State of Kerala AIR 1998 SC 2276 wherein it was held as under:
I.T.A. No.315/Coch/2018 "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."
5.4 Further, the CIT(A) relied on the judgment of the Supreme Court in the case
of Ajit Singh Thakur Singh v. State of Gujarat AIR 1981 SC 733, 735 wherein it was
held as under:
“It is true that a party is entitled to wait until the last day of 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."
5.5. In the light of the decisions of High Court and Supreme Court cited supra,
the CIT(A) observed that it was evident that the assessee seeking condonation of
delay in filing of appeal must bring all the evidences explaining the cause for such
delay. According to the CIT(A), the, assessee had not filed any documentary
evidence to prove that there was sufficient cause for not filing of appeal on or
before 16.05.2015. Further, the CIT(A) observed that the petition for condonation
of delay does not state the correct facts. Considering these facts, the delay in filing 5
I.T.A. No.315/Coch/2018 of appeal was not condoned by the CIT(A) and thereby, the appeal was not
admitted. As the appeal was not admitted in view of delay in filing of appeal, the
grounds raised by the assessee were not adjudicated and the appeal was dismissed
by the CIT(A).
Against this, the assessee is in appeal before us.
The Ld. DR relied on the order of the CIT(A).
We have heard the rival submissions and perused the record. Admittedly, in
this case there was a delay of 50 days in filing the appeal before the CIT(A) and he
dismissed the appeal of the assessee in limine without condoning the delay on the
reason that there was no reasonable cause for filing the appeal belatedly before
him. Hence, he refrained from adjudicating the issue relating to levy of interest u/s.
220(2) and 234D of the Act Now before us, the assessee has raised the ground
with regard to levy of interest u/s. 220(2) and 234D of the Act. As seen from the
grounds of appeal raised before us, the assessee has not raised any ground with
regard to non admission of the appeal by the CIT(A) on account of delay in filing
the appeal before him. Hence, the ground raised by the assessee before us with
regard to levy of interest u/s. 220(2) and 234D of the Act is not at all emanating
from the order of the CIT(A). If the assessee had any grievance with regard to the
dismissal of the appeal in limine by the CIT(A), the assessee ought to have raised
the ground with regard to condonation of delay. Since there was no ground with
I.T.A. No.315/Coch/2018 regard to condonation of delay in filing the appeal before the CIT(A), we dismiss
the appeal in limine and refrain from going into the grounds raised by the assessee
with regard to levy of interest u/s. 220(2) and 234D of the Act.
In the result, the appeal filed by the assessee is dismissed. Order pronounced in the open Court on this 01st May, 2019
sd/- sd/- (GEORGE GEORGE K.) (CHANDRA POOJARI) JUDICIAL MEMBER ACCOUNTANT MEMBER
Place: Kochi Dated: 01st May, 2019
GJ Copy to: 1. M/s. Nelliampathy Tea & Produce Co. Ltd., No.27/1032, Panampilly Nagar, Kochi-682 036. 2. The Assistant Commissioner of Income-tax, Circle-1, Alappuzha. The Commissioner of Income-tax(Appeals), Kottayam. 4. The Pr. Commissioner of Income-tax, Kottayam. 5. D.R., I.T.A.T., Cochin Bench, Cochin. 6. Guard File. By Order
(ASSISTANT REGISTRAR) I.T.A.T., Cochin